Singapore's brand name seen as an advantage in Myanmar
IF the new Myanmar government continues to speed up economic reform to attract foreign trade and investment, the South-east Asian nation will grow into an attractive destination for regional and global companies.
And Singapore firms will have an edge there because the country's brand name resonates with the locals, according to International Enterprise (IE) Singapore's Yangon-based centre director Audris Tan.
IE Singapore, a statutory board under the Ministry of Trade and Industry, is the agency tasked with driving Singapore's external economy.
In an interview with The Business Times, Ms Tan gave her outlook on the operating climate and the investment prospects in Myanmar, like Singapore also a member of the Association of South-east Asian Nations (Asean).
The country's new government is led by Htin Kyaw, its first civilian president who took office in March this year after the National League for Democracy's landslide victory at last November's general election.
"Myanmar firms are receptive towards working with Singapore companies and partnerships will be mutually beneficial," said Ms Tan.
"Singapore companies can bring in management expertise and technological know-how, while Myanmar companies can help navigate the local customs and regulations. More importantly, they have access to networks that might be difficult for foreigners to access," she added.
Beyond commercial considerations, Singapore firms are encouraged to demonstrate meaningful job creation, opportunities for skills upgrading and to offer an environmentally and socially sustainable growth path in their business proposals. These factors, said Ms Tan, would put them in good stead with the new administration, which is armed with a strong mandate to govern for the next five years.
According to latest figures, Singapore is the second-largest investor in Myanmar, after China, with US$13 billion worth of approved foreign direct investment as of April this year.
Myanmar was Singapore's 28th-largest trading partner in 2015, with bilateral trade growing 9.6 per cent year-on-year to reach S$3.5 billion last year
Many well-known Singapore companies are already active in Myanmar, including the likes of Keppel Land, Pan Pacific Hotel Group, Soilbuild, Yong Nam, MDS Collections, Pastamania and Ya Kun Kaya Toast.
For business services, UOB and OCBC are currently the only two Singapore banks - out of nine foreign banks in total - to have a banking licence by the Central Bank of Myanmar.
Rajah and Tann, Allen and Gledhill, and Wong Partnership are among the local law firms that have established an early presence in Myanmar.
Meanwhile, Changi Airport International is working with Yong Nam to pursue the Hanthawaddy International Airport project in Bago, and SembCorp Utilities will develop one of Myanmar's largest power plants in Mandalay, the country's second largest city.
Stressing that companies should take a long-term view towards Myanmar, Ms Tan singled out urban solutions and consumer services as the two key sectors that IE Singapore is looking at in the immediate term.
With Myanmar's key cities expected to grow rapidly, the physical infrastructure will need to be upgraded to cater to the needs of growing urban populations.
A larger middle class will also emerge as investments lead to an increase in jobs and incomes, and in turn these people will demand more sophisticated goods and services.
"The Singapore brand name is well received in Myanmar due to cultural similarities and a huge Myanmar diaspora in Singapore. There is good potential for more food, retail and other lifestyle-type companies to expand into Myanmar," said Ms Tan.
In the long run, there is potential in manufacturing as Myanmar moves towards industrialisation, with the Thilawa Industrial Park on the outskirts of Yangon already in operation.
"Myanmar's large population and abundance of land place it in a good position as an alternative manufacturing hub, complementary to neighbouring Thailand and Vietnam. Singapore manufacturers are already looking towards Myanmar as an option," she said.