Starting with the government’s five-year plan. We would like a general update on where you are moving Myanmar at this exciting time. Can we start with the plans that came out in August regarding the rest of the current government’s plans for developing the country and moving forward?
Yes, as you know the country is in the dynamics of transition. We are moving from a centralized economy to a more decentralized economy, from the top down planning to more of the bottom up planning. We are working on the planning process of our five year short term plan, as well as the twenty year national comprehensive development plan (NCDP). In our short-term plan of five years we are currently in the third year, we have already passed thirty-two months and we are trying to cope with the remaining twenty-eight months of our term. In our annual plan we are in the process of mid term evaluation and review. For the mid term evaluation we are analyzing the sectors that exceed above their targets and those that recede below their targets. This is a normal situation; it is apparent that this year has shown an increase in prices, in the past we had experienced 2.5-3% inflation however this year there is about 5% inflation. On the other hand, on the foreign exchange markets and various other markets, starting in April through to August (within a six-month time span), there has been an increase in kyats to dollars from 850 kyats to 950 kyats, so around 100 kyats increase, therefore the kyat has devaluated, this is relevant to the financial sector. In general the economy is going rather well, we are trying to give greater priority to seven sectors. In August 2013, the President indicated seven priority sectors for the remaining period, these seven priority sectors are: electricity, drinking water and fresh water, employment, telecommunications, agriculture and development, the financial sector, and finally poverty reduction and rural development. In the short term, the government has given priority to these sectors, on the long term one can recognize the government has proposed quite an ambitious plan towards an industrialized nation.
Some people feel the financial reforms are going to fast, others feel like they are going too slow, how do you feel about the financial reforms, must it be taken step by step?
Regarding the financial reforms, we have achieved a very successive reform, especially in reference to the long deep-seated exchange rate/multiple exchange regime which has been replaced by the managed float. This is a huge and very successful reform without any disturbance or distortion to the local economy. There is some fluctuation, however, not as severe as other countries faced at that stage of reunification, that transformation was very successful. Due to this we believe we are in our own momentum of the reform process, especially the financial reform, based on this basic principle reform on the exchange rate and the other financial management. We are furthermore working closely with the IMF, the World Bank and the ADB on this public financial management (PFM). We are heading towards our financial reforms on the capital market at the end of 2015 and we are trying to set up public companies and strengthen them and the multinationals in the future. We will start with the JV’s, these are the opportunities and the reform measures that we are opening up for global partnerships and the global investors.
Some people feel that 2015 is rather quick for the capital market to be established, there needs to be stronger public companies. Many are worried it may follow in the path of Cambodia’s stock market in which people did not trust the system. Do you feel that it will be postponed a little if the economy is not ready for it or if the structures are not in place yet?
In 2015, our target is to establish the foundations, the very start. That period will not be the opportune time nor give us sufficient time for a fully established stock market. We just finished our exchanges rate reform spanning from April 2012, We will not have established the foreign exchange markets and the other related stocks and share markets and capital markets fully in 2015, it is too fast.
You have brought up the concept of lack of trust e.g.: in the press, people and the government. However, that trust appears to be building, are you concerned that this trust could be eroded?
I haven’t seen any erosion in the trust building however, the trust building in the moment of increasing and trying to strengthen it between groups, between ethnic minorities between the government and also between the different classes and groups is an increasing trend. The trust building has strengthened over time and we hope to construct the overall peace building process in the very near future.
From your standpoint, what will ASEAN 2015 mean for Myanmar?
Starting from the 1st January 2014, the country is going to chair ASEAN for one year. We have already prepared for chairing ASEAN, there will be over one thousand small meetings furthermore, there will be to big summits, one in the first half of the year and the other in the later part of the year. The summit in the later part of the year will include ASEAN plus 6 dialogue partners: the US, the EU, Canada, Russia and others, the second summit will be much larger. We are chairing in 2014, the basic year for the build up of the ASEAN communities, especially the ASEAN economic communities, ASEAN social culture communities amongst others. As for Myanmar, its economy is still at an infant stage, especially when competing and entering ASEAN and the global economic community. Our industries are very small when compared to the ASEAN six. At present, we are not ready to compete with the global market with our products. Furthermore, AFTA and the commitment agreement seem rather challenging for our small and medium enterprises (SME’s) and their owners.
How are you working to strengthen and help your SME’s confront the challenges?
One of the major topics in ASEAN 2014 is strengthening SME’s. It shall be one of our major discussions at the ASEAN economic ministers meetings, not only for Myanmar, but for Cambodia and Laos. As a “baby” in ASEAN, we have to prepare for the challenges and ask for support and facilitation from our trade partners. We are expecting our products to have an opening in the market from Europe and the US for it is a potential new market for us. We hope to get this opportunity soon; the EU has already opened and resumed the GSP and we hope to have an opening from the US because the US is one of the biggest stimulus for all developing nations.
I wanted to ask your position on the question of human resources, what model can you put forth to help people train and get their heads around the changing working environment?
For short-term aid, we are doing capacity building programs, in house and also abroad. We have three generations, from which the middle generation needs to increase their capacity. The younger generations, from the age of twenty to thirty are very active and have a high capability; they can communicate well and have exposure to abroad. From the age of thirty to forty-five fifty, an age when they are positioned in decisive positions we are looking to provide them capacity building training, as well as short-term courses on capacity building. In the long term, we are trying to get human resource development programs. More specifically, we have started degree courses with the US community and the EU community. We already have a connection with John Hopkins University; they opened the John Hopkins Yangon University joint master degree program on political science along with other exchange programs. There are discussions between a Canadian school and Yangon economic university on public administration. We have programs in the field of medicine, engineering and other disciplines. We are working in parallel with the short-term capacity building whilst addressing the long-term build up of a human resource development program. The government gives priority on further education but this is a long-term investment process, which is why we put it as a medium to long-term priority.
Give us some examples of sectors in which you feel like investors could make a big difference for the people of Myanmar while of course benefitting themselves as well?
The food industry and food production industry are very important, as are consumer goods. Myanmar itself has a large opportunity in these sectors due to a population of sixty million. In the domestic market, there is an increasing trend in the per capita income and the standard of living, when people’s income increases they utilize consumer goods more frequently. Myanmar still depends on the importation of consumer goods. At the moment we are giving priority to direct foreign investment to export products, specifically the free trade zone. Investors can come and make use of our resources by producing for exportation, but also for the domestic consumption of food, beverages, clothing and other consumer goods. There is still great potential for investors targeting consumer goods. Currently, we are still depending on the consumer goods of our neighboring countries.
What makes you worried?
Timing. Our government is a government of transition, we have a time limitation of 5 years. Our President, the government and all the people are undertaking a huge transition from a very deep structured situation towards the new modern setting. I worry as to what extent can we achieve our goals within that time span, we need a perspective view of 20-30 years but with a considerations to our remaining 30 month term.
Personally how has it felt to be part of this huge transformation in your country?
I am very confident and proud to be working under the leadership of President U Thein Sein and this reform process; we have had unprecedented achievements within these past 31 months. Myanmar and its people’s achievements are recognized and praised by the international community on all reforms. This gives us confidence in moving forward.
What would your message be to the international investors?
For business, timing is an important factor for decision-making and for opportunities in investments. I would like to say to potential investors and friends of Myanmar that the present time is the best time, they do not need to be too cautious, the way ahead is clear. Myanmar is a country that is working for the people and with the people we will move forward, shoulder to shoulder in the ASEAN community and the global community, in a peaceful energetic mode of development. Please come and see; seeing is believing.