by Anthony Larmon
In an article posted last week titled “Don’t Invest in Myanmar, Here’s Why”, a young Mr. Reid Kirchenbauer encourages the good readers of his InvestAsian blog not to invest in Myanmar. He doesn’t encourage them to do their due diligence, to think twice, or to proceed cautiously – he just says don’t invest at all. I thought, as someone who has actually invested in the country and worked for investors here, people might appreciate a more holistic, even optimistic, view of investing in Myanmar – one of the fastest growing economies in the world.
Kirchenbauer notes that Myanmar’s pro-investment law fails to make investing easier because of the country’s incompetent and corrupt bureaucracy. I suppose no one told him that Myanmar is rapidly democratizing and has revised and enacted a new investment law – one that, among other things, allows foreigners to own up to a 35 percent stake in a local business before it is considered a “foreign” business. Previously, that threshold was one percent.
The new policy means local companies can now enjoy access to more foreign capital and expertise, and foreign investors can enjoy more reasonable regulations in partnership with competent local businesses.
But even setting up a wholly foreign-owned business in Myanmar is not as daunting as Mr. Kirchenbauer would have you believe. I personally set up a foreign-owned public relations agency, Echo Myanmar, a couple years ago. This is the type of business that Mr. Kirchenbauer says requires a $50,000 investment. Actually, it requires $25,000 upon registration, with the rest due in four years.
The young mogul also says the process of setting up such a business involves “bribes, incompetency, frustration, and lots of waiting”. I can safely say I experienced none of those things. I worked with the very competent Consult Myanmar team, who helped me set up my business in a few months, with a temporary license to operate during the “lots of waiting”.
There are plenty of frustrations in Myanmar, but it is naïve to expect smooth sailing in a frontier economy.
The next reason offered by our investment-savant for keeping your investments out of Myanmar is that foreigners can’t own property. This is true, but I’m going to let all you would-be investors in on a secret: there are other lucrative markets in Myanmar than real estate. Importantly, these other markets involve a mid-to-long-term approach and actual knowledge and skills – not just a bit of cash to throw around.
Through my investment, I’m not bringing my money to Myanmar; I’m bringing my background and experience at the world’s leading public relations networks. As a result, my team of aspiring PR professionals gets to work on campaigns for some of the biggest brands in Myanmar and the world.
Investment is more than flipping a house for profit; it’s providing real opportunities to young, ambitious professionals who, for decades, were denied fair opportunities for advancement in society. It’s offering them access to partners and investors from around the world who bring decades of needed experience to the Myanmar market. It’s building up the country’s human capital and, eventually, a middle class with more disposable income that can be spent at – wait for it – other businesses. Maybe even one you’ve invested in.
And if, while building this capacity and providing these opportunities, you can make money doing something you’re good at, why wouldn’t you? Nothing in my entire life has felt so rewarding. The financial benefits remain an afterthought.
Lastly, Kirchenbauer cites high opportunity cost and time required for an investment to make money. When you’re 25 years old, five or 10 years might seem like a long time. However, when you’ve got decades of emerging market investment experience, like private equity firm (and my first employer in Myanmar) Anthem Asia, you practice a “patient capital” approach that appreciates the time it takes to build something that does more than yield a return – something that satisfies a societal need and benefits the overall business environment for years to come.
Myanmar is not for everyone, but my own experience with investing here has been incredible, and the people I know, personally and professionally, who have invested in this market are some of the most impressive individuals I’ve encountered anywhere.
If you have an appetite for excitement, an inclination toward giving back to society and an appreciation for emerging economies as more than just a vehicle for profit, I’m sure you will find great reward here, and maybe a little money, too.
Anthony Larmon is the founder and managing director of Echo Myanmar.
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