SINGAPORE - Singapore Inc is in hot
pursuit of business opportunities in Myanmar,
where a recent reform drive aims to lure more
foreign direct investment. A long time ally to
Myanmar's former military regime, Singapore is
well placed to reap first-mover advantages
vis-a-vis Western countries that maintain but are
slowly lifting economic sanctions against the
Last month, a delegation
representing 74 Singapore-based companies traveled
to Myanmar for networking and business matching
with Myanmar counterparts in construction,
education, finance, infrastructure and logistics.
Organized by the trade promotion groups
Singapore Business Federation (SBF) and
International Enterprise (IE) Singapore, the trip
featured site visits, the signing of a memorandum
of understanding to promote economic relations and
trade ties, and
courtesy calls on
reformist President Thein Sein and many of his
The Union of Myanmar Federation
of Chambers of Commerce and Industry (UMFCCI), a
national level group that promotes the business
interests of Myanmar's private sector and
coordinated the Singaporean delegation's visit,
said the group was the largest to explore new
business opportunities in the country.
military has dominated and mismanaged Myanmar's
economy since a wave of nationalization of assets
that began in the 1960s. The country's recent
ambitious pace of change, abundance of natural
resources, strategic geographic location and
sizeable workforce positions it for rapid growth
over the next few years, SBF chairman Tony Chew
said during the trip.
Participants in the
delegation have sounded similarly optimistic
notes, while at least one Singaporean property and
construction company, Yoma Strategic Holdings, saw
its share price surge on expectations of
yet-to-be-announced new Myanmar-related ventures.
James Aw, business development director at
Singaporean building construction group Hor Kew
Corporation who last visited the country in 1996,
said he saw some potential for housing projects.
"In 1996, things were still very raw.
There were no roads or other infrastructure; the
locals also didn't have much money to spend." he
said, while noting that property prices in the
former capital of Yangon have risen quickly in the
past two to three years.
spending power now. We couldn't build mass housing
of 30,000-40,000 units at one go yet, as we are
doing in Singapore. But at least we could do 15-20
unit project types now." His business group is
also looking into building a 100-room hotel in
Yangon with newly found local partners.
Jimmy Neo, managing director at Filtec, a
logistics and heavy equipment provider, said
Myanmar's more open environment makes it easier to
do business compared with the more heavily
restricted 1990s and 2000s.
certainly changed in the past one to two years. In
the past you would need connections with
high-ranking military generals if you wanted to do
business in Myanmar," said Neo, who has conducted
business in Myanmar for the past 15 years. "Now it
is easier to navigate. There is less red tape and
the business climate is more conducive now."
Neo has noticed a growing number of
Singaporean businesses in Myanmar, which he
suggests is a reflection of Singapore government
policy. "The recent trip organized by SBF-IE shows
that there is obviously some attention [from the
government and trade boards] on Myanmar being
touted as the next developing market with business
opportunities for Singapore-based businesses," he
comrades Singapore is Myanmar's
fourth-largest export partner and second-largest
import partner, with bilateral trade amounting to
S$1.6 billion (US$1.3 billion) in 2011.
of October 2011, Singapore was the sixth-largest
source of foreign direct investment in Myanmar,
with 74 Singaporean companies contributing a total
of US$1.8 billion, according to Myanmar's Ministry
of National Planning and Economic Development.
Around 70% of Singaporean companies invested in
Myanmar are involved in hotel construction,
tourism and real estate. The rest are involved in
agricultural, energy, mining and manufacturing
Singaporean businesses started
to enter Myanmar, then known as Burma, in 1988
when the then ruling State Law and Order
Restoration Council (SLORC) ended General Ne Win's
dictatorial rule and started tentatively to open
the hermit country to more international trade.
While Western legislators, including in
the United States and European Union, imposed
economic sanctions over the military's lethal
crackdown on pro-democracy demonstrators, use of
forced labor and government-linked narcotics
trafficking, Singaporean companies continued to
pour money into the country throughout the 1990s.
"While the other countries are ignoring
Myanmar, it's a good time for us to go in," said
Tay Thiam Peng, director of foreign operations at
Singapore's Trade Development Board, in a
revealing 1996 media interview. "You get better
deals, and you're more appreciated... Singapore's
position is not to judge them and take a
judgmental moral high ground."
pro-engagement stance mirrors that of the
Association of Southeast Asian Nations (ASEAN),
which Myanmar joined under a cloud of controversy
in 1997. Since then, Singapore, Malaysia, and
Thailand have consistently been among Myanmar's
top sources of FDI, along with neighboring China
and India. Those ties, however, have sometimes put
Singapore at loggerheads with the US.
World, one Myanmar's largest business
conglomerates with diversified interests in
trading, manufacturing, real estate, construction,
and transportation, has strong ties to Singapore
and is also on a US Treasury blacklist of
sanctioned companies. Lo Hsing Han and his son
Steven Law, respectively the company's founder and
current chairman, have been on a US visa blacklist
since 1996 for suspected drug trafficking
In February 2008, they were
both put on a US Treasury Department sanctions
list, along with Asia World Company and
subsidiaries Asia World Co Ltd, Asia World Port
Management, Asia World Industries Ltd and Asia
World Light Ltd, for their financial connections
to the then ruling military junta. Law's wife,
Cecilia Ng, owns 10 more companies under the
group's banner which are situated in Singapore.
US officials have also criticized
Singapore for allowing senior regime members to
maintain questionable bank accounts in Singapore.
Senior junta members, including former junta
leader Senior General Than Shwe, frequently visit
Singapore for health care. Former junta leaders'
and their business associates' children are known
to attend some of Singapore's top private schools.
Skewed wealth Despite recent
foreign investments, particularly in
export-oriented oil and gas ventures, Myanmar
remains one of the poorest countries on most
development measures. There are widespread
perceptions among Myanmar's citizens that the
benefits of FDI have accrued mostly to a narrow
and historically unaccountable military elite.
Since Thein Sein took office last year,
however, the pace of reforms has taken many
international observers by surprise. "During the
president's inauguration speech last March, there
was the acknowledgement that the country is poor,"
said Tin Maung Maung Than, senior fellow at the
Institute of Southeast Asia Studies in Singapore.
"It has also been realized that other countries
have moved forward, and more things should be done
in Myanmar to bring the country forward."
In that direction, Myanmar's government is
drafting new foreign investment rules that could
bring an end to protectionist requirements such as
foreigners having to take on local partners when
establishing businesses in the country and
products produced by foreign firms having to be
exported. Foreign investment may also be granted a
five-year tax holiday from the start of commercial
operations, according to a draft of the new
investment law obtained by Reuters.
reforms, including plans to harmonize the official
and black-market rates of the local currency, the
kyat, are also in the pipeline. According to a
recent International Monetary Fund report, recent
reforms are expected to boost Myanmar's gross
domestic product growth to 5.5% this fiscal year
2011-12 and 6% in 2012-13. The latter figure could
rise higher if Western countries, as some have
signaled, start to remove their economic and
financial sanctions in reward for recent reforms.
Singapore arguably has a head start on its
Western competitors. Singapore's Foreign Minister
K Shanmugam reaffirmed the two countries' "good
and longstanding" bilateral relationship during
Thein Sein's official visit to the island state in
At that meeting, the two sides
signed a Technical Cooperation Program bilateral
agreement where Singapore agreed to offer courses
in investment promotion, infrastructure building,
trade, tourism development and central banking, as
well as training in English language, technical
and vocational skills for Myanmar's workers. On
the private sector side, business promotion groups
SBF and IE say they plan a second major business
mission to Myanmar in May.
Singaporean businesspeople say there are still
hurdles to making money in Myanmar, including a
lack of modern banking and financial facilities as
well as foreign exchange risks related to holding
or transacting in the country's still highly
distorted kyat currency.
Others are taking
a wait-and-see approach due to political
uncertainties, including prospects for stability
before and after April 1 by-elections, when
opposition leader Aung San Suu Kyi and her
National League for Democracy party will contest
45 of 46 vacant parliamentary seats. The military
and military-linked Union Solidarity and
Development Party dominates Myanmar's newly
"The by-elections do
not hold any political significance in the sense
that it will not influence the power balance in
Myanmar. The election is a symbolic one, to
illustrate openness and stability in Myanmar,"
said ISEAS's Tin Maung Maung Than. "This [in turn]
can show foreign investors that the country is
To Singapore's outward
looking businesses, who wins and whether Myanmar's
fledgling democracy is more representative is of
Businessman Aw said,
"The most important thing is that the elected
government should be able to create an open,
conducive business environment and implement
Wijaya is a Singapore-based journalist. She
may be contacted at email@example.com
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