Asia Pacific Weeks 2013German Ministry of Foreign AffairsBerlin7th June 2013MyanmarChallenges and OpportunitiesVolker Friedrichwww.gbp-international.com
21. Introduction2. Politics3. Economy4. Tourism +Construction5. Q & A
3GBP INTERNATIONAL engaged in Myanmar since 1998GBP is active in Asiasince 1997 and has anetwork across AsiaPacific. We work onstrategic and operationalproject managementchallenges with localknow how and localknow who.
4The dramatic changes in Myanmar are unprecedented in thehistory of Asia and equal the system changes in EasternEurope with Glasnost and Perestroika
5Myanmar is suddenly on every agenda related to Asia and newmarket opportunities – Expectation Management is the key
Myanmar in the newsMyanmar faces very difficultreformsAssociated Press, 23.04.2012„If you can find ways to invest in Myanmar, you will be very, very rich overthe next 20, 30, 40 years!“Jim Rogers, 21.02.2012Asian Development Bank saysMyanmar economy poised for boomAssociated Press, 11.04.2012
, 7Myanmars potential can only be achieved if reforms aresustainable and an attracive environment for FDI can be builtChallenges Opportunities• Average productivity of workers(1700 US$) is 70pc lower thanthe average in ASEAN• Only 4 years of averageschooling• Movement of 10 Mio peoplefrom rural areas to the citycenters• Requirement of up to 650 billionUS$ in foreign direct investment(thereof 50pc in infrastructurerelated projects)• By 2030 the GDP of Myanmarcould reach 200 billion U$ (4 xGDP of 2012)• The consumer class could reachca. 20 Mio people spending 100billion US$ p.a. (today around35 billion over 2.5 Mio people)• 10 Mio new job opportunities innon-agricultural areas• Reaching out to 500 Mio plusconsumers in neighboringmarketsSource – OECD, World Bank, McKinsey, GBP Analysis 2013
81. Introduction2. Politics3. Economy4. Tourism +Construction5. Q & A
“We are working hard to move frommilitary rule to democracy, to end themultiple arms conflicts that have riddenthis nation since independence in 1948,and to reform the economy away from acentralized economy to one based on freemarket,….I promise you that we will notwaver in this task.”President U Thein Sein9
10Myanmars reforms are one of the biggest surprises in Asia –welcomed and supported all around the world
11Myanmar –Facts and Figures• Borders with China,Thailand und India• ca. 60 Mio people• 85% Buddhist• Per capita GDP of ca. 850US$• Strategic importance of EastWest relations• Rich in natural resources ofoil and gas, minerals, teak,gold and others• Reform process ofunparalled speed• Member of ASEAN1,500 US$ p.a.
“You should never let your fearsprevent you from doing whatyou know is right.”Aung San Suu KyiBurmese NationalLeague for Democracy12
131. Introduction2. Politics3. Economy4. Tourism +Construction5. Q & A
14Due to decades of sanctions European and Americancompanies have to catch up now with the dominance ofAsian neighbours, India and Russia who have stayed inMyanmar8,275,392,943,4ChinaHong KongThailandOthersIn billion dollarsFDI (2011) – by countriesQuelle: GBP AnalyseOl- and Gas is the mostimportant sector
15Myanmars needs time to fulfill all the (high) expectations –disappointments are for sure for local and internationalinvestors, shareholders and stakeholders alike …
GDP should grow 8% p.a. – target at ca. 200 bn US$ by 20300 20 40 60 80ManufacturingAgricultureInfrastructureEng. & MiningTourismFinancial Serv.Telecom20302010Structure of the Myanmar EconomySource – Data from OECD, World Bank, McKinsey 2013… but the potential is attractive if the necessary institutionalreforms continue and investment flows into Myanmar willcontinue and increase over time
GBP International has several mandates for securinginternational investments in Myanmar – Managing Expectations!
181. Introduction2. Politics3. Economy4. Tourism +Construction5. Q & A
19The PEOPLE and PAGODAS of Myanmar are the biggestassetts and attractions alike
21Bagan – Air Ballon RideTraditional Fishing at Lake Inle
• There are currently 8’000 hotel rooms in Yangon and building hotels is oneof the main drivers of the ongoing works in Myanmar, as over 300 hotelsare estimated to be under construction today• The number of rooms in Yangon is expected to increase by 37% per yearby 2016 mainly driven by big international hotel chains from across theglobe• This shortage has pushed hotel room rates up 350% in 5 years and pricesare expected to increase a further 25% in 2013. This doesn’t seem tobother tourists whose number increased 54% in 2012 alone, many ofwhom are sleeping in the temples as hotel occupancy is100% in the dryseason22Hotels in Myanmar are getting windfall profits these days andnew hotels are one of the drivers of construction works…
• The influx of expats and “returnees” (wealthy Burmese migrants returningto Myanmar) as well as the growing upper--‐middle class are driving thedemand for new residential buildings and condominiums with internationalstandards.• Airports, Pipelines, Roads, Bridges, Railways, Power Plants, ShoppingCenters, Industrial Zones etc will have to be built or upgraded withinternational support• One of the problems of doing business in Myanmar is the very poorinfrastructure, notably the lack of electricity and the very old road network.Much of the infrastructure still dates from the British era, which ended in1948, and has only marginally evolved since then23Demand for construction work is available throughout thecountry but often lacking financial backing
241. Introduction2. Politics3. Economy4. Tourism +Construction5. Q & A
25What will Myanmar look like in the year 2030 and beyond andwhat lessons about rapid development can be learned fromthe Asian Tiger Countries?
GBP INTERNATIONAL offers local support servicesMYANMAR BUSINESS POOL (MBP)MBP
GBP InternationalGBP InternationalUOA Centre 19-9-619 Jalan Pinang50450 Kuala LumpurMalaysiaPhone: +60 3 2162 email@example.comGBP InternationalMoosdorfstr. 7-9D-12435 BerlinGermanyPhone: +49 30 93624739Thank you for your attention