Commentary: Umesh Pandey
Yet another trip to the “last frontier” market in Asia last week was another eye-opener for me and my colleagues.
Over the past year or so, I have had a few opportunities to visit Myanmar and am enjoying every opportunity. The scenery is magnificent, the resources abundant, and the people have the drive to strive for a better life and to pull themselves out of the hand-to-mouth living they had been accustomed to.
Land at the airport and you once you walk out you have an option to get a “rented” SIM card for both voice and data at $3 and $4 per day. The data SIM is a 3G that has a decent speed.
Drive to your hotel and on the way you will witness new construction and new businesses popping up. And this time around I was surprised to see an exhibition of information technology products taking place.
Check in to your hotel and you will loads of people, and over drinks or dinner, most of the conversations you strike up will reveal that they are there looking for any kind of opportunity.
All these are indications that yes, things are changing fast — as fast as the types of vehicles on the road.
A year ago driving around in a Toyota Alphard would have been relatively unthinkable, but now the duties on imported cars have been reduced sharply. Affordability has gone up many times, and as a result the cars that are falling apart have been relegated mainly to taxi service. And even that is changing, with many taxi drivers now using Toyota Altis cars.
A drive to a meeting in Yangon these days can take you as little as 15 minutes or as long as 90 minutes depending on the traffic, and all this reflects the impact of the flow of money into the country.
The Myanmar economy is on a rise never witnessed before and hotels are among the hottest commodities. Rooms are going for $200 and up per night for a five-star hotel, with facilities that are lower than you’d find in a three-star property in Thailand, Singapore or Malaysia.
But then there is a limited supply and huge demand, so it is the market mechanism at work.
The boom going on in Yangon is evident from the fact that today the average cost of land in the central business district (whatever that may mean in Yangon) costs anywhere between 750,000 and 800,000 baht per square wah — comparable to what prime land would fetch on Silom or Sathorn in Bangkok.
All this is in a country that’s just opening up and where the infrastructure is still in its infancy.
The boom in Yangon might be bad news for Thai investors looking to enter the market, but also a good lesson for those businessmen who have been too lethargic to get moving.
Talk to any businessman, diplomat or government official in Myanmar and they will say, “Thai businessmen are too slow to make decisions.” They go to Myanmar, look around, talk to people and then decide not to participate.
Take, for example, some of the larger retailers in Thailand, who have been talking about expanding their businesses in the region. During my visit last week I was surprised to see a building being constructed right next to the Bokyoke or Scott market in Yangon.
This building is none other than an outlet of the Malaysian department store group Parkson, which plans to open what would be Myanmar’s first retail outlet on such a scale.
Many of Parkson’s peers across the region would be thinking, do the people of Myanmar have the purchasing power to support a department store? Well, if that’s what they are thinking then they should go and see what’s on the roads. People today are buying imported vehicles like never before, new showrooms are opening up every few kilometers, selling gas guzzlers imported directly from Japan or South Korea.
Reluctance to test the waters in Myanmar appears to be especially applicable to the small and medium-sized enterprises that have not made up their minds and have not walked their talk when it comes to seeking opportunities outside Thailand.
Maybe they have been too sceptical of the changes going on and are not too sure of what the future holds in Myanmar. But the fact is that the country is moving at such a rapid pace that not many of these SMEs will have the time and opportunity to invest if they continue to procrastinate as they have been doing for so long.