The reforms in Myanmar have awakened its economy after a half-century of stagnation, with growth approaching 7% and foreign direct investment now expected to top $5 billion in the current fiscal year, 25% higher than earlier forecasts.
A visitor studies material at the Thailand Pavilion at the recent Intermach Myanmar 2014 exhibition in Yangon. The event brought together about 100 industrial machinery suppliers and service firms with prospective customers doing business in the emerging market.
The recent gathering of leaders including Xi Jinping and Barack Obama at the East Asian summits further established Myanmar's credentials as a country that is once more engaged with the world.
However, there has been talk inside the country lately that the momentum of reform has slowed. Both the government and businesses, be they domestic or foreign, have come to accept that Myanmar still has a lot of shortcomings and success is far from assured. It is not a place for anyone fixated on the short term.
"The most important thing is to think long-term; think about the real benefit of the people of Myanmar. If you come with good intentions and a good attitude, local people will embrace that," says M Gandhi, managing director for Asean business United Business Media (UBM).
As an exhibition organiser in a number of highly specialised areas, UBM is clearly betting on Myanmar's future. It recently staged its second Myanmar International Industrial Manufacturing and Subcontracting exhibition (Intermach Myanmar 2014), showcasing products from more than 100 international participants, mainly from Thailand, China and Japan.
"In Myanmar, it's not about making quick money," Mr Gandhi said in a recent interview with Asia Focus. Everything takes time as the infrastructure is limited and some policies are not yet settled. "By introducing and educating local people about new technologies, it will be a win-win situation for both parties."
In many ways, he said, Myanmar was a blank slate where people were still deciding which direction they should take, what type of development to pursue, and which technologies to adopt.
"The regulations here are still unclear and the government is trying to put policies in place. These companies [that are investing now] will have the opportunity to influence the future direction of the country," he added.
Local policymakers also have opportunities to learn from the rest of the world and compare various approaches as they strive to make the right decisions about the country's future development.
Choosing the right policy mix could lift the country's potential annual GDP growth rates from its pre-2011 baseline of 4.8% per year to as high as 9.5% by 2030, said Cyn-Young Park, assistant chief economist at the Asian Development Bank (ADB).
One of the biggest advantages that Myanmar has is its people as most are very hard-working, honest and ethical, said Mr Gandhi.
If more companies were to build factories in the country instead of importing workers from Myanmar to man factories in their home countries, both sides would win, in Mr Gandhi's view. The workers would have better jobs with better pay, and productivity would improve as they do not have to be away from home, thus benefiting their employers.
However, the country needs to upgrade the quality of its human capital in order to maximise its strengths, says a recent ADB report titled "Myanmar: Unlocking the Potential".
"Myanmar has a vacuum in skilled labour and a large group of uneducated youth," said Ms Park. "High youth unemployment could be a serious risk if not properly addressed now. Proper jobs and learning opportunities need to be created."
To achieve truly sustainable economic growth, she said, the country would need longer-term commitments from foreign companies to develop skills and invest more in human resources.
"In the short term, policy measures should focus on upgrading skills and strengthening vocational training, but in the long run, the education system requires comprehensive reforms at all levels to provide skilled and educated workers that will meet the increasing demand for skills as the country moves up global value chain," she said.
The growth and wealth concentration in big cities is another challenge as wealth disparity could widen, making future growth less inclusive.
"Poverty remains high and access to economic opportunities and social services is unequal across regions," said Ms Park. "Reforms should target areas that can increase chances for a broad range of the population to grasp economic opportunities.
"Agriculture remains the backbone of the Myanmar economy. With relatively abundant land, water, and labour resources and proximity to the world's fastest-growing markets for food, the country has comparative advantages in this area."
Basic infrastructure remains the major constraint to developing agriculture, on which about two-thirds of the population in rural areas still depends.
According to the ADB, agriculture accounts for 32% of Myanmar's GDP, 52% of employment and 21% of exports.
OPPORTUNITIES FOR THAIS
At the recent Intermach and Subcon exhibition, companies eager to get in on the ground floor of industrial development were showcasing their wares, and many of them were Thai.
"Thailand has the advantages among its neighbouring countries as there are many skilled labourers in the country. Foreign companies are using Thailand as the hub to produce automotive parts and electronic products while relocating the less complicated production to neighbouring country such as Myanmar," said Sanchai Noombunnam, group director of UBM Asia (Thailand) Co Ltd.
"The good thing about Thailand and Myanmar is that they are neighbours with very similar culture and Burmese people tend to trust Thais in doing business together."
Mr Sanchai noted that in Myanmar, many sectors were growing, including infrastructure, energy, gold mining and telecoms. "We also see that automotive, machinery and subcontracting industries will be the future of Myanmar as Japanese auto companies have signed a number of agreements to invest into this market."
Although many companies have entered Myanmar, profits remain slim or elusive as most are still familiarising themselves with the market and trying to get their brands known among local people.
"We're still receiving very limited feedback from Myanmar. Most of our business still remains in Thailand," said Pattaera Sangpan, a customer support engineer with Hexagon Metrology (Thailand) Ltd, which offers products and services for industrial metrology applications. "We have a 5-10% market share in Vietnam and we expect the same with Myanmar within the next four years."
"We came [to Intermach] to establish our name in Myanmar," added exhibitor Fei Fei, customer manager of Shanghai Demiele Industry Machinery Co Ltd. "Our company is not hoping for sales in this country yet as we are studying the possibility of the market.
"This is the second year that we've come to this exhibition in Myanmar. Last year, our sales were very high and many Burmese people were interested in our product, but this year the crowds are much smaller," said Phicharn Zhou, marketing director of Pumpkin Corporation Co Ltd, a hand tools and hardware company.
In any case, Myanmar still has a long way to travel. In the World Bank's Doing Business 2015 report, it narrowly escaped being named one of the 10 most difficult places to do business, ranked 177th on the 189-country list. Any investor who comes to Myanmar knows that patience, as well as the right connections, will be crucial.
"More than 60% of the investors here come to Myanmar to find the right partner instead of making quick money because that's the best way to operate a business here. There are a lot of restrictions if you come here without dealers or a local partnership," said Mr Sanchai.
"You need to know about local conditions. Mostly we recommend that you look for local or right partner who is related to your business," added Aung Thein, vice-chairman of the Myanmar Industrial Association (MIA).
He noted that the current government placed a much higher priority on the private sector than the military junta of the past. "More than 90% of business is done by the private sector and they are encouraging more development in the private sector so there will be more job opportunities created."
Mr Sanchai sees substantial opportunities for Thai businesses as a result of the prevailing attitude of the country's leaders.
"For Thai investors, Myanmar will become a strategic partner with Thai companies as it is helping Thais to expand their market and drive the economy forward," he said. "As Thailand remains the hub for production in many sectors, Myanmar is a perfect spot for relocating certain production."
Currently, China accounts for 30.5% of total cumulative foreign investment of $46.71 billion in Myanmar, followed by Thailand with $10.1 billion and Hong Kong with $6.55 billion. Significantly, 72% of all investments are still in two primary sectors: electricity and oil and gas.