 After decades of conflict and isolation, Myanmar is now on the road to rapid political and economic reform. The once-reclusive nation is now one of the world's most compelling investment stories. With the promise of a population of 62 million, a large youthful workforce, and a wealth of natural resources, Myanmar is open for business, but is it ready? Can it balance the inflow of foreign interests with domestic capacity building? Over the next hour, we discuss and debate Myanmar, the way forward with our panel of experts, Indra Nui, Chairman and CEO of PepsiCo and Co-Chair of WEF East Asia, Helen Clark, Administrator of the United Nations Development Program, and former Prime Minister of New Zealand. She's also a Co-Chair of WEF East Asia, Anand Sharma, Minister of Commerce and Industry for India, Michael Andrew, Global Chairman of KPMG International, and finally Serge Pan, Chairman of Serge Pan & Associates, and also Executive Chairman of Yomah Strategic Holdings. Welcome to the World Economic Forum. I'm Martin Soong. Whenever the World Economic Forum gathers or huddles, it brings together or harnesses big business, big brain power from academia, also big multilateral institutions, the World Bank, the IMF, also NGOs, towards one goal, their big thing is how to make the world a better place. But at this particular gathering, the World Economic Forum East Asia here in Myanmar, it's all about how to help a single country become a better place. And that is Myanmar, and that is why we're gathered here today, and what we're going to be talking about, the way forward for Myanmar. You've met our guests already, our experts, let's launch right into it. Ms. Clark, you've just been re-appointed, second term, excuse me, second term as head of the UNDP, I get confused as well sometimes. So, if you take the long view, golfers say, you know, the long game, say, imagine 20, 30 years down the road, what kind of place Myanmar is going to be, how is it going to get from now here to there? What's the sequencing? Well, I think if we look ahead, we see how other nations in ASEAN have really pulled themselves up. I think regional integration has helped the opening session today. We heard quite a lot about some of the big regional infrastructure projects which are going to connect people, but then come back home here to Myanmar. I don't think it's a question of whether the economy is going to grow. It's going to grow and grow, and it'll be fueled, of course, significantly by the extractive industries boom, but that in itself won't reduce poverty and increase the living standards of people. So parallel to undoubtedly a resource flow into government coffers from the extractive industries, I think there needs to be a focus on basics like agriculture. That's where the great majority of people in this country currently are living and working, but it's a sector that needs more investment, more support for the small holders to increase their productivity. So I'd be putting a big focus on agriculture right now as key to lifting not only the people in Myanmar, but restoring Myanmar as a significant exporter of these kinds of goods. Excellent. Very good. Let me bring surgeon on this. You know, when people talk and look at development, they look at three basic stages. Agriculture, making stuff, manufacturing, and finally services. How much of a risk is there? Sirs, do you think that too much maybe of the new investment coming into Myanmar is going to be focused on that second layer that is making stuff because it's a fast, easy way to create jobs to lift incomes? Well, there's no shortage of foreign investments that wish to come into agriculture. I mean, we have a lot of large agricultural companies, medium size, small size wanting to grow, all sorts of things. So there's no shortage of that. In our new foreign investment law, however, there's some passages which on one hand denotes the fact that we really welcome foreign investments. On the other hand, give some sort of protection or ample protection to our small farmers so that they don't get run over. So if you read the investment law carefully, I mean, you can come in as a foreign investor, do large scale farming, big stuff, but when you want to go into small stuff, you have to abide by certain things and there are certain restrictions. So it would be fair to say that as far as our policy is concerned, we actually encourage investments in the agricultural sector. I think it's also very important because as somebody said this morning, which is very true, we are actually endowed with a lot of good things based on agriculture. We have a very fertile land, we have a huge mass of land, we have a huge population, 70% of them farmers, and a history. Yet, we are not an agricultural force. Our produce are sold at lower than other people's prices. Our productivity is low and that's because of a lack of investment, lack of R&D, lack of technology, and all that can be easily filled in by the foreign investor. Okay, alright, interesting. Is there a lesson to be learned here because we were talking about this earlier on a few seconds ago in the green room and that is that if you take a look at how the North Asian countries have developed China, South Korea, Japan, and compare them to what's been happening in Southeast Asia, the Northern countries have developed and accelerated very aggressively. The Southeast Asian ones though, not so much. Places like Malaysia have hit a bit of a ceiling. The multilats call it the middle income trap. How much of a lesson is there to be learned by Myanmar from these two different paths of development? Well, I think undoubtedly Myanmar will want to industrialize and want to be on the next wave, if you like, of offshore processing. But to do that, you need a lot of infrastructure, you need your energy, you need your water. That's why I say that the quick wins immediately, I think, are with the small holder agriculture, given the opportunity and the incentives can really move ahead. But I do feel confident that Myanmar can get on a fast track. I've watched from the vantage point of New Zealand over many years how the ASEAN economies have lifted and I'm absolutely confident that this economy can lift. I just come here as an advocate for human development and making sure that as it lifts, it lifts the people with it and that it can turn the will from extractive industries into a blessing that can go back into the virtuous cycle of development, the education, the healthcare, the housing, the infrastructure, the social protection so that you take everybody with you. For agriculture to work the way that you think it should, is land reform going to be necessary here? And from the talks that you've had with officials, is that where they're headed? Well, I don't have any expertise on that, but I, looking at the history of the development of agriculture in many countries, including my own, often start small and then as it succeeds and the production rises, you start to get the base for further processing, the farms amalgamate, you get more scale. So I wouldn't try to start big. I try to start by growing that base of the small holder agriculture so that it can generate its own wealth and onward development. Minister of India's perspective? With respect to agriculture? Yes. Well, agriculture is very important because when you look at the percentage of people in Myanmar who are dependent on agriculture today, maybe 58%, investment in agriculture and particularly creating the institutions, both for better management of crops, crops diversification, management of water, water here is abundant. It rains eight months or if not more in a year and that's one of the priority sectors of India's engagement. We have a multifaceted partnership which embraces critical areas, agriculture being one of them, education, skills training, healthcare and also infrastructure building among others. So we are in fact going to work here with Myanmar which was decided during the visit of my Prime Minister last year to establish an institute on agriculture research and there's another institute on rice which is being established, the rice bio park which India is developing. I'm sure that this will help the investments in agriculture and the engagement of the other countries, both the government-to-government partnerships which are being built and also the investment as Sahajpun talked about with the big companies coming in. It will be important as Helen Clark said that there has to be a balance, a balance to ensure that more people get empowered and the investments have a beneficial spin-off and that should be the objective because eventually agriculture has to yield more but the sustenance of the percentage of people on agriculture is bound to change with the manufacturing, with industrialization as it has been the case with other developing countries including mine and we can say today with a large presence of the corporate leaders and institutional leaders from all over the world that in the coming years and decades there's going to be dynamic economic activity, construction, manufacturing in this country and that's where that balance and the priorities have to be correct. Okay Ms. Nui, I'll get it right this time. Let me bring you in on the discussion. You're from the second layer, making stuff. Pepsi and a lot of other things obviously but you understand implicitly that in order to get there to sell to this market of 60 million plus people there are a lot of fundamental basic things that have to happen first and you're very active in that. As a company that's food and beverage we need a large consumer base with discretionary income because we are in the discretionary consumables and the only way to get discretionary income into the hands of the people in Myanmar is to actually build a base and give those people money to be able to spend it. So you're involved in... So for example the agriculture work we've just begun to do in Myanmar is to grow a potato crop, a high yield potato crop and then buy the potatoes from the farmers so that they have an income stream and then use those potatoes to make products or export the potatoes to other ASEAN countries because there is no fertile acreage to the extent that Myanmar has anywhere else in the ASEAN country so this could be a big export zone for critical crops so our goal is to create this virtual circle that Helen was talking about and make sure that on the food side we actually invest in agriculture but buy the crops back so that they do get income in their hands and then on the other side invest in skills building because we need very good talent for all of our businesses there's no point going in with the business model and not having enough people to do it and so we are working with Yangon University and UNESCO to put in place a skills development university to be able to train matriculating college students with basic business skills and that's what we're working on so building the fundamentals and working with the Myanmar government to actually help them in the nation building Interesting, it seems to me that what you're doing with the potatoes that first bit is smart, it's strategic and this is an interesting phrase that we talked about earlier on I said, ah, this sounds like CSR and you said, no, this is way earlier than CSR this is simply R Absolutely, I honestly believe that if you talk about CSR it sounds discretionary because a CSR program can change if the CEO changes or if you run out of money you can say or cut the CSR program, it's an option but if it's a responsibility of a company business the right way in a country then you go in with a model which says the only way you make money is by building the base the only way you can make money and get a license to operate is by doing things right for that country with that country and I think that's two very different concepts we often confuse a responsible corporation with corporate social responsibility and I want to make sure we separate the two one is a discretionary activity one is a license to operate Okay, I'm already fair enough Serge, when you hear comments like this from somebody like Indra, what do you think? I said something this morning about CSR there's so much talk about CSR I'm actually confused so I think what I look at a company coming in and I would say do you have the right conscience if you have the right conscience to come here, do good for the country do good for the people promote education impart knowledge you're okay it doesn't have to be a fancy program if you're coming here to say I'm going to make a lot of money and run or where's my profit it's a matter of conscience so I would like to say that we really have to emphasize and judge people who come in by what kind of conscience they bring when they come here let me ask you a blunt question you know, an interesting way has been used to describe the situation in Myanmar now with regards to foreign investors a lot of people are sniffing around but not a heck of a lot of actual capital has been committed I'm curious whether there's also a risk in Myanmar as there has been in China a foreign company is coming in with the exact opposite view that is, look, it's such a dangerous risky place I better make my money while I can take it and run is that fair? Is it prevalent? no, it's not fair I think if you come in thinking that this is a dangerous place highly risky, I better make my money quick I think you should stay home because this is not a dangerous place this is a place with a lot of potential if you are long term if you are going to do something good for the country you are going to benefit and let me put it this way having worked in China and many other countries we are trying to prevent foreign investors coming in and in the first wave losing money this happened as you know very well in China absolutely, yes we are trying to prevent that we are trying to give them a good deal a fair deal we are trying to spend backwards to accommodate that but you've got to be responsible and you've got to have a conscience if you come here and all you want is profit I think it's problematic okay, excellent search, hold that thought we are going to take a quick break and our coverage here at the World Economic Forum East Asia, our discussion on the way forward for Myanmar continues after this okay, so what's happening now is we are taking a pretend break a commercial break, we are not actually making any money on it yet maybe later so we'll pause for about a minute or so and then we'll resume welcome back, thanks for staying with us here at the World Economic Forum our discussion panel discussion continues on the way forward for Myanmar we left off with some thoughts from Serge Poonlitz swing over to the other side and bring in Mike here Serge made a statement this is a safe country do you agree well I think this is one of these interim stages where brand Myanmar has been defined and I think most foreign investors are for the first time having experience with Myanmar and even this conference I think people form their own views that's why issues around law and order governance are so important because this is what will encourage foreign investors in the future you only have to look at some of the less successful examples around the world who are still 20 years later trying to live down issues of law and order of corruption so I think the government policy settings are absolutely critical and the reputation that business investors inform in these early years is going to be part of the long term success of Myanmar interesting, earlier on we were talking about the agriculture part you're obviously the other end of the scale services, professional services do you even think about stuff like farming? absolutely because the experience we have is that those economies which have balanced economies are the ones that actually get through ultimately through the middle income trap and you've got to play to your advantages you've got a resource based economy you've got the low cost manufacturing the special economic zones you've got the resources sector you're between the two largest countries in the world with growing middle class with a population of 71 million people you can have a very balanced economy here if you actually have the framework right and what foreign investors look for is clear direction as to what the government wants you to invest and what are the rules and what it doesn't want you to do in building long term sustainability so it's a question of understanding the government motives and then working in partnership with the community to basically establish those and make sure that you have a long term sustainable business and brand and this really important mark Ms Clark, from talks that you've had with officials do you get the sense that they are determined not to let the resource curse happen here in Myanmar? I've been really impressed at the way government officials have opened up and listened in the last two days and I find them very responsive and I think you've actually looked at the resource sector the gas sector is one sector here that's working really well. Why? It's been going for 20 years. They already have good joint venture partners in place, everyone understands the rules, they comply with the international standards and governance and you're getting very competitive bidding you're getting very good foreign investment which is again starting to translate into economic outcomes. You have the telco licenses at the moment underway there'll be a whole series of these coming through the next few years and it's really important these processes be seen to be transparent, level playing field and open to international standards. Are IPPs likely to be next? Is that what you understand? I'm not sure about PPPs as such but I think there's any number of sectors that are really important going forward that need to be opened up for private sector investment. We only have to see across our client base the number of people for example in consumer markets that are looking here at the moment and what's some understanding about property rights how can they establish their retail stores here we look at the banking sector people are wanting to know how they can get a branch license here to provide funding to their clients that are in this marketplace even we look to see what are basically the local licensing rules and be able to audit the books of the major companies that are here to access capital markets and to give them confidence overseas so there's quite an extensive program to do with clear precise regulation and we've got a role to basically help government understand those priorities and what are the rules that operate in different countries. We've been talking about rules and regulations things that are on people let's move over and talk about people if we could Ms Clark a lot has been talked about in terms of Myanmar's infrastructure deficit but it's human capital deficit literally two decades where the result of mismanagement of education you have a population which is not very well equipped for the modern age I think it would be fair to say from the UNDP's point of view where do you start I mean you can't grow or educate a person overnight well there will be a lost generation in the years when the education system wasn't what one would wish it could be and I think when we're talking about the future of education it's not only investing in today's young people which is absolutely critical but also trying to help those who didn't miss out to catch up I think adult education, adult extension will be important as well but it may be a case in this race to the future now of let a thousand flowers bloom we're hearing some quite exciting examples of for example the technology sector coming in and what it can do with its specific skills training and modules and so on so I think it will be a mix of investment in a better quality public education system but also looking in this race for quality growth for spin-offs in the private sector investment and how they upskill staff as well if I could just make a comment on what Indra said about her approach at Pepsi I think this is a model approach to talk about a value chain approach for young people and really see your capacity to do well here is so linked to the opportunities that you open up for the small producer I think that's very, very encouraging to hear from a major corporate community and actually most of our success stories have come when we set up that virtual circle we did the same in Mexico with Sunflower we planted Sunflower with the farmers in Mexico but we bought the crop from them and then allowed them to keep this virtual circle going and use it in our snack production so when you set up that model you actually put income back in the hands of the farmers that creates a very virtual circle but talking about skills building if I may just add Helen one of the unique problems in Myanmar that was flagged to us this morning was the fact that young men or young boys are dropping out of school at a very early age and the girls are going on to study and so there's really a mismatch as you get into college and higher levels two thirds women I think there's an issue of finding a way to bring young boys back into the education system and retraining them so that you don't have a skew in society it's an additional challenge in Myanmar Sir, I don't know if that's something that was mentioned in the panel this morning Well, I also heard it for the first time but if that's true then we'll be ruled by women very soon Great, Myanmar is going to be great which might not be a bad thing who knows, right? Minister, let me bring you on this we were talking about technology a while ago, Miss Clark was when I think of India, I think many people think of IT services, of course and if you read reports like the recent one out from McKinsey they draw attention to the possibility that Myanmar opening up now is actually an advantage because they can make a leap a technology leap forget the copper, laying wires go straight to wireless and straight to the internet and this could be a huge driver of development, do you believe that? Of course and therefore investment in human resources is important institutions have to be built that's what we believe in we've already identified priority areas particularly in the field of education science and technology information technology in particular and also training in skills we have already established center of excellence in IT sector in Yangon we are going to establish now information technology institute like a university in Mandalay in addition to that we also we have established one in Pukoku we are doing another one the industrial skills training centers so that would help in creating opportunities not only for the younger people in particular because Myanmar has huge young population given the demographic profile of the country and the potential that youth have so if they are empowered with more investments coming in whether multinationals corporate entities or the public sector entities they will need skilled people and that's what we are seeking to do besides that in our institutions in India we are taking young people from Myanmar on our scholarship programs in fact we are doubled last year when Prime Minister came here the number of scholarships and they come to our professional institutions we are looking at most actors not restricting only to technology medicine engineering information technology or agriculture but going well beyond that and specializes in training programs which we have in mind which we will do in our institutions but also help in establishing centers here including we were talking this morning private sector, silk sector, hand looms so that people living in the rural areas are empowered and at the same time when we are talking of high end of skills people have to be the youth in particular to be made employable that is part of our engagement because it's not only the private sector but also the state as such so we have a developmental assistance program in our engagement which is huge plus of our corporate entities public sector and private sector who are coming to invest and investment means manufacturing value addition and job creation I'm just thinking while the new generation literally of Myanmar needs to get trained as well as schooled there needs to be a bit of a filler and I think Serge we've talked about this before Myanmar needs to live work to broad coming back seeing vast opportunities to hear you indeed are hiring many of them but is there a flip side to this because some of these people are possibly so disconnected from what should be their home country do they in the end really help there is no doubt that even the Myanmar nationals who have lived overseas for many many years and master their knowledge and now come back to work to help needs adjustments the adjustments are mainly pertaining to trying to apply what they have learned to local conditions because you can expect the catch word is let's become international well I think there's a lot of pitfalls being international for the sake of being international if you join yourself being a local company then you really will have a lot of problem operating here so using international standards international mindset international values that are commonly accepted and trying to adopt it to local conditions is what is needed and these we call them repads have got to go through that adjustment just the same that they would have to so we're trying very much to bring that gap smaller bringing up our local staff their capacity their knowledge and then hoping also that the people who come back help them but also they would have to adjust so it's quite a bit of challenge there ok Serge you are of course I will call it Serge I guess the poster boy for the opening up of Myanmar and a nobleman among entrepreneurs here we've had this discussion before I asked you Serge you know people talk about the risks the challenges of operating in Myanmar but you've managed to build a fairly sprawling sort of conglomerate with fingers in a lot of different pies and I asked you how you did it you didn't really give me an answer but you said it's easy explain a little bit more well to be honest half of the companies we have and we have maybe 40 of them in the group grew organically you start a service and you find that this service is very much in need and when you started it you actually wanted to service your own companies within a very short period of time you would be servicing the society and 80% of your contracts will be third party contracts so it becomes an independent stand alone company and that is because the market requires that service so badly I'll give you an example we have a real estate project we hire 50 security guards because it's a gated community pretty soon the neighbor says you seem to be doing a good job and then the companies come and the embassies come and before you know you have a security force of 800 security staff it's a stand alone company now so these are what I call organic growth it's not because we are a genius the market needs it and in the service sector particularly there is an enormous amount of need even today maybe more so today for service companies to come in and service what is needed so I don't think it's very difficult interesting okay you know we were talking earlier on about something else and that is the role of the military in an economy in a country and I wanted to know, I wanted to ask you whether there was too much crowding out here in Myanmar is that the case I would worry less in Myanmar about the military or SOEs in other countries emerging markets in particular let's say China the advantages that SOEs have the state enterprises have is so distinct as compared to the private enterprise okay but Myanmar as it happens today has got a very unfavorable climate for proliferation of SOEs and in fact the government is very adamant to privatize a lot of the state-owned enterprises which have proven to be unsuccessful because of the system because of the lack of motivation for the people who work there so there is no climate for that to grow and for that purpose in that respect I think it is a great time for entrepreneurship to grow and to flower so this is indeed a very fertile ground for entrepreneurs we're going to take a quick break our discussion here at the World Economic Forum on the way forward for Myanmar continues after this so this artificial commercial break just let you know towards the end again we're going to have questions and answers we'll try to involve you could somebody turn my mic up okay welcome back to the World Economic Forum we're continuing our conversation here on the way forward for Myanmar and Helen Clark Serge here was talking about the reason whether that crowds out private enterprise you and I talked about this earlier on how good a model is Indonesia for Myanmar in the sense how they transitioned away from too much dominance by the military in politics as well as in business and the economy I think one of the most useful things in development these days is sharing experiences between countries across the south there are plenty of experiences out there of transition from quite authoritarian regimes military backed regimes to something different and I think Indonesia has a lot of experience to share with that again think back 20 years ago to how Indonesia was and where it is today as a functioning democracy with tremendous respect for the path that it's traveled while no one will want to say I'm your model on the other hand sharing experiences is extremely important and I think it is a relevant one I wanted to come in a little bit on what Serge said about the role of the expatriate if you like and entirely agree that it can be quite difficult for people to come home and fit in the salary structure may be very different they used to operating in a different environment and I don't think we should think that it's just coming home that's the only way to help your country actually if there's a skilled world place to diaspora out there it can be creating vital connections for the new Myanmar for its entrepreneurs for its youth to connect with that wider world so no one should feel unless I come home I'm not being patriotic you can be patriotic and help your country with the connections that you've made in the life that you've got out there okay let's move on to talk about physical connections if we could infrastructure and we had an interesting discussion a few minutes ago as well in I mean one of the great advantages of this country of course that a lot of people talk about is that it is basically sandwiched between east and west and is a physical connection land roots especially the Japanese have been very interested in this for decades but the main plans and ideas now for physical road connectivity are what? connectivity and infrastructure we view as vital very important when we engage with Myanmar and beyond you have to look at the map India shares a 1600 kilometer long border with China and with Myanmar four of the northeastern states of India that's Manipur Mizoram then we have Nagaland and Arunachal the first crucial states they are also land locked when you look at northern Myanmar and northeastern India with the vast potential biodiversity young population the need of connectivity is an imperative we are now working towards that India is developing a Kaladan multi-modal transport corridor that's on the Kaladan river including building bridges development of a port in Sethwe and a riverine port which we are almost there but we could not reach the point but we have stopped at Pallega and therefore the road component has increased to be about 285 kilometer long that will ensure connectivity and with the development of the port the maritime linkages the shipping linkages between the Kalqata port and the Sethwe port besides this corridor India is working very closely with Myanmar and Thailand to develop the trilateral highway as we call it linking Zoi Pui in India that's in Mizoram through Myanmar that's a long highway to Thailand and Moesat now we are halfway there I'm sure that by 2015 2015-2016 they should be fully operational in other words it will be ready for this whole idea of an ASEAN economic community? yes you see because it will connect India, North-East India Myanmar with ASEAN countries now we are already engaged Myanmar is a member of ASEAN India is a member of East Asia summit we are part of the ASEAN the regional economic cooperation as it is evolving and it is very important for this region and for the world what's happening we have a very focused national initiative to look east policy this would be a very important aspect of that look east policy Myanmar and India have historic relationship cultural linkages, shared experiences similar developmental challenges parts of India and Myanmar and also when we look at some of the ethnic groups and their linkages cultural influences for India this country is a bridge and gateway to the ASEAN countries and eventually as was said earlier that it will connect right up to Cambodia and we had the car rally prior to the commemorative summit between ASEAN and India marking 20 years of India ASEAN engagement in November-December and the car rally covered the entire route so it is very much there certain parts of it which need to be upgraded, developed that's exactly what we are doing Thailand is doing its bit and Myanmar is doing its bit sounds exciting and also like a huge physical undertaking but Indra, when you hear ideas like that for physical connectivity how much does it really mean for you because you prefer to make in-country for the market because even within the country we need an infrastructure highways, road, rail to move our products to bring the crop from the farms and then send manufacture product back into all of the cities and towns so without a very good highway system it is very hard to transport and with the trade agreement that exists within ASEAN it is very easy for us to manufacture in the ASEAN for the ASEAN countries moving agriculture across even moving finished goods across ASEAN is important and a lot of the foods and beverages today especially the packaged foods and beverages have a lot of bulk so it is very important that when you have to move the trucks you have the shortest possible time between production and the point of display and from the farm shortest possible time from the farm to the manufacture so I think the more you invest in infrastructure the lower the cost of the supply chain is going to be and the cheaper the product is going to be for the end consumer so it can't be fast enough all the work that you are doing with the Myanmar government because I think it will help the overall food chain and it will actually reduce prices to consumers. Sir, does this mean anything for you and your businesses? It opens up a lot of opportunities for construction companies infrastructure companies and so forth we are a developer basically but for us all what we are talking about is an immense opportunity over the coming 5 to 10 years as the so called middle class comes up there is a need for virtually everything from housing to schools to services leisure, entertainment everything so I do feel that the future is very very bright for any type of business without giving too much away as a local entrepreneur where do you see the most immediate opportunities as foreign investment comes in as momentum keeps up for opening the low hanging fruits are what everybody sees the hospitality industry is very easy to enter and it is very much needed for the first time in probably 15 years surpassed 1 million visitors coming to Myanmar last year we have always waived around 250 to 350 thousand visitors a year a year now that compares to like 15, 17 million a year in Thailand probably more in Singapore and Hong Kong and even Cambodia gets 3 million tourists a year we got 300 thousand every year for many years for the first time we passed a million the plan of the government is hopefully that we will reach 3 million by 2015 which is very reachable but that's that's exponential growth exponential demand you're talking of demand that is not 2x, 3x but maybe 7x, 10x so I think hospitality industry is very much needed supporting that of course is your logistics if you have 300 million 3 million people coming to your country how do you transfer them from point A to point B where do they eat and all the things that goes with it so we find that we are in a very urgent need to build up the capacity the investment part I think is the easy part because there is no shortage of people queuing at the door trying to invest build a hotel, build this, build that but the capacity the software where are the staff that will man the hotel and so forth these are the issues that I think we need to address Mike you want to comment on this? I want to just summarise the last conversation because recently we've done quite a benchmarking of just the infrastructure gap that exists within ASEAN but within Myanmar to the rest of ASEAN and but I think the great advantage that Myanmar has is first of all that no longer do individual foreign investors look at this on a country basis what's the supply channel into India, what's the supply channel into ASEAN, what's the supply channel into China so therefore it's also in the interest of the neighbouring countries to basically assist and help as Minister Sharma described in having a sort of collaborative partnership about building something which is greater for the region and I think that's a wonderful opportunity for a country like Myanmar to participate just given us geographic edge at the moment we had an opportunity to talk this morning as well we've raised a number, a magic number 3 million people by 2015 correct so that would be triple the estimated amount of people, number of people who were expected to visit this year we spent some time with a gentleman from Visa and you probably won't be surprised to know that he was very excited about this because now Visa also, MasterCart is accepted in Myanmar but he said look that's just the beginning and the tip of the iceberg is that it's going to be that way but of course obviously we're looking in country 60 odd million people and he's already made connections with several banks here, local banks but one thing I thought is look there's still a very deep seated culture here where people don't usually open bank accounts there have been runs on banks historically, that hasn't been unusual how do you change that because this is a place where people don't have the financial system well first of all I think you start with microfinance education and you develop a product which is adapted to the local community of the market something that they can understand very readily within their own local village and how it applies the second thing you have to do is actually build an infrastructure a prudential supervision which makes sure that they have confidence that a party like the government becomes sophisticated and all of a sudden it becomes the loan for the car and then the loan on the house and then gradually becomes a loan for a small business and all of a sudden if the examples of other countries are such it becomes part of the norm but that initial phase of winning confidence is critically important this is why reform of the financial sector here to me is a very very major priority because not only is it a sponsor foreign direct investment but it will start domestic consumption as the country has not seen before interesting if I may correct some of the misconception here about what you mentioned just about our consumers being probably very rudimentary in their knowledge of how to use financial services I think that's actually wrong because what actually meant was the system or what systems that do exist are rudimentary well our first opening this country the first opening is not today we call it a second spring the first opening was 1990 in 1988 we had a change of government and we had at that time was called state law order restoration council and in 1990 the first foreign investment act was promulgated it was a very good foreign investment act and that was when the foreigners started coming in and from 1990 to 2003 we had 13 good years of economic growth as a matter of fact I visited Vietnam and various other emerging economies those times we were far ahead I can tell you for a fact the financial services banking industry was liberalized in 1993 when they allowed private banks to be set up and there were 8 of us private banks we had home mortgages with credit cards albeit checked domestic credit cards we had trade financing we had higher purchase with everything it is only in 2003 when we had services and there was mismanagement some very bad decisions and they start closing down all credit cards were cancelled within a span of a month you got to pay back everything home mortgages were cancelled you got to pay back within so many months credit was taken away from the market just like that okay and you can imagine it was like a pond a fish swimming happily and then you let the water out and what happens to the fish they died our economy died overnight and we went into a tailspin a negative tailspin many foreigners come today and think this is the first time we opened it is the first time we have democracy but it's not the first time we have economic reform okay so we hope that some of the mismanagement will be corrected and the banking sector will come back even if it comes back to its own 1996-97 2002 level it would be quite good okay, Serge, thank you very much we'll take a quick break our conversation continues on the way forward for Myanmar at the World Economic Forum after this that's a good point this is going to be our last one where would you like to take it we haven't really talked about politics or security is that something that you would like to address yeah alright, welcome back thanks for staying with us at the World Economic Forum for our conversation on the way forward for Myanmar and Helen Clark let me come to you people like to use a lot of phrases to describe Myanmar and develop and all sorts of things but it's pretty clear that right now with the opening over the last two years there is a great opportunity to start, if not from scratch at least very much sort of clean sheet is Myanmar in a position to be one of the very first countries in the world to think very long term I'm thinking 25-30 years with an economic blueprint probably right now for leaders who are engaged in a very complex reform process they're looking to the end of the year and beyond what legislation you have to pass and how you get ready for the next set of elections and so on it's hard to come up for air in these times but for sure if a clear national vision projecting out can be communicated there's a chance then to align what you want from your partners with that and really go for it and no matter how great the pressures of the moment are it is important to be thinking well we're going to reach this benchmark but what next there will be more hills beyond so keep your eye on the longer term as well quite interesting the discussion about the banking services because around the world one of the issues for poor people is nowhere safe to put their money so it tends to go under the mattress and that's very vulnerable but there's now this tremendous linkage we're seeing between the rollout of information communications technology and mobile banking services for poor people so the sooner this connectivity can come with the ICT rollout the sooner we can see more poor people have access to banking services and I look at Kenya and the phenomenal revolution of mobile banking there is really a model and experience to be shared as rapidly as possible Michael I just endorse that I mean one of the real success factors for Africa these days is just the incredible use of mobile phones and for all sorts of day to day activities and particularly when you're also fostering an SME sector you know your market entry these days has been reduced dramatically because of the technology that's available so I couldn't agree more with Helen let me bring up a subject in an issue which is sensitive controversial touchy which we really have to talk about and that is corruption in terms of rankings Myanmar is still quite a ways down there how do you change that I think it needs leadership absolutely from the top that this won't be tolerated a culture of impunity has to be dealt to you need strong law you need a judiciary that's reformed and able to deal with it you need to build codes of ethics and convict of conduct in your public service and administration you need a parliament with teeth that's prepared to really examine government accounts and budgets and say where did the money go you need the free media and you need an active civil society so it's not one swing of the wheel to tackle the corruption issue now we can see that some of these elements are in place the press is operating pretty freely the parliament now has an opposition which is vocal so I think in the administrative and civil service reform this is something that really has to be highlighted now so that you compliment that kind of democratic reform with institutional reform around integrity it may need specific integrity institutions to be built some countries go that way others rely more on generic rule of law open accountability and transparency but for sure it needs to be tackled I think this goes again to the discussion we had I think the first segment the pace of growth if we pace the rate of growth I think you won't have this mad rush for business and then everybody starts to open up suitcases of whatever it takes to make your licenses come to life I think in corruption there's a corruptor and a corruptee if the corruptors who want to rush in and do things here can check themselves I think life would be so much better so I think there's a lot of education to be done and goes back to your question you asked Helen if you have a systematic plan to blow the country which I'm sure the Myanmar government is doing I think that will guide the pace of change and pace of development that can in fact anticipate and address some of these issues on rapid growth and what that can do we have just a couple of minutes left I want to do this if we could just go all the way around starting with you Serge imagine with me or for me if you could Myanmar 25 30 years from now what kind of country is it going to be describe it my hope if we were to differ ourselves with anybody else in the region I hope that we would be building an economy on some very solid grounds there are a lot of traces and indications that we're already starting to do it the government is trying very hard to follow through with anti-corruption, anti-graphed level playing field anti-cronism etc etc these reforms unfortunately do not show the effects immediately but 20 years from now I hope they will be the foundation on which our economy sits and then we will be different we've always have a saying that why is it that you cannot compete with Hong Kong and Singapore even though they are so small as a city state the rule of law the absence of corruption transparency good governance all this makes them unbeatable as a place to do business we have too many countries that have prospered economically and when light on these reforms and now they want to reform but the economic interests of special interest bodies are so strong they cannot reform I hope we don't get into that right I think actually 25 years from now we're all going to look back and think of the world economic forum in Myanmar and say a lot of the debate started then interesting time in the evolution of Myanmar but 25 years from now this is no longer an Asian tiger but the Asian Jaguar, the Asian cheetah because it's really sprung forward taken all the lessons from other countries, the mistakes and the good lessons and brought it to bear in Myanmar to build a sustainable well thought through economy and we want to be part of that economy want to be part of growing with Myanmar for Myanmar okay, Anand well with the reforms and democracy both development and education building is on is also going to unleash a wave of entrepreneurship in this country and what will be done today of course it will take a long time when we are talking of institution building in infrastructure development but the benefits of that the rewards will be clearly visible 20 years down the line and this country will be able to in partnership with its neighbors and also with the other major countries of the world benefit A from the technologies that are available and accessible be a partner when it comes to development and bridge the developmental divide therefore the generations which will be there and generations to follow would have immensely benefited from the nation building that is on I think the goal is by 2030 for the country to be a middle income country that has to be achievable there is no reason why Myanmar projecting up to there can't be thinking of where Thailand is today where Indonesia is today I would hope as part of that package it sees a eradicating extreme poverty and also reaching permanent peace and settlements with the minority peoples because conflict de-develops it under-develops and that's been a problem I think Indra's caution about not going too fast so that you outstrip your capacity to do things well is important and one thing that always concerns me about wholesale and very rapid privatization is there won't be a lot of people in a position locally to take advantage of that so you can build an oligarchical class which again concentrates a lot of wealth so I'd be looking for how the wealth can be better distributed better shared as the country comes up Martina a role model of sustainable well balanced development where the country is produced a thousand surge poons so how do you feel about that excellent to all our panelists and experts thank you so very much for talking with us and we hope you've enjoyed our discussion here at the World Economic Forum on the way forward for Myanmar, thanks for watching ok so now comes the fun part we've done the TV part, you guys can actually talk questions, comments, raise your hand Michael come to you there you go Sir, right at the end Hi, Kentron from the local company I'm involved in the energy sector so if you look at the recent report we have a new investment coming in FDI last year was 1.4 billion of which the majority of 400 million goes to the manufacturing and then the oil and gas and the power 300 million the rest is the hotel like such say and then the we have to think about the president the plan for the GDP where they want to expect less of the contribution from the agriculture sector and expect more on the manufacturing and the service and also we need to actually look at the even though the Japan are not the world we also need to think about the Japan factor in the Myanmar which is I understand I see that they want to put Myanmar as the manufacturing the facility hub in South Asia and just to give you about the agriculture mainly we have agriculture the farming coming from the Aewari now it's actually happening only and if you look at the Karen State which is the endic area a lot of people go to Thailand to work so you see those land full of the elephant grass and then if you look at the how to call it the Aewari side there's something, some climate things or whatever anyway so we but everybody believe that we have a role Myanmar has a role in terms of the regional connectivity and we are also playing a very big role in the regional energy supply and we also have some role in the manufacturing so with this background so will you change again about this the Myanmar as the way forward as to the playing bigger role in the agriculture sector so that's like I like to ask this question to respond all panel line because I heard somebody say the agriculture will be there the way forward and then we see the agriculture I think some of us said it's quick win for poverty eradication now but for sure one would like to see a short medium term future where there's enough energy water infrastructure to fuel short processing from companies like Japan now it's not happening at any great pace now because that basic infrastructure isn't there to drive it but there will be a time when it will be but I all I can say looking around the world if you've got such a significant proportion of your people living in a rural sector now you better focus on that sector because people are looking for quick wins for their standard of living their water, their sanitation their basic and you'll get it with some relatively cost effective investments there indeed I would agree it seems fairly obvious other questions or comments ma'am on the right hi my name is Annalisa I'm the CEO of women's sphere I'd love to ask about the role of the empowerment of women and girls in the economic development of Myanmar if you could comment on what your thoughts are on what it would take to close the gender gap in economic participation political participation and education investments and how you think this will impact the long-term economic development of the country and who would you like to answer that I'd love to get comments from the panel from the panel okay sir do you know the best about women in Myanmar if what Indra said is right just now the the balance is to protect men because you don't need any protection sir we will have two-thirds of graduates all female means a lot more female executives female engineers, female doctors no but seriously I think discrimination against women in my own mind is not a serious issue here unlike many that we have seen in South Asia or in certain areas which are on headline news women has a very high position not only in the society in the family they're always the boss most of my Myanmar friends go back and hand the whole salary package to them right away and then get a penny cash on a daily basis so they are the boss but professionally I think if you look at it there is no such thing as you don't get a position because you're a woman if it's of any measure we have a bank we have 2,000 employees at this moment I have 51 branch managers I have only 9 men that are managers interesting Helen would you like to weigh in? I would like to start with a comment on the political participation the last elections in this country of course were run with the dominant party being basically a party that is coming out of a government very military influenced and women obviously don't have too many high places in the military so they end up with a parliament now that is just too low the Millennium Development Goal target is 30% and I would really hope that for the next elections in Myanmar in a couple of years there can be a huge effort made to push for women to come forward to be members of parliament because the truth is unless you have a critical mass of women you don't get the issues raised the women feel too lonely they don't get the support for raising them higher even if it means taking special measures to get that participation up it has to come up and then also look in this presidential system for more women to be appointed to the ministerial positions and so on as well so I think that's important we normally talk about a package of political and economic empowerment and legal status and rights so you have to approach the three together excellent well democracy will address the issues of both disparities alleged discrimination or women lagging behind particularly when it comes to economic administrative positions it's not one country but many countries who are seeking to address this challenge and the empowerment of the women will come through education financial inclusion that the women access the opportunities that are created with economic growth we'll have to leave it there and wrap it up thank you so much for being a part of this and coming we'll see you next year pleasure