Myanmar: Decentralise and let regions and private sector develop infrastructure: WEF takeaways

World Economic Forum on ASEAN 2017

Key lessons from the World Economic Forum on ASEAN include tapping in the private sector when making infrastructure policies and decentralisation.

The regional governments and private sector should be able to carry out small-scale infrastructure projects related to regional trade.

The Myanmar Times asked Khin Maung Win about the World Economic Forum (WEF) on ASEAN 2017. Mr Khin is the chair and managing director of Myan Shwe Pyi Group and was part of the delegation from Myanmar to take part in the WEF from May 10 to 12 in Cambodia.

Previously, The Myanmar Times asked Ken Tun, CEO of Parami Energy, as well as James Song, managing principal and co-founder at Faircap Partners, for their thoughts on the Forum.

Klaus Schwab’s The Fourth Industrial Revolution

Mr Khin told The Myanmar Times that he and other members of the WEF community would soon complete the translation of The Fourth Industrial Revolution into Myanmar language. They plan to distribute the books to young people, education institutions, policy makers, parliamentarians and the Tatmadaw.

The Fourth Industrial Revolution was written by economist Klaus Schwab, who is founder and chair of the Davos-based World Economic Forum. Mr Schwab argues that this revolution is different in scale, scope and complexity from any that have come before. Characterised by a range of new technologies which are fusing the physical, digital and biological worlds, the developments are affecting all disciplines, economies, industries and governments.

“This book is unquestionably the best reference to understand the opportunities and challenges presented by Fourth Industrial Revolution,” Mr Khin commented.

“Myanmar has a large part of the population still living partly in pre-industrial era relying on farm animals for agriculture and transport. On the other hand, majority of our youth are also very connected, using smart phones and social media.

“I cannot stress enough to make data costs affordable for them. Income gaps will start to narrow as regional physical connectivity improves and the population more digitally-connected,” he added.

The key lesson for the Myanmar government offered by Mr Khin is straightforward: reach out to the WEF and get involved in the collaborative initiatives. Myanmar’s economic vision should be trade and logistics focused and hence the Forum offers a platform to learn about the most competitive trade policies and infrastructure solutions.

“WEF’s collaborative initiatives; such as partnerships with Grow Asia, Global Alliance for Trade Facilitation [GATF], youth engagement, digital ASEAN and the best practices and success stories from WEF members are the best public policy library for the Myanmar government,” he said.

The Global Alliance for Trade Facilitation is a public-private partnership for trade-led growth to accelerate trade facilitation reforms, such as mobilising public-private partnerships.

“We understand that Cambodia and Vietnam reached out to the WEF for assistance, especially in infrastructure. Myanmar should do the same,” he said, adding that the business community in the country can benefit from those initiatives in order to tackle income inequality, and social inclusion.

Decentralisation, “China fatigue”

As for infrastructure, Mr Khin cautioned against the state being overloaded with infrastructure proposals, ending up with little progression.

“Countries and governments can get overwhelmed by infrastructure development ideas from investment partners and financial institutions, eventually ending up with a dozen national master plans; plenty of talk with no action.

“It may then take a government forever to make timely decisions to proceed with the most practical solution for their country,” he said.

Mr Khin’s solution in carrying out infrastructure development is two-fold. First, Myanmar should push for either state-led projects or infrastructure focused on regional trade, and the country should work with strategic partners such as Japan, China, India and ASEAN.

“Due to its geographical location, Myanmar has a unique opportunity to invest in large scale infrastructure to be shared with regional economies.

“Multi-stakeholder participation and regional collaboration will allow more financing options beyond China and Japan,” he said.

Myanmar has an “unfortunate legacy of China fatigue” owing to the country’s dependence on China in the past for large-scale infrastructure projects, associated with the lack of transparency and community engagement.

He emphasised that Myanmar needed to overcome this “China fatigue” as China was a strategic partner for trade and presented a lot of opportunities for businesses.

The second part of the solution is decentralisation: allow the regional government and private sector to take the lead in implementing small-scale, “mini and micro” infrastructure. Doing so, he argued, would close the gap and provide the rural population access to larger domestic and regional markets.

“Regional governments should be empowered more and they can leverage both local and foreign private sector participation,” he noted.

Draft in the private sector for infrastructure policies

Myanmar’s unique geographic advantage is a common theme embraced by businesses. Despite all the cheerleading, such potential is not realised because there is little physical connectivity. The Myanmar Times asked Mr Khin how this advantage could take off.

Apart from the two-fold solution, he named finance, digital connectivity and private sector participation in policy-making as the answers.

“Physical connectivity is highly important for Myanmar to become a strategic logistic and trading hub.

“Top two priorities to support this hard infrastructure should be for Myanmar’s financial system to be seamlessly integrated into global financial system and empower the population with the most affordable digital connectivity.

“The government should create a highly competitive framework and also invest to provide the fastest and cheapest digital connectivity for the entire population. Bring the data costs down to be the most affordable in the region,” he said.

The government should also engage the private sector starting from the initial stages of its infrastructure policies.

“In today’s digital age, technologies and solutions are so disruptive that without early private sector participation, policy decisions can be outdated by the time they are rolled out. Private sector should play a proactive and responsible role avoiding vested interests to assist in implementing the right policies,” he remarked.

Some businesses have argued that the infrastructure, such as road network, within Myanmar is more important for the agriculture sector than linking the country with its neighbours. Mr Khin agreed with this but stressed that the central government should not be the only one to lead the development.

“Regional governments and private sector are in the best position to develop the rural infrastructure. It should be scaled up accordingly to match income growth of farming population,” he said.