Putting the government’s performance into perspective. Interview with Peter Beynon from the British Chamber.
MANY in the business community have expressed disappointment over the new civilian-led government’s first year of office. But how does the pace of change in Myanmar compare to her neighbours? Chair of British Chamber of Commerce Myanmar Peter Beynon told The Myanmar Times that the government’s second year should provide more concrete definitions to their policy directions in different sectors. He also shared his thoughts on Myanmar’s liberalisation in comparison with other emerging markets and what Myanmar’s unique selling points are. This is the second part of our interview with Beynon.
Part of the purpose of the British Chamber is to provide a platform for members to engage with the government on issues affecting businesses. Do you feel that the administration is listening to concerns of the business community?
In their first year, the National League of Democracy [NLD] had spent a good deal of time soul-searching for its strategy and direction.
The NLD came into power with its mantra of ‘change’. What that term meant was not particularly well-voiced or well-presented to the people in their election manifesto. Normally, an election manifesto lays out what their [the party’s] policies are for different industries, trade unions, agriculture, joint-venture investment and so on. But those were nothing similar to what the NLD did – that hasn’t been their major focus.
I hope that, after these first 12 months, the NLD is now in a better position to move forward and provide concrete directions to the people in different sectors. They can start proactively communicating what their strategy directions are to the nation as a whole.
In the last 12 months, has the NLD been proactive to the business in the private sector?
It had been a formation period for them. Charitably, they’ve been consolidating their views and presenting and defining what their case is. I hope that the following 12 months are going to have more definition and communications with the people at large, and also give some substance to those strategy directions.
You said that “access to land, finance, utility and human capital are four key issues” and your key message will be liberalisation. Is the new government liberalising the economy in the right speed?
Like everything else, I would prefer to do it faster rather than slower. Obviously, I would promote a faster liberalisation for the insurance sector, for the banking sector, for the non-bank financial institutions [NBFIs] sector and for microfinance.
But there needs to be a level of regulatory supervision over this. You can’t liberalise everybody to go out and start a wild-west-shooting-in-the-street type of stuff – you need to have the policemen in place to make sure that law and order prevails. For example, law and order in the financial market depends on the banking regulator, the Central Bank.
The Central Bank needs to build the skills and the expertise. It needs to understand what credit-risk management means, how to establish and run a corporate bond market, how to regulate the interest rate regime and how to regulate the exchange rate regime. It doesn’t have all these tools right now, and it doesn’t have the expertise either. So the Central Bank needs to gain that expertise.
Making a regulated economy into a deregulated one immediately [an economy which is liberalised without the regulations in place] is equally not the right thing to do.
I would certainly encourage Myanmar to take advantage of what’s being offered in terms of expertise in the financial sector. The expertise, involving both execution capability as well as directional change, would allow the country to be liberalised sooner rather than later.
The quicker you can liberalise, the quicker you can bring capital in, and the faster the average man in the street will be able to get his new job, his new car, his new television set, and do all the things which he wants to do but is now waiting to achieve.
How does Myanmar’s economic liberalisation compare to the other CLMV (Cambodia, Laos, Myanmar and Vietnam) countries?
I’ve lived through and worked through the Asian-tiger economies. For example, I was in the Philippines back in the 80s and I worked in Thailand over the last 30 years, and I was in the Middle East during the Arab Spring, so I’ve seen from afar. What Myanmar is going through is not dramatically different. It doesn’t come as any shock to me that the anticipated benefits of Daw Aung San Suu Kyi and the white knight coming in and ‘wow, everything is going to be different overnight’ does not happen.
It just does not happen, life isn’t like that – we need to learn the lessons of the past. Unfulfilled expectation for what was coming was always going to happen. Everybody was bound to be underwhelmed by what the new government was able to do, it’s not a surprise.
But the likes of Cambodia, or what people term as CLMV and Thailand, are going through similar cycles, though each country has different unique selling propositions [USPs].
Myanmar’s biggest opportunity is in its tourism and agriculture. There is a huge capability in gas and economic opportunities for Myanmar to be part of China’s Belt and Road initiative.
All of these are critical aspects for Myanmar over the next few years. Is it any different? As someone who has been through it before, here’s nothing I haven’t expected. I always hoped that it happened quicker than it actually does, but none of the four issues [access to land, finance, utility and human capital] are solvable overnight.
They’ve got to take time.
Improving the education system, for example, is going to take one or maybe even two generations, together with investments. You just don’t suddenly build schools and then the system is suddenly improved – you need teachers, curriculum and direction.
The fact that you’re well-educated doesn’t mean you come out as a well-educated doctor. Similarly, if you are well-trained to become a doctor, but you actually want to be an accountant, you have been trained wrong. I’m using a dramatic example but the question is: are the schools producing the type of people relevant to the business that they’re going to go into? That’s a symbiotic relationship which will only develop when Myanmar finds its place in the world.
I was always sanguine about the expected speed at which Myanmar’s changes were likely to happen. The euphoria that this change produces always drives expectation far higher than reality will ever be able to achieve. But I’m still very excited about the opportunity here.
This interview has been edited for length and clarity.