Myanmar [Burma] Spotlight


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The recent political change in Myanmar has seen it turn a corner. The opening of the country and the relaxing of
international sanctions have resulted in a flurry of excitement from potential investors. IDC called it an ‘unpolished
gem’ and promised high levels of growth within the IT industry this year. Several companies have already entered the
market, including Coca-Cola, but many are wary and unsure about entering the market so soon. To test opinion on
Myanmar, we interviewed 54 IT and business professionals, asking if they thought the country’s IT market had great

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Myanmar [Burma] Spotlight

  1. 1. AsiaMYANMAR [BURMA] : SP TLIGHTIntroductionThe recent political change in Myanmar has seen it turn a corner. The opening of the country and the relaxing ofinternational sanctions have resulted in a flurry of excitement from potential investors. IDC called it an ‘unpolishedgem’ and promised high levels of growth within the IT industry this year. Several companies have already entered themarket, including Coca-Cola, but many are wary and unsure about entering the market so soon. To test opinion onMyanmar, we interviewed 54 IT and business professionals, asking if they thought the country’s IT market had greatpotential. Yes No Don’t Know 66.7% 90% 31.4% 10% Inside Myanmar 1.9% Outside Myanmar 38% 2.3% 59.1% “Do you think there is great potential for IT in Myanmar [Burma]?” [source: IDG Connect] “Country Breakdown: Inside/Outside Myanmar [Burma]” source: IDG ConnectFindingsAs Myanmar is barely a year into its newfound freedom, creating a wide-ranging sample from the country itself proveddifficult. We did however, get a decent response from professionals further afield, many of whom have first-handexperience of the country. This provides valuable insight, and helps illustrate the situation.The general consensus is that Myanmar does indeed hold great potential within its IT sector, with a total of 66.7%agreeing with the statement. People within the country itself are overwhelmingly positive- 90% think their countryholds potential for the future. When looking only at respondents outside of Myanmar, the levels of negativity rise, with38% disagreeing with the statement. But overall the results point to a positive future for the country.
  2. 2. AsiaReasoningWhen asked for their reasons, both sides agreed that the country offers what is essentially a clean slate; thereis a lack of infrastructure, industry and skills. But it seems how this void is viewed affects the answer. Theinterviewees who feel positively about the opening up of the country think a workforce willing to learn, the abilityto enter a competition-free market and growth in other sectors that will inevitably require IT presents a greatopportunity. One interviewee explained, “Burmese companies are just at the nascent stage of their developmentand most of them don’t even have access to the World Wide Web. Think about how much IT it would need to just bring them so that they can compete at the world stage.”“Most Burmese companiesdon’t even have access to the One response from within the country said, “IT is very popular withinWorld Wide Web. Think about Myanmar as a commodity. However, there is poor infrastructure and grounding in the basics to be able to understand and develop thehow much is needed in IT so new and novel applications Myanmar needs to address its problems.that they can compete at the Much is needed in the areas of education, training and development ofworld stage.” standards.”On the other hand, the negative responses cite skills shortages, poor infrastructure and a lack of industry asbarriers for investment. Several respondents also commented how they didn’t feel the country was ready yetbecause there was so little on the ground, but possibly would be in the future around 10 years from now. Thegovernment was the most dividing subject among interviewees. Some cited a fresh government and a waveof new legislation as a boon, however it seems some are distrustful of the government and reluctant to believethings will change. One interviewee explained, “This is one of the most repressive regimes on the planet. Untildemocracy comes to Myanmar I plan on boycotting any business involved there.”BackgroundDespite Myanmar’s checkered past, in the last 12 months the country IDC has called Myanmar anhas turned a corner. The release of the pro-democracy party leader AungSan Suu Kyi after nearly 20 years of house arrest, free elections and the ‘unpolished gem; virtuallyeasing of international sanctions on the country have seen the nation take one of the last untappeda U-turn. ICT markets in the APAC region’As well as greater freedom and the hope of improving the lives of thepeople, companies around the world are seeing real potential for thecountry to become the next major emerging market. Companies such as Coca-Cola and ad agency WPP are alreadystarting to build a presence, and executives are flying out on a regular basis to scope out the landscape. $268.45m 15% 2011 2012 2013 2016 “15% expected growth in Myanmar’s IT sector in 2012 reaching $268.45 million in 2016”, [source: IDC]
  3. 3. AsiaAn Unpolished GemOne of the big areas opening up is IT. IDC recently released a report into the country’s IT sector, calling its greenfieldmarket an ‘unpolished gem’. “Myanmar is virtually one of the last untapped ICT markets in the Asia/Pacific regionwith fast rising potential. For IT spend alone, IDC is expecting 15% year-on-year growth in 2012, and the marketis expected to reach US$268.45 million by 2016.” That represents a massive annual growth rate of 14% overfive years. IDC predicts Yangon and Mandalay will be the two leading IT hubs for foreign market-entry and ITconsumption, with telecoms, government, utility and energy, financial services, hospitality, and media sectors allmajor areas for growth.The government has taken steps towards the future, with both a long-term plan looking to 2030 set up in 2005 anda more near-term one that addresses the plans for the next few years. These kind of goals help focus initiatives andfunds, and with so much change on the table coming all at once, focus will definitely be needed. The telecoms areamay be the first to take the leap, with Myanmar’s Post & Telecommunications Department Director General, KhinMaung Thet, saying a new communications law is being studied to create four new telecommunications licenses inthe country that are open to both local and foreign investors. Previously foreign investors were barred from holding alicense.Blind Spots, Stumbling Points and Dangers 550,000 1% mobile penetration mobile subcriptions [source: World Bank]Despite the buzz and talk of potential, Myanmar has been an information black spot for IT, and the information thatis available is usually either outdated or comprised of sketchy estimates. World Bank data shows there were around100,000 internet users as of 2009, a number which had stayed level for the previous few years, while broadband isvirtually non-existent. Mobile subscriptions stand at around 550,000, which equates to a penetration figure of around1%. Socialbaker, a site providing regular Facebook figures, doesn’t haveany Myanmar figures, although as the things open up this is bound to The government wants to triplechange. According to StatCounter, mobile access to the internet hasrisen sharply from practically nothing at the start of the year to just under the size of the economy in the9%, with Android being the most popular user choice. For desktops, next five years, but things areWindows is king, and web browser choice is split 50/50 between IE and moving so quickly that theFirefox. country risks overloading its rickety institutions.Piracy levels in the area remain murky; neighbours such as Vietnam havesoftware piracy levels around 80%, meaning some companies, suchas Microsoft, are nervy about entering the market. Introducing an IP system, trademark registry and correspondingintellectual property law may help to alleviate fears, but that in itself could bring more problems. The governmentwants to triple the size of the economy in the next five years, and to facilitate that has been passing dozens of newbills. Things are moving so quickly that according to Reuters, the country ‘risks overloading its rickety institutions.’
  4. 4. AsiaThese rapid changes could lead to a host of problems.The fast rate at which new bills are being passed couldlead to poorly thought and inadequate legislation, Expert Opinionwhich would only put off investors and cause trouble forpeople and companies on the ground. The government John Naing,recognises their lack of knowledge and expertise in many Citrix Systemsareas and have been recruiting help from neighbours Systems Administratorsuch as Singapore and Japan, but other dangers remain.The country has a serious unemployment problem, andexpanding too quickly into areas that require specialistskills will create a major skills shortage. Already vast I grew up in Burma, and left around 17 years ago. Iamounts of people are unemployable for skilled work, have lived and worked in the States since. My wholemany in general are unfamiliar with modern technology family are still back home, and I will soon be joiningsuch as smartphones and desktop computers. them.Sustainable growth and education are essential toprevent future problems. The current situation in the country is very promising, and so I want to go and give it a try. My two elder brothers work in real-estate and selling motor vehicles, and are both doing very well. They say things areConclusion looking bright and asked me if I wanted to come back and work with them and have a go, so I agreed.By 2015 the government is hoping for 50% of the My field of work is IT. Currently I work as a Citrixcountry to have wireless access. But with around 80% of systems admin; I do a lot work with applicationthe country’s 60 million people living in rural areas, many deployment and managing servers, as well asof them in poverty, there are several issues that first enterprise data centres. If my brothers want to doneed to be addressed: Fixing the chronic lack of decent something in IT, I will go down that road, if I want to doinfrastructure, including the rolling power cuts; further something myself, they have said they will help me out.relaxing internet censorship; and dealing general lack If we find a partner from overseas that wanted to comeof familiarity with technology. These are thing that won’t in and do something in IT, we’d be open to engaginghappen overnight. To fulfil its potential, Myanmar has with them. Under current laws outside investors need ato move at the right pace and think things through, not local partner- they can’t come in by themselves.charge ahead blindly. A lot of companies from Asia are coming into Burma and testing the water, but so far there is very little indication of major US or UK corporations makingAbout IDG Connect the move. So far only a handful of companies, such as Coca-Cola have started up, just to test. I think all of them are waiting for the new bill to come from theIDG Connect is the demand generation division of government. The new investment law, amongst otherInternational Data Group (IDG), the world’s largest things, will remove the requirement for a local investor,technology media company. Established in 2005, it should be out by the end of August, but there are noutilises access to 35 million business decision makers’ confirmed details yet.details to unite technology marketers with relevanttargets from any country in the world. Committed to For IT in the country, there is actually nothing reallyengaging a disparate global IT audience with truly solid, almost no companies that are doing IT as a mainlocalised messaging, IDG Connect also publishes business. Although there are a few modern pop specific thought leadership papers on behalf of I think it’s very open for any companies who start doingits clients, and produces research for B2B marketers business in Burma.worldwide. For more information visit: