 Hi, thanks for coming to CSIS today. We're delighted you're all here. My name is Murray Hebert. I work on Southeast Asia here at CSIS It's a delight to Welcome our guest Serge Pan who is the head of Serge Pan Associates founder Company founded in 1983 It's a now very diversified conglomerate in in Myanmar. It's involved in real estate banking health care Aviation recently got involved in aviation And but Serge was born in Myanmar, but he's got a really interesting history and 65 People of his ethnicity you can probably tell from his family name. He's ethnic Chinese They were all mostly expelled from from Burma back in the day and went back to to China had if you arrive back in China 1965 you can tell some you probably know that was a rather unusual time So Serge has some some interesting experiences back then in 80 finally in 83 Actually late 70s you got out right 73 73 and then was involved in real estate in Hong Kong and China and then eventually set up SPA which is now listed in Singapore if I remember correctly not SPA, but Another company called Yoma. Oh Yoma is okay. Sorry So Serge we're delighted you're here. Why don't you if you're up for it? Give us some a brief overview of how you see things in and Myanmar these days in light of the reforms the upcoming elections Relations with neighbors including if you want to talk about the United States and then we'll have lots of questions Thank you. Thank you, Marie Thank you for inviting me to this event and I'm not sure if any of you will get anything out of this one hour but You will at least get probably an honest perspective of how a Businessperson Views what's happening in Myanmar today And that's about all I can say about What we're going to talk about I Do not represent any party. I'm not in any politics No, am I interested it? but the years in China has probably compelled me to be a little more sensitive to political developments in any given country because Politics always affect Economics and how we do business and for that reason I've been rather Interested to see how our political scene in Myanmar has developed particularly over the last four years of the New administration under what we call a nascent democracy Today four years Into the new administration. I think the hot topic is none other than the elections that are coming towards the end of the year and There's been a lot of speculation as to what's going to happen. I think There are two things that are probably Meaningful and significant One thing the first is that I believe That the election will be free and fair clean This believe is based on what I know of the administration's desire of the military's desire and Their commitment to invite publicly People like the Carter Center The EU and various other governments including the UN to come in as observers For this year's election. I think that's a very Important a step for the government to ensure that Everything is clean. I Also think that it's a very smart move because the legitimacy of whoever has been elected at this moment seems to be hanging on on One particular parties endorsement and to be honest. It's where the NLD endorses the election and there's such a great threat that if NLC is not NLD is not happy That it might render the selection to be like less or even not legitimate The invitation or to the Carter Center as well as the EU governments and the UN and Any other government that cares to come and observe through their embassies and ambassadors. I think it's a very Rational and smart move to Finally give legitimacy as to whether the election was clean fair and free So that's the first thing I think was good the second thing is that Today, I think the minorities are having a bigger say and With the signing of the draft draft piece are caught on the 31st of March It has given a new impetus and a new Perspective to what is going to happen? We know that peace can never be assured unless we have the minorities all on site under a federalist government We also know that peace cannot be assured and will not be stable Unless we have the strong support of a military The support of the military is an interesting subject that a lot of people have been talking about and I personally for one thing that in the last four years The military has behaved very well I have not seen any evidence of the military you know trying to Throw their weight around influence political decisions or Two things that are probably not Against the democratic principles of the society so do in that a to that effect, I think the military has behaved extremely well and it is It would be a folly to think that we could have a very stable society particularly in the early days of a Democratics of transition without a stabilizing force and That's stabilizing force in Myanmar in my mind is one and singular and that's the military with that we can perhaps Ensure a stable transition to democracy without that. I think the chances of chaos and Infighting I would probably derail any democratic attempts however noble and however Good the intentions are so that's my view it may not be correct and I think What would be more interesting is perhaps we have a dialogue today to? sort of exchange views if you have any questions, I'll be Will they happy to answer them and then we can have a little debate if we want Okay, Murray are there questions or should I Maybe I'll ask a question and give you guys a little chance to to prime your your thinking Do you just also talk about what's the atmosphere like for a businessman in? Myanmar today there have been some reforms in the banking sector and Foreign exchange But it seems like a lot of the reforms are more on the political side than the economic side So what's it like? Well, it is true that in the first 20 months of the administration There was virtually no economic reforms Everything was focused on political and social reform Which in my opinion differentiates Myanmar to all other Emerging markets in the last two to three decades If you look at if you look back the first major legislation that our parliament passed was the Labor law I'm a labor law is typically a kind of law that emerging markets don't want to touch for about 25 years and only talk about Labor protection and minimum pay after they have achieved some degree of economic prosperity But our government chose to or this government chose to take labor law as the first major law to be passed in this new parliament and the law was highly acclaimed by ILO and You know quite funny and some and ironically and we had 250 strikes and demonstration in the first year or Strikes that never happened before and some of them when they arrived for the office of ILO became sort of a joke because there were workers who would go and say we have not been given lunch So the ILO chief would say are you on strike? Yes, we are strike Well, if you aren't strike you won't get lunch, of course And they would say well we thought lunches lunch and strike a strike You see we want to strike and we want our lunch to so things of that nature happened But it's a good sign the second major law was the land reform where farmers were given land titles to Farmlands that they have been cultivating for decades without any entitlement and then we had the freedom of press law All these were major social reforms the foreign investment Act actually only happened in November of 2012 a good You know 20 months into the administration right, so I Would say yes Economic reform was not very high in a priority, but since November of 2012. It has become a major a major focus of the government and as a businessman all I can say is that Before before the commencement of this government. It was very difficult unless you are Part of what do you plan unless you're a crony? It was cronyism running amok It was the way of life So you either be part of the game and then you're okay If you choose not to be then you're not okay today present things things major major Policy is that we have to level the playing field He abolished all the monopolies held by the various interest groups for imports he Basically said everything has got to be transparent go for tender and That's why I think we had some prosperity and Economic progress today. Everybody has a chance if anything I think my friends who are being branded as cronies are having a tough time because They couldn't get a fair hearing Hi, Thomas Yandel I'm a consultant, but I've also been a political economist in academia And I studied Vietnam for the last almost 20 years. So comparative question two questions actually very connected One thing that I always wondered about Vietnam is not why do investors go there today? But why did the first investors go there given all the problems that you described now for Myanmar that Existing Vietnam to so my first question is other than that You're born there. Why did you make the chump and the second question related? I wrote a book about this for Vietnam, and I wonder how it works in Myanmar one of the things that investors want to see is this the Self-limitation by elites right reduced predation Credible business climate what's Myanmar doing to create so to Portray that credible business climate in the long run that make people like you and many others at some point Ideally come and stay to start with I went back for the first time in 1970 1970 89 if you recall the Nehwin government stepped down in 1988 and a transitional government was the slog was formed And in 1989 they announced that People like us were for the first time permitted to return to Myanmar Before that you were just not granted the visa So having been away for 26 years. I went back out of curiosity to see what has happened I had to be honest no intention to start a business there. It's just a tourist but it was fate that arranged that a Meeting on that trip for me to meet a general by the name of David Abel David Abel was the only Christian in the cabinet of slog. He was also the only Sandhurst officer Who retained his name as David Abel and then changed it into a Burmese name? he was also the Minister of three portfolios minister of finance minister of trade and minister of national planning and David did a fantastic sales job on me He played to my roots and Any basic said you need to come back to help invest Do something that was what we call the first spring Actually, most people in the world only know Myanmar today as Being opened up. You might actually open up the first time in 1990 With the promulgation of the foreign investment act in 1990 That was when we could go back set up companies get all the tax breaks and so forth And you could actually own your business and be guaranteed. It would not be nationalized and Those were the years when David Abel was Minister of Finance and Minister of Trade and as well as Minister of National Planning The second thing was that I actually walked the streets where I grew up went back to my old school and felt extremely sorry To see the state it was in So make a long story short. I said, okay I will come back and invest and so we started a small company with seven people 10 years later It was four and a half thousand staff and it has grown to about 40 companies Most of it organic growth Wasn't designed that way Organic growth give you an example. I built a real estate project which was a gated community We had about 50 security guards manning our community The next thing I know is the chap next door says it seemed to be doing a good job Can you come and do security for my factory and this? just sort of multiple and Before you know, we were doing security for embassies for corporations and we had 850 security staff on our payroll So it became a security company instead of just a division and a lot of our companies was like that There was such a need for services that whatever we started for our own self became a company and it had 80% third-party contracts so that was the first spring and then a Whole thing came to a halt in 2003 when we had our financial crisis what I call a self-inflicted financial crisis And we didn't recover from that coupled with the sanctions that came in towards the end of the century and Sort of escalated all through 2001 2002 2003 We had a tough time and that's when actually chronism corruption when blatant and That is the history of the recent 20 years Now we have a new government In fact, the tool the thing to compare with Vietnam, which is very very obvious and evident for businessmen is that Vietnam is a place where it's so easy to get in They welcome you with open arms and it's very easy to start a business It's after you get in that your troubles start No, my it's just a reverse. It's so difficult seemingly to get in The bureaucracy getting the permits getting the approvals from one department another takes months But I have never experienced any foreign investor who have come in established and want to leave They're happy the workers are good. You know the government bent backwards to help you So that's a different the different situation with the two countries and if you're talking about The rate and the the the recent survey of Myanmar being still at the bottom of of the list of Survey of if you if this country was friendly to business and so forth. I mean we'll rank very low. I Personally don't agree with it because I also know Vietnam well enough the corruption in our country in our country today at least has It's not as blatant Anymore as it used to be Because our president is a very clean president and he's got a very clear policy That he wants anti-graph anti-corruption level playing field to be the center of the core of his policies and He practices it the people around him in a circle are clean patriotic. I can't say that for all the ministries and There is still a lot of an occurrence, but I don't think that's a situation in Vietnam So I don't know how these Institutions does their rating and so forth, but we'll always get to the very bottom of the ranking Okay We're just as happy I hope I've answered your question Sorry, you got a bunch of hands here, but it was this one and then we'll go to the back and we'll come back here Thanks, I've Steve Hirsch. I'm a journalist and let me ask two very simple, but obvious questions about the political situation One is you talked about the election Is the key to its acceptance as being free and fair as Many people here think whether on-site sushi Participates my second question is what do you think the prospects are that the current Consultations will result in an actual ceasefire. Thanks I'm sorry. I need I didn't hear your first question clearly Can you is it is on-site sushi the key to whether the elections are accepted as free and fair? Whether she whether she's allowed to run for president Well the Constitution today Say, it's very clearly that she is not Allegable to be president It doesn't mean that her party cannot win It doesn't mean that her party If it wins more than 51 percent of the seats in the parliament Cannot rule the country We have a system where it's actually the elections for the parliament and only after the parliament elections over the The parliament actually the two houses Nominates three candidates to be president and if you have more seats your candidates going to be president for sure right, so I Don't think it's fair to say. Well the trouble here is that is outside suji's presidency equal to democracy and Is her not being president equal to no democracy Any conclusion of that sort? I think it's too simplistic For instance, we still have an issue about Whether or not she will boycott the elections when she had said unteamed times. I hope she does not because if she does Chances are that the election will continue will go on as planned and It'll be a tough time for her to fight back into the system to do whatever she's so good at doing Being the conscious of our nation, you know But if she doesn't join then there is no fight Okay, you can say whatever you like outside of government outside of parliament. It won't mean anything You have to be in there inside to make the reforms and in the last four years I think that she has done a great deal to Contribute to the reform of this country and I hope she continues to the only missing Peace is that clause about who is eligible to be president and who's not and That part I think will need time to be solved I mean I have said this before which may not be totally a rebel irrelevant I said if there is one superman in America That everybody believes can take America to extraordinary heights But he was not born in America He will not be American president. That's the Constitution. What can you do about it? The only difference is that that Constitution was not directed at one person whereas ours in 2008 seemed to be directed at one person. That's the only difference But every country every constitution will have some clause, right? How we address that I think it should be the aftermath of the election and not a precondition to this election See this fire. I'm I'm very happy that it happened on the last day 31st of March was an imaginary date that if it didn't happen It probably never happened and they work very hard all sides work day and night Finally on the 31st of March. They signed it now. They've got a few moments to work to get to the real agreement but while some worst in an analyst media sort of Dismiss the importance of that draft agreement. I think that that that is unfair Getting that draft agreement signed in itself is monumental They have tried so many years to get there and finally they got there on the last day It gives us hope that over the next few months that we will be able really go into an Agreement a peace fire a peace agreement peace accord not only just a ceasefire because everybody now realized that it's a Loose-lose situation going forward if we don't have peace It just it's not tenorable. We have to get there under a federalism System or some system that is acceptable by all parties. Otherwise, it's a dead road So I'm optimistic back there in the middle red tie Yeah, thank you Have a couple of questions and the first one is on federalism. You said that probably we're gonna go towards the direction I think that it would be a huge step of course if it happens from what I understand president I'm saying was not closed on it, but many others are still Reluctant you think is is it realistic to imagine such a Path and the second one is more on the economic side You mentioned that foreign investors usually enjoy being there Which are the sectors in which you think for foreign best would be more interesting to be now in Is the first question more federalism Is it possible I think it's not only possible it is the consensus today There was a lot of debate up on the definition of federalism and that was mainly the reason of Disagreement and some dismissing federalism as Discussions progress. I think There seem to be now a consensus of what what federalism is applicable to Myanmar and it is very much along the lines of the Pan-Long agreement Basically of how the Union of Burma originally got started, right and in essence It's how the economic benefits of each region is equitably distributed to those regions Right and this is more prevalent and prominent today More than in 1947 Because we rarely see economic benefits being not equitably Distributed so that I think will come to a conclusion that federalism is the best way where Everybody is happy in a big family The second question which are the industries Honestly, every industry is good We are in such a low stage of economic development that you can pick and choose anyone you want It would still be okay, and it would have a good prospect Okay, some are lower hanging fruits some are a little more difficult and it depends on basically the investor For a very long-term investors. I think infrastructure projects are the ones to really focus on Where you are actually looking at very long payback periods are very steady And that is the areas where the country need most FDI most investments I'm James McNaughton, and I'm in the private equity business If 40 some years ago, I was a junior economist in Bangkok when the Bangkok Stock Exchange Securities Exchange of Thailand started and since then it's grown tremendously very successfully and The main participants in it when it was starting were Chinese Thai the Sino-Thai entrepreneurs otherwise known as Cronies back in those days, and they were friends of the Thai generals and and so forth And I'm looking at the efforts led by the government of Japan and Daiwa Securities whose people I've met with a couple of times in Yungon And I'm wondering do you think that this is going to be a successful stock exchange? Or will it be so much in a Japanese style with Japanese regulations and listing requirements and so forth that it will be not very open to the Sino-Bermes entrepreneurs and Foreign entrepreneurs in general. What are your thoughts about the possibilities of the new stock exchange? I have to be extremely careful of the subject because we're probably going to be the first and For the timing the only company listed on the new So whatever I say it's very very it's going to have some impact So I have to be very careful. So here's the disclosure. Okay The stock exchange of Yangon which is earmarked to be opened by the third quarter of this year It's a good start It would be naive and a folly to think that it would be anywhere near what a stock market a stock exchange should look like It will not be But it's a good start Without the start we will not never get to where it should get to So from that angle, I think we welcome it Okay In 1990 1994 I think when the first attempt for the stock exchange Same with Daiwa securities and your my economic bank and it's today called them your mass security changes form We were also invited to list because we were we were at that time. They're only public company in in the country and I remember When they came to talk to me as I said I only have one condition So what is it? I said I want the serial number 001. He said good. You've got it Then I asked so who else is going to be listed. He said no one else only you So I said no, I don't want to be you know In the middle of a circus sort of everybody looking in and had absolutely no benefit So we didn't list and as a result of the stock exchange sort of just did it away for for nearly 20 years this time. They're serious doing it and We're qualified. So we we said we would be and to start with many companies Well as we grew closer to the date, I'm just told that we are probably again the only company and That bothers me, but it's too late. We're in so we will be there the difference today and Then was that today they have some understanding of what needs in these to have a storage change they have a true understanding of the importance of developing a capital market okay, and while the understanding is very Elementary and that is not good because a lot of decisions that they'll make will not be good enough but at least It's better than 15 20 years ago when they just wanted something Without refusing to even change the very basic laws to make it happen Today they have a whole team Baker Mackenzie is on it. Everybody's on it. I'm trying to pass Draft and then pass all the laws that you would need to make that stock exchange viable That's where we stand Whether or not Chinese or Sino businessmen will be excluded. I do not think so. I don't think so if you're qualified the trouble is a motor Particularly the Chinese ethnic Businessmen in Myanmar Just don't like to pay taxes and you don't pay taxes. You can't be listed as simple as that so That's the situation Please back there. I saw from the voice of America I have a two-part question My first question is how do you become such a successful businessman without being branded as a crony because you know your contemporaries Some of the businessmen they are being branded as a crony, but you are the only one as far as I know Not being branded as a crony my second question is What would you do if the government offer you a cabinet position or the government position? well answer the first one first because the first question has been a question that's been asked and It's our so many times some would sincere sincerity some Basically trying to prove a point Let me just say this When I went back in 1991 to start search point and Associates SBA I Said down a rule that there will be no bribes paid. There'll be no under table and It was not because I was very noble. Let me be clear that I was just pragmatic If you recall and some of you will I'm sure That was a time when the South Korean president chundu one was arrested for corruption Made when he was president 15 years ago He has since retired and three administrations have passed, but then he was thrown in jail For the time when he was president 15 years ago Because of his contribution to the democratization process of South Korea The incumbent president pardoned him and he came back out within a few days The full chairman of the show balls that accompanied him into jail never came out and I said to myself I Don't want to be in that position 15 years after I retire for something. I did 20 years ago so that was a policy laid out a lot of my Associates even my directors said It would not be possible to be successful And I said cheeky Lee I said Then we don't do it. I am here in Myanmar Because the government has invited me to come and invest I have five other offices. I Need an office in Myanmar like I need a hole in my head So if I'm going to do something like that with the risk of something negative happening 15 years 20 years down the road. Why am I doing it? So if we have to pay to get a project, we don't do the project full stop period The fact is that in the cabinet there are basically three groups of people The first which I call them the young Turks Now I'm going back to 1991 and the early 90s the young Turks patriotic young good people good military people once a country to move ahead after 28 years of Burmese way of socialism and in shambles second group the big majority senior cabinet ministers senior generals. I mean senior military People they sit on the fence and they look at how the wind is blowing They probably take a bribe if you give it to them, but they don't don't necessarily ask for it a Very small number of ministers totally corrupt You cannot get anything done unless you pay and because of our policy The first group became very close to us and I had more than my share of projects Without having to pay anyone because I performed The middle group came to us when there's an important project that needs performance Probably the sweetheart deals or went to their friends not to us and the third group never came near us And we never went near them and we live happily thereafter together So that is how we survive the first ten years Right and we prospered and That's why I keep saying it's a myth to say that you have to bribe somebody in Myanmar to do business You don't have to The trouble is business people choose to and then complain a lot So whenever I hear a co-businessman complaining about About having to bribe somebody I actually get very angry. I said you choose to do it don't complain Okay, I am sure that's not your face when you're talking to the minister You are trying so hard to shove that money down his down his pocket and then now you complain The trouble is that when you decide not to pay You have to also decide at the same time to take the consequences and that is you won't get the project if You're willing to take that consequence. You have no problem Okay, it's those businessmen who Desperate to get it and will get it by all means and then they complain about corruption and that is why today. I'm under on the Global agenda council of the WEF on anti-corruption and we keep saying that it's a buy and sell You know people buy people sell both sides have to be responsible if you want to eradicate corruption So that's the answer your first question. The second question about cabinet post Not a chance Not in my consideration not interested I'm Kim also of working for radio free Asia bomb service and I just want to know that they are them about the minimum wages now Most of the majority of the community they only want to pay One and a half dollar to up to two dollars per day, but the workers are demanding four to five dollars What is your suggestion, please? The current law has got a minimum wage Hey, I'm not exactly sure but I think it's probably about 50 or dollars a month That's the minimum wage. All right, which comes to a bit more than you know less than two dollars a day But and it's in charts. It's 50,000 charts. I think But the point is that the actual expense that a company spends is not that minimum wage Because as you know in Myanmar if you have a manufacturing plant with less than a thousand workers You have to provide not only the lunch But you have to provide transport because we have no public transport for that thousand workers to get to work if you don't have Ferry service they can't get to work right so the Expenses that the company actually have is more than the minimum wage now, of course workers would like to have more and I'm not saying is right or wrong. I think it just you know what the market will bear to me I Advocated that for us at this juncture of time It's the creation of jobs Our low our slogan is that Let's create one million jobs One million job sounds like a big figure. It's not it's 1,000 factories each employing 1,000 workers. You got a million You go to southern China. You have 30,000 factories each employing more than 2,000 workers, right? so in Myanmar Just get 1,000 factories going each employing 1,000 workers. You got a million a million jobs Okay If you take conflict areas like the current state, okay, the two million Myanmar workers across the border in Thailand working for less than what? Thai law Dictates right because they're refugees. They should all come back and work, but there's no job So if you provide that opportunity, they want to come home. They could actually be better off so at this moment Getting a job to me is a lot more important than asking for a higher minimum wage Because the people who are asking for a higher minimum wage other people already has a job But there's a multiple portion of people who hasn't got that job yet Right and we should not be distorted by looking at a small percentage who has a job and who wants higher and Forget about the masses that has no job and Should get up to have a job with their minimum wage. So that's my view Thank you. My name is James Michael. I'm a consultant I wanted to ask in the same vein as the question about the stock exchange It seems to me that Myanmar is faced with enormous pressure on its institutions both in government professional institutions and organizations that render services to people and as you look to bring more people into the society as you seek to Make a piece that will extend to the areas throughout the country You've talked about reforms that are legislative But if you have a land reform law, but you don't have a land reform registry office in the community the impact on the Individual is is not evident and I wonder if you could share your perception of How me and Mar is doing both in in government and in the private sector in professional sectors in Responding to this enormous set of needs that are so prevalent in the country right now. Thank you The short answer is that it's struggling It's struggling to fill the gaps that you just described the gap between what a legislation produces and the ability to really Carry out that legislation there is a capacity gap and that's well recognized by government by civic society as well as by business and We're all trying very hard, but we're all struggling. Okay. I Think that's that's my view Please my name is When you can I work for VOA Burmese service I have a question about what banks loan hundred million loans to the Yuma bank if I'm not wrong to Yuma strategic not your Yuma bank the two different entities, okay? Strategy So that loan is going to focus on the small and medium Entrepreneur and I want to know more about what kind of small and medium Entrepreneur that you're going to focus. I think I'm glad you asked this That allows me to clarify a few things that obviously I think you're just confused like everybody else First of all the hundred million dollar loan is to Yuma strategic holdings limited Which is a Singapore listed company and it's not given by World Bank. It's given by Asia development Asian development by ADB The World Bank on the other hand And the IFC Has given Yuma Bank another loan of 340 million that is to be used to fund SME loans Okay, and SME is typical SME Yuma Bank is committed to become an SME bank and we are probably in the forefront of Pushing the envelope to to the maximum because current legislation in financial institutions law has is very restrictive to give loans to SME because by nature our Legislation particularly governing financial institutions is very conservative. So for instance, you have to have extremely high collateral value For your loans. We cannot give more. We do not give more than 50 percent of the value of your collateral Which is valued at at least 30 percent lower than market as For sales value. So at the end of the day the amount of loan you can get on your collateral is not much. Okay, and By virtue of that most banks are very secured The collateral they own they hold is many times the loan value But that causes big problem with SMEs who first have no collateral or very little collateral and Secondly if they have a very small value so we're trying to push that envelope and We have a very Very good robust risk assessment team that actually do not look at your collateral But look at your business as well as your repair ability To ascertain how much we will lend you okay We have a totally different approach not a pawn shop where is you bring your collateral I give you 50% you go we don't come back a year later You come and pay me back if you don't pay me I sell your collateral. I get my money back That's very much a pawn shop pawn shop mentality, which is the encouraged Motors operandi for banks in the past today Your own bank is trying to change that and that's where IFC is supporting Please With the World Wildlife Fund in DC, I was wondering if you talk about Corporate social responsibility in Myanmar and perhaps your vision for that country. Thank you CSR we have a very big team doing CSR because We took it upon ourselves that CSR is a very new subject in this country Now we have this great support from the government as well as many civic society Including our UF UMF CCI, which is our Federation of Industries and so forth because somehow Today CSR is the cash phrase that Everything you do has to have a CSR Element in it, but we also feel that CSR is not necessarily understood clearly and Where the confusion is for local Enterprises is CSR means donation Which defeats the whole essence of CSR? so we are trying to be a Pioneer in a lot of these CSR activities like we have a lot of seminars that we do in the countryside about Responsible business about compliance about governance about paying taxes Etc, which we feel is what we really need. Okay, and then we have a projects Which basically is not really donating money, but actually more on the social enterprise elements of Making something sustainable, so we do have Heavy emphasis on CSR and we think it's very important in in in this respect I would like to brag a little bit You know in Yoma strategic is the only Myanmar company listed outside of Myanmar or in any international Stock exchange is listed on the Singapore Stock Exchange and of the hundred largest companies Listed on the Singapore Stock Exchange This year the rating of the best Governed the best companies in ranking on CSR compliance corporate governance We ranked number 18 That's very high last year. We were number 50 this year. We're ranked number 18 and That's ahead of many many famous Singapore companies Because we really take it as a responsibility. Remember the global you and global compact. I personally I'm very much involved in that the web global agenda councils and We take it seriously We hope it will have an effect on other companies in Myanmar, but there are a lot of companies that are already doing it Kelly hi, I'm Kelly Curry from project 2049 There I want to go back to politics. There's a group in Burmese Political society that you haven't spoken very much about but they play a pretty significant role in the politics of the country And that's the military As to whether the NLD participates and then in the upcoming elections For more than a year now. It hasn't been the article 59 F about whether Aung San Suu Kyi will be able to run for president But the ability of the 25 percent of seats held by the military To block any amendment to the Constitution at all on any of the many non-democratic aspects of the 2008 Constitution Which was drafted by the military Without real genuine public Consultation or participation and ratified in a deeply flawed exercise and If you look at this and the fact that there will be 25 percent of the seats in the upcoming election set aside To again be appointed by the military The Elections in 2015 regardless of how clean they are will still be fundamentally flawed and unfair So do you I keep hearing the use of this phrase free and fair as a standard for these elections But is it really even reasonable to use that as a standard and shouldn't we be Trying you know coming up with maybe some different standards Around these elections because they can't possibly be free and fair when you have 25 percent of the seats set aside Okay, I got your question. I back to differ with you on this issue and Not because I'm right or you're wrong or the other way around It's only because you are looking at democracy with a understanding and view of a Democracy that is 200 years old and I'm looking at a democracy that is four years old in 2010 when we had the first election it was democracy zero years old and 50 years before that there was no democracy So we talk about this 25 percent. I think there's a wide divide on The view of whether the 25 percent of the seats of parliament held by the military is good or bad Democracy forces will Instantly say that's bad. That's not fair But I'd like to ask a question if you look at Indonesia Indonesia went through the same route of Having the military dominate Politics for the first ten years of its transition to democracy and today Indonesia's democracy. I think it's most successful than a lot of countries so if You were to say we do we need a stabilizing force Maybe we don't maybe we do but I think the chances of chaos without a stabilizing force is higher and Then the chances of democracy real fair democracy is higher when you are stable So we have a lot of debate on this to me If we do not have one factor that will at least be a stabilizing force We will have a situation where everybody is clamoring over their own self selfish interest in the name of democracy and At the end you will really not have a united Country as a matter of fact, we have seen this so many times in other countries where there's no Stabilizing force and it goes in all directions So the risk at that time was that yes It doesn't seem fair that the millery gets 25% free ride and they have so much influence and At that time while I was a rather skeptic on this four years down the road I'm less of a skeptic because I look at how the military behave in the last four years and I think they have behaved well and If they continue to behave well, I think it will be positive rather than negative so if you say Because of this clause that they are there for 25% anything that results is unfair and not Democratic and is no good I back to differ What is called good? I'm not sure what is really good Okay, my business people are very scared of instability Business people don't want to see factions fighting fighting for whatever political aspirations or goal with no regard to the well-being of the people People getting jobs if this is not willing to invest there'll be no jobs no matter how good a politician you are Jobs are created by business and business don't come if you are not stable and Therefore, there's a big debate on whether that 25% is totally negative or something that is a needed Evil if you want to call it that way with quotation marks for the transition period and I for one openly would say that I am of the latter opinion that we would like to see stability over the transition now if in the last four years the military has been acting differently and throwing their weight around and and Canceling a lot of things that the democratic government civilian government is doing. I would probably have a different view But that has not been the case. So I hope we can continue to remain in difference of that So I think we're basically finished, but I'll just ask Matt. Do you have a short question? Okay Thank You Matthew Pennington from Associated Press. Do you have a view on? What US sanctions policy should be at the moment? military companies can't Sorry, US companies can't Invest with military companies or with targeted Cronies former officials. Do you think that's a positive or a negative? the US sanctions when it was imposed I think Were not effective, but I don't think it was negative. It was the right political Statement to make And it did have certain effects, but was it effective? No Because the military government couldn't get less okay, the real victims of that sanction were the people and I Recalled because I'd lived next to an industrial estate where in the 90s We had about 3,000 garment factories right next to where I live and I don't know how many thousands and thousands of workers Because of because of section sanctions I think 2% or 3% of those factories remain and the rest all closed down because their goods cannot be sold anywhere well Those people just lost their jobs You know in one industrial estate. I remember the petition was 320,000 jobs gone Nobody could save it right So in that sense the people where the real that took the brunt of that of the sanctions the government The military government they couldn't care less in fact it allowed them to close the dose and Really loop the country more than they could have if it was open So in that sense I'm not sure whether it was positive today different scenario different landscape Is the sanctions still Needed I don't think so the sanctions will just be more negative more good hurt the US interest as well as hurt democracy Sanctions on arm deals. Yes. I think it's necessary because you don't want to encourage that The government to go along those road and it's actually no good. Anyway, okay But Overall, I think the US should reach out the US should reach out because I don't know if you believe this or not the people of Myanmar actually look up to the US The people of Myanmar if you're talking people to people if you survey a hundred Burmese And ask them do you have family members outside of Myanmar and if the answer is yes Where are they? Chances are that 95 out of 100 are either in America United Kingdom or Europe or Australia Five will be in China And that's why when they say China has got a lot of influence I say it's not true because the people to people level it's with the west The Myanmar people look up to the American people look up to the American government And you should reach out and that income passes with the military If you believe that the military plays a very important role in Myanmar politics then reaching out neutralizing reforming that mindset is a task that all Western nations democratic nations have as a responsibility That is going to go a long way towards our democratic process Instead of saying don't touch the military Treat them as something untouchables unwelcome I think that's not pragmatic and that's actually quite like Cutting your nose to spite yourself Right you should reach out The military likewise, I think would love to be taken in as a partner And from what I know They are hotliners But the vast majority of officers Would love to be west point graduates, but they never had a chance You make them west bank graduates. You don't have to do much the whole military will change color Right So it's as easy as that see But if you take a different view of isolation isolating them You're just giving yourself trouble. I hope I answered your question Not that you might agree Serge, thank you very much Appreciate you allowing us to plumb your views and perceptions of what's going on and and Myanmar today We'll be watching I think a lot of people in this room are going to be watching from now till November And maybe if you come back early next year, we'd like to hear what's going on Again, but so please join me in thanking Serge for coming down from new york to talk to us today Thank you