Myanmar Closed CountryBurma Closed country
Myanmar's continuing economic steps on the global stage
And when Coca-Cola opened a filling facility outside Yangon, Myanmar's biggest town, in 2013, it was a comeback to the South East Asia region after 60 years of inactivity. This beverage giants was one of many multinational corporations from abroad that abandoned Burma in the 1960' when the land turned inwards and took control of the army for many years.
As the US and the European Union adopted trade restrictions, doing more and more with and in Myanmar became more and more challenging for overseas businesses. Obama's government began a commitment strategy with the once-closed nation, triggering an outbreak of US capital spending totalling $30 billion in authorized overseas credit.
Coca Cola did not waste a moment transforming Myanmar's new home base into a brand. The same year that the filling facility opened, the Chinese authorities organised decriminalised meetings of the population. Tales like these exemplify the attraction - and indeed the hugely promising opportunities - of what is probably the last borderland in Asia when Myanmar makes its first footsteps back onto the forefront.
It is one of the most precious geo-political areas in the whole wide globe. Located at the interface between China, India and Southeast Asia, it is within 1,000 nautical mile of half the world's people. Myanmar, with its long coast and kilometres of navigable rivers, has huge traffic junction capacity connecting all of the regions market.
There are many overseas firms trying to gain a foot in the door, hoping that they can benefit in the same way as some firms with the economies of other Asia's developing countries. Although the economy has slowered from a star 8 per cent in 2014, there will still be an envy of the 6th century.
5% in 2017, according to the latest World Bank statistic. However, the country's economic expansion and Coca-Cola' early market success are deceptive in one important respect. Myanmar's challenge may be even greater than that of its precursors in developing countries such as China in the 80s and Vietnam in the 90s.
Burma faces certain major issues in the tradition of attracting cheap labour to industry such as the garment industry. If it cannot find jobs for its own citizens, this could be a symptom of a general issue that could hinder many border countries from taking their place in the world economic system.
In particular, global progress in automating can hinder them from following the same gamebook that has led to economic expansion in former poor nations. Myanmar's challenge may be even greater than that of its precursors from newly industrialising nations such as China and Vietnam. The Myanmar administration, pursuing a crucial phase of industrialisation to create jobs for tens of thousands of millions of Myanmar's people, has come across the increasing use of robotics in low-cost production.
In a 2016 study by Oxford University and Citigroup (pdf), it says: "While the potentially disturbing effects on the labor markets associated with the increasing level of automatization are likely to hit less developed nations than developed ones, they could potentially be more disturbing in poor consumption and restricted welfare networks.
" Re-shoring - in which multinationals move production nearer to where they live and cut cost through automisation - could also discourage the employment-generating production export ing they would have used before. Clothing and footwear are still a relatively small part of Myanmar's economic activity, driven by petroleum and natural Gas, building, energy and telecoms.
Myanmar is the third smallest exporting nation of clothes and shoes in the Association of Southeast Asian Nations (ASEAN), according to the International Labour Organization (ILO). Clothes and shoes account for only about 2 per cent of those imported from Vietnam, another ASEAN member. Nevertheless, garments are one of the fastestgrowing industries in the state.
Textiles and shoe imports almost nearly doubled between 2012 and 2017, accounting for 75 per cent of Myanmar's industrial export in 2015 (the last year for which ILO figures were available). It has been declared a nationwide strategic focus under a 10-year plan supported by the Myanmar Garment Manufacturers Association (MGMA).
As Myanmar relies on the industry (and other sectors) to industrialise the country's population, there is now the danger of automating the work. This wider vulnerability is exemplified in a 2016 ILO survey (pdf), which estimates that 56% of all jobs in ASEAN's five major economys-Indonesia, Thailand, Malaysia, the Philippines and Vietnam-are at high predatory risks over the next-10 years.
Even though wage levels in the country's textiles and shoes sectors are relatively low - $99 in 2015 as against $182 in Vietnam for work of equal value - low salaries no longer offer the kind of comparative edge to a nation they have had in the past.
Chang said in a recent interviewee that the ILO had received reports from some firms that had decided not to relocate to Myanmar because production could be done more cost-effectively with machinery nearer to their market. Burma is not alone in the face of the bottleneck of automisation. In Myanmar, where 66 per cent of the people work in farming - a higher percentage than in most other ASEAN states.
In the Philippines, for example, the rate is 29 per cent. Many developing economies, however, believe that higher-wage economies are more susceptible to automatization. Myanmar, with its low labour cost, could be sheltered for a while if so. In 2016, DFID started a five-year support programme to develop a joint strategic plan for the industry with the Myanmar Textiles Manufacturers' Associations.
A part of this programme is to raise political decision-makers' apprehension that Myanmar's taxation system is preventing businesses from entering more lucrative sectors of the textiles world. "Although emerging in Myanmar, the textiles and clothing industry is expanding rapidly and could have a major influence on jobs, so we take it very seriously throughout our entire industrial pipeline," says Tom Coward, DFID Head of Integrative Grow and Livelihood at the British Mission in Yangon.
Automating is seen as an opportunitiy in some jurisdictions to raise the number of more highly qualified workplaces such as coding and designing. However, Myanmar has a poor educational system that will hardly generate well-trained grad. After the first generally recognised Myanmar democracy elections since 1990, the Myanmar administration, established in 2015, is trying to make investing in learning a top political agenda.
Monthly spending is $1. 3 billion to training, a 30 per cent growth from the year before. Following a 1988 riots among students that killed several thousand in Rangoon, the Myanmar administration shut down many colleges across the nation and moved others resolutely to eradicate disagreements.
Today, schoolchildren still emphasize memorizing and employer regrets that Myanmar's college grads do not have the necessary abilities. In addition, many specialists have departed the state. Approximately 10 per cent of Myanmar's indigenous inhabitants are living abroad, many of them in neighbouring Thailand, Malaysia and Singapore. Myanmar recently received $98 million from the Asian Development Bank to finance programmes to improve the standard of higher learning and to improve technological and professional outcomes.
Several multinationals have returned Myanmar employees. The large Myanmar workforce - an estimated 60 million - is often referred to as proof of Myanmar's large domestic economy by those surveyed. Almost two third of the country's inhabitants are living in the countryside and working in farming. In spite of the very rich Myanmar countryside, the agricultural industry is still one of the least effective in the game.
Only one third of the land uses the outdated power network, so that many in the countryside have to overpay for their own power supplies. Power cuts are still widespread even in Rangoon, Myanmar's richest town and the country's economical capitol. An epoch-making Yangon YEDx incident in May was hit by failures that led to indignation in the public service press.
Much of Myanmar's immense land is inaccessible despite the country's improved highway network due to its low traffic densities and few asphalted streets (slightly more than one fifth of Myanmar's streets are asphalted, as against 95 per cent in Thailand). A lack of adequate natural resources prevents large parts of the country's people from participating in the new trade-dependent economies that Myanmar is trying to create.
It' s not yet clear whether Myanmar's hard-won advance from a country ruled by the army jungle to something nearing an economy that is growing. Myanmar's de facto head Aung San Suu Kyi has spent much of her term in power settling regional conflicts between the German constitution and ethnical minorities.
However, the paradoxical effect of the liberalisation of politics has perhaps made it more difficult for there to be a tension between the peoples of the countrys peoples, and there are still a number of difficult issues, such as the continuing tension and the mass influx of tens of thousands into neighbouring Bangladesh. Myanmar needs to capitalize on its significant strength to meet these challenging times and find its way into the international economic landscape.
Myanmar was once the world's largest travel exporting nation and ranked number 25 in the global agricultural sector, with a per head supply of fresh and cold drinking waters tenfold higher than in China and India. Burma has 90 per cent of the world's total natural resources of Java, as well as ruby, sapphire, salt, pewter, zinc, magnesia, brass, nickel and old wood -bearing wood.
By 2019, natural-gas production, supported by the building of new tunnels across the state, is set to have doubled. Myanmar has played a prominent role in its Belt and Road campaign - a major project to connect all of Eurasia's market with high-speed trains and other types of infrastructures - and Myanmar is also involved in India's so-called Look East campaign, which is aimed at linking India with South-East Asia.
For years Japan has been investing strongly in Myanmar in electricity, infrastructures and other areas, partly as a result of a strategy of commitment with the Mekong and Southeast Asia in general. However, since Myanmar's road to wealth is not the same as China's or Vietnam's, the road still needs to be paved.
Last year, the German federal administration presented a long-awaited 12-point business strategy, which has not yet been implemented in detail. Schiavenza is a novelist and journalist working for the Asia Society in New York.