In the Business of Promoting Business
“Governments need to focus on government-related work. Why are they going into business?”
“Is it necessary for the Yangon Regional Government to establish a corporation such as NYDC to conduct business?”
“Is the Yangon Regional Government trying to build a business empire?”
There have been numerous questions and comments on social media and the news media questioning why the Yangon Regional Government is going into business by setting up a wholly-owned company – New Yangon Development Company Ltd. Standard economic theory often prescribes that governments should maintain an arms-length relationship with businesses, let alone set up business entities.
The business of NYDC is to attract investors to the new Yangon city by setting up systems and processes and laying the foundation for a conducive environment for investors to invest for the long haul. The responsibility is on NYDC to promote business and to encourage the maximum possible investment from the private sector into building this city with the goal of creating 2 million jobs.
Myanmar is not the easiest place to convince foreign investors to park their money for the long term. It is filled with numerous risks such as operational, political and governance. But it is a frontier market that offers potentially compelling investment opportunities to satisfy investor demand, and our role is to attract these foreign investors by explaining that the new Yangon City is a good long-term investment project and that we are working towards creating a sustainable business environment, and we are here to support them.
It could be said that NYDC is not in business, but in the business of promoting business. We aim to call upon the widest range of people who are interested in building NYDC together with us. NYDC is not there to undertake all the work that is required, nor is it there to compete with business. It is there to ensure that businesses will find the right environment and conditions and be convinced to invest in the new City.
Can we emulate Singapore and China’s success stories?
Shenzhen was once a village of 30,000 people. Today, the city has grown and developed in line with the world’s insatiable demand for electronic goods. It is now one of China’s largest cities as well as its wealthiest. Pudong in Shanghai transformed from mainly farmland to what is now home to Shanghai’s financial district. Singapore, despite lacking in natural resources and a hinterland is now a global commerce, finance and transport hub. These are great success stories where the role of government in business has led to a great deal of success. Yangon Chief Minister U Phyo Min Thein has the foresight to see what Yangon could be decades from now, and he and his team has the conviction to turn it into reality.
I’m sure there will be many naysayers who feel that we would not be successful. I think we should be confident that we will be successful if we do it right. There are many examples for us to learn from so that we minimise mistakes and ensure the highest degree of success.
I would, however, like to emphasise that there is a fundamental difference what China or what Singapore has done and what we are doing with new Yangon. We do not have the financial resources required for the essential and prerequisite infrastructure projects. This adds another degree of challenge to NYDC, and this is why we are looking to attract equity investors. We need investment to fulfil the basic needs of infrastructure so that the goals of the regional government in building this new city can materialise.
We understand and appreciate the challenges, but at the same time, we are confident that these challenges will be overcome. Our confidence is not based on airy-fairy dream and blind enthusiasm. Rather it is based on the analysis of our own conditions and in finding effective solutions. The key factors that need to be in place to meet these challenges successfully are:
- A business-friendly climate anchored on progressive economic policies of the government, with policies that encourage, support and reward investors in an accredited manner;
- A strategy that allows effective transfer of technology and deployment of Myanmar labour;
- Consistent laws and regulations that will bring about confidence from investors. In this regard, transparency, good governance, and the prevention of corruption are all important factors which NYDC shall strive to maintain.
With these key factors in place, investors worldwide will take a look at us and realise there are real opportunities and together, we will be able to achieve the Yangon Regional Government’s goal of creating 2 million jobs.