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German ambassador says investor sentiment, Myanmar relations could improve under new govt


Photo: Hong Sar/Mizzima

German Ambassador Mr. Christian-Ludwig Weber-Lortsch talked to Mizzima Editor-in-Chief Soe Myint about the long history of German-Myanmar relations, the hurdles to investment, and the hopes for the incoming government.

The interview was carried out on February 1.

Mizzima: Today we had a new parliament dominated by the National League for Democracy. So how do you view the changes, or the reforms, that have taken place over the last four or five years?

German Ambassador: Well for the last four or five years I have seen lots of changes. I have seen lots of changes. I remember my first day in this country I couldn’t even connect to the internet, now everybody runs around with a smartphone. But it is not only the technical, the hardware, it’s the software that changed. First, we had free by-elections, now we have free and fair elections and I think well there was a mandate for change, but for inclusive change. We never told the Myanmar people who they should vote for, this is none of our business. But we made a small contribution to organise free and fair elections. It worked very well, now there is a winner with a big mandate and I think the first steps I could see, it’s encouraging, as I mentioned, it’s a mandate but an inclusive change we see the first nominations have also included people from the losing party and from some of the minority tribes of this country, so this is an encouraging start I would say.

Germany and Myanmar have had a very long relationship, more than 50 years. It been a good relationship over these years despite a short period because of the 1988 movement and what happened here in the country. When you look back at those German-Myanmar relations, there was a military-to-military weapons trade between the two countries, what do you think of German-Myanmar relations?

We are older than you think. We have been here for sixty-two years with a diplomatic office and second there is a simple fact you can’t run away from your history. So our history started in a different time. We had encounters during the colonial days and then soon after independence, the world was different. Yes, we had very close ties to Myanmar, we helped to build up the industrial sector in this country, we were, and I think after Japan, we were the second biggest donor for development and also quite a substantial industrial and commercial partner. In the old days. Until, 1988, we also had a close relationship with the military. We trained senior officers at our academy in Hamburg and due to the unfortunate developments after 1988there was a time when we had, let’s say, no more official contacts. But we never left. We always stayed with our embassy, we did what was possible during those days. And we continued and since I am here, since 2011, gradually first European sanctions had been suspended then they had been done away and we could build up again all our bi-lateral relations in business, cultural and other fields and we consider relations to the military also very important because the military is one of the key pillars in this society.

The main factor also of stability to hold the country together and we hope step-by-step to reconnect our military relations. I hope that in the future we will have a defence attaché here. We don’t have yet. I hope we can develop some programmes. For example, there’s one area where we can have a real substantial discussion is when we had unification of Germany. Twenty-five years ago, we also had to rebuild our country, we had to rebuild our armed forces. To integrate completely different political systems, that is, where we maybe politically, we can make a contribution to this country.

When we talk of these bi-lateral ties, what is the role of education and culture and your policy of strengthening these two ideas with Myanmar?

Well, education has always been very important in our relationship here. We always provided scholarships. We have an alumni association, there you will find the first, they started over fifty years ago, and then our senior ladies and gentlemen and they still unite. We rebuilt the scholarships, but it goes beyond the scholarships, it’s a two-way road. We have in the first student and lecturers coming to Myanmar and so we’ll have an exchange at the level of universities. There is still a way to go, this complemented by the reopening of the Goethe Institute, it had been closed in 1964, and only recently we could reopen when the (German) president came here.

 We are renovating premises in the traditional, historical building and this for cultural exchange. Let’s say it’s also a platform for Myanmar filmmakers, for artists,painters, and musicians to meet. It also offers training courses in language and beyond that we try to reach out to the general public. There are some projects in e-learning, through TV, also new media to reach a wider audience especially young people. We have Deutsche Welle TV, have a cooperation agreement here on the ground and I think they can have a major contribution here.

I would like to take this opportunity to thank you personally for your active support to Myanmar journalists. My understanding is you support capacity-building and women’s resources development here in the country. How do you view the skills development programme of Germany in Myanmar? What are the areas you are working in to promote skills in Myanmar?

You just touched on the journalistic skills. I think this is a growing programme and very important because now you have more or less freedom for the media but you need also the skills to be a proper journalist. Next to this we have in our development assistance portfolio we focus on sustainable economic development, we concentrate on vocational training both on the ground and in terms of curriculum to advise the relevant ministries. We concentrate on small and medium enterprises. Again, our experts advise government about legislation but also we have feet on the ground in Taunggyi, Shan State with some agricultural projects,so not about talking but doing. I think this is very helpful. We also have a third pillar which is assistance in financial training, the main objective is to create access for the small and medium industries to the financial market to give the banks the skills. Our people published a small booklet with the basic notions and skills of the trade. For example, to explain what is a letter of credit and some basics of accountancy. I think this is really very practical. And in development, finally now we are reaching out to the rural areas through building roads, important to connect people in remote areas, and also to start programmes about rural electrification to contribute to basic infrastructure.

When you talk about the financial system, how do you view the reforms that have taken place in the financial sector, in the banking system?

Well first, I think one has to say where you come from. When I first entered a bank here this was still all cash and the book-keeping was all done in books, I didn’t see a single computer. This changed gradually. The Central Bank became more independent for the first time you now have a more or less transparent budget that the general public can see not only how you collect your money but also how you spend your money. This is big progress and also important to manage your natural resources. It’s more transparent then it used to be before. As far as international standards, to be honest I think there is still a gap. Today’s world is extremely connected especially in banking so here there is still some training needed, but it is not only training in the end these are political decisions, how much independence you want to give your central institutions, how much competition you want to let in from the foreign side. It is a difficult mix to decide. I think we as foreigners can only provide you with the skills, the tools. The use of the tools for what political end has to be decided by the government of this country.

I think we have not seen a rush of German investors coming to Myanmar. What is needed to generate interest among German investors to come to Myanmar?

To start on a good note, many people come and look. It is bit like window shopping. When it comes to business proper, still not that many people really spend money on the ground and invest. Why? First of all, you have to see all the businessmen I know come here, they compare what are the advantages or disadvantages of Myanmar in the context of the region. What is better here than in Malaysia, Vietnam, Indonesia and so on, or China even?

Here are still some obstacles because you have a long time a more or less closed economy with some leftovers. Let’s say some leftovers. The legal framework is not really satisfactory. Then there is a lot of bureaucracy, procedures take very, very long and in the end the cost structure. For various reasons, it is not so much the salaries but property, the cost of energy, the cost of bringing goods in and out.

For example, production, many pre-materials, you can’t buy here, you have to import. And for those who decided to come here, to produce, if they want to sell locally, you need a distribution license. Normally the foreigner doesn’t get it. Only a few people have a distribution license, this contributes to cost. And in a way you have to look at the timing. You just can’t do now what others did in the 1960s and 70s. Let’s say a neighbour like Thailand was luckier. They industrialized at an earlier stage. The whole world was looking for cheap labour. Cheap labour, there is plenty nowadays. It is more about productivity. And we have new forms of production now. We are in an age where let’s say data, the digitalization translates, somehow manufacturing. So this is very … this may affect the whole world in a way.

In the end, you have your data here and you can produce online somewhere like a print-out also. We still need labour, we need, this country needs jobs, there are still some industries on the good side also, many of our peoples are producing here, sourcing garments, some of the big chains like Adidas, for sports shoes, or a really big retail chain from Germany, they manufacture here so we have quite some (interest) but we hope for more.

Myanmar will tend to be a destination for many German investors in the future?

Sure, we hope but you have to be, how should I put it, it is a beauty contest, it is a beauty contest, and people compare with all the neighbours, what is better here. There are advantages in this country, certainly there is a market, and there is a need for many products, from big infrastructure to consumer goods, there is a big market here. I tell everybody, I tell everybody. But there is competition, there is competition, and, well, we hope more international investors will follow. We hope that let’s say administrative procedures can be cut short. And most of all, businessmen like security. They want to be sure, what I sign today will still be valid in ten years. Stability. Stability is a catchword for business people. I think, well, there is a lot of hope now that the business climate will even improve. But it has to be done.

What do you think of the draft EU-Myanmar investment protection agreement?

A very simple answer – we need one. We need one because without an investment protection agreement, you wouldn’t get major investment. It is as simple as that. It is as simple as that. I know, some people have problems accepting for example arbitration or that no substantial international venture would submit to local judiciary under the given circumstances.

Germany was one of the very first countries in Europe where the outgoing president Thein Sein visited when he visited Europe. Germany and Myanmar have a long history, including military to military. Do you have an influence of the Myanmar military on what is happening, especially the reform process in the country?

Oh, we don’t look for influence. We are foreign friends. We give advice only when we are asked for advice but of course we also talk to the military. I talk personally to the Commander in Chief. We always encourage them to cooperate with the civil government, in the framework of national reconciliation. And I think what I can observe is the process at the moment goes quite smoothly. We advise both sides to compromise because in the long run, like every armed forces, the Tatmadaw has the interest to modernize to fulfil their true duty of protecting the country. And one of the, let’s say preconditions for a retreat to the barracks I think would be that we have a lasting peace, a lasting internal peace. This is one of the longest civil conflicts in the world here and I hope that the next administration, as one of the first priorities can try to fix it.

It will take time. We need strategic patience. But in the beginning of a process you also need leadership and direction.

Myanmar’s agriculture is struggling even though it is one of the main businesses or economies in the country. What can Germany do together to build up, to strengthen, and to support Myanmar’s agriculture?

Well there is, most of the things let’s say, it is a national issue the Myanmar national government has to do. We don’t interfere in questions of land ownership or legislation on this issue. But you should move to upgrade production facilities, for example. From a foreign perspective, from my country, we had one of the first one or two people who came here who looked at what we can buy here, whether it is fish or agricultural products. But if you buy here and export to Europe, you need to meet international standards in terms of quality and in terms of health. For that, it starts with the production. It starts with packing, it starts with logistics, transport. I am always, I wouldn’t say shocked but a bit sad when I go to a good supermarket here and I see in simple products, like chilli, most of it comes from other countries, although you can grow it in our own gardening plot. Logistics and packaging. So here a lot can be done, I think it is a big advantage of this country – you have a relatively small population compared to the size of the country. Most other countries, it is the other way round. They are overpopulated. Even in big China there is not much fertile areas for agriculture. Here you have. In principle, you could produce much more than you can eat, meaning you can sell to your neighbours. Many of the neighbours are not so advantaged. Next to the natural resources, I think this should be a big source to tap on.

What do you expect for German-Myanmar relations under the new government led by the National League for Democracy?

Well we continue, we continue that good relations will further develop. We always offer our assistance, for example in terms of development assistance. This will continue, this may increase but our philosophy here is always ‘on demand’ – we don’t need force. If the government asks, can you help us in this area or that area, we will always try whatever we can do within our means, and we are more than happy. For example, we are a federal state. Let’s now talk about federalism. There are different (forms of) federalism. There is federalism in Malaysia, in the United States. Well, we are ready also to show how our federalism works, what works well, what works not so well. So you can pick and choose and make your own plans and decisions. But here also we have something to offer in terms of politics, in terms of economic advice, because … it’s still, it’s a new government coming but it still the same country and the same people, don’t underestimate.

You have been here since September 2011. What would you say are the highlights of your stay so far?

Well, the biggest highlight is relatively simple – the visit of my president here in 2014. This was a major, major step for the re-launch of our relations. A second was a concert, an open-air concert by a most famous German rock group, this was the year before, at the end of 2014.

In terms of culture, how do you view Myanmar’s culture? You have been to many countries. So how do you view Myanmar’s culture?

Myanmar’s culture is different from others. You find some ingredients you see in other places, including from the two big neighbours you have, but it is a special mix, it is original, it is different. I have been serving in many Asian countries. It has a genuine note. What is very (clear), apart from others aspects, there is a big diversity, all the ethnic groups in this country. But one thing goes for everybody, culture somehow also related to religion is quite deep, is deep inside people. They don’t care only about food, they care about culture. This is very important. People read here, whether they read online or in a book, it doesn’t matter. They read, they debate, and I think this culture will never really be extinct and it is going up now again.

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