Myanmar is seen by some business people as the last trade frontier to conquer in Southeast Asia, maybe even Asia.
It is the largest mainland Southeast Asia state by land area and has a population of 53.7 million, not far from neighbour Thailand which has 66.6 billion people living within its borders. Myanmar, a former British colony, has inherited the British legal and governmental systems. English, though not widely spoken by the masses is used in by the better educated, in government and in business.
Based on an estimate for 2019 by the International Monetary Fund (IMF), Myanmar has a nominal GDP of USD 66 billion which places it 72nd among global economies. After taking into account purchasing power parity (PPP), it is ranked 51st with an economy of USD355 billion. It has a nominal per capita GDP of USD1,245. Economic growth has averaged 7.5 per cent for the past five years and is expected to grow at a pace of 7 per cent in the medium term.
Although not considered wealthy, with a wide disparity between the rich and the poor, it has a huge potential for growth. Consumerism is only beginning to take shape.
Upon arriving at the spanking new International Terminal 1 at the Yangon International Airport, one will be greeted and inundated with banners and billboards plastered with advertisements from various international consumer brands from Samsung to Huawei to Heineken.
The overt product promotion seen at the airport is reflected in Yangon, the main business city. It is a bustling and congested city of over 5 million with all manner of commercial and retail activity. Where vehicular ownership was not common a few years ago, today, the streets in the city centre are jam-packed with cars and people. It resembles those of any Southeast Asian metropolitan centres like Manila, Bangkok, or Jakarta. Yangon is no longer the slow-paced last vestige of the colonial era in this part of the world.
In fact, just 4-5 years before the 2015 election that brought Daw Aung San Suu Kyi’s party to power, there were only 2 four or five-star hotels of international calibre. Today you will find more than 30.
As an investment destination, Myanmar is incredibly attractive. Its population is youthful, eager to learn and full of enterprise. It is already attracting the attention of manufacturers looking to diversify their supply chains. Furthermore, it is resource-rich.
Infrastructure and communications are lacking and so is a banking and financial system of international standing. There are plans by the government to invest in these areas. There are also plans to privatise state firms. While India companies have a 25 per cent market share in the telecom sector, China leads infrastructure development by far due mainly to its Belt and Road Initiative. In comparison, between 2011 and 2019, India’s share of foreign investment in Myanmar was a mere 3.7 per cent as reported by BusinessLine.
India’s exports to Myanmar grew almost 25 per cent in the fiscal year 2018-19 compared with a year ago. However, trade in the opposite direction declined some 18 per cent. Overall USD1.7 billion worth of goods were changed hands. Myanmar ranks a lowly 58th place among India’s trading partners whereas India is Myanmar’s 5th largest trading partner. Only China, Thailand, Singapore, and Japan are ahead of it.
India mainly exports pharmaceutical products, electrical and electronic products, iron and steel, vehicles and parts, and mineral fuels to Myanmar and imports mostly agricultural products, fishery, and forestry and wood products.
Recognising the potential for Indian businesses in Myanmar, there have been various attempts to cement trade ties with its neighbour.
The latest being just last week when the PHD Chamber of Commerce and Industry organised an interactive webinar titled “India-Myanmar Business Promotion, Challenges and Opportunities Post COVID-19”. Distinguished delegates and panellists from both countries attended with the aim to strengthen mutually beneficial business partnerships.
As reported by Myanmar media house Mizzima, when the Indian Ambassador to Myanmar, Mr Saurabh Kumar, addressed the attendees, he emphasised the maintenance of high-level exchanges over the past few years and affirmed that the momentum should be carried forward. He added that Myanmar has been an important centre of exchange of trade and business for India as it is a land bridge between India and countries of Southeast Asia. While India-Myanmar shares trade relations in many areas, post-COVID-19, they can expand their trade relations in areas such as pharmacy, healthcare, transport, food processing, steel, renewable energy, communication and education.
His counterpart, Mr Moe Kyaw Aung, Myanmar’s Ambassador to New Delhi, India, continued that India and Myanmar share trade relations in energy, infrastructure, health, transport and communication. He emphasised that India has been an important country for Myanmar. He also briefed the attendees on steps and measures taken by the Myanmar government to control the spread of COVID-19. He further said that post-COVID-19, there will a lot of business and trade exchanges that will benefit businesses and companies in both countries to help them bounce back and grow in the future.
Other delegates called for improvements in air, land, and sea connectivity to boost relations and globalisation which can help lead both countries out of the COVID-19 economic slump.
They further added that although COVID-19 has created a challenging business and economic environment for all, they should look past the pandemic and focus on what can be done together to lift businesses in both countries post COVID-19 with the Indian pharmaceutical industry expected to play a leading role.