StanChart upbeat on Myanmar re-entry By Esther Lee of theedgemalaysia | The Edge Malaysia – 2 hours 2 minutes ago KUALA LUMPUR: Standard Chartered Bank (StanChart), which has identified Myanmar as one of its key markets in Southeast Asia, is confident that its re-entry into the country this time will be different from its previous attempts. “We are keen and committed to opening a branch or a bank in Myanmar when the licensing regime gets clear. Right now, the rules surrounding licences for foreign banks are not defined yet,” said StanChart regional CEO (Southeast) Asia Neeraj Swaroop in a recent interview with The Edge Financial Daily. “As soon as they can define the rules, we will be keen on making our move there,” he said. The global bank has a 150-year history in Myammar. Many entrepreneurs and multinational corporations are flocking to the country in search of exponential growth in this undeveloped economy. Since 1862, the bank’s representative office has been in and out of Myammar several times due to political unrest that has plagued the country which is emerging after decades of isolation under a strict military regime. Swaroop said StanChart is looking at the opportunity in Myanmar based on the commitment by policymakers and the government to open up the country and economy. “Our view is that the changes seem to be for real. It is with this confidence that we are making our plans. We believe the government is serious about opening the country’s economy,” he said. According to StanChart, there has been a rising interest among its clients in the potential business opportunities in Myanmar in the last six months. This came after sanctions on the economy were lifted about a year ago. “A lot of our clients in the region have been enquiring about opportunities. Much of that interest may not have been translated into specific businesses as yet because people are trying to understand the country, its rules and the opportunities there. “I think the region is at a stage where everybody is trying to fully understand the opportunities, hurdles and the operating environment in Myanmar. There is a sharp learning curve happening there. That gives us confidence that in the coming year or so, we should see businesses getting into Myanmar,” Swaroop said. He said the country, which has been a closed economy for the last 50 years, provides a fresh avenue for investments and businesses. Swaroop said Myanmar, the second largest country in Southeast Asia in terms of landmass, is a unique market for investors because of its underdeveloped status and richness in natural resources. “Myanmar needs a lot of investments and developments for it to integrate with the world economy. From a macro point of view, I think there is a great opportunity in the medium to long term for that market and businesses in the region to participate in the development of the economy,” he said. “It is one country that has been underexposed to the development of the world for two generations over 50 years. When you visit Myanmar, the infrastructure is that of the 1950s and 60s. It has a lot to catch up with and that is what excites businesses in other countries.” One industry which Swaroop foresees will develop at a faster pace is the telecommunications sector that has picked up in recent times. The country recently liberalised its telecommunications sector and awarded licences to several foreign companies to operate there. “A lot of investments are needed there because the need for communications is so high. That is the most immediate thing that we will see. The next sector is energy — petroleum, oil and gas. There is a lot of interest there,” he said. Although the Myanmar government is taking steps in the right direction, Swaroop said there is still much to be done before foreign investments can start rolling into the country significantly. “What they need to do now is [to develop] infrastructure in order to absorb investments. This requires the financial sector to be developed, and the country needs more banks outside Myanmar to come in and help strengthen the local banks in the country. It will happen, but over time. There also needs to be certainty over the policy and confidence in the legal system which the government is sensitive about. But for that we have to see how it develops,” said Swaroop. Myanmar has been on the radar since it began its transition towards democratic reforms in 2011. While laws and codes have been enacted, Swaroop said they have not been put to the test yet. He said businesses wishing to venture into Myanmar will have to take a long-term view. “Every three to four months, changes are taking place. The whole ecosystem of the economy has to be in place for businesses to succeed. For example, in the banking system, until a year ago, you couldn’t make overseas payments. “But now you can. Step by step, with all these developments, doing business there will become easier,” Swaroop said. This article first appeared in The Edge Financial Daily, on September 17, 2013.
Posted on: Tue, 17 Sep 2013 07:56:51 +0000
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