Myanmar-focused conglomerate Yoma Strategic Holdings Ltd said Southeast Asia needs to work exceptionally hard to realise a balanced, European Union-style integration of such disparate economies.
Yoma is listed in Association of Southeast Asian Nations (ASEAN) member Singapore whose advanced island-state economy contrasts with that of fellow member Myanmar, rich in gems and natural gas but paralysed by decades of military rule and isolating sanctions.
Elsewhere in ASEAN, communist Laos has an economy that is less than 3 percent the size of that of monarchist neighbour Thailand, according to The World Bank. The population difference would suggest a size of 10 percent.
“That we will all share the benefits of integration is beyond dispute,” Yoma Chairman Serge Pun said at the Reuters ASEAN Summit. But a “lopsided” result where some members benefit more than others “is not sustainable.”
“I think we will make it happen,” Pun said. But “I feel that there has been … over expectation of what ASEAN integration will do for all of us.”
The ASEAN chairmanship this year resides with Pun’s native Myanmar, which has been looking to attract foreign investment since a quasi-civilian government took office in 2011.
Asia’s second-poorest country after Afghanistan has no functioning stock market from which companies can raise funds, and foreign banks cannot open branches, just maintain representative offices from where they can offer companies nothing beyond advice.
“I think we have a fairly long way to go to develop our financial sector, which always is the most important sector to support the growth of an economy,” Pun said.
The government plans to permit limited foreign bank activity this year – good news for Singapore’s Overseas-Chinese Banking Corp Ltd which has had a representative office in Myanmar for around 20 years.
“When it opens up we are quite interested to establish a business presence there,” chief executive Samuel Tsien said at the summit, at the Reuters office in Singapore.
“We think that’s a market in which many Singaporean companies have engaged with for quite some time. There are quite a lot of Myanmar businessmen in Singapore who are already doing business with us,” Tsein said.
Sectors in Myanmar offering investors the highest growth include infrastructure, transportation, tourism and agriculture, Pun said.
His Yoma conglomerate earns almost all of its revenue in Myanmar from property. It also leases vehicles and runs balloon tours as it aims to diversify by raising non-property revenue to 50 percent.
Last month, Yoma said it would spend $20 million to set up what could become Myanmar’s biggest coffee plantation. It also said it would diversify by investing $46 million in dairy, $12 million in cold storage and $1.3 million in vehicle rental.
“I think we are very focused on Myanmar,” Pun said. “For the moment, I don’t think we have any plans to do anything outside of Myanmar.”
“We think this is a once-in-a-life-time opportunity and we intend to fully capitalise on the major reforms that have been going on, fully capitalise on the good prospects of the economy,” Pun said.
Shares of Yoma have fallen 5.3 percent so far this year compared with a 2.0 percent decline in the benchmark stock index. Reuters