Control Risk Generic Powerpoint Template - EuroCham Myanmar · 2016-12-01 · Kyaukphyu SEZ,...

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MYANMAR

A level playing field for EU business?

Control Risks

21 November 2016

2 © Control Risks Group Limited

CONFIDENTIAL

Task no: 0

3 Framework Agreement - Proposal for BW Maritime

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Today’s agenda


What is the influence wielded by Myanmar’s key East Asian trading

partners on policy making and the business landscape?

Is there still a level playing field for European companies to engage

with the government and seize opportunities?

Roadmap

Who’s done what and where?

Japan Inc – Growing involvement in Myanmar, buttressed by a holistic

and concerted engagement strategy

The China story – SOEs with unresolved legacy issues

ASEAN – Geographical, historical and cultural affinity but investment is

of a specific nature

Where do we see opportunity and why?

Policy recommendations

Topic

CONFIDENTIAL

Task no: 0





Influence of Myanmar’s top East Asian trading partners

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Setting the scene… the biggest economic players

Source IMF / European Commission Source DICA


Large economic involvement

SOE-led

Kyaukphyu SEZ, Myanmar-China O&G

pipelines

O&G, hydropower, mining, real estate,

‘border industries’

Analysis

Will ultimately remain an integral player

in light of the US election result

continued volatility in border regions

No clear discernible strategy vis-à-vis

G2G activity

Overarching interests: energy and state

security

Legacy issues: CSR problems arising

from environment, land disputes,

community opposition, public perception

China – still the biggest player in the room


Over 300 firms: Mitsubishi,

Sumitomo, Marubeni, Suzuki,

Thilawa SEZ (Sep 2015)

Yangon Stock Exchange

(YSX): 49% Daiwa Securities

Group and Japan Exchange

Group)

Myriad of sectors: energy,

power generation (coal),

banking, infrastructure,

automotive, agriculture and

agribusiness, construction,

insurance

2013 Myanmar-Japan bilateral

investment treaty

Japan – Strategic economic presence


Debt write-off in 2012

Developmental assistance and

capacity building

ODA loans through JICA for

Thilawa, infrastructure, irrigation,

water supply

Technology-transfer

Japan – concerted strategy

“And we have been talking about government

assistance from the Japanese Government to the

Myanmar Government. What we feel is the ideal

way to do this is we see many Japanese

companies in Myanmar, and what we feel the best

way to do this is make sure the government

assistance to the Myanmar Government goes

hand-in-hand with investment from Japanese

companies coming into Myanmar.”

Japan Ambassador to Myanmar,

Tateshi Higuchi , June 2016


Japan is poised to play a key role

in the Burmese economy

Regional hegemon, whose

presence will increasingly

counterbalance Beijing’s

Positive public perception

However, there are challenges:

Japanese aid for Japan?

Ties to old regime?

Limitations to the type of

assistance it can render

Japan – Analysis


Thailand

Military-to-military links

Dampened business sentiment in

Thailand, post-coup

O&G, seafood, agribusiness, garments,

cement, F&B

Questions over funding for Dawei SEZ

Singapore

Prominence by virtue of its standing as

a regional hub for MNCs, banking

sector support

European / Japanese companies

investing via SIN, whilst sanctions were

in place

Construction, real estate, power,

airports

ASEAN – Thailand, Singapore

CONFIDENTIAL

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Myanmar: A level playing field for EU business? – Yes

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…Consequently, areas ripe for policy

engagement.

Support for the democratic process and

institution building will become even more

critical:

Loss of key ally in the white house

Asian governments’ policies of non-

political interference in domestic affairs

Rule of law: Policy and legislative

assistance, institution building, transparency

Public demands need to be met:

Employment, public goods, social

services

Desire for ‘clean’, ‘responsible’

investment

Challenges faced by the NLD government and...


Involve technology transfer

Are employment multipliers

Have a training / vocational

element beyond low-skilled labour

Operate in sectors that need to be

heavily regularised for public

safety / compliance reasons

Involve ‘clean’ technologies with

minimal environmental impact

Exist in sectors where there is an

opportunity to export a workable

‘industry model’

Because of existing gaps, there are key opportunities

for businesses that …

FDI by sector (Sep 2016) Oil & Gas (34%)

Power (30%)

Manufacturing (11%)

Transport &Communication (8%)Real Estate (5%)

Mining (4%)

Hotel & Tourism (4%)

Livestock & Fisheries

Agriculture

Industral Estate

Construction

OthersSource DICA, Control Risks


Certainly areas where Asian investors have dominated, and will continue

dominating

BUT, Myanmar has historically adopted an independent foreign policy

that minimizes over-dependence on any one source

Government will increasingly look to diversify its portfolio of investors

Motivated by a need to balance against regional players to avoid becoming a

‘satellite’ state

Positive perception of European investment amongst government and the

public

European strength in: institution building, industry excellence

Why do we still see a level playing field for EU

businesses?


Identify the gaps and needs:

Government’s priority investment sectors?

Sector-specific bottlenecks and challenges?

Entrenched incumbents within each sector, the nature of their influence and linkages

to foreign and local business?

Nature of assistance from other investors and what are the gaps there?

The role for European businesses:

Advocate and educate on international industry standards

Secure government backing, commitment on the same

Assist in drafting industry-relevant policies, standards

Demonstrate value proposition of European firms, SMEs

Demonstrate investment benefits to local economy – technology and skills transfer

Facilitate linkages to local SMEs, civil society and environmental groups

Suggested strategy for government engagement

17

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Control Risk Generic Powerpoint Template - EuroCham Myanmar · 2016-12-01 · Kyaukphyu SEZ,...

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