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Editors Note

ACUMEN enters into its second month as the political and economic changes in
Myanmar keep on coming. President U Thein Sein landed a major diplomatic coup
in May, as the United States announced its intention to lift a longstanding ban on
imports from Myanmar coinciding with his visit to Washington, the first such
appearance by a Myanmar head of state since 1966. The steady flow of foreign
interest in Myanmar shows few signs of abating; General Electric announced its
intention to make investments totalling half a billion US dollars over the next few
years. But as ever, the attitude of most would-be foreign investors is still tinged with
caution, a sentiment that has been reinforced by ethnic tensions spilling over into
violence in recent months and corruption allegations leading to the reassignment of
at least one prominent minister, among other occurrences.
This issue of ACUMEN takes a look at many of these issues, in the form of
features on the relationship between conflict and economic growth and the pernicious
problem of corruption. We take an in-depth look at the prospects for Myanmar's
garment sector, as well as the issue of extractive industry transparency and the
ASEAN common market that is set to go into effect - at least in part - in 2015. What
is certain about Myanmar today is that the narrative of exuberant growth and
democratic opening popularised in the West has come into question as of late. While
Myanmar's recently-forged economic ties with the outside world are not likely to
recede entirely, lingering governance issues have casted doubt on the prospect of
Myanmar's trajectory to prosperity occurring in a linear fashion.
But in uncertain times, it falls upon the Fourth Estate to tell Myanmar's
story to the world, even if that story is not resoundingly positive on all counts. The
press is a critical tool for promoting transparency - especially in an environment in
which transparency cannot be taken for granted - and, as we hope has been reflected
in our editorial stance thus far - ACUMEN strives to provide its readership with high-
quality, incisive and critical content every month. Last month was a success - and
hopefully what we've managed to put together this month is even better. A
CEO / Chief Editor
Dr. Htet Zan Linn
Director
Dr. Hein Thu Aung, Tin Tun Kyaw
Executive Editor
Phyo Wai
Editor English Edition
Alex Bookbinder
Editors
Hein Zaw, Khin Win, Su Le` Nandar
Contributors
Danielle Bernstein, Naing Thit, Vincent MacIsaac
Reporter
Nang Aye Chan Moe
Designers
Aung Aung (AN Computer), Thaw Tar Oo
Computer Operator
Zin Wai Wai Shein
Marketing Department
January Khine Mon, Naw Keziah, Yadanar,
Nan Mo, May Hsu Mo Mo
Cover Photo
Aung Kyaw Moe (New Image)
Photographers
Hla Maung Shwe, Aung Kyaw Moe (New Image),
Han Saw, Alex Bookbinder, Christopher Symes,
Hein Zaw
Publisher and Copyright
Dr. Htet Zan Linn
Printer
Editorial Board
ACUMEN
myanmarb2b@gmail.com
ceo@myanmarb2bmagazine.com, management@myanmarb2bmagazine.com,
editor@myanmarb2bmagazine.com, marketing@myanmarb2bmagazine.com,
Advisors Advisors Advisors Advisors Advisors
Prof. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet (Senior Advisor, UN Resident Coordinator's Office)
Dr. Maung Mg Thein Dr. Maung Mg Thein Dr. Maung Mg Thein Dr. Maung Mg Thein Dr. Maung Mg Thein (Ph.D. (Law), LL.M., LL.B., B.A.(Law), ANZIIF (Australia), Pg. Dip in Applied Psychology)
Prof. Maw Than Prof. Maw Than Prof. Maw Than Prof. Maw Than Prof. Maw Than (Rector (Ret), Yangon Institute of Economics Yangon)
Soe Tint Aung Soe Tint Aung Soe Tint Aung Soe Tint Aung Soe Tint Aung (Special Consultant for Advocacy, PSI Myanmar)
Dr. Tun Lwin Dr. Tun Lwin Dr. Tun Lwin Dr. Tun Lwin Dr. Tun Lwin (Consultant, Myanmar Climate Change Watch,Tun Lwin Foundation)
Than Lwin Than Lwin Than Lwin Than Lwin Than Lwin (Deputy Governer (Ret), Central Bank of Myanmar)
Tin Zan Kyaw Tin Zan Kyaw Tin Zan Kyaw Tin Zan Kyaw Tin Zan Kyaw (Principal, Device Business Management Academy)
Grace Swe Zin Htaik Grace Swe Zin Htaik Grace Swe Zin Htaik Grace Swe Zin Htaik Grace Swe Zin Htaik (Media Advocacy Advisor, PSI Myanmar)
Office
No. 24/26, 4B-C, Race Course Condo, South Race Course Street, TAMWE TOWNSHIP, YANGON
Tel : (+959) 420033355
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ACUMEN 11
The transition
process is al-
ways fraught
with danger,
and there are
risks we cannot
avoid. But I
know what my
country and my
people are like.
I understand
that they ex-
pect this transi-
tion to democ-
racy to be suc-
cessful.
President U Thein Sein
May 22th, 2013 (The Mirror
Newspaper)
We need to identify international partners that are willing
to help Myanmar develop. This is the only way we will be
able to move forward in a meaningful sense.
U Tin Naing Thein
Minister of National Planning and Economic Development
~., . . . ..~ ,q~ ~ ~ The Flower News :,. ~~ , ~. ~ ~, .|
...~~:......:.~..qqq, ..~,..:. ~.~:.~~_.e:..:.q~..'
.~. ...:. ..|.. .~:~ . ~ .~ ,
The Thilawa Special Economic
Zone is the first - and most important
- SEZ in Myanmar, and will serve to
bolster Myanmar-Japanese relations.
It will provide Myanmar with job op-
portunities, new technologies and an
influx of investment.''
U Hsat Aung
Chairman
Thilawa SEZ Management Committee
~., . . . ..~ ' q~ ~ ~ ._~.. ..~. ..:.| . ~~|. . ~ , . _., .:~ . ~ ~ .. . .
., ~ . ~ . .. . ...|. .~.~:. ~~_ .e: ._ ' .~. .. .~:~ . ~ .~ .,
"A TIFA (Trade and Investment Framework Agreement) would make sure that
our countries engage regularly on trade and investment - identifying issues that
are important to us both, looking for opportunities and solving problems. A
TIFA would be an important step in normalizing our bilateral commercial rela-
tionship."
Demetrios J. Marantis, Acting US Trade Representative, in an address at the American Center, Yangon,
April 26, 2013.
oices
V
News in Brief
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July 2013
News in Brief
14 ACUMEN www. myanmar b2bmagaz i ne. com
Multimedia Showcase on Myanmar Launched
go on sale worldwide in December 2013,
according to Editions Didier Millet, the
publishing house behind the project.
The photographers who will be partic-
ipating in [7 days in Myanmar] have been
selected after a careful study of their
photographic backgrounds, said Melisa
Teo, a professional photographer who
has published photos for National Geo-
A press conference held at Yangons
Chatrium Hotel on April 27
th
saw the
announcement of the 7 Days in Myan-
mar project, a multimedia showcase
that will be produced by 30 award-win-
ning multimedia journalists and photog-
raphers from Myanmar and abroad. The
organizers expect to produce a photo-
book through the project, which is set to
graphic and other outlets. Media relat-
ing to Myanmars natural environment
and cultures will be the projects prima-
ry emphasis. U Aung Thura, a local
photographer selected as a participant
in the project, feels that while the it will
serve as an important platform for local
photographers, the contributions by in-
ternational photographers are important.
To make the world know about the
changes and developments that are tak-
ing place in Myanmar, he said, its good
that we have photos from international
professionals as well, as theyre better
than what local photographers can pro-
duce. Projects similar to 7 Days in My-
anmar have been launched in other
Southeast Asian countries, including Sin-
gapore, Indonesia and Thailand. The
photography project is being made pos-
sible through the contributions of numer-
ous local and foreign backers, including
Chatrium Hotels, Chevron, Loi Hein
Group, City Mart Holdings and Myan-
mar Brewery, Ltd., along with media
partners Ignite Marketing and SkyNet. A
Venture to provide much-needed economic information about Myanmar
The Directorate for Investment and Com-
pany Administration, the government
body which oversees foreign investment
in Myanmar, signed a memorandum of
understanding on May 11 with Oxford
Business Group, an international eco-
nomic research and publishing firm, to
produce a comprehensive study on the
prospects for foreign investment in
Myanmar. The book issued by the ven-
ture should serve as a reliable source of
information in what has been, up to now,
a highly opaque investment climate for
forei gn i nvestors to operate i n.
[Myanmars process of economic reform]
has attracted substantial attention from
foreign multinationals, as well as SMEs
(small-and-medium enterprises), said U
Aung Naing Oo, DICAs Director-General.
94 foreign investors came to Myanmar
over the past year, particularly from the
hotel industry and other businesses in
the service sector. The book will make
information gathered through research
undertaken over the past year available
to prospective foreign investors, accord-
ing to Stephanie Harl, Business Director
at Oxford Business Group. Myanmar has
re-entered the global economy at last,
and we are very glad to have the oppor-
tunity to work in this golden land, she
said. According to Oxford Business
Groups research, Myanmars economy
is set to grow at least five percent per
year for the next 20 years. A
ACUMEN 15
Ford enters Myanmars burgeoning
automobile market
Ford Motor Company, one of the world s largest auto
manufacturers, has entered into a partnership with local firm
Capital Diamond Star to market and distribute its products in
Myanmar. At a press conference held April 30 at Yangons Inya
Lake Hotel, Ford announced its intention to sell a full range of
cars and trucks in Myanmar by the fourth quarter of 2013. Ford
will strive to provide extensive employment opportunities for
local people and will train new employees in quality-assurance
and customer service practices, claimed David Wester-man, Fords
Export and Growth regional manager for the Asia-Pacific Region.
Ford will provide comprehensive after-sales service through
a nationwide network of dealerships, said U Ko Ko Gyi, the CEO
of Capital Diamond Star. Fords first showroom in the country
will be located on Insein Road, in Northern Yangons Hlaing
Township. Among the most important products for Ford in
Myanmar will be the companys popular line of F-Series pickups,
which are among the best-selling trucks in their class in the United
States. Ford is the first US automaker to have an official presence
in Myanmar, and US Ambassador Derek Mitchell was present at
the historic event. Ford is making its investment in Myanmar on
the recommendation of the US government, said Westerman. A
Parkson FMI, Yangons Parkson FMI, Yangons Parkson FMI, Yangons Parkson FMI, Yangons Parkson FMI, Yangons
first international first international first international first international first international
department store, opens department store, opens department store, opens department store, opens department store, opens
for business for business for business for business for business
Malaysias Parkson Asia Retail Ltd.,
which operates a number of high-end
department stores throughout Asia,
i naugurated i ts fi rst branch i n
Myanmar on May 11. The 43,000
square-foot outlet, built in cooperation
with local partner Yoma Strategic
Holdings, is located in Yangon s
Pabedan township in between two
hallowed icons of commerce, the
Bogyoke Aung San and Theingyi
Markets. Parkson FMI offers Myanmar
shoppers international cosmetics and
perfumes from international brands, as
well as a full range of mens and
women s apparel, j ewellery and
household goods. Many of the brands
sold by Parkson FMI, including
Lancme, Gucci, Coach, Lacoste and
Tommy Hilfiger, have never been
officially imported to Myanmar before.
A food court, serving a wide variety
of international cuisines, is located in
the basement of the department store.
Through the full suite of services the
facility offers, Parkson FMI fills a new
ni che i n Myanmar retai l i ng: a
department store which, aside from its
role as a high-end retail outlet, serves
as a destination in its own right. As a
leading department store in Asia,
Parkson strives to satisfy its customers
by providing quality goods, top-notch
service and reasonable prices, said
Tham Tuck Choy, the stores managing
director. A
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July 2013
Cover Story
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ACUMEN 17 ACUMEN 17
18 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Work model of its own, but steps are being taken to prepare
for it, Marshall said. Essentially, what everybody has agreed
is that at this stage it is too early to introduce a Better Work
type scheme here because the legal structures do not exist
for it, he added, citing the absence of a minimum wage law
and a lack of occupational health and safety regulations as
examples.
Laws addressing these concerns are pending, however,
and are expected to be passed during Parliaments next session,
which begins on June 25.
W
estern garment and footwear brands are
conducting due diligence on individual
Myanmar garment factories, the industry as a
whole and the governments political and
economic reform process as they continue to scour the globe for
the latest source of inexpensive - but productive - factories they
can outsource production to.
Officials and industry representatives say that the Western
brands are drawn by the easing of sanctions on imports to key
markets, a new legal framework that establishes basic workers
rights, and nascent efforts to improve working conditions at
factories.
Foreign producers expect that production costs in Myanmar
will fall as access to reliable electricity improves; economic
reforms should also serve to drive down the cost of freight,
telecom and conducting financial transactions .
The depreciation of the Kyat - hitting new lows against the
US dollar - also adds to the excitement.
Myanmars high unemployment rate and low wages are
another draw. Of the countrys roughly 60 million people, labour
force participation sits at only 67 percent, according to Dr. Than
Win, Director-General of the Ministry of Labours Department
of Labour Relations. His department has been at the forefront of
revamping labour laws, most of which were drafted before
1950, to bring them into harmony with global standards.
The International Labour Organisation (ILO) has also been
busy. Steve Marshall, its liaison officer, said that several global
brands had contacted his office as part of their research on
Myanmar. Obviously they are concerned about reputational risk,
he said, adding that they are doing their due diligence, seeking
reports on broader human rights and also specifically on labour
market issues.
Global brands fled Myanmar a decade ago due to widespread
media reports of human rights abuses and the imposition of
sanctions by Western governments, tossing 80,000 garment
workers out of their jobs, according to the Myanmar Garment
Manufacturers Association. Marshall said he would not be
surprised if global brands started sourcing from Myanmar fairly
quickly, but preferred not to name the brands that had contacted
his office because it is a very competitive business.
Aside from the market factors that are making Myanmar
increasingly attractive to global brands, two key developments
are underway that could clean up the countrys image, and
possibly fuel the sort of social justice politicians like to talk about.
Myanmar is rewriting its labour legislation, while the ILO is
working with the Ministry of Labour, industry groups and
workers organisations to lay a foundation for establishing its
Better Work program in the garment industry (sidebar). This
will allow it to monitor factories for compliance with labour
laws and ILO conventions.
Myanmar is a few years away from establishing a Better
In this photo set, workers at various factories in Yangons Hlaing
Thar Yar township produce garments for export. Hlaing Thar
Yar is one of Yangons largest industrial zones, and is an important
site for light manufacturing, dominated by the garment business.
In this photo set, workers at various factories in Yangons Hlaing
Thar Yar township produce garments for export. Hlaing Thar
Yar is one of Yangons largest industrial zones, and is an important
site for light manufacturing, dominated by the garment business.
Cover Story
ACUMEN 19
Better Factories Better Factories Better Factories Better Factories Better Factories
The Better Factories model was initiated in Cambodia in 2001, following a trade agreement between
Washington and Phnom Penh that gave Cambodia better access to American markets in exchange for
improved working conditions in the garment sector. Trade negotiators refer to such agreements as trade
privileges or preferential access, but one buyer for a global brand described it differently. The Americans
were the first to discover their brands could get cheap labor in Cambodia, he said.
Still, the industry now employees about 500,000 Cambodians, and the value of garment exports hit
US$4.61 billion last year - up 9 percent from 2011. Garment exports account for about 80 percent of
Cambodias exports, according to the IMF. Before Better Factories Cambodia, the country had only 90
garment factories employing a total of about 100,000 workers. Last year, the Council for Development of
Cambodia - the equivalent of the Myanmar Investment Commission - approved the building of 12 more
garment factories with a total capital investment of US$499 million. Wages also rose last year from $61 to
$80 a month for a six-day work week. Real wages, including bonuses and overtime, push this up above
$120, in a country where the average teachers salary is roughly $30 per month.
The model has received scathing criticism from US academics and the Clean Clothes Campaign in
Europe over the past year, with both saying its monitoring reports whitewash ongoing problems. The
reports present a synthesis of data from all factories without publicly naming the individual factories that fall
short of compliance.
The programs country director, Jill Tucker, has managed to revamp Better Factories since assuming
her role in late 2011. At the time, the industry had a massive expansion of orders, which led to coerced
overtime and a rash of mass fainting incidents at factories. In early 2012 she told a forum on working
conditions in garment factories that other countries considering setting up such a model should ensure
complete transparency from day one, because Better Factories faced a backlash against attempts to publicly
name individual factories found to be in breach of ILO standards or Cambodian labour law. Following the
collapse of a shoe factory complex in April that killed two workers, however, Tucker has said the ILO
intends to name and shame factories that consistently breach ILO conventions and Cambodian labour law.
20 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Labour law reform is a prerequisite for attracting Western
brands to Myanmars factories, as they face pressure from unions
and human rights groups in the West to uphold labour standards.
They also fear that their carefully crafted brand images - the
main drivers of their profit margins - will be tarnished by an
association with the sweatshop label.
Legal moves Legal moves Legal moves Legal moves Legal moves
Despite its many contradictory and controversial sections,
the 2008 Constitution laid a foundation for a revamp of labour
legislation: section 24 of chapter 1 calls for the enactment of
laws to protect workers rights, and article 3 of section 354
enshrines the right to form associations and organisations.
Since then, two key pieces of legislation have been passed:
The Labour Organization Law of 2011 (promulgated in 2011, it
was not enacted until March 9, 2012), and the Settlement of
Labour Disputes Law, which was enacted on March 28, 2012.
These acts enshrine the right to collective bargaining, allow
unions to form, require employers to recognize them and make
it legal for workers to strike.
Employers are also allowed to lock out staff during disputes,
though limits are placed on both strikes and lockouts. Pending
labour legislation includes four key bills on social security, the
minimum wage, workers compensation, as well as employment
and skills development. The Payment of Wages Act, Factories
Act and Leave and Holidays Act are also set to be amended,
according to Dr. Than Win.
Marshall described the process of drafting and fine-tuning
these laws as collaborative and excellent. The labour ministry
is also receiving technical assistance from the European Union,
trade-related agencies of Western governments seeking bilateral
deals with Myanmar, and Western brands seeking to source
20 ACUMEN www. myanmar b2bmagaz i ne. com
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Cover Story
ACUMEN 21
from Myanmar factories.
The ILO is aiming to coordinate this. It is helping develop a
legal framework for the industry, to establish enforcement
mechanisms, and help build more responsive institutions for
factory owners and trade unions alike. A major goal, according
to Marshall, is developing industrial relations that are
cooperative rather than confrontational.
He is betting that this can be achieved by ensuring
constructive social dialogue between factory owners and
workers so that the interests of both sides are taken into account
in the decision-making process. It is a goal he acknowledges
will be tricky to pull off in a country that has recently emerged
from 50 years of military rule.
This country has basically been an orders-based
environment. Orders were issued, orders were received, orders
were passed on and orders were obeyed, Marshall said. This
applied in all environments, including the workplace.
An internationally-competitive garment sector will require
this attitude to shift, and those working to achieve this are under
no illusions that it will be easy. The timing may be right for a
swift change in social attitudes to occur. Aside from ongoing
political and economic reforms, Myanmar has a demographic
advantage: about half the population is under the age of 25. The
emergence of an independent trade union movement could
also help ensure that the rhetoric of reform is at least partially
realized.
The system of organized labour is actually a very important
part of the social fabric in the development of a democratic
society, but there will always be disputes between capital and
labour, Marshall said. But what we got to try and do is get
people to understand is that workers need employers as
much as employers need workers. And it is very important
ACUMEN 21
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July 2013
that they build a relationship in which the respective interests
of both parties are taken into account in the decisions that are
made.
A competitive industry is in the interests of both owners
and workers, said Marshall. An unprofitable company does
not employ staff so we have make sure that companies can
be competitive and maintain profitability, and that is achieved
not on the back of low wages but on its back of high productivity,
high quality, low waste, less rework , he said.
He believes that Myanmars advantage is that it is starting
from scratch, which will allow the formation of effective unions
and industry associations as wells as a collaborative approach
to creating a garment sector that benefits both. I actually believe
[starting from scratch] creates opportunities, which if we are all
clever we could actually use for very useful ends in terms of
developing not just the economy, but as a tool for supporting the
development of society, because what goes on in the work is a
microcosm of what goes on outside, he said. If we can develop
those attitudes [of inclusiveness and collaboration in the
workplace] then you can see them develop more broadly in
society.
Ri sks? Ri sks? Ri sks? Ri sks? Ri sks?
Although Myanmars garment industry is close to gaining
direct access to Western markets, it does face several hurdles.
Exports of garments are expected to near $1 billion this year,
with the lions share going to Korea, Japan, China and Hong
Kong. It is an open secret that Myanmar garments are already
selling in Western retail shops after being repackaged in China,
but direct access would allow manufacturers here to move up
the value chain and improve their access to high-end markets.
They will face pressure from human rights groups, who
will seek to tie access to markets with changes they want to see
here. US-based Human Rights Watch is the most vocal on this
front, and has called for more reforms before preferential trade
status is given.
If the US moves too fast, it will undermine the ability of the
US government to push for improved respect for labour rights,
Human Rights Watch said in a statement in late April. The
statement did not note, however, that activists in the United
States have accused some of its state governments of turning
prison labor into an industry.
Perhaps the biggest risk facing Myanmars garment industry
is a possible failure of the peace process. The peace process is
absolutely critical, said Marshall. Everything is contingent on
it. He is confident that the desire for peace is universal. We
deal closely with all the non-state armies [they] are not just
going to roll over and accept everything, but they have a desire
for peace, he said. The government also understands that
having a semi-democratic, semi-developed Myanmar with eight
civil wars going on the outside is not the model they are looking
to achieve.
While the future of Myanmars garment industry may hinge
on stitching together a peace deal, the rebranding that has
already occurred has caught the eye of global brands.
The opportunities are huge, said Marshall. You have to admire
the courage of the people to grab this opportunity. A
Many of Myanmars recent labour
reforms have been the result of con-
sultations with the International Labour
Organization, whose Director-General,
Guy Ryder, is pictured here.
- DGEMPL/Flickr
Cover Story
26 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
I
n his address at Yangon University last November, US President Barack Obama
stated his belief that the governments ongoing process of reform will [not] succeed
without national reconciliation. This statement, and the public forum in which it was
made, underscores the threat to stability and prosperity posed by Myanmars ongoing
ethnic conflicts, and the increasing attention paid to them in the international arena.
Feature
26 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
By Phyo Wai
ACUMEN 27 ACUMEN 27
Since President U Thein Seins government came to power in April 2011, it has had to
balance three difficult, delicate and often contradictory priorities: political and economic
reforms, as well as launching a peace process with Myanmars restive ethnic minorities.
These reforms are interdependent: peace and stability are crucial for democratic norms to
deepen. Democracy and transparency will, in turn, facilitate Myanmars economic development.
As foreign investment is likely to flood into Myanmar in coming years, the absence of
internal peace could prove to be a serious challenge to the staying power of recent reforms.
28 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Federalism - the solution? Federalism - the solution? Federalism - the solution? Federalism - the solution? Federalism - the solution?
Ever since Myanmar gained independence from Britain in
1948, the country has been beset by civil war. Myanmars myriad
insurgencies are widely considered to comprise the longest-
running civil war in the world, a complicated pattern of internal
conflict that has involved ethnic armies and communist insurgents
over the years. Few pathways to national reconciliation are in
sight.
Myanmars ethnic peoples have long demanded equality,
and have advocated for Myanmar to become a genuinely federal
state granting them a modicum of self-determination under the
law. These demands have been raised by the ethnic leaders
in our talks with them, said U Hla Maung Shwe, an advisor to
the President who is acting as a mediator in the peace processes.
And I think, he said, all these demands are sensible.
These demands have a historical basis in the Panglong
Agreement, the first abortive effort to establish a federal state,
led by martyred nationalist leader Aung San in the late 1940s.
Ethnic leaders claim that successive military regimes have
ignored the spirit of Panglong in their dealings with ethnic
minorities. Armed uprisings, including that by the KIA (Kachin
Independence Army) are, simply,the result of the governments
failure to honour it [Panglong], said Kachin Nationalities Advisory
Committee member NHtung Hka Naw Sam. They [the
government] still insist on [maintaining] a unitary form of
administration.
Different ethnic groups conceptualise the notion of a federal
system differently. To us, its a system that ensures peace and
equality, said Mahn Aung Pyi Soe from the Karen-ethnic Phalon-
Sawaw Democratic Party. I believe that a federal system will
allow Myanmar to become a prosperous nation.
Nai Min Kyaw Win, an official from the Mon Democratic
Party, noted that many in Myanmar fear federalism, which raises
the spectre of secession from the Union of Myanmar, he said.
I am in favour of promoting the development of a genuine
Union along federal lines - which I firmly believe will bring
peace.
Aside from Panglong, there have been other dalliances with
federalism in Myanmars political past. In the time of Prime
Minister U Nu, representatives of various indigenous races took
part in a conference on federalism, U Win Tin, a veteran
journalist, former political prisoner and high-ranking member
of the opposition National League for Democracy, told ACUMEN.
The consensus was that some sort of federal system needed
to be established, whereby judicial power would be vested in
the central government and most other powers would be
devolved to the states and divisions. But this did not happen,
as in 1962, General Ne Win used it as pretext for the coup
which toppled U Nu, ushering in direct military rule, he
explained.
To many people in Myanmar, both in the government and
among the general public, the association between federalism
and secession is a deep-seated one. But the reality is more
complicated. Above all, it is an avenue for self-determination
without secession and most ethnic armed groups have officially
dropped demands for sovereignty as a result.
But federalism is not perfect. Federalism alone is by no
means a cure-all, claims Dr. Sein Sein Thein, an NLD
representative from northern Shan State. Regional governments
working separately from one another just wont work. Myanmar,
sandwiched between its two giant neighbours, is in danger of
being influenced or even engulfed by either of them. The problem
of Chinese influence in Shan State is particularly worrisome.
Federalism is still an issue of national security, she claimed. At
(Left/Upper Right) Kachin
Independence Army soldiers
wait in anticpation of
government attacks. Lajaiyang, ,
Kachin State, January 2013 -
Christopher Symes/Alex
Bookbinder
Feature
ACUMEN 29
clash of interests between the government which owns 70
percent of the resources in the state - and the Kachins, who are
reluctant to part with the natural resources on their land without
receiving a fair share. This is the essence of the resource curse.
The phenomenon of natural resources fuelling internal conflict
exists in other countries, as well. In Africa, theyre fighting for
diamonds, said U Myo Yan Naung Thein, director of Bayda
Institute. In Myanmar, natural resources such as teak - are
being sold abroad by the government as well as by non-state
armed groups.
Towards a durable peace Towards a durable peace Towards a durable peace Towards a durable peace Towards a durable peace
To a certain extent, President U Thein Seins government
has made an effort to secure peace in Myanmar once and for
present, ethnic conflicts are still going on. So federalism is not
the solution. Our people are not ready for democratization, as
we are not unified. As the saying goes, if there are two people
theyll form three groups the inability of Myanmar people get
united towards a common goal is well-documented.
Myanmar is rich in natural resources, including gemstones,
oil, minerals, and forestry products. Armed conflicts across
Myanmar, between various non-state armed groups and the
central government, are rooted in the fact that minorities have
historically benefited little from the bounties of their land.
For example, U Win Tin explained, the people of Rakhine
State should have the right to decide, at least in part, what
happens to revenues from the offshore natural gas projects in
their backyard. Armed clashes in Kachin State are essentially a
(Above) Recently felled timber at the Port of Yangon.
30 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
all. Were trying to bring about peace that will endure for a
long time and make national reconciliation possible. The peace
process takes place on a number of levels: first, both sides meet
at the state level to negotiate a ceasefire, the President said in
a recent statement. Both sides must stay in agreed-upon areas,
and arrangements can be made for a second round of
negotiations at the national level. There will be no political
dialogue at first, but a genuine desire for peace will make these
negotiations run smoothly, he said.
He subsequently explained that Union-level negotiations
are intended to extract promises from non-state armed groups
to accept the Three Main Causes (non-disintegration of the
Union, non-disintegration of national solidarity, perpetuation of
sovereignty), to cooperate on economic development, and the
eradication of narcotics. As well, Union-level dialogue is intended
to normalise the status of armed groups by allowing them to
form political parties and participate in national political life.
The constitution allows for the country to have only one armed
forces, which may prove difficult when it comes to disarmament.
At the third stage, all political players in the country the
government, ethni c l eaders, pol i ti cal parti es and
hluttaw(parliamentary) representatives will sign the
agreement, U Thein Sein said. These three stages constitute
the governments roadmap to eternal peace in the country.
The government will have to tread delicately in its dealings
with ethnic armed groups, says Dr. Aye Maung, the chairman
of the Rakhine Nationalities Development Party and a hluttaw
representative. Just as a physicians skill is important for curing
a disease, so is the skill of a peacebroker. Effective mediators
need to be trusted by both sides.
Naypyidaw has managed to secure ceasefires with some
armed groups, but in the absence of a political solution, military
conflicts are most likely to continue, according to analysts. These
negotiations can be successful in bringing about ceasefires, but
because armed conflict is just politics by other means, if political
problems persist, the chance that armed conflict will break out
remains a possibility, said Dr. Min Zaw Oo of the Myanmar
Peace Centre, an organisation that has taken an active role in
the peace process. Our country has more than 20 armed groups,
explained U Hla Maung Shwe. In no other country has there
been a government that has tried to settle that sheer number of
insurgencies. But well try our best to achieve peace.
A fledgling democracy in a raging storm A fledgling democracy in a raging storm A fledgling democracy in a raging storm A fledgling democracy in a raging storm A fledgling democracy in a raging storm
Recent communal violence in Myanmar of a religious and
racial nature underscores the problems Myanmars reformist
government faces as the country transitions from a dictatorship
to a democracy. Myanmars rapid opening to the outside world
has served to reignite sectarian hatreds. These disturbances
may pose a threat to the countrys prospects for achieving true
democratization, and could hinder economic development.
As there are invariably a handful of hardliners behind this
violence, President U Thein Sein has called for the violence to
end and for Myanmars citizens to help build a democratic state.
When a problems arise, some people try to exacerbate them,
he said. Some work behind the scenes to incite violence, and
other actively participate in carrying it out. According to the
President, peace and stability are prerequisites for foreign
investment to come in.
U Aung Min
and Maj Gen
Htein Maung
at Karen affair
meeting in
Pha-An 2013
March 29.
- Hla Maung
Shwe
Feature
ACUMEN 31
Myanmars economy is like a car with a dead battery.
Pushing the car wont get you anywhere: what you really need
is a new battery from somewhere else, Dr. Aung Tun Thet, a
noted economist and member of the Myanmar Investment
Commission, explained. Thats the role that FDI will play in
Myanmars economy moving forward, and this is the way
Myanmar people should think. Myanmars business leaders
have been wishing a massive inflow of foreign capital for years
and for sanctions to be lifted. To a degree, the international
community has been responsive to these requests in response
to the reforms of the past two years. But trying to open up as
internal conflict rages on is like inviting guests into a home
wracked by domestic violence.
To be sure, some foreign investors have already made the
leap into Myanmars untapped economy, especially from
Myanmars neighbouring countries, but most are here just to
test the waters, so to speak, and think strategically about future
investment plans. Foreign investors are not philanthropists: they
are not going to risk large investments in a country where their
security cannot be assured. While theres no way of knowing if
Myanmars dictatorship-turned-democracy will revert back to
its old repressive ways, one thing is certain: if there is no peace
and stability in Myanmar, foreign investors will begin to look
elsewhere.
In February, The Voice Weekly quoted Union Minister U
Soe Thein claiming the government has made significant
headway when it comes to ending Myanmars insurgencies. By
negotiating ceasefires, entering into constructive dialogue with
armed groups and holding a conference of nationalities in
Myanmar, we believe that we will be able to achieve a
comprehensive peace plan by 2015. His statement underscores
the importance of U Thein Seins efforts throughout his tenure
in office; if the governments efforts succeed, the FDI needed to
jumpstart Myanmars economy may finally be forthcoming. A
When problems arise, some
people try to exacerbate them.
Some work behind the scenes to
incite violence, and others actively
participate in carrying it out.
President U Thein Sein poses with members of the Karen National
Unions executive committee. - Hla Maung Shwe
32 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Feature
By Hein Zaw
32 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
ACUMEN 33
Myanmar is gradually
undergoing a process of
profound reform. Some
foreign investors have
already made large-scale
investments, and more are
expected to arrive in short
order. Despite the general
spirit of optimism, corruption
and bribery cases are still
cause for concern. This
problem threatens
Myanmars development
prospects, and should be
addressed as a matter of
utmost urgency.
ACUMEN 33
34 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Corruption as it is today Corruption as it is today Corruption as it is today Corruption as it is today Corruption as it is today
Over the first few months of this year, a number of media
reports and articles were released about corruption and brib-
ery. Over 1,000 government employees were reprimanded for
corrupt practices, 16 customs officers were dismissed, and se-
nior officials in the Ministry of Communications came under
investigation. These scandals rightfully provoked public out-
rage. While the governments response might appear to reflect
transparency and openness, these cases represent the tip of
the iceberg, ac-
cordi ng to
some analysts,
who claim that
gover nment
employees who
bear the brunt
of the punish-
ment are those
on the lowest
echelons of the
bureaucracy,
and that rela-
tively fewer ac-
tions are taken
against corrup-
tion at the top.
In i ts
annual Corrup-
tion Perceptions
Index (CPI),
Transparency
Int ernat i onal
(TI), a Berlin-
based NGO
that monitors
public and pri-
vate sector cor-
ruption, ranks
Myanmar as the 172
nd
most corrupt country in the world, a
score worse than all but Sudan, Afghanistan, North Korea and
Somalia. Within ASEAN, Singapore is ranked as least corrupt
by TI.
Tea money culture Tea money culture Tea money culture Tea money culture Tea money culture
Bribery and corruption have become deeply rooted in
Myanmar over many years, and as such have become part of
Myanmar culture. They are seen as acceptable for getting things
done and buying influence. Tea Money, in particular, has
become a common euphemism for bribes used in everyday
language. Daw Khin Aye Than, an economist with 20 years of
teaching experience at foreign universities, isnt convinced that
these cultural traits are going to die out any time soon. Bribery
has become a habit with the people. They consider it a must-
do; nobody bothers to question why, she said. This is a long-
running problem, and its grown into a major one, but nobody
can be bothered to stop it.
Building a society that is intolerant of corruption will take
a while, says Dr. Aung Tun Thet, a prominent local economist.
If corruption is only in the blood, you can remove it by taking
the blood out, he said. But its deep in peoples DNA, its
embedded in their genes. The whole genetic engine, so to speak,
needs overhauling. He is not particularly optimistic, either.
Thinking about corruption, its just frustrating, he continued.
People have grievances about so many things and the countrys
administrative machinery is falling apart. Things dont function
very well, which leads people to show little respect for the
law.
Although corruption exists in the private sector as well as
within the government, government departments are likely the
most corrupt institutions in the country. The fact that people
have little faith in public institutions underscores the magnitude
of the social corrosion caused by corruption and bribery.
Is poverty the root cause? Is poverty the root cause? Is poverty the root cause? Is poverty the root cause? Is poverty the root cause?
As the old Myanmar saying goes, one cannot afford to be
moral on an empty stomach. Most people intuitively see a
correlation between corruption and bribery and the relative
Rank Ten Most Corrupt Countries Score
165 Haiti 19
165 Venezuela 19
169 Iraq 18
170 Turkmenistan 17
170 Uzbekistan 17
172 Myanmar 15
173 Sudan 13
174 Afghanistan 8
174 Korea (North) 8
174 Somalia 8
Rank Ten Least Corrupt Countries Score
1 Denmark 90
2 Finland 90
3 New Zealand 90
4 Sweden 88
5 Singapore 87
6 Switzerland 86
7 Australia 85
8 Norway 85
9 Canada 84
10 Netherlands 84
Result of CPI (2012) released by TI
organization
North Korea (left) and Somalia (right)
are at the bottom of the CPI -
but Myanmar is not far off
- EU Aid and Civil Protection/Flickr
Feature
ACUMEN 35
level of poverty in a country. In this country, making an
adequate living is difficult, said U Toe Hlaing, technical director
at MAGA Manufacturing Company, Ltd. Government employees
find it hard to live without outside income. The majority of
educated people in this country agree, but a comprehensive
analysis of the factors at play still needs to be done.
The backward state of Myanmars economy makes it
difficult for people to earn enough for food, clothing and shelter,
which invariably leads them to resort to corruption and bribery.
But how do things function in other countries? Corruption is a
fact of life everywhere in the world to varying degrees, even
in the United States, the worlds sole economic superpower.
But in developed countries, there is generally a healthy system
of checks and balances in place to tackle corruption. There is
a correlation between per capita income and corruption
perceptions: highly advanced and wealthy states, such as
Singapore, Australia, and Switzerland, are in the top 10 in terms
of income and the bottom ten when it comes to corruption.
South Korea, despite the fact that is a prosperous, has always
had its fair share of corruption to contend with. Income levels
5
1
0
1
5
2
0
2
5
3
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Corruption Perceptions Index (2003-2012) for Myanmar
36 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
and corruption are related to a certain
extent, but low incomes alone cannot
explain the pervasiveness of corruption
i n Myanmar. Many government
employees are not corrupt, despite their
low salaries and their exposure to the
structural factors that breed corruption.
Many high-ranking officials, however,
cannot resist the temptations of outside
money.
Power and responsibility Power and responsibility Power and responsibility Power and responsibility Power and responsibility
The element of power is crucial to
understanding corruption, said U Min
Sein, a high court lawyer. Historically,
nobody dared question those in positions
of power and authority. If, for example,
it became known that an official took a
bribe, it would be impossible to report it
to a higher authority, as the next level
up would also be complicit in accepting
bribes. When systemic abuses of power
become normalised, the problem of
bribery thus becomes a cancer that
pervades the entire system.
It is commonly perceived that these
kinds of practices are rampant on all
echelons, from top to bottom, including
in law enforcement. This does not
engender much trust towards
government departments across the
board.
The current government has only
been taking action against people
responsible for corrupt practices between
2010 and 2012, said U Than Maung, a
high court lawyer from Sittwe. There
was a lot of corruption going on before
then, as well. Weve had to deal with the
devastating effects of corruption for the
past 20 years now. The ascent to
prominence by the cronies over the
past two decades - businessmen that have
profi ted off of cl ose ti es to the
government - are a case in point. The
people in charge claim that American
sancti ons were responsi bl e for
corruption but paradoxically, weve
seen the emergence of millionaires and
billionaires in Myanmar. This indicates
that its impossible to isolate one issue
as being responsible for the problem. Its
a case of so many things being wrong
on all levels.
Tradition exploited Tradition exploited Tradition exploited Tradition exploited Tradition exploited
Giving presents and paying respects
to teachers and elders are cultural
traditions that need to be preserved as
Myanmar modernizes. But over time, the
significance of these traditions has
changed as money has come into the
equati on; gi ft-gi vi ng has become
synonymous with buying influence. Put
simply, Myanmars cultural traditions are
being exploited. Since gift-giving is part
of Myanmar culture, I would have no
problem with my students coming to pay
respects after they graduate, said Daw
Khin Aye Than, the economics professor.
There is no obligation for teachers to
reciprocate by handing out high grades.
These gifts arent bribery: they are part
of traditional Myanmar culture. But there
need to be limits. Expensive gifts, like
cars and jewelry, arent acceptable. These
are, in practice, more than gifts; gifts
should just be small tokens of gratitude.
Effects of corruption Effects of corruption Effects of corruption Effects of corruption Effects of corruption
Corruption and bribery adversely
affect Myanmar s prospects for
modernization and accountability, and
petty corruption affects the functioning
of government offices and how they are
able to deal with the public. But despite
recent steps to improve accountability
and transparency, the public is fed up
with the slow pace of change, says Dr.
Aung Tun Thet. It takes a week for a
document to go from one desk in an office
to the next. Under the new government,
while things have improved, problems
remain. Continued corruption and
bribery may result in a backlash against
recent reforms. Recent disturbances in
Rakhine State, for example, have raised
questions about how the government has
handled citizenship issues. Corruption
disproportionately impacts the poor, as
they are made to pay the same bribes
for the same services as rich people are.
Feature
ACUMEN 37
Continued corruption can also
tarnish Myanmars image as a reforming
state in the eyes of the international
community. A lack of international faith
and trust in Myanmars reform process
has already held back foreign investment
and international economic engagement.
There will be no investment in a
corruption-ridden country, said Dr. Aung
Tun Thet, because potential investors
are aware that their investments will only
be enjoyed by a handful of people at the
top. This extends to the aid sector as
well: Myanmar receives a paltry amount
of foreign aid just eight dollars per
capita.
Good governance, clean government
- these are the buzzwords President U
Thein Sein has employed in his major
policy speeches, and they have struck a
chord with Myanmar s population.
Whether or not the rhetoric matches
concrete action remains to be seen.
But the government does, at least
superficially, seem to be committed to
stamping out corruption. On January 8,
a commission to end corruption and
bribery was founded, and will be led by
Vice-President Sai Mauk Kham. The
following month, Parliament passed
comprehensive legislation that stipulates
harsh penalties for people found to be
engaging in corrupt practices.
A major point of contention has been
government officials lack of openness
about their personal assets, and on this
count Parliament has not been as
responsive. A motion demanding that
government officials declare their assets
was defeated in Parliament late last year,
which will invariably compromise the
sticking power of recent reforms.
Common wisdom suggests that
corruption in Myanmar reached a zenith
under previous military governments, but
this is not necessarily the case. Things
today are arguably much worse than they
were during the Ne Win regime, when
opportunities for corruption were more
limited. The period of SLORC/SPDC rule
between 1988 and 2010 was arguably
the most corrupt in Myanmars history,
and it is this legacy that the current
government must make a concerted effort
to undo. It is clear that previous military
governments fostered a climate of
corruption, said U Than Maung. Those
governments were not governments for
the people, especially the regime that
immediately preceded the current
government. It is demoralising to see
Myanmar lagging behind while other
countries make tremendous strides
forward.
How to go about reform How to go about reform How to go about reform How to go about reform How to go about reform
Anti-corruption campaigns cannot
be static: rooting out corruption needs to
be an ongoing process. We need an
action plan, Dr. Aung Tun Thet said. In
the past, close relationships between
businesses and government were normal,
and bribing government officials for
contracts was commonplace. These
dealings need to be made transparent in
order to prevent bribery and it is up to
all government departments to be
responsible for their own disclosures.
U Than Maung feels that no matter how
good the legal framework gets, the greed
inherent to human nature will always
reign supreme. Laws dont necessarily
need correcting, but men do, he said.
You cant reform anything when the
peopl e who are entrusted wi th
maintaining the social contract have no
external checks and balances on their
impunity. All of those responsible law
enforcement officials, businessmen,
parliamentarians, etc., must act in a fair
and just way.
Dignity and humility need to play a
part in stemming corruption, according
to some thinkers, and people in Myanmar
need to start looking at bribes as personal
assaults against their integrity. The media
may al so have a rol e to pl ay i n
normalising non-corrupt practices, and
expose corruption when it occurs. First
and foremost, societal attitudes towards
corruption need to change, and this will
only occur if people on an individual
level refuse to pay or accept bribes. A
A lack of international
faith and trust in
Myanmars reform
process has already
held back foreign
investment and
international economic
engagement. There
will be no investment
in a corruption-ridden
country, said Dr. Aung
Tun Thet, because
potential investors are
aware that their
investments will only
be enjoyed by a
handful of people at
the top.
ACUMEN 33
Myanmar is gradually
undergoing a process of
profound reform. Some
foreign investors have
already made large-scale
investments, and more are
expected to arrive in short
order. Despite the general
spirit of optimism, corruption
and bribery cases are still
cause for concern. This
problem threatens
Myanmars development
prospects, and should be
addressed as a matter of
utmost urgency.
ACUMEN 33
34 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Corruption as it is today Corruption as it is today Corruption as it is today Corruption as it is today Corruption as it is today
Over the first few months of this year, a number of media
reports and articles were released about corruption and brib-
ery. Over 1,000 government employees were reprimanded for
corrupt practices, 16 customs officers were dismissed, and se-
nior officials in the Ministry of Communications came under
investigation. These scandals rightfully provoked public out-
rage. While the governments response might appear to reflect
transparency and openness, these cases represent the tip of
the iceberg, ac-
cordi ng to
some analysts,
who claim that
gover nment
employees who
bear the brunt
of the punish-
ment are those
on the lowest
echelons of the
bureaucracy,
and that rela-
tively fewer ac-
tions are taken
against corrup-
tion at the top.
In i ts
annual Corrup-
tion Perceptions
Index (CPI),
Transparency
Int ernat i onal
(TI), a Berlin-
based NGO
that monitors
public and pri-
vate sector cor-
ruption, ranks
Myanmar as the 172
nd
most corrupt country in the world, a
score worse than all but Sudan, Afghanistan, North Korea and
Somalia. Within ASEAN, Singapore is ranked as least corrupt
by TI.
Tea money culture Tea money culture Tea money culture Tea money culture Tea money culture
Bribery and corruption have become deeply rooted in
Myanmar over many years, and as such have become part of
Myanmar culture. They are seen as acceptable for getting things
done and buying influence. Tea Money, in particular, has
become a common euphemism for bribes used in everyday
language. Daw Khin Aye Than, an economist with 20 years of
teaching experience at foreign universities, isnt convinced that
these cultural traits are going to die out any time soon. Bribery
has become a habit with the people. They consider it a must-
do; nobody bothers to question why, she said. This is a long-
running problem, and its grown into a major one, but nobody
can be bothered to stop it.
Building a society that is intolerant of corruption will take
a while, says Dr. Aung Tun Thet, a prominent local economist.
If corruption is only in the blood, you can remove it by taking
the blood out, he said. But its deep in peoples DNA, its
embedded in their genes. The whole genetic engine, so to speak,
needs overhauling. He is not particularly optimistic, either.
Thinking about corruption, its just frustrating, he continued.
People have grievances about so many things and the countrys
administrative machinery is falling apart. Things dont function
very well, which leads people to show little respect for the
law.
Although corruption exists in the private sector as well as
within the government, government departments are likely the
most corrupt institutions in the country. The fact that people
have little faith in public institutions underscores the magnitude
of the social corrosion caused by corruption and bribery.
Is poverty the root cause? Is poverty the root cause? Is poverty the root cause? Is poverty the root cause? Is poverty the root cause?
As the old Myanmar saying goes, one cannot afford to be
moral on an empty stomach. Most people intuitively see a
correlation between corruption and bribery and the relative
Rank Ten Most Corrupt Countries Score
165 Haiti 19
165 Venezuela 19
169 Iraq 18
170 Turkmenistan 17
170 Uzbekistan 17
172 Myanmar 15
173 Sudan 13
174 Afghanistan 8
174 Korea (North) 8
174 Somalia 8
Rank Ten Least Corrupt Countries Score
1 Denmark 90
2 Finland 90
3 New Zealand 90
4 Sweden 88
5 Singapore 87
6 Switzerland 86
7 Australia 85
8 Norway 85
9 Canada 84
10 Netherlands 84
Result of CPI (2012) released by TI
organization
North Korea (left) and Somalia (right)
are at the bottom of the CPI -
but Myanmar is not far off
- EU Aid and Civil Protection/Flickr
Feature
ACUMEN 35
level of poverty in a country. In this country, making an
adequate living is difficult, said U Toe Hlaing, technical director
at MAGA Manufacturing Company, Ltd. Government employees
find it hard to live without outside income. The majority of
educated people in this country agree, but a comprehensive
analysis of the factors at play still needs to be done.
The backward state of Myanmars economy makes it
difficult for people to earn enough for food, clothing and shelter,
which invariably leads them to resort to corruption and bribery.
But how do things function in other countries? Corruption is a
fact of life everywhere in the world to varying degrees, even
in the United States, the worlds sole economic superpower.
But in developed countries, there is generally a healthy system
of checks and balances in place to tackle corruption. There is
a correlation between per capita income and corruption
perceptions: highly advanced and wealthy states, such as
Singapore, Australia, and Switzerland, are in the top 10 in terms
of income and the bottom ten when it comes to corruption.
South Korea, despite the fact that is a prosperous, has always
had its fair share of corruption to contend with. Income levels
5
1
0
1
5
2
0
2
5
3
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Corruption Perceptions Index (2003-2012) for Myanmar
36 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
and corruption are related to a certain
extent, but low incomes alone cannot
explain the pervasiveness of corruption
i n Myanmar. Many government
employees are not corrupt, despite their
low salaries and their exposure to the
structural factors that breed corruption.
Many high-ranking officials, however,
cannot resist the temptations of outside
money.
Power and responsibility Power and responsibility Power and responsibility Power and responsibility Power and responsibility
The element of power is crucial to
understanding corruption, said U Min
Sein, a high court lawyer. Historically,
nobody dared question those in positions
of power and authority. If, for example,
it became known that an official took a
bribe, it would be impossible to report it
to a higher authority, as the next level
up would also be complicit in accepting
bribes. When systemic abuses of power
become normalised, the problem of
bribery thus becomes a cancer that
pervades the entire system.
It is commonly perceived that these
kinds of practices are rampant on all
echelons, from top to bottom, including
in law enforcement. This does not
engender much trust towards
government departments across the
board.
The current government has only
been taking action against people
responsible for corrupt practices between
2010 and 2012, said U Than Maung, a
high court lawyer from Sittwe. There
was a lot of corruption going on before
then, as well. Weve had to deal with the
devastating effects of corruption for the
past 20 years now. The ascent to
prominence by the cronies over the
past two decades - businessmen that have
profi ted off of cl ose ti es to the
government - are a case in point. The
people in charge claim that American
sancti ons were responsi bl e for
corruption but paradoxically, weve
seen the emergence of millionaires and
billionaires in Myanmar. This indicates
that its impossible to isolate one issue
as being responsible for the problem. Its
a case of so many things being wrong
on all levels.
Tradition exploited Tradition exploited Tradition exploited Tradition exploited Tradition exploited
Giving presents and paying respects
to teachers and elders are cultural
traditions that need to be preserved as
Myanmar modernizes. But over time, the
significance of these traditions has
changed as money has come into the
equati on; gi ft-gi vi ng has become
synonymous with buying influence. Put
simply, Myanmars cultural traditions are
being exploited. Since gift-giving is part
of Myanmar culture, I would have no
problem with my students coming to pay
respects after they graduate, said Daw
Khin Aye Than, the economics professor.
There is no obligation for teachers to
reciprocate by handing out high grades.
These gifts arent bribery: they are part
of traditional Myanmar culture. But there
need to be limits. Expensive gifts, like
cars and jewelry, arent acceptable. These
are, in practice, more than gifts; gifts
should just be small tokens of gratitude.
Effects of corruption Effects of corruption Effects of corruption Effects of corruption Effects of corruption
Corruption and bribery adversely
affect Myanmar s prospects for
modernization and accountability, and
petty corruption affects the functioning
of government offices and how they are
able to deal with the public. But despite
recent steps to improve accountability
and transparency, the public is fed up
with the slow pace of change, says Dr.
Aung Tun Thet. It takes a week for a
document to go from one desk in an office
to the next. Under the new government,
while things have improved, problems
remain. Continued corruption and
bribery may result in a backlash against
recent reforms. Recent disturbances in
Rakhine State, for example, have raised
questions about how the government has
handled citizenship issues. Corruption
disproportionately impacts the poor, as
they are made to pay the same bribes
for the same services as rich people are.
Feature
ACUMEN 37
Continued corruption can also
tarnish Myanmars image as a reforming
state in the eyes of the international
community. A lack of international faith
and trust in Myanmars reform process
has already held back foreign investment
and international economic engagement.
There will be no investment in a
corruption-ridden country, said Dr. Aung
Tun Thet, because potential investors
are aware that their investments will only
be enjoyed by a handful of people at the
top. This extends to the aid sector as
well: Myanmar receives a paltry amount
of foreign aid just eight dollars per
capita.
Good governance, clean government
- these are the buzzwords President U
Thein Sein has employed in his major
policy speeches, and they have struck a
chord with Myanmar s population.
Whether or not the rhetoric matches
concrete action remains to be seen.
But the government does, at least
superficially, seem to be committed to
stamping out corruption. On January 8,
a commission to end corruption and
bribery was founded, and will be led by
Vice-President Sai Mauk Kham. The
following month, Parliament passed
comprehensive legislation that stipulates
harsh penalties for people found to be
engaging in corrupt practices.
A major point of contention has been
government officials lack of openness
about their personal assets, and on this
count Parliament has not been as
responsive. A motion demanding that
government officials declare their assets
was defeated in Parliament late last year,
which will invariably compromise the
sticking power of recent reforms.
Common wisdom suggests that
corruption in Myanmar reached a zenith
under previous military governments, but
this is not necessarily the case. Things
today are arguably much worse than they
were during the Ne Win regime, when
opportunities for corruption were more
limited. The period of SLORC/SPDC rule
between 1988 and 2010 was arguably
the most corrupt in Myanmars history,
and it is this legacy that the current
government must make a concerted effort
to undo. It is clear that previous military
governments fostered a climate of
corruption, said U Than Maung. Those
governments were not governments for
the people, especially the regime that
immediately preceded the current
government. It is demoralising to see
Myanmar lagging behind while other
countries make tremendous strides
forward.
How to go about reform How to go about reform How to go about reform How to go about reform How to go about reform
Anti-corruption campaigns cannot
be static: rooting out corruption needs to
be an ongoing process. We need an
action plan, Dr. Aung Tun Thet said. In
the past, close relationships between
businesses and government were normal,
and bribing government officials for
contracts was commonplace. These
dealings need to be made transparent in
order to prevent bribery and it is up to
all government departments to be
responsible for their own disclosures.
U Than Maung feels that no matter how
good the legal framework gets, the greed
inherent to human nature will always
reign supreme. Laws dont necessarily
need correcting, but men do, he said.
You cant reform anything when the
peopl e who are entrusted wi th
maintaining the social contract have no
external checks and balances on their
impunity. All of those responsible law
enforcement officials, businessmen,
parliamentarians, etc., must act in a fair
and just way.
Dignity and humility need to play a
part in stemming corruption, according
to some thinkers, and people in Myanmar
need to start looking at bribes as personal
assaults against their integrity. The media
may al so have a rol e to pl ay i n
normalising non-corrupt practices, and
expose corruption when it occurs. First
and foremost, societal attitudes towards
corruption need to change, and this will
only occur if people on an individual
level refuse to pay or accept bribes. A
A lack of international
faith and trust in
Myanmars reform
process has already
held back foreign
investment and
international economic
engagement. There
will be no investment
in a corruption-ridden
country, said Dr. Aung
Tun Thet, because
potential investors are
aware that their
investments will only
be enjoyed by a
handful of people at
the top.
38 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Feature
38 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
ACUMEN 39
A
t a conference held in Sydney in May, U Win Shein, Myanmars finance minister, reaf-
firmed the Thein Sein governments intention to become adherents to the Extractive
Industries Transparency Initiative, a program designed to increase transparency sur-
rounding oil and gas revenues worldwide. EITI is a global standard that aims to
improve governance of natural resources by asking governments of signatory countries to disclose
information about revenues from the extractive industry sector.
EITI will assist us to get in line with international practice for our country. We have been away
from the international community... but we have a chance to be engaged, to reenter the international
community, he said. We want to go ahead with international best practices, so we acknowledge
that EITI is one of the supportive arms for our reforms.
The statement was made in the presence of his commissions biggest critic, Daniel Kaufman.
ACUMEN 39
Workers relax amid the scarred
landscape of an open-pit gold
mine near the central Myanmar
town of Thabeikkyin.
40 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Kaufman is president of Revenue Watch Institute (RWI), an
international watchdog organization that ranks how transparent
countries are about their extractive resource revenues. In RWIs
annual Revenue Governance Index (RGI), Myanmar is currently
ranked 58
th
out of 58 countries looked at by the study. To date,
23 countries have achieved EITI-compliant status worldwide.
In early May, President Thein Sein appointed U Win Shein
to head a high-level committee to recommend reforms to
Myanmars natural resource sector, replacing former minister
U Soe Thein in that position. The President set the committee a
deadline of December 31 this year to create an EITI work plan
and initiate reforms.
While implementing EITI standards alone cannot solve the
numerous problems plaguing the extraction of natural resources
in Myanmar today, it certainly can help make a dent in
Myanmars poor RGI performance. Considering Myanmar scored
four out of a possible 100 points on RGIs criteria, however, at
least marginal improvement next year is likely.
At the same time as U Win Shein was in Sydney, the EITI
secretariat approved revised performance standards, requiring
EITIs 39 signatory states to release information about production
volumes, companies holding licenses, license allocations, state-
owned companies, corporate social responsibility payments and
transfers from central to local governments, as well as disclosing
revenue data.
These new, more stringent standards will give the EITIs
mechanisms more teeth, allowing it to address the complexities
of resource allocation in the extractive industries, according to
Kaufman. The EITI has finally recognized that, when it comes
to complex industries, merely disclosing payments is not enough.
By including contracts and licenses, beneficial ownership, state-
owned companies and production information, the new standard
could make EITI more effective in addressing the vast governance
challenges facing resource-rich countries.
As the mid-June deadline for 30 licenses to operate in
Myanmars Bay of Bengal waters for oil and gas exploration
approaches, the governments ability to crack down on accepting
or soliciting bribes to award contracts will be under scrutiny.
U Win Shein stated that Myanmar wishes to reenter the
international community, which unambiguously identifies
Panning for gold near Thabeikkyin
Feature
ACUMEN 41
increased international trade as a motivation for improving
transparency. It suggests deeply corrupt industry could
perfunctorily satisfy certain minimum requirements set by a
weak international governing body, in exchange for emergence
from economic isolation. And even if EITI is effective and the
ministers intentions are truly geared towards reform, just how
long is the road ahead for U Win Shein and his committee?
At present, legislation covering Myanmars natural resources
does not define the licensing process, the role of government
authorities, or the fiscal system for extractive revenues. Almost
no information is available on the management of the extractive
sector. Myanmar has no freedom of information law, and requires
no environmental or social impact assessments.
According to RWI, one of the biggest obstacles to a
functioning regulatory system is that the ministry of energy and
state-owned Myanmar Oil and Gas Enterprise (MOGE) oversee
the petroleum sector, award contracts, and require foreign
companies to sign a production-sharing contract with them. The
monopoly forces foreign investors to accept the risk that the
government may announce policy changes at any time. An
overhaul of the system is important, as reforms could allow
space for civil society to participate in the regulatory mechanism,
clarify which authorities receive payments from which extractive
companies, and identify which politically connected people are
receiving licenses. EITI have seconded a group of Australian
lawyers to help MOGE reform, but can military or government
owned enterprises get genuinely clean without privatizing?
The joint venture between Union of Myanmar Economic
Holdings (UMEH) and Chinese military-linked company Wanbao
at the Latpadaung copper mine is a case in point, underscoring
how politically-connected companies in Myanmar are currently
accountable to nobody. EITI will report on just how much money
is actually received by which parties, and hold Wanbao
accountable for its stated profit-sharing scheme, which would
see 17% of the spoils go to the government, 13% to UMEH, and
12% to itself. But even with transparent profit reporting, the
project still fails to adhere to international standards with regards
to land grabbing, compensation, and environmental degradation.
Even the opposition-led Letpadaung investigation commission,
headed by Aung San Suu Kyi, decided to allow the project to
Underground shaft at
a gold mine near Thabeikkyin
42 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Feature
ACUMEN 43
proceed. Key to the commissions decision was the concern
that cancellation of the contract would deter much-needed
investment in the mining sector and complicate relations
with China. It would be erroneous to believe that accurately
reporting profits gained through projects that are egregious
in the first place solves any problems.
For Myanmars reforming economy, the way the
extractive resource industry develops will be the single
most important factor in determining its success. The
extractive sector accounted for 39 percent of exports in
2010, and the majority of foreign income came from oil
and gas revenues. The International Monetary Fund
estimates gas revenues will increase by 85 percent over
the next three years as the Shwe gas project becomes
operational. Myanmar has an estimated 10 trillion cubic
feet of offshore natural gas reserves, and precious metals,
gems, minerals timber, and hydroelectric power to boot.
Yet despite it all, Myanmar remains one of the least
developed nations in the world.
Resource-rich countries frequently fare worse than their
better-off neighbors on most governance measures, resulting
in corruption, increased poverty rates, and escalating civil
unrest. All of these are problematic factors currently present
in Myanmar. Furthermore, the value of the Myanmar kyat
was, in the very recent past, inflated due to an influx of
foreign currency in the extractive industry sector, another
destabilizing effect extractive industries can have. Non-
renewable resources can create economic prosperity for
generations if managed effectively, but as RWIs Anthony
Richter said, resources and their mismanagement can mean
impunity for those perpetrating human rights abuses.
In short, human rights abuses in countries with
geopolitical or economic significance receive less criticism
than countries without the same trade, energy or strategic
significance, Richter said at the most recent US Helsinki
Commission hearing, and most importantly, where
corruption and mismanagement are present in such
economies, there are often human rights abuses. Wanbao
and UMEH were able to convince the commission that
their project should go ahead, and even got away with
perpetrating a brutal crackdown on peaceful protesters at
the mine because of their position as political and financial
giants. While measures enshrining transparency are a step
forward, initiatives like EITI will be relatively powerless
when it comes to stopping human rights abuses. A
46 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Interview
46 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
ACUMEN 47
D
agon Win Aung is one of Myanmars best-known businessmen. As
President of both his own company, Dagon International Limited,
and the Union of Myanmar Federation of Chambers of Commerce
(UMFCCI), he has garnered a reputation as an effective advocate for
Myanmars businesses both at home and abroad. In conversation with our
Dr. Aung Tun Thet, he shared some of his proudest moments in life, as well
as his outlook on the future prospects for Myanmars business community.
Dr. Aung Tun Thet : Dr. Aung Tun Thet : Dr. Aung Tun Thet : Dr. Aung Tun Thet : Dr. Aung Tun Thet : The purpose of Myanmar B2B is to share information
on Myanmars most successful enterpreneurs with its readers. In keeping
with that mission, there are three topics I am keen to discuss with you. First
of all, I want to know: what has allowed you to become as successful as you
are? Second of all, I am interested to hear about your activities today . Last
but not least, I am curious to know what your prognosis for Myanmars
business community looks like as reforms begin to take root.
What sets you apart from other businessmen is the fact that you juggle
two important positions simultaneously: that of public figure and advocate,
on top of being a successful businessman. So that others may be able to
emulate your successes, please tell us about the journey that got you to
where you are today.
U Win Aung : U Win Aung : U Win Aung : U Win Aung : U Win Aung : Im descended from merchants; both of my parents were
traders. They came from Padigon, in Pegu Region, and subsequently moved
to Pyay, where they founded a company that produced digestive medicines.
At that point, they enrolled me in St Pauls school in Yangon, which gave
ACUMEN 47
48 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
me the opportunity to receive a good education and move on to
university. When I was still in university, I started my first
business, buying and selling cars. After I got married, I opened
a glass factory, which employed 65 workers. Aside from the
glass factory, I managed two factories I inherited from my father-
in-law, which produced tin cans and wire mesh.
Things were very hard during the socialist era. In 1984, I
started producing paper from recycled materials; I was the first
businessman in the country to do so. Most businessmen were
concerned with heavy industry at the time; the pulp-and-paper
operation was my hobby, in a sense.
In 1989, after the transition to a market economy, I founded
Dagon International Trading Co, Ltd, which serves as the
corporate umbrella for my business ventures to this day. My
first office was located on Sule Pagoda Road in downtown
Yangon, and I only had three employees to start out with. I
should clarify that at this point, I was still managing the businesses
I mentioned earlier. I thought it wise to use my established
ventures to prop up my new business, and seize commercial
opportunities as they presented themselves. I started to do import-
export under the Dagon banner, and at around the same time, I
made my first foray into logging.
Before the first wave of economic liberalization in the late
80s, forestry licences were auctioned off. During the socialist
era, only selective felling of mature trees was allowed, a policy
that dated back to the colonial era. When I decided to move
into forestry, the government finally allowed clear-cutting. At
the same time as I went into logging, I started a construction
company, which specialized in high-end developments.
Among my first ventures were shopping malls. There had
been some traction to upgrade various markets in Yangon
Theingyi Zay, for example but these projects were not
completed in a timely manner; it was really exasperating. The
slow pace of commercial development at the time pushed
potential developers away from this sector, but at the time I
thought that if I took on some risk, in the long term I would see
results. With a friend who already had experience in this sector,
I decided to get into the business, and together we built the
Dagon Center on the site of the Myaynigone night market. I
was involved in other construction projects at the time, too. I
diversified into agriculture, as well, and began to open hotels.
I planted oil palms to begin with, and I am now heavily
involved in the seedling business. Its a very important industry
in Myanmar farmers need the seedlings we provide but it is
a sector that few people know much about. My seedling business
is the first private-sector venture of its kind in Myanmar. I
produce three kinds of paddy, drawn from seed stock given
acquired from Ifugao in the Philippines. After three years of
testing, I was able to patent my seed stock about three months
ago. Given the high quality of these varieties, I intend to continue
producing these three strains, which I hope will come to replace
the inferior Sinn Thwe Nat varietal grown by most farmers in
Myanmar. This country needs good, pure varietals for its crops,
for rice and other grains. I hope I will be able to assist the
agricultural sector to become more productive, and wish to work
towards developing comprehensive strategies to that end.
My company is a family business, but I also need to dedicate
part of my time to the activities of the UMFCCI. For that reason,
Ive brought my wife and children into the business to take
Interview
ACUMEN 49
over the day-to-day running of affairs. I have about 4000
employees, some permanent and some temporary. I also
subcontract work out to other companies when I need to. This
is essential for me to be able to maintain and develop my
diversified assets.
Yes, it is true that your businesses are very diversified. You Yes, it is true that your businesses are very diversified. You Yes, it is true that your businesses are very diversified. You Yes, it is true that your businesses are very diversified. You Yes, it is true that your businesses are very diversified. You
started in manufacturing and then went into construction. Back started in manufacturing and then went into construction. Back started in manufacturing and then went into construction. Back started in manufacturing and then went into construction. Back started in manufacturing and then went into construction. Back
when you were moving into the pulp-and-paper sector, how when you were moving into the pulp-and-paper sector, how when you were moving into the pulp-and-paper sector, how when you were moving into the pulp-and-paper sector, how when you were moving into the pulp-and-paper sector, how
did you expect your business interests to grow? did you expect your business interests to grow? did you expect your business interests to grow? did you expect your business interests to grow? did you expect your business interests to grow?
Of course, I had to think about what business I wanted to
be the flagship of my operation, so to speak. At the time, given
the economic conditions in Myanmar, I had to think about what
sectors would offer the best opportunities for growth. Partially
out of necessity and partially out of interest, I tried my hand at
various businesses, but it was the flagship that always needed
to be given priority. I ultimately decided to prioritise property
development and construction, as well as hospitality. I was
interested in the long-term nature of the retail sector: if I sell off
a property after developing it, I cant gain long-term profits
from it, whereas retail and hotels have the potential to bring
larger marginal returns over time.
While I didnt benefit much from these early developments
at the time, I realised that in the long term Id be able to profit
nicely off of it. The Dagon Centre in Myaynigone, for example,
turned in pure profit from the retail floor after the initial
Dagon Centre near Myaynigone in Sanchaung Township, Yangon.
50 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
investment for construction had been recuperated. Our strategy
of getting into retail directly paid off; companies approached us
looking to lease the lower floors of the shopping centre, but we
were only willing to lease out less-than-prime retail space on
the upper floors.
We engage in these kinds of practices for all our property
developments. It would be easy to sell plots of land on main
roads, for example, but we hold on to these plots with an eye to
the future. Based on my experiences, I have found that sometimes
its better to develop projects gradually, and build further
additions when market conditions are right. Whether or not
this is a good strategy depends, of course, on prevailing market
forces and government policy. The nature of the economy is
such that if a countrys economy improves, the property market
is the last to feel the impact. But in recessions, the property
market is the first to collapse. Its important to keep these
dynamics in mind, and plan strategies out accordingly.
What hinders business development in Myanmar? What about What hinders business development in Myanmar? What about What hinders business development in Myanmar? What about What hinders business development in Myanmar? What about What hinders business development in Myanmar? What about
the state of corporate finance? the state of corporate finance? the state of corporate finance? the state of corporate finance? the state of corporate finance?
The financial system in this country still has a long way to
go. Frankly speaking, its very underdeveloped. We need to
manage our finances very conscientiously and systematically.
As avenues for corporate finance are practically non-existent,
cash flow issues are a perpetual problem.
So how do you finance your projects? By yourself or on credit? So how do you finance your projects? By yourself or on credit? So how do you finance your projects? By yourself or on credit? So how do you finance your projects? By yourself or on credit? So how do you finance your projects? By yourself or on credit?
When theres money available to borrow and it makes sense
to, we do that. But this is very difficult in Myanmar, as companies
need to front substantial collateral to take out loans, and for that
we need assets. Thankfully, because weve always had assets,
we are able to finance new projects based on our existing assets.
Yourre commonly referred to by the name of your company: Yourre commonly referred to by the name of your company: Yourre commonly referred to by the name of your company: Yourre commonly referred to by the name of your company: Yourre commonly referred to by the name of your company:
Dagon. Where does the Dagon Groups logo come from? Dagon. Where does the Dagon Groups logo come from? Dagon. Where does the Dagon Groups logo come from? Dagon. Where does the Dagon Groups logo come from? Dagon. Where does the Dagon Groups logo come from?
My father-in-law founded the Dagon Tin Factory in 1951,
which I subsequently came to run alongside my glass factory.
The can factory was actually a secondary operation next to the
machine shop we had on-site. My own businesses were taking
off as well by that point, and in 1982, I took the name of the
factory that had been the most profitable and applied it to the
whole group of companies. The name Dagon is well-known in
Myanmar, as it is a pre-colonial name for Yangon. Its a name
Ive carried with me throughout my career, which is why Ive
chosen to maintain it and apply it to new ventures over the years.
Youve said that, aside from your businesses, your duties at Youve said that, aside from your businesses, your duties at Youve said that, aside from your businesses, your duties at Youve said that, aside from your businesses, your duties at Youve said that, aside from your businesses, your duties at
the UMFCCI are more important. As you are the chairman of the UMFCCI are more important. As you are the chairman of the UMFCCI are more important. As you are the chairman of the UMFCCI are more important. As you are the chairman of the UMFCCI are more important. As you are the chairman of
the UMFCCI and it is an organization that foreigners know, I the UMFCCI and it is an organization that foreigners know, I the UMFCCI and it is an organization that foreigners know, I the UMFCCI and it is an organization that foreigners know, I the UMFCCI and it is an organization that foreigners know, I
would like to talk about it. would like to talk about it. would like to talk about it. would like to talk about it. would like to talk about it.
Ever since my student days, Ive been interested in working
with the business community. I joined the Merchants and
Industrialists Organization in 1991 it wasnt officially
incorporated as a federation back then. I think my member
number was 536. One year later, I was asked to join the executive
council. Under the leadership of the elders delegation, I was
able to contribute my expertise, and we strove to build a
headquarters for the organization. On the recommendation U
Interview
ACUMEN 51
Khin Maung, the chairman of the organization, I was made
chairman of the building construction committee. I wanted to
make that dream a reality, and the UMFCCIs current building
is a testament to these efforts.
Ive used my platform at the UMFCCI to develop projects
that will help Myanmars economy grow. As there was a need
for a bridge between entrepreneurs and the government, I made
an effort to fill that gap through the UMFCCI. In 1999, I became
the vice-chairman of the UMFCCI, a position I held for 12 years.
After President U Thein Seins reforms began to kick in, our
organization needed to freely elect a committee, and all members
cast their votes for me to become President.
How long does your term last? How long does your term last? How long does your term last? How long does your term last? How long does your term last?
The term runs for two years, and my first term is almost
complete. Through a transparent process, a new executive and
a new President will be elected soon. There many be some
existing rules and regulations that need to be amended, and the
action required to do so will be undertaken according to the
wishes of all members.
Your two roles as a captain of industry as well as your Your two roles as a captain of industry as well as your Your two roles as a captain of industry as well as your Your two roles as a captain of industry as well as your Your two roles as a captain of industry as well as your
position at the UMFCCI makes you uniquely suited to analyse position at the UMFCCI makes you uniquely suited to analyse position at the UMFCCI makes you uniquely suited to analyse position at the UMFCCI makes you uniquely suited to analyse position at the UMFCCI makes you uniquely suited to analyse
the implications for Myanmar after the AFTA (ASEAN Free the implications for Myanmar after the AFTA (ASEAN Free the implications for Myanmar after the AFTA (ASEAN Free the implications for Myanmar after the AFTA (ASEAN Free the implications for Myanmar after the AFTA (ASEAN Free
Trade Agreement) and AEC (ASEAN Economic Community) Trade Agreement) and AEC (ASEAN Economic Community) Trade Agreement) and AEC (ASEAN Economic Community) Trade Agreement) and AEC (ASEAN Economic Community) Trade Agreement) and AEC (ASEAN Economic Community)
come into effect in 2015. What challenges do you foresee as a come into effect in 2015. What challenges do you foresee as a come into effect in 2015. What challenges do you foresee as a come into effect in 2015. What challenges do you foresee as a come into effect in 2015. What challenges do you foresee as a
result of these developments? result of these developments? result of these developments? result of these developments? result of these developments?
Myanmar has pledged to uphold all of the principles of the
ASEAN community. AFTA and AEC are integral parts of that.
In theory, the borders between all ASEAN nations would be
completely open 2015. While this is not likely, more openness
is a good thing for Myanmars entrepreneurs, especially SMEs
(small-and-medium enterprises). Traders, manufacturers and
service providers will have to work hard to bring their operations
up to international standards; there will be opportunities for
those who work hard, but nothing is certain. At this stage, the
mantra is this: protectionism isnt good for the economy, and
companies that push for protectionism will not survive.
I feel that the best strategy for Myanmar to pursue is to
promote our SMEs. We need to create opportunities to make
that promotion possible. We need to transform our assets into
new markets for Myanmars products, improve capital markets
and bring in new technologies. Were a long way off when it
comes to developing these things. To develop businesses, there
needs to be opportunities, which is why we have worked hard
to get the new FDI law passed that would give SMEs the
opportunity to enter into joint ventures with foreign firms. The
UMFCCI has a capacity-building program for Myanmar
entrepreneurs.
To do this, we collaborated with international organizations
to conduct trainings, and through these seminars discuss the
ramifications of the AEC at length with local entrepreneurs. But
the message needs to get out there, and this is where we need
the help of the media. The media is happy to cooperate with us,
but we need to prepare ourselves to meet the challenges, and
we intend to introduce this knowledge to as many people as
possible moving forward.
52 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
When it comes to trade liberalization, does there need to be a When it comes to trade liberalization, does there need to be a When it comes to trade liberalization, does there need to be a When it comes to trade liberalization, does there need to be a When it comes to trade liberalization, does there need to be a
tradeoff between trade promotion and protecting infant tradeoff between trade promotion and protecting infant tradeoff between trade promotion and protecting infant tradeoff between trade promotion and protecting infant tradeoff between trade promotion and protecting infant
industries? There are no more European sanctions, and one industries? There are no more European sanctions, and one industries? There are no more European sanctions, and one industries? There are no more European sanctions, and one industries? There are no more European sanctions, and one
day there will be no more American ones, either. When this day there will be no more American ones, either. When this day there will be no more American ones, either. When this day there will be no more American ones, either. When this day there will be no more American ones, either. When this
occurs, what will change for Myanmars economy? occurs, what will change for Myanmars economy? occurs, what will change for Myanmars economy? occurs, what will change for Myanmars economy? occurs, what will change for Myanmars economy?
When all sanctions are lifted, businesses will be able to
grow in a way impossible in the past. The fact that the EU
suspended sanctions last year scared off a lot of potential
investors, who ran the risk of losing their assets if sanctions
were re-imposed. With the EU, that is no longer a problem, and
it is unlikely to be for the US much longer, either. More than
anything else, investment is what we need. We need a wider
variety of trading partners. To put it simply: between a narrow
value chain, what have you, need to benefit from this export-
oriented growth equally. If they dont, the advantages Myanmar
might enjoy will not last long.
Myanmar manufacturers must produce the premium quality
products the EU market demands. For a long time, captains of
industry in this country have had the ability to produce goods
at international standards but chose not to as there was no
incentive to. Thats why business ethics are important for
sustainable businesses and sustainable development. This is a
matter we entrepreneurs must take seriously. If and when
market and a wide market, which is more profitable? The latter,
obviously. The traction seen recently towards removing all
sanctions for good is very promising.
Markets like the EU and US will be wide open for Myanmar
exporters, and we need to develop these links in short order.
There will also be tax incentives for Myanmar exporters, which
the EU is currently reviewing and which the United States is
likely to soon, as well. Theres still a risk that the Americans
will re-impose suspended sanctions; theyve done it before. Laos,
for example, still does not enjoy preferential trade status with
the US and its exporters do not enjoy tax advantages when
selling to the US. Having these tax advantages is important for
Myanmar, as they would give us an upper hand over countries
that do not enjoy these benefits. But tax advantages aside, what
is really important is to understand the economy and what
products are marketable in foreign markets. Its important to
know what consumers abroad want so you can fill the demand.
If you dont do that youre just forfeiting opportunities for growth.
Its also important to mention that all levels of the supply chain,
For a long time, captains of industry
in this country have had the ability
to produce goods at international
standards but chose not to as there
was no incentive to. Thats why
business ethics are important for
sustainable businesses and
sustainable development.
Interview
ACUMEN 53
American or European companies become interested in Myanmar
products, they will avoid buying from us if we dont practice
corporate social responsibility (CSR) or ethical best practices.
The fact that we might be able to compete on price wont matter,
which is why we need to work hard to achieve these goals.
As you yourself are promoting CSR, I dont think you need to As you yourself are promoting CSR, I dont think you need to As you yourself are promoting CSR, I dont think you need to As you yourself are promoting CSR, I dont think you need to As you yourself are promoting CSR, I dont think you need to
say any more about this. say any more about this. say any more about this. say any more about this. say any more about this.
Ive always been a staunch promoter of CSR. From my
first day in office, Ive made use of the term CSR, which at the
time was a new concept. Given the fact that EU sanctions have
been suspended, many Myanmar companies are thinking of
taking their products and services to Europe. But its a two-way
street: European companies will be able to sell their goods here,
to Myanmar people. We arent the only beneficiaries now that
sanctions have been lifted; this is a win-win situation, and we
must be thankful for the opportunities the lifting of sanctions
will provide for Myanmar. It will finally give us an opportunity
to compete with international firms on an even footing, both
here and abroad.
54 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Foreign firms have marketing power, and
we have price advantages. Thats the benefit
of trade: our respective strengths can
complement each other. But what is most
important is that foreign firms come here to
invest. We want foreign firms to enter into
joint ventures with local firms. Our market of
60 million people isnt small compare it to
Laos, which is one-tenth of the size. Myanmars
economy truly is the last frontier; if foreign
investors come, they can sell to a large market
and repatriate the funds home. The local
companies that will succeed are the ones that
know foreign markets well, what consumers
want. Theres much to be gained for them by
doing business abroad.
These are just the most obvious examples
of the benefits of trade: everybody in Myanmar
will benefit from export-oriented growth, as
will countries that drop existing sanctions. As
I said before, its a win-win situation for
everyone.
As for your role with the UMFCCI, do you As for your role with the UMFCCI, do you As for your role with the UMFCCI, do you As for your role with the UMFCCI, do you As for your role with the UMFCCI, do you
bel i eve t he f ederat i on promot es B2B bel i eve t he f ederat i on promot es B2B bel i eve t he f ederat i on promot es B2B bel i eve t he f ederat i on promot es B2B bel i eve t he f ederat i on promot es B2B
(business-to-business) relationships? (business-to-business) relationships? (business-to-business) relationships? (business-to-business) relationships? (business-to-business) relationships?
I work to promote B2B activities daily.
Business-to-business relations need not occur
only with in the country: as Myanmar opens
up, business-to-business links will become
more internationalized. It s possible to
establish a business entirely on your own but
theres a limit to how successful one can be
with that approach. But when thinking of
future strategies, you can t ignore B2B
relations. Business-to-business links are crucial
for enterprises to achieve their goals. A
Year Established - 1989-90
Business - Trading, Construction, Agriculture, Hospitality
Head Office - 262/264 Pyay Road, Dagon Centre, Block-A, Sanchaung Township, Yangon.
Workforce - 3,000
Phone - (+95) 1 503515, 514227
Dagon International Limited
Interview
56 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Opinion
56 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Former Thai Prime
Minister Abhisit Vejjajiva
shakes hand with former
ASEAN Secretary-
General Surin Pitsuwan
at the 2011 ASEAN
Summit in Bali,
Indonesia.
ACUMEN 57
The ASEAN Economic Community
(AEC) is set to go into effect in 2015,
which will serve to integrate the ten-
country bloc economically and socially
in unprecedented ways. But how much
is really going to change, and what does
the AEC mean for Myanmar?
By Alex Bookbinder
O
n January 28, 1992, the leaders of ASEAN
member states met in Singapore to sign
on to the ASEAN Free Trade Agreement
(AFTA), a move that was heralded at the time as
a watershed moment for multilateralism and an
unprecedented step for regional cooperation. The
notion of a pan-Southeast-Asian free trade zone
would have been unthinkable a few decades
before; chilly relations between Indonesia and
Malaysia almost resulted in war in the 1950s,
and Singapores touchy relationship with its
larger, majority-Muslim neighbours served as a
point of contention.
Much as leaders in post-war Europe sought
to end interstate conflict through deepening trade
ties, ASEAN leaders have long promoted trade
as a way to secure lasting peace. The blocs
integration of communist Vietnam in 1995 - long
an enemy of staunchl y anti -communi st
governments in Singapore and Jakarta - was
the first major instance of ASEANs drive to make
peace with the past and move together towards
a common future. Myanmar, Laos and Cambodia
had all joined the bloc by 1999, and along with
ACUMEN 57
58 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Vietnam were required to sign onto AFTA as a condition of
their acceptance to the bloc.
But although the political and economic ramifications of a
Southeast Asia-wide free trade zone have already been profound,
ASEAN leaders have sought to push further. At the 13
th
ASEAN
summit in 2007, ASEAN adopted the Political-Security
Commitment Bulletin, a major element of which was the
introduction of the notion of the ASEAN Economic Community,
or AEC, which, according to ASEAN, is the goal of regional
economic integration by 2015, which will transform ASEAN
into a region with free movement of goods, services, investment,
skilled labour, and freer flow of capital.
As Myanmar is set to assume the mantle of ASEAN
leadership next year for the first time, its leadership will be
crucial to the success or failure of how the AEC is implemented.
As early as 1997, ASEAN has stated a commitment to realising
a vision of a functionally integrated regional bloc, dubbed ASEAN
2020, and whether or not the AEC will succeed will serve as
an important litmus test for the future of regional integration in
Southeast Asia.
But what exactly will the implementation of the AEC entail?
Although there has been a lot of speculation and hype, there
are still serious barriers that will make it difficult for ASEAN to
become a truly unified regional economic bloc. According to a
statement published by ASEAN, the AEC will not at least at
first - be a comprehensive integration of national economies but
will focus on a number of specific areas, namely human resources
development and capacity building; recognition of professional
qualifications; closer consultation on macroeconomic and financial
policies; trade financing measures; enhanced infrastructure and
communications connectivity; development of electronic
transactions through e-ASEAN, and integrating industries
across the region to promote regional sourcing.
How far along ASEAN is in terms of fully implementing
the AEC is also debatable. At the 22
nd
ASEAN summit, held in
Brunei this past April, Sultan Hassanal Bolkiah, in his capacity
as rotating ASEAN head, claimed that 256 measures of the
ASEAN Economic Community Blueprint 77.54% of the total
had already been implemented, which would superficially seem
to indicate that full compliance is within reach. But the remaining
stipulations that have not already been put into effect will be the
most problematic to bring about.
Although the AFTA has already eliminated the majority of
tariff barriers across Southeast Asia, protectionism still remains
a nagging problem. An oft-cited example is Malaysias auto
industry, which is dominated by two companies Proton and
The Proton Gen2 is often seen on
Malaysian roads - but Malaysian
cars are rare elsewhere in South-
east Asia. If all AEC measures are
passed, Malaysia will have to
drop tariffs on imported cars
from other Southeast Asian
countries.
- Rafiq Mirza/Flickr
Opinion
ACUMEN 59
Perodua that were established
by the Malaysian government in
the 1980s, pri mari l y as an
import-substitution measure.
Regionally, Malaysian cars have
generally been a failure on the
export market next to models
produced by Japanese
manufacturers the vast majority
of whom produce cars i n
neighbouring Thailand.
Given the competitive
pressures on the domesti c
market that would ensue if Thai-
made Japanese models were
al l owed to be i mported to
Mal aysi a tari ff-free, the
Mal aysi an government i s
unlikely to push for total free
trade, a key provision that
remains in the AEC measures
that have yet to be enacted.
Other areas such as
agriculture which is heavily
subsidised in many countries in
the region - may also prove
contentious. If remaining AEC
measures are passed, ASEAN is
set to become an open skies
zone in 2015, as well, which will
serve to disadvantage small
airlines operating in regional
markets. Myanmars established
airlines are set to lose out, even
if consumers are likely to benefit.
Dominated by a host of small
airlines without the capital to
expand greatly beyond the
countrys borders, Myanmars
airline industry may pressure
the government into protecting
the countrys aviation sector for
a while longer until the benefits
of increased demand from the
expansi on of the touri sm
industry can be felt.
Otherwise, the story for
Myanmar is altogether more
positive, as low labour costs and
improving infrastructure should,
in theory, make the country an
Cross-border trade will increase af-
ter 2015 when the AEC is set to go
into effect; Myanmars international
gateways, like this border cross-
ing between Mae Sai in Thailand
and Tachileik in Shan State, will
become increasingly important. -
The Thailand Project/Flickr
Cross-border trade will increase af-
ter 2015 when the AEC is set to go
into effect; Myanmars international
gateways, like this border cross-
ing between Mae Sai in Thailand
and Tachileik in Shan State, will
become increasingly important. -
The Thailand Project/Flickr
60 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
attractive manufacturing base for regional
exports. But one of the first areas set for
liberalization through a measure that
would make it easier for highly-skilled
professionals to have their qualifications
recognised ASEAN-wide may be a
mixed blessing for Myanmar. ASEAN is
home to both highly-developed and
undeveloped economies, which will give
hi ghl y-trai ned professi onal s from
Myanmar incentive to seek out better-paid
opportunities abroad.
Many of these professionals will
invariably have been trained abroad and
will have recently returned to Myanmar
as a result of reforms, and a brain drain
brought about by liberalized immigration
pol i ci es serve to negati vel y effect
Myanmars development prospects. But if
Myanmars economy continues to grow,
liberalized immigration policies may serve
to attract highly-skilled foreigners from
around ASEAN to offset the loss of
professionals to other countries in the
region. How these policies will play out in
practice remains to be seen.
While further regional integration will
probably be a net benefit to all of ASEANs
member states, the vast socio-economic
differences between Southeast Asian
countries precludes the formation of a truly
transnational bloc like the European Union.
For Myanmar, without established export-
substituting industries that desire protection
from foreign competition, the barriers to
implementation are relatively lower than
they are for other countries in the region.
As Myanmar is in need of readily accessible
foreign markets for its exports, the
advantages to be gained from eliminating
tariff barriers ASEAN-wide are likely to be
great. But the political will of other ASEAN
states to bring all AEC measures into effect
by 2015 is still unknown, and in its position
as ASEAN chair next year, Myanmar may
be forced to compromi se on some
liberalization measures that would otherwise
be in its best interests to implement. A
Low labour costs
and improving
infrastructure
should, in theory,
make Myanmar
an attractive
manufacturing base
for regional exports.
If a planned ASEAN-wide
open skies policy goes into
effect in 2015, Myanmars
domestic airlines may suffer
even as consumers benefit
- calflier001/Flickr
Opinion
62 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Opinion
B
rowsing through news on the In-
ternet recently, I was in for a sur
prise. There, glaring from the
screen, was a piece with the headline,
Readers Digest parent files for bank-
ruptcy.
Our generation - these of us who
lived with tight media scrutiny, under
sequential military regimes - quenched
our thirst for information from abroad
partly by reading Readers Digest maga-
zines, low cost editions that filtered down
to us through used bookstores. TIME,
Newsweek, Life, Readers Digest and
other foreign periodicals were subscrip-
tion-only and only available in limited
numbers, so those that did reach the open
market were mostly second-hand, dis-
carded from embassies or the offices of
the elite.
As I was a writer and translator,
Readers Digest articles provided me with
lots of inspiration. I recall one very dis-
tinctly, because I felt it was a represen-
tation of Readers Digests entire ethos.
The article was entitled Be Different and
Get Ahead and it stared at me, in bold,
large, print, from the half-page attached
over the magazines front cover.
I had read how the Digests founders
operated under the assumption that the
swiftly advancing world of the 1930s had
no time to waste absorbing long articles.
They were successful in this approach;
they managed to condense and dissemi-
nate information into fast food for the
By Naing Thit
62 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
ACUMEN 63
mind, starting out with five hundred lo-
cal subscribers to become a magazine
with an international reach of over 12
million people monthly.
Readers Digest, as an idea, was so
innovative and profitable that it spawned
numerous copycats, but none of its imi-
tators were able to improve upon it be-
cause they did not live up the Digests
credo of being different to stay ahead of
the curve.
I knew a lot of Myanmar business-
men who enjoyed Readers Digest - one
of which even had the words Be Differ-
ent and Get Ahead embossed on wood
hanging in his office. But the ability of
Myanmar businessmen to live up to this
credo was very limited.
Businessmen in Myanmar are often
criticized for not being adventurous
enough. Of not being creative, or of not
being thinking big, or for not thinking
long-term. But all those faults were due
to being contained in an enviroment
where risk taking could be suicidal.
In the latter years of the 1960s, with
all major businesses nationalized, most
entrepreneurs who wished to venture
into manufacturing had to do so using
raw materials procured from the gov-
ernment or purchased on the black mar-
ket. As all such products were question-
ably legal, nothing could be mass-pro-
duced privately, and no businesses could
go big.
For instance, a confectioner was al-
lotted only a limited amount of ingredi-
ents for the items he made, and that scar-
city made reselling his supply in the black
market - in its raw state - more profit-
able than turning out finished products.
Many small businesses and cottage in-
dustries - or to used the current term,
small-and-medium enterprises were es-
sentially frauds. Faking business was
more profitable than really doing busi-
ness.
Entrepreneurs would set up false
work sites, including implements like
cement-coated bamboo matting in the
shape of a kiln, with cosmetically re-
freshed machinery that was in reality
unusable. These entrepreneurs obtained
work permits from corrupt government
inspectors, for the sole purpose of ob-
taining raw materials that could be then
sold on the black market.
It is a shame to speak ofresource
scarcity in a country like Myanmar. In
recent history, there have been four na-
tions - England, Japan, Switzerland and
Singapore - that have had disproportion-
ate influence on the worlds economy
despite their paucity of natural resourc-
es. England and Japan had to invade or
colonize nations that had resources, while
the Swiss and Singapore had to hone
their human resources with technologi-
cal know-how in order to develop. But
Myanmar, much larger than any of the
abovementioned countries and with an
abundance of natural resources, has been
bestowed the unwelcome moniker of
least developed country.
For Myanmar, an abundance of nat-
ural resources seems to have turned into
a curse rather than a blessing. This coun-
try has long been satisfied with selling
ACUMEN 63
Businessmen in Myanmar
are often criticized for not
being adventurous
enough... [b]ut all those
faults were due to being
contained in an enviro-
ment where risk taking
could be suicidal.
64 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
off its raw minerals instead turning them
into consumer goods. The plan to be-
come a world-class economy seems to
have been drawn up lackadaisically, and
its failures have been explained away
by claiming that Myanmar lacks a tech-
savvy intelligentsia. Yet many of Myan-
mars talented citizens, who could not find
positions appropriate for their qualifica-
tions at home, are now top executives in
various international organizations. It was
not for a lack of brainpower that Myan-
mar receded to an undeveloped state,
but due to brain drain - and because the
majority of the talented brains that re-
mained in Myanmar went into a decades-
long coma, finding that it was safer to
stay within the herd rather than forge
ahead of it under a despotic government.
There were rumours that a group
of technology students who - reflecting
what was going on in the rest of the
world at the time - tried to invent a hov-
ercraft, only to have their prototype con-
fiscated by the authorities. In a country
where radio-controlled model planes and
ham radio were banned, its no surprise
that everyone here ended up in a time
warp. To see a minister visit a car facto-
ry and hear him boast that it could pro-
duce 50 cars annually - seven decades
after Henry Ford was able to produce
ten thousand cars per month - made
sense in a country where anything pro-
gressive was banned in the name of law
and order and security. This enforced
isolation caused Myanmar to unwitting-
ly degrade into an exotic land. Exotic
for being extremely out of date, despite
its natural endowments and geopolitically
strategic location.
Strong states - from democratic Ath-
ensto militaristic Rome - all developed
upon solid foundations that could not
ignore businessmen, however much pref-
erence those various political orders gave
to politicians or generals. Not giving
true businessmen generators of
wealth adequate support prompts rent
seeking behaviour among elites. Myan-
mar developed or rather, didnt devel-
op the way it did due to competing
64 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Opinion
ACUMEN 65
factions fighting to survive as best as they
could over a shaky political foundation.
Only foolhardy businessmen, faced
with such conditions, could be daring
enough to project long term plans for
their businesses. Under an irrational ad-
ministration where what was legal to-
day could be banned the next, laying low
and doing the minimum required seemed
like a good survival strategy. And so,
even though many wanted to think big
and get ahead, the struggle to survive
day-to-day prevailed above all.
The unexpected reforms of the past
two years have given Myanmar a glim-
mer of hope. The government has be-
gun to open up all sorts of economic
doors, not only for Myanmars business
community but for ordinary citizens as
well. It seems that everyone can afford
to pursue dreams of being a billionaire
by following the motto, Be different and
get ahead.
But of course, most are still going to
be limited by decades of conditioning,
feeling that the restrictions of the past
will cause their big ideas to be swept
under the rug and that they have noth-
ing to contribute to the global market of
ideas. Many Myanmar businessmen are
liable to feel fundamentally incapable of
functioning in Myanmars newly cosmo-
politan business environment, not know-
ing east from west, so to speak. But to
be where the action is - with the ability
to act - is what makes all things possi-
ble, and Myanmars business community
is up to the challenge.
Perhaps it is ironic to find that the
publication behind the motto has fallen
just as those its motto should be teach-
ing have found the power to rise. And
yet, there is a bigger lesson that Read-
ers Digest teaches for all who are sharp
enough to heed it. Being different on its
own doesnt set a business up for suc-
cess; rather, being adaptable to ever-
changing situations and conditions sus-
tains a business and keeps it going.
And that is the lesson that we in
Myanmar must heed now. A
U Naing Thit is a journalist, writer, translator and editor.
ACUMEN 65
66 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Among Myanmars most popular tourist destinations,
Inle Lake is a true national treasure. But the rapid
development of tourist facilities and unsound environ-
mental practices threaten the areas fine cultural and
ecological balance.
66 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
Travel
ACUMEN 67
I
nle Lake is located in the Western part of Southern Shan
State, some 20 miles from the state capital, Taunggyi. Among
the most popular tourist sites in Myanmar, the lake has
attracted significant attention internationally due to its profound
natural beauty and rich cultural endowments. The verdant
mountains that surround the lake, set against the clear blue
skies of the dry season, are a sight to behold. The primary
access point to the lake is the town of Nyaungshwe, although
there is another route to the lake, through Inle Khaung Dine,
which is becoming increasingly popular with tourist arrivals.
Inle Khaung Dine is an attraction in its own right due to the
numerous villages of the Intha ethnic group in its surrounding
environs, and many tourists choose to go there after a stay in
Nyaungshwe.
As soon as visitors arrive in Nyaungshwe on the main
road to the lake, they are greeted by the sight of the Pawrissa
and Shwe Yan Pyay pagodas, two imposing structures that have
been important local places of worship for many years.
Nyaungshwe is an important place in Myanmars recent political
history, as it was the home of Sao Shwe Thaike, Burmas first
President upon independence from the British in 1948. Before
his ascent to national politics, Sao Shwe Thaike was the
hereditary local monarch of Nyaungshwe and its environs: a
Saohpa, which literally means Sky Lord in the Shan language.
His palace still stands among the hotels and tourist facilities in
Nyaungshwe, and has been preserved as a museum dedicated
to Shan culture and history from the time of the Shan monarchies.
Owing to its enviable location next to the lake, and enjoying
a pleasant climate due to its location high in the Shan hills,
Nyaungshwe has become one of Myanmars most important
ACUMEN 67
68 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
tourist destinations. The hills around the lake offer extensive
recreational opportunities, including trekking and bathing in
hot springs, and many visitors choose to tour the town and its
environs by bicycle. Long-tail motorboats depart Phaungdaw
Jetty to transport tourists around the lake.
Owing in part to the lakes popularity with tourists, the
unique crafts produced by the Intha people are readily available.
The tourist trade serves not only as a lucrative source of income,
but also as a vehicle to preserve traditional arts. The floating
gardens that dot the lakes surface are unique in Myanmar, and
are an example of traditional Intha agricultural techniques. There
are number of attractions of note in the lake itself, including
Phaungdaw Oo Pagoda, as well as floating markets. These
markets rotate on a daily basis to five different locations around
the lake.
As the number of tourist arrivals has increased steadily,
local businesses have needed to adapt. In Inle Khaung Dine,
there was only one hotel in 1970, but there are around a dozen
there now. As the hotel industry has developed, it has provided
job opportunities for the areas indigenous people; most staff at
high-end hotels on the lake are ethnic Shan, Intha and Pa-O.
The tourist trade has also proved to be a boon for the
lakes farmers. The hotels in the area are steady customers of
Travel
ACUMEN 69
their produce, which includes tomatoes, cauliflowers, and mustard
greens. The Intha peoples unique method of propulsion around
the lake rowing small canoes using an oar propelled by one
leg is also a money-spinner, as tourists are able to hire boats
and drivers to take them on tours. As the hotel business has
expanded, so have opportunities for local people to improve
their living standards.
One of the most important dates on the calendar at Inle
Lake is the Phaungdaw Oo Pagoda festival, which occurs in the
month of Thadinkyut, roughly coinciding with October. During
the festival, Buddha images are taken by boat from Nyaungshwe
to the Pagoda, down Nanthe Creek, the only waterway linking
the town with the lake. But rapid development in recent years
has caused water levels in the lake to diminish considerably.
The contraction of the lake threatens the Intha peoples way of
life and cultural practices, and the Phaungdaw Oo festival may
not be immune for long. In April 2010, water levels had receded
so much that temporary islands actually rose above the water
near the pagoda, and inadequate water levels made navigating
Ngaphe and Nanhoo creeks which feed into the lake
altogether impossible. This year, the dry season brought with it
the lowest water levels seen in years, but the government has
taken measures to stop water levels from falling even further.
Nearly 30 small creeks flow into Inle Lake, and blockage is
a serious problem. The Irrigation Department maintains
machinery on the lake to clear silt and weeds, enabling proper
water flow into the lake from these various creeks. In a bid to
improve water flow into the lake, the authorities installed a
pipline to transport water from the hills and further afield into
the lake, to augment the natural inflow from the creeks. Aside
from these measures, the government has begun to build barrier
walls to protect against landslides, which have occurred with
increased frequency in recent years due to severe deforestation
on the hills surrounding the lake.
Preserving the natural and cultural splendour of Inle Lake
must be a collective effort, and measures to preserve the
environment will be crucial for reversing the drying-up of the
lake seen in recent years. Owing to the areas value as a tourist
destination, the government is making a concerted effort to
preserve the lake, and has established a fund for its long-term
preservation in conjunction with the UN Development Program.
As the torrent of tourists arriving at Inle is only set to
increase in coming years, the impetus to preserve its natural
splendour is more significant that it was even in the recent past.
With political will and sustainable practices by locals and tour
operators alike, the wonders of Inle Lake will hopefully be
preserved for future generations to enjoy. A
Dining Out
Padonmar Restaurant, located in the heart of Yangons embassy row in Ahlone Township,
is something of an enigma. Set back from the road in a stately mansion, its size and environs make it
popular with foreign tour groups in search of an authentic Myanmar culinary experience. But
Padonmar manages to defy the tourist-restaurant stereotype of mediocre meals at inflated prices: the
food is top-notch, authentic, and reasonably priced. Padonmars balance of high quality and mass-
market appeal make it difficult to understand why so many tourist-focused operations around the
world fail to follow this simple formula.
72 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
By Jayaram Gopalakrishnan
Much of Padonmars success can be chalked up to the
management of owner Sonny Aung Khin, who took over the
reins from the restaurants original owners in the early 2000s.
Decorated with traditional Myanmar arts, crafts and cultural
artifacts, the sprawling complex has dining rooms named after
flowers commonly found in the country. Owing in part to its
location, Padonmar is popular with visiting foreign dignitaries,
and has hosted US Senators John McCain and Mitch McConnell,
as well as former Secretary of State Hillary Clinton, among
others.
But it is Padonmars food that is the real draw. The
restaurant specializes in traditional Myanmar cuisine, and offers
diners a wide variety of appetizers, curries and salads. Aside
from its Myanmar dishes, Padonmar serves a diverse array of
Thai dishes as well. Standouts include an excellent goat curry,
as well as a wide range of seafood dishes prepared in both
Myanmar and Thai culinary traditions. To its credit, Padonmars
food is less oily than the fare usually on offer in Myanmar, and
is more akin to real home cooking than what is usually found
at restaurants specializing in Myanmar cuisine.
Padonmar also offers home delivery services and event
catering. Rooms are available for private bookings that can
accommodate a maximum of 140 guests. The restaurant is open
from 11am to 11pm daily.
Address: No.105/107, Khayaepin Road, between
Pyidaung-su Avenue(Halpin) and Manawhari Road, Ahlone
Township, Yangon. A
ACUMEN 73
Yangon - Guangzhou
MON CZ - 3056 17:40 22:15
TUE 8M - 711 08:40 13:15
WED CZ - 3056 11:20 15:50
THU 8M - 711 08:40 13:15
FRI CZ - 3056 17:40 22:15
SAT CZ - 3056 11:20 15:50
SUN 8M - 711 08:40 13:15
Guangzhou - Yangon
MON CZ - 3055 14:45 16:35
TUE 8M - 712 14:15 15:50
WED CZ - 3055 08:40 10:30
THU 8M - 712 14:15 15:50
FRI CZ - 3055 14:45 16:35
SAT CZ - 3055 08:40 10:30
SUN 8M - 712 14:15 15:50
Yangon - Phnom Penh
WED 8M - 403 16:50 19:15
SAT 8M - 403 16:50 19:15
Phnom Penh - Yangon
WED 8M - 404 20:15 21:40
SAT 8M - 404 20:15 21:40
Yangon - Taipei
DAILY CI - 7916 10:50 16:10
TUE BR - 288 11:35 17:20
FRI BR - 288 11:35 17:20
SAT BR - 288 11:35 17:20
Taipei - Yangon
DAILY CI - 7915 07:00 09:50
TUE BR - 287 07:45 10:35
FRI BR - 287 07:45 10:35
SAT BR - 287 07:45 10:35
Yangon - Kunming
DAILY MU - 2032 14:40 18:00
TUE CA - 906 14:15 17:35
WED CA - 906 14:15 17:35
MU - 2012 12:20 18:10
THU CA - 906 14:15 17:35
FRI 8M - 501 07:50 11:50
MH - 743 16:55 21:10
SAT 8M - 501 07:50 11:50
SUN MH - 743 16:55 21:10
Kuala Lumpur - Yangon
DAILY AK - 1420 15:05 16:15
AK - 1424 06:55 08:00
MH - 740 10:05 11:15
MON 8M - 502 12:50 13:50
TUE 8M - 502 12:50 13:50
MH - 742 14:45 15:55
WED 8M - 502 12:50 13:50
FRI 8M - 502 12:50 13:50
MH - 742 14:45 15:55
SAT 8M - 502 12:50 13:50
SUN MH - 742 14:45 15:55
Yangon - Singapore
DAILY 8M - 231 08:00 12:25
8M - 6232 11:30 16:05
SQ - 997 10:25 14:45
3K - 586 11:30 16:05
Y5 - 233 10:10 14:40
MI - 517 16:40 21:15
MON MI - 509 00:25 05:00
TUE MI - 509 00:25 05:00
FRI 8M - 233 15:05 19:30
SAT 8M - 233 15:05 19:30
MI - 509 00:25 05:00
SUN 8M - 233 15:05 19:30
MI - 509 00:25 05:00
Singapore - Yangon
DAILY 8M -232 13:25 14:50
8M - 6231 09:10 10:40
SQ - 998 07:55 09:20
MI - 518 14:20 15:45
3K - 585 09:10 10:40
Y5 - 234 15:35 17:05
MON MI - 520 22:10 23:35
FRI 8M - 234 20:30 21:55
MI - 520 22:10 23:35
SAT 8M - 234 20:30 21:55
MI - 520 22:10 23:35
SUN 8M - 234 20:30 21:55
MI - 520 22:10 23:35
D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI
Yangon - Bangkok (BKK)
DAILY TG - 302 14:55 16:50
TG - 304 09:50 11:45
TG - 306 19:45 21:40
PG - 702 10:30 12:25
PG - 704 18:20 20:15
PG - 706 07:15 09:30
8M - 331 16:30 18:15
8M - 333 08:20 10:05
Bangkok (BKK) - Yangon
DAILY TG - 301 13:00 13:45
TG - 303 07:55 08:50
TG - 305 17:50 18:45
PG - 701 08:50 09:40
PG - 703 16:45 17:35
PG - 705 20:15 21:30
8M - 332 19:20 20:05
8M - 334 11:30 12:15
Yangon - Bangkok (DMK)
DAILY FD - 2752 08:30 10:20
FD - 2754 17:50 19:35
FD - 2756 12:50 14:40
Bangkok (DMK) - Yangon
DAILY FD - 2751 07:15 08:00
FD - 2753 16:35 17:20
FD - 2755 11:35 12:20
Mandalay - Bangkok (DMK)
DAILY FD - 2761 10:45 13:10
Bangkok (DMK) - Mandalay
DAILY FD - 2760 08:50 10:15
Yangon - Kuala Lumpur
DAILY AK - 1421 16:45 21:00
AK - 1425 08:30 12:45
MH - 741 12:15 16:30
MON 8M - 501 07:50 11:50
TUE 8M - 501 07:50 11:50
MH - 743 16:55 21:10
WED 8M - 501 07:50 11:50
74 ACUMEN www. myanmar b2bmagaz i ne. com
July 2013
International Flight Schedules
D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI
SAT CA - 906 14:15 17:35
SUN CA - 906 14:15 17:35
Kunming - Yangon
DAILY MU - 2031 13:30 14:00
TUE CA - 905 13:00 13:15
WED CA - 905 13:00 13:15
MU - 2011 08:35 11:30
THU CA - 905 13:00 13:15
SAT CA - 905 13:00 13:15
SUN CA - 905 13:00 13:50
Yangon - Beijing
TUE CA - 906 14:15 21:55
WED CA - 906 14:15 21:55
THU CA - 906 14:15 21:55
SAT CA - 906 14:15 21:55
SUN CA - 906 14:15 21:55
Beijing - Yangon
TUE CA - 905 08:05 13:15
WED CA - 905 08:05 13:15
THU CA - 905 08:05 13:15
SAT CA - 905 08:05 13:15
SUN CA - 905 08:05 13:15
Yangon - Chiang Mai
THU W9 - 9607 14:20 16:10
SUN W9 - 9607 14:20 16:10
Chiang Mai - Yangon
THU W9 - 9608 17:20 18:10
SUN W9 - 9608 17:20 18:10
Mandalay - Kunming
DAILY MU - 2030 14:40 17:20
Kunming - Mandalay
DAILY MU - 2029 13:55 13:50
Yangon - Hanoi
MON VN -956 19:10 21:30
WED VN -956 19:10 21:30
FRI VN -956 19:10 21:30
WED NH - 913 11:10 17:05
SAT NH - 913 11:10 17:05
Yangon - Hong Kong
MON KA - 251 01:10 05:45
TUE KA - 251 01:10 05:45
THU KA - 251 01:10 05:45
SAT KA - 251 01:10 05:45
Hong Kong - Yangon
MON KA -250 21:35 23:35
WED KA -250 21:35 23:35
FRI KA -250 21:35 23:35
SUN KA -250 21:35 23:35
Yangon - Frankfurt
WED DE - 2369 06:10 19:35
Frankfurt - Yangon
TUE DE - 2368 14:05 05:10+1
Mandalay - Bangkok (BKK)
DAILY 8M - 335 08:25 10:45
TUE TG - 782 09:30 11:55
WED TG - 782 09:30 11:55
FRI TG - 782 09:30 11:55
SAT TG - 782 09:30 11:55
SUN TG - 782 09:30 11:55
Bangkok (BKK) - Mandalay
DAILY 8M - 336 06:15 07:35
TUE TG - 781 07:25 08:50
WED TG - 781 07:25 08:50
FRI TG - 781 07:25 08:50
SAT TG - 781 07:25 08:50
SUN TG - 781 07:25 08:50
Mandalay - Singapore
DAILY 8M - 335 08:25 15:15
Singapore - Mandalay
DAILY 8M - 336 16:05 07:35
ACUMEN 75
SAT VN -956 19:10 21:30
SUN VN -956 19:10 21:30
Hanoi - Yangon
MON VN -957 16:35 18:10
WED VN -957 16:35 18:10
FRI VN -957 16:35 18:10
SAT VN -957 16:35 18:10
SUN VN -957 16:35 18:10
Yangon - Saigon
TUE VN -942 14:25 17:10
THU VN -942 14:25 17:10
SUN VN -942 14:25 17:10
Saigon - Yangon
TUE VN -943 11:40 13:25
THU VN -943 11:40 13:25
SUN VN -943 11:40 13:25
Yangon - Incheon
DAILY KE - 472 23:45 08:05+1
THU 0Z - 770 00:35 09:10
SUN 0Z - 770 00:35 09:10
Incheon - Yangon
DAILY KE - 471 18:40 22:55
WED 0Z - 769 19:50 23:25
SAT 0Z - 769 19:50 23:25
Yangon - Doha
DAILY QR - 619 08:15 11:15
Doha - Yangon
DAILY QR - 618 21:05 07:00+1
Yangon - Tokyo (NRT)
MON NH - 914 21:30 06:40+1
WED NH - 914 21:30 06:40+1
SAT NH - 914 21:30 06:40+1
Tokyo (NRT) - Yangon
MON NH - 913 11:10 17:05

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