Transcript World Finance - Euromoney Conferences

Think
• Ahead
• Again
• Across
Three Secrets
1. Understanding the Context
2. Seizing the Opportunities
3. Addressing the Risks and Challenges
1. Understanding the Context
Myanmar
• Pivotal moment in economic, social, and political
transition
• Prioritization and sequencing of policy actions and
investments critical to success of reform agenda
and long-term development
Projections
• Annual average gross domestic product (GDP)
growth as high as 9.5% by 2030
• From pre-reform baseline of 4.8%
• GDP per capita to nearly $5,000 by 2030, up from
about $900 today
Myanmar
• Ripe with possibilities for foreign investors
• Emerging market in every sense of the word
• Isolated from international community for
many decades
• Bypassed globalisation
Myanmar
• Fresh opportunities
• Attracting foreign corporations and agencies
eager to invest in energy and resources,
telecommunications, financial services,
manufacturing and infrastructure sectors
• Enormous labour force and consumer
market
Myanmar
• Asia’s Last Frontier
• Last untapped sizeable economy and
market in Asia
• Easing of international sanctions
Strategic Location
• Combined market of close to three billion
people
• Conduit to Indian Ocean and beyond
Reforms
•
•
•
•
•
Political
Economic and Social
Administrative
Private Sector Development
‘
Little Done, More To Do
• Focus on developing economy and
rebuilding financial, legal and physical
infrastructure
• Promote inclusive growth
• Developing skilled workforce
Little Done, More To Do
• Foreign investment
• Sharing of technology and skills
Eight Strategic Areas
1.
2.
3.
4.
5.
Accelerating governance and public sector reform
Ensuring macroeconomic and financial stability
Creating business-enabling environment
Leveraging rich natural endowments
Fostering internationally competitive sectors manufacturing and services
6. Enhancing regional connectivity and integration
7. Promoting human development and poverty
reduction
8. Pursuing environmentally sustainable growth
2. Seizing the Opportunities
Strategic Opportunities
1. Digital Leapfrogging
2. Urbanization
3. Shift in economic structure
4. Reconnecting with global
• “Latecomer Advantage”
New Opportunities
• FDI
• SEZs
FDI 2014-15
6
5
5
Over 100 Foreign Companies
Over 50 Local Companies
4.1
4
3.3
3.3
3
2
1
0
2014-15
2013-14
Projection
Actual
Goals
• Job creation
• Sustainable and inclusive growth
• Re-engagement with international economic
community
Investment Opportunities
• Extractive Resource Sector - Natural gas,
Timber, mining
• Power generation
• Agriculture and Fisheries
• Labour-intensive manufacturing sector
Foreign Investors
• Bridge gaps in Myanmar’s economy
• Meeting Myanmar’s immediate needs
provide opportunities in longer term for
sustainable economic growth
Foreign Investors
•
•
•
•
•
•
•
•
•
Add value in many sectors
Financial Services
Infrastructure
Urban Development
Power, Electricity, Telecommunications
Hospitality
Manufacturing
Agriculture
SEZs
Investment Strategies for Foreign Companies
• Scope of opportunities immense - size,
population, resources, market and
relatively undeveloped economy
• Immediate demand for products or
services across wide spectrum of
industries
Seizing Short-term Opportunities
• Identify areas where immediate solutions
can be provided
• Keep ‘bigger’ picture in mind
• Adopt entrepreneurial approach
• Creating ‘niches’
3. Addressing the Risks and Challenges
Past
•
•
•
•
Centralised command economy
Self-sufficiency
Sanctions
Institutions and enterprises isolated from
international market
• Information gaps, infrastructural challenges
and policy risks
‘Frontier’ Economy
• Attendant risks and challenges
Challenges
• Financial, legal and regulatory systems
• Unforeseen contingencies
Lack of Infrastructure
• Insufficient telecommunication infrastructure
and coverage
• Transport and logistical links
underdeveloped
• Lack of power
Tackling the Challenges
• Serious commitment of time and financial
resources
• Realities on the ground - legislative and
regulatory restrictions
• Assess probability of success
Niche Opportunities
• Myriad opportunities
• Identify and provide selected services or
products within key sectors
• Deliver solutions that meet specific needs,
Niche Opportunities
• Establish meaningful foothold
• Careful feasibility studies
• Ancillary support
Opportunities for Early ‘Adopters’
• Work with local public and private partners
• Long-term sustainability and mutual success
Quick Wins
• Immediate results wins trust
• Combine short-term objectives with longterm strategies
Risk Mitigation
•
•
•
•
Essential in frontier market
Contingency plans in place
Due diligence
Stay abreast of both prevailing market forces
and government policies
• Political risk insurance for large investments
• Prudence