TNBR 2014-02 by Thai-Norwegian Chamber of Commerce

Thai-Norwegian Business Review 2014 â&#x20AC;&#x201C; 02

Thai-Norwegian Chamber of Commerce

Norway-Asia Business Summit 2014 Post Summit Issue

Contents President’s foreword 5 The Ambassador’s Clarion Call for Sustainable Growth 6 Cover story: The Summit

Kristin Skogen-Lund Balancing Competitiveness with High Prices

Norway’s Commitment to Investment in Asia

Asian Development Bank’s Optimistic Forecast for Asian Economies 16 Dr. Deunden Nikomborrirak “The winner takes it all”

U Zaw Oo Myanmar: A New Shining Star?

Rajiv Bawa A Triumph of Will: Telenor’s Success Story in India

Grand Dinner and Award Ceremony, 25 April 2014 at Mandarin Oriental Hotel

Deputy Minister of Trade and Industry, Dilek Ayhan The primacy of trade in Norway’s relations with Asia

Creating Value in a High-Cost Environment Lessons from Yara

Using Team Norway to Add Value to Norwegian Businesses in Asia 30 Closing Remarks and Summary from the Bangkok Summit

Ambassador Ann Ollestad: Responsible Business Practices Will Help Myanmar’s Reform Process

Shwe Dagon Pagoda Welcomes Summit Delegates

Allison Morris on the Complexities of HR in Myanmar

Vicky Bowman on the Need for Responsible Business in Myanmar

Tragedy, Tyranny and Beauty: Progressive Transport and Energy Options for Myanmar

Connecting Myanmar Petter Børre Furberg on the Challenges for Telenor Myanmar

Investment Capital: Discussing Business in Nay Pyi Taw

Thailand’s economy at a glance 55 Membership Directory 56 Editor: Thitikul K. Opdal Advertising: Anders Magnusson Journalists: Eric Baker, Ezra Kyrill Erker Graphic Design: Graphics-Related Co., Ltd. www.norcham.com

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President’s foreword

This is the second issue of Thai-Norwegian Business Review dedicated to the Norway-Asia Business Summit 2014. The summit was the most important event in the Chamber’s history and many participants have written thanking us for a very successful summit. The summit attracted 170 participants in Bangkok and another 60 participants in Myanmar. The agenda was set at a regional level, focusing on the relationship between Norway and Asia as a whole, not only Thailand and Myanmar. Many high-profile speakers graced the event, but equally important were the opportunities to network and exchange experiences. A central theme covered by several speakers at the conference was the competitiveness of Norwegian industry. With the rising costs of doing business in Norway, we are in danger of losing our competitive advantage. Several companies presented their visions for continued growth, with internationalisation towards Asia being a key component to future success. Many of the speakers, especially in Myanmar, focused on Norway’s role as an ambassador for responsible business and setting standards. In this respect we have a unique opportunity to shape world opinion and give something back to the societies we rely on in our business dealings. The Norway-Asia Business Summit as an institution needs continuous interest from the Norwegian community in Asia, Norwegian industry and the government back home to survive. It’s only by flagging opportunities for Norwegian industry in Asia that we create attention and understanding for what’s happening in this part of the world. I would like to take this opportunity to again thank everyone who contributed to the summit and the success it became. In particular my thanks goes to Ambassador Katja Nordgaard, who is leaving Thailand this summer, for the enthusiastic support she has shown Norwegian businesses in Thailand and Myanmar during her four years here. We wish her all the best in her new endeavours back in Norway. As Business Review is going to print, we just experienced yet another military coup d’etat in Thailand. It’s my hope the generals will do their utmost to solve the country’s internal problems and that we will again see a democratic Thailand with checks and balances introduced into the country’s legislation to ensure all sides are heard, listened to and respected. Vibeke Lyssand Leirvåg President Thai-Norwegian Chamber of Commerce

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The Ambassador’s Clarion Call fo By Eric Baker

orway’s Ambassador to Thailand H.E. Katja Nordgaard is leaving her post on 1 July this year after a full four years here. She gave a candid interview to the Business Review reflecting on her time in the kingdom and what lies ahead for her and the region. For most of her stay in Thailand, her office was also charged with representing Norway in Myanmar and Cambodia. In November of 2013, Norway opened up a full-fledged embassy in Yangon. Ms Nordgaard believes her greatest accomplishment and most rewarding work experience was taking part in the first years of transition for that country, as Norway was a prominent leader in supporting change in Myanmar.

“With a lot of these issues, it is surprising how much leadership plays a role, both within politics and with private companies. Also surprising was the ambassador’s speech during Norway’s Constitution Day festivities, where she gave some advice to Thailand’s political leaders. Ms Nordgaard said the leaders need to solve their conflicts in a peaceful manner through compromise and dialogue, there needs to be free speech that is practised responsibly and political transparency and equal protection under independent legal institutions that people trust. Ms Nordgaard finished with the salvo “economic inequality is a recipe for political conflict”, which is a theme she would return to in our interview.

“If you look at these three countries, it doesn’t seem possible that they could be neighbours given how different they are,” she said. “But it’s always important to remember where these countries came from. Both Cambodia and Myanmar have experienced great suffering in their recent pasts. The speed of change in Myanmar is mind-boggling, particularly when compared with the way Thailand has been hampered by political conflict the last few years.”

“Norwegian companies thinking of investing in this part of the world need to do their homework to understand the local conditions and adapt accordingly.

“This part of the world has enormous potential, but also great challenges on the horizon, from dealing with climate change to immigration, lack of clean water, rising energy demands, population growth and educational development. And if there’s one lesson I’ve learned in my time in this region and that I feel very strongly about, it is that economic growth should not be the ultimate goal. We have to be mindful about using our resources in a sustainable way, because focusing solely on economic growth without protecting the environment and making sure wealth is more equally distributed will undermine society in the end.

“The whole region needs to have more inclusive growth in addition to improved transparency and popular participation,” said Ms Nordgaard. “The countries need to spend on health, education and technology so that some of this growth actually reaches the people and you have more social mobility. This, in addition to empowerment of women, will strengthen the economies and unleash the potential and creativity of its people.”

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She said Norway places great importance on its relationship with Thailand and will continue to engage actively in the region. There is a need for strong international cooperation in order to tackle all the challenges the world is facing, and Norway sees Thailand and ASEAN as important partners in this regard. Norway will also continue to push for issues

or Sustainable Growth

“Norwegian companies thinking of investing in this part of the world need to do their homework to understand the local conditions and adapt accordingly. And they need to be in it for the long term, to build local knowledge and create goodwill in the community. Companies that engage beyond their core business will certainly be able to play an important role in the development of the countries” Ms Nordgaard emphasised she is part of a team in Thailand and she has had wonderful support from her staff and the Norwegian community at large.

H.E. Ambassador Katja C. Nordgaard addresses the Norway-Asia Business Summit. Photo: TNCC

related to decent working conditions and human rights, as well as for increased sharing of expertise and technology between countries. “Consumer pressure plays a big part in policing manufacturers as well,” said Ms Nordgaard. “Consumers have a responsibility to think about the products they are buying, and if they stop buying because of bad practices, companies are guaranteed to notice.” “Norway is well-placed for trade in this region within several sectors, ranging from energy and the environment, both for resources and know-how concerning energy efficiency, to oil & gas, ICT including telecom, maritime, marine and agriculture. A good example of engaging with local communities to improve a company’s standing is the way Yara interacts with the farmers who use their fertiliser, teaching them which kind and how much to use so that they can actually increase their yields.

“My time here has been extremely challenging and rewarding,” she said. “I was received with warmth and generosity from all parts of Thai society and I interacted with amazingly nice and interesting people. One thing I will miss the most about Thailand is the way the sunlight hits your face in the morning when you go out to start your day. If you haven’t spent time in Norway, you can’t understand how different this is from waking up and going to work and returning home all in the dark (during winter). The constant sunlight provides energy and positive feelings.” “I will also miss how present Thai people are in the here and now. When I walk to work in the morning and see the street vendors and locals going about their jobs, they really seem to be invested and comfortable in their work. Thais are very good at making the most of what they have.” Ms Nordgaard will take leave from public service after her posting ends. She has accepted the position of Executive Vice President and Head of Corporate Affairs at the Telenor Group, where she will start on 4 August 2014. As such she will have a unique opportunity to influence decisions and make sure her new employer continues to conduct responsible business throughout the group’s global reach covering 13 countries and close to 180 million subscribers, of which the majority are in Asia. “I am convinced that the private sector plays a major role in finding solutions to the many challenges the world is facing,” she said.

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Cover story

The Summit

Participants claimed the Norway-Asia Business Summit was a rousing success last month. This issue of Business Review portrays many of the speakers and the varied and interesting subjects they presented. Some 170 delegates joined the programme in Bangkok and 60 in Myanmar. In addition close to 30 spouses also participated in parts of the programme. The success of the summit was to a large extent caused by a growing interest for Asia in Norway fuelled by the slowdown of the economies in the developed world. With the world economy shifting eastwards, many Norwegian companies are keen to avail themselves of the multitude of opportunities created by a growing Asian middle class and the opening up of new markets like Myanmar. One of the central topics covered by several speakers at the conference was the competitiveness of Norway as a nation and of Norwegian industry in the world arena. With the rising costs of doing business in Norway, the country is in danger of losing its competitive advantage. Several companies presented their visions for continued growth with internationalisation towards Asia being a key component to future success. Read on and find out what the summit was all about.

Kristin Skogen-Lund Balancing Competitiveness with By Eric Baker and Ezra Kyril Erker

orway consistently ranks among the top in the world for quality of life, but the country is also known for some of the highest prices across the globe. How do companies compete in this environment? Kristin Skogen Lund, the chief executive of the Confederation of Norwegian Enterprise (NHO), emphasised the importance of Norwegian business strengths at the Norway-Asia Business Summit in addition to focusing on areas for improvement. She divided the strengths into ingenuity, policy and trade policy, and spent the bulk of her time on ingenuity. “Investments in domestic industries in Norway are way too low. Petroleum investments are leveling off, and overall domestic investments reached their lowest comparative level in 40 years,” said Ms Skogen Lund. “We’ve kept increasing our wages even as competitiveness has flattened out.” “Norway sells expensive goods and imports cheaply. I believe labour should have its fair share of our beneficial trade terms. We also have 20% of our working age population out of the workforce. The social benefits we offer them serve as a de facto minimum wage because we pay people not to enter the workforce. But there will come a point in time where this will prove too costly, and we’ve got to prepare for that.” She highlighted the need for Norway to expand its export base, as 70% of exports now go to Europe, where there is excess capacity and higher competition. As the Norwegian krone appreciates, it causes problems for exporters, especially as wages in her home country are 55% above the OECD average. “If you outsource too much, you’re going to dilute your competitiveness base,” said Ms Skogen Lund. “As one shipbuilder told me, ‘You can’t be a leader in ship design without building some ships at home.’

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“The biggest difference a small country like Norway can make is in innovation. I just pray that our politicians will create a climate policy that does not limit our technological innovation. For instance, Yara has made much progress on limiting emissions with its fertiliser products, and there is a cement company back in Norway that makes a product that captures carbon dioxide.”

“Investments in domestic industries in Norway are way too low. Petroleum investments are leveling off, and overall domestic investments reached their lowest comparative level in 40 years,”

She noted that living in a country with high costs requires discipline, because you can’t afford to be undisciplined. Ms Skogen Lund cited the example of a Norwegian shipbuilder who built two ships, one in Finland and the other in China. There was a problem with the design and the door to the fire hose would not open. Employees in Finland saw the problem and fixed it without waiting for a response to run up the corporate ladder, while workers in China did not. She said Norwegian leadership allows companies to attract top talent because the organisational structure is a flat hierarchy, enabling employee empowerment.

h High Prices “Norway just signed free trade agreements with Singapore and South Korea, and we are pursuing more bilateral investment treaties in part to reduce the risks for Norwegian companies trying to expand abroad,” said Ms Skogen Lund. “We are also working to change some regulations, as Canada has much more favourable conditions for its fisheries regarding trade with the EU than does Norway.”

NHO Director General, Kristin Skogen Lund addresses the Norway-Asia Business Summit. Photo: TNCC

Turning to a policy focus, Ms Skogen Lund started by pointing out the importance of a strong educational foundation. All Norway’s advantages in competitiveness branch out from a core of education, she said. In addition, Norway utilises a tax regime that provides incentives for research and development and innovation. And the country adopted the model of industry clusters where companies within in a sector work together to develop smart, green innovation. Norway’s trade policy approach is to support open markets and access, whether that is through the WTO or bilateral agreements.

“NHO thinks the Team Norway concept is a great change. This is a shift from traditional aid to business development. If you can bring the internet to all of Asia like Telenor or offer efficient fertilisers to ensure there’s enough food for the world like Yara, these are admirable goals because they are both sustainable and profitable. These companies have figured out how to be local and use those street smarts and know-how in the market.

“And we can’t underestimate the support our diplomatic missions provide. In most foreign markets, at some point Norwegian companies will run into a problem, and this is when the embassies can help provide some protection. “One rule of thumb I’ve developed over the years is the 5-15-80 success formula. Five percent of whether you will be successful is whether your strategy can be copied. Some 15% depends on whether you are in a good market position; the position can be easy to lose or it can give you too much to defend. And a full 80% of whether you will be successful comes down to simply execution. Can you execute the plan you have devised?”

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Ms Skogen Lund then led a separate session in the Myanmar portion of the summit. In Myanmar, Ms spoke about Myanmar’s anticipated growth and Norway’s potential role in its infrastructural, agricultural and general development. “Much reform is taking place. There is high potential and many resources,” Ms Skogen Lund said. Norway is well placed in Myanmar, and it is necessary to maintain that goodwill by not alienating local sensibilities and by being pragmatic. Norwegian companies are very adaptable and experienced in Asia and in developing economies. “Norway must play its cards well to stay in such a good position here,” said Ms Skogen Lund. She cited Telenor’s access to high level officials as an example, and its successful telecommunications bid will connect Norwegian companies in senses both literal and figurative, with others due to benefit if it is successful. She also discussed the benefits of entering the market now as opposed to waiting a few years. While it can be a big advantage for companies to move in early to grasp opportunities and establish ties and recognition, there may also be some advantages for latecomers. They can avoid common pitfalls and not be as marred by a damaged reputation in case of early failure, while being able to leapfrog competitors or avoid outdated facilities and technologies, not to mention being able to cherry-pick in sectors that have taken off. Early arrivals may need greater investments of time and money before seeing returns. “Getting it right can be as important as being first,” said the 38th most powerful woman in world business, according to Forbes Magazine. “Finding that balance is important. It can be hard to fix a damaged reputation, and sometimes there is an advantage in not having a legacy.”

preferences and “IT spaghetti”. Kodak, which developed the digital revolution in cameras but decided it was a threat to its established film camera market, lost out because of legacy. Others took charge instead, and Kodak eventually folded. “Myanmar does not have to repeat the mistakes of other countries, but it needs to build infrastructure – that’s a Norwegian strength,” she said. It’s a good match that should benefit both countries; however, “any company operating here will have to face a lot of unpredictability and change”. “Recipes that worked elsewhere may not work here,” she warned. “It’s not for beginners.” Luckily Norwegian companies have a lot of experience in the region and are very adaptable, she added, being “less rigid than the Swedes and Germans”. While Myanmar may prove a more extreme market even than India, the pairing in sectors such as agriculture and energy is very encouraging. “Our experience in adaptability will be our strength.” Leadership is about anticipation and navigation, she added. Of Telenor’s 60 expatriate employees, not a single one will be without experience working in Asia, trumping all other considerations, because navigating in Myanmar would be much more difficult for the uninitiated. “Don’t treat issues in the country as black and white; the country is mostly grey,” she said. Corporate Social Responsibility is also a big issue that “should be at the core of what you do”, she added. Empowerment, training and development are facets of CSR that shouldn’t be overlooked, as well as ethical and green business practices. “It’s about building a country, not just about business. It’s a fulfilling task. The people deserve that we build it well, and we’re in a unique position to do that.” Ms Skogen Lund ended.

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Norway’s Commitment to Investment in Asia By Eric Baker

.E. Deputy Minister of Foreign Affairs Morten Høglund received recognition during his introduction at the Norway-Asia Business Summit 2014 for introducing dragon boat racing to Norway. In providing the Norwegian government’s message to Norwegian businesses in Asia, he showed he was just as enthusiastic about the region. “When Norway gained independence in 1905, a primary goal was to develop support for its shipping,” said Mr Høglund . “This remains an important objective for the country, and I can think of no region more important to its achievement than Asia.” “Norwegian companies employ 50,000 people in Asia, and over the last four decades, the most important change in the world economy has been the rise of Asia. More than half the world’s population lives in Asia and it makes up 28% of global trade. “Norway needs to continue its institutional support to ASEAN countries, as we emphasise the need for a level playing field for trade under the auspices of the WTO. We have long-standing agreements with the Asian Development Bank, the UN and ASEAN agencies on a number of development issues.”

“Norwegian companies employ 50,000 people in Asia, and over the last four decades, the most important change in the world economy has been the rise of Asia.” He added the Norwegian government needs to focus its development priorities abroad on many of the same issues that have helped it become a global leader in Europe.

Deputy Minister of Foreign Affairs, H.E. Morten Høglund addresses the Norway-Asia Business Summit. Photo: TNCC

agreements with several of Asia’s largest economies. We also need to continue to promote good corporate governance in Myanmar. “Education remains a global development priority for Norway. And I think every country needs to adjust their education priorities to the needs of the business sector, and each country needs to make this analysis on their own. Mr Høglund acknowledged there are plenty of challenges to Asian growth in the near future, such as traditional and territorial disputes, pollution, climate change, nationalism, and increasing income inequality. But he feels like the mechanisms of ASEAN are working to deal with these obstacles so development can occur. “I am impressed by the level of local knowledge held by Norwegian companies in Asia,” said Mr Høglund . “This knowledge is of value to other companies and even the government, so as a community we need to listen and learn from what they have to say.” “Norwegian economic growth is dependent on Norwegian companies succeeding abroad, so we encourage foreign investment. Norway has access to vast sums of risk capital, so we need to be smart about how and where we invest it in Asia.”, said Mr Høglund

“Norway needs to continue to uphold universal values and work in specialised clusters as we negotiate free trade

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Asian Development Bank’s Optim Economies By Eric Baker

he outlook for Asian economies the next few years is generally upbeat, despite some hiccups from the traditional powerhouses, said an economist at the Norway-Asia Business Summit.

Dr Joseph E. Zveglich, Jr., assistant chief economist at the Asian Development Bank, provided a macroeconomic overview of Asia, predicting the region would have steady economic growth of 6.2% this year and 6.4% in 2015 as China cools down somewhat while developing countries experience an uptick. “Domestic demand is generally robust in many Asian countries, and Malaysia, China and the Philippines reported strong investment figures,” he said. “The recovery in the US, EU and Japan should help buoy export figures. “Even though Chinese growth is flattening out, Hong Kong and Taiwan are still growing strong, and Papua New Guinea projects to make the biggest leap in growth, from 6% in 2014 to 21% in 2015 because a natural gas project that will come online.” Dr Zveglich pointed out China was focusing on quality control after rapid growth the past few decades, trying to

The biggest risks to Asian economies remain a shock to international financial markets from US policy and weak Chinese growth rein in credit growth and tackle the shadow economy as well as corral corruption. “India is still operating well below its economic potential, and growth can be supported by addressing its current account and fiscal deficits,” he said. “The economy is constrained by infrastructure bottlenecks and regulatory barriers that need to be cleared.”

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ADB Asst. Chief Economist, Dr Joseph Zveglich Jr. addresses the Norway-Asia Business Summit. Photo: TNCC

Dr Zveglich predicted Thailand would record GDP growth of 2.9% this year, followed by 4.5% growth in 2015. The Philippines projects to a much heftier 6.4% in 2014 and 6.7% in 2015. Global food prices fell 7% in 2013 and crude prices were elevated but stable. With soft commodity prices, inflation remains in check, he said. The biggest risks to Asian economies remain a shock to international financial markets from US policy and weak Chinese growth, but widening income inequality brings a whole range of other obstacles for economies to confront. “Countries with weaker fundamentals such as those with high current account deficits or inflation are more vulnerable to an outflow of foreign money should a shock affect the system,” he said. “But while Asian economies have been prosperous recently,

mistic Forecast for Asian

income inequality is widening and they must spend more on education, health and social protection. Spending on these sectors also creates a virtuous cycle that can lead to higher and more sustainable growth. “Indonesia, China and Laos have started to use fiscal policy more effectively to combat the income inequality gap, but OECD countries and Latin America spend about double that of developing Asia on these sectors.” Asia’s developing economies have been prudent in keeping fiscal debt low, said Dr Zveglich. But East Asia’s population is shifting toward an older demographic and spending on public health is skyrocketing. East Asia spends about 3% of its GDP on health now, but this will shoot to 10% by 2050.

The region has to increase its fiscal revenue if it wants to cope with this shift, he said. “Options include expanding personal income tax and the value-added tax, increasing corrective taxes and nontax revenue, progressive taxes on property, capital gains and inheritance taxes, and improving tax collection and enforcement,” said Dr Zveglich. He believes the ASEAN Economic Community will not have much of a short-term effect on the regional economy because much of the substantive framework involves trade and has already been priced in by the market, considering it low-hanging fruit as the majority of trade barriers have already been eliminated.

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Dr. Deunden Nikomborrirak “The winner takes it all” By Eric Baker

To many living in Thailand, curtailing corruption, which has become a way of life in some circles, seems like a pipe dream. But a look at other Asian countries shows that the kingdom is not confined to this legacy. Dr Deunden Nikomborirak, research director for the Thailand Development Research Institute, said Thailand ranks somewhere in middle of Asian countries for bribery, with a bribe estimated to take place in 15-20% of all transactions by Transparency International. Japan, South Korea and Malaysia all take pride of place at less than 5% of transactions, while Cambodia and India received the worst rankings for Asia at 50-75% of transactions. “The reason there are no trends across developing Asia is corruption can be checked by certain systems, such as political parties, police and civil servants,” she said. “Unfortunately, in much of ASEAN politics including Thailand, the system is winner take all and the perception is those three institutions are the three most corrupt in Thailand, according to a study by Asian Intelligence Report. “Cambodia, Thailand, Vietnam, Indonesia and India all have very high levels of corruption in this report, which is hurting the business environment in these countries. The governments and parliaments are the problem, so they have very little incentive to change. Reform has to come from the bottom up.” Thailand already has several anti-corruption laws and bodies, but there is very little enforcement of those laws, so she sees little hope in trying more top-down approaches to deal with corruption. For instance, from 1992 to 2009, only 12 of the 220 executives against whom the Thai Securities and Exchange Commission filed charges against faced legal sanction. And even if you are caught, the fine is not commensurate to the level of damage done, so there is little incentive for people to follow the rules, she said. While Dr Deunden conceded share manipulation is very difficult to prove in Thailand because the prosecution has the burden of proof, she chalked up the lack of a single conviction to four factors: a high level of regulatory capture, where the regulatory body is protecting the interests of those they are supposed to regulate; light penalties; a slow judicial process; and lax enforcement.

TDRI Researchg Director, Dr. Deunden Nikomborrirak addresses the Norway-Asia Business Summit. Photo: TNCC

Dr Deunden concluded Thailand needs a three-step bottom-up approach to fighting corruption: 1) increase anticorruption network building among NGOs, academics and the media; 2) communicate the anti-corruption message to the public; and 3) demand political parties commit to key reforms including disclosure of public information, public consultation and hearing procedures, and the abolition of broad discretionary powers of politicians and administrators. “For example, Thai people don’t even know how much rice the state owns, to whom it is sold, at what price and to which company,” she said. “This is all public information, but the government won’t reveal it. Public hearings are held for government projects, but while the comments are recorded, no one ever pays attention to them or changes their plans. “Thailand also retains several unnecessary laws solely for bribery. Did you know it is illegal for you all to be sitting here right now, as you cannot attend a business meeting without a work permit?” In looking to Asian neighbours with similar problems, Dr Deunden pointed to South Korea as a possible example for Thailand to emulate. “I think South Korea serves as a good model for Thailand in its corruption fight,” she said. “The country has a large population and lots of big businesses, just like Thailand, and it had to fight from the bottom-up. There was one professor there who bought one share in every listed company so he could go to all the shareholder meetings and scrutinise all the numbers. It was just one person, but he was trying to provide accountability.”

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U Zaw Oo: Myanmar: A New Shining Star? By Eric Baker

he rapid transformation of Myanmar’s economy in only a handful of years has been inspiring, but investors still have several questions about where the country goes from here. After all, for a country with the population and resources of Myanmar to switch from closed to free market in recent history is almost unheard of.

U Zaw Oo, presidential economic adviser for Myanmar, provided an upbeat outlook for Thailand’s neighbour. “A recent McKinsey report estimated the country has a chance to reach US$200 billion in GDP by 2030, four times that of today,” he said. Zaw Oo acknowledged the country had almost a 50-year period where the economy was stagnant, but said the Myanmar has a number of advantages upon which it can build. “We are a latecomer, so we can learn from the lessons of others and use more advanced technology and focus on green growth,” he said. “We have a strategic location, squeezed between the giants of China and India. Our international relations and donor coordination has improved because we have more good will from NGOs from opening up. Our human resource development is growing as we reallocate investments toward health, education and the social sector. Telecom was made a priority sector by our president to help development. And we plan to shift away from a resource-driven economy.” Natural gas and jade make up 60% of Myanmar’s export revenue, and extractive sectors comprise 78% of foreign direct investment. “But we no longer provide licences for the export of raw lumber. We are trying to promote resource governance,” he said. “The new priority sectors are agriculture, sustainable tourism, health, education, forestry, telecom, and construction and infrastructure.

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“When Vietnam opened its economy in 1986, it was a food importer. Now it is a food exporter. Myanmar has much to learn from this lesson, as right now we focus on only a few crops—beans and pulses—of which we are the world’s top exporter. But we need our agricultural production to be more stable and efficient. “In fact, just last year we had a rice pledging scheme similar to the one in Thailand proposed in parliament, but we learned to focus on insurance rather than a price guarantee.” Myanmar is no longer a country where companies can look to exploit cheap labour and resources, said Zaw Oo. “Our development projects require more participation now. You cannot just extract a resource without involving the public,” he said. Much has been made in the Thai press about the gargantuan potential of the Dawei Special Economic Zone (SEZ), which if it comes to pass would include the world’s largest port. Zaw Oo provided insight about why investment in the project has stalled.

“We are a latecomer, so we can learn from the lessons of others and use more advanced technology and focus on green growth,” “Dawei didn’t take into consideration the local people’s concerns,” he said. “The real value involved included the forest locals used for their livelihood, and there needed to be linkages to the greater economy. Many investors were not interested because the main source of energy would come from Thailand, not Myanmar. “But a new SEZ on the other side of Yangon called Thilawa is receiving all kinds of investments. The farmlands were acquired for a proper compensation and the private sector has taken the lead with some Japanese counterparts.

Myanmar Presidential Economic Adviser, U Zaw Oo addresses the Norway-Asia Business Summit. Photo: TNCC

“In the past when China was the only investor, we did not always manage the negative impacts of investing very well. But now there is some competition as lots of other foreign investors are interested in Myanmar.”

Extractive Industries Transparency Initiative requires us to streamline and organise the country’s finances, as previously we did not always know where the nation’s finances were going.”

Zaw Oo admitted there will be speed bumps along the development path too.

As ridiculous as it may sound for a country with less than 1% mobile phone penetration before it opened up to bank on strategies such as jumping straight into 3G technology for its development, Zaw Oo is optimistic based on the country’s past. “From the 1870s up to the second world war, Myanmar had a per capita GDP equal to China, Malaysia, Indonesia or Thailand. We were the rice bowl of the world.

“There is a risk if you develop too fast because you can’t sustain it,” he said. “We have underlying fault lines because we don’t have strong institutions, so we are trying to change the way government does business. We also need to find a solution to our conflicts with minority groups, as Myanmar has huge resource assets in some of these minority areas. “We are also building the institutional capacities of the Finance Ministry, and the push for membership in the

“The military also seems committed to reform, as it voted for the liberal version of the foreign investment bill as well as the telecom bill.”

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Rajiv Bawa A Triumph of Will: Telenor’s Succ By Eric Baker

ninor, Telenor’s subsidiary in India, won the 2014 Norway-Asia Business Award at the summit, in part for its perseverance in the face of daunting odds. Rajiv Bawa, Telenor Group’s chief representative officer in India, gave a short rundown of the company’s experience in a market everyone told them was too crowded to make an impact. “We entered the market in India in 2009, and it was indeed hard in the beginning,” said Mr Bawa. “There were 12 operators at the time and the market was in chaos. “But we had our strategy and we stuck to it. As you know, there are several different markets within India, and our target was the mass market, because we felt we couldn’t offer value in places like Mumbai and Delhi. Only certain

“We allowed ourselves one day of doom and gloom. But the main Scandinavian trait Telenor brought from Norway was transparency, and we decided as an organisation to be absolutely open about everything we did.”

Norway-Asia Business Award is presented to Telenor India. Photo: TNCC

“Then in February of 2012, the Supreme Court ruled that many of the telecom licences were granted illegally because they were given at incorrect prices. The court rescinded the licences and said the government could reschedule a new auction following the proper procedures. “We allowed ourselves one day of doom and gloom. But the main Scandinavian trait Telenor brought from Norway was transparency, and we decided as an organisation to be absolutely open about everything we did. We told the government and employees everything we were doing and thinking at the time.

classes of people had mobile phones in India at that point, but within three years of our entering the market competition had increased mobile penetration for the country by 2.5 times. Our strategy was to stay very customerfocused, keep costs low and avoid complicated services. This means we started with only voice and SMS services, forgoing data.

“And the response was incredible. Our employees went out and protested the decision, waving signs saying “We love Uninor” and wearing our T-shirts. They wrote an open letter to government pleading with them not to accept this decision because they would lose their jobs. But the most amazing event out of all this was February 2012 turned out to be our highest sales month. People were going out of their way to support us.

“We started to make headway by 2010, and in early 2012 we had 40 million customers, which in India is not that much, but was significant considering how little time we spent in the market.

“I also have to thank the Norwegian government and their ambassador to India for helping us out and making the Indian government understand all this happened through no fault of Telenor. This was a policy from a previous

Thai-Norwegian Chamber of Commerce

cess Story in India government many years ago that led to this court decision. “The Indian government was also very receptive in including us in the discussion about the terms for the new auction, allowing us to ensure the rules were fair to everyone, including Uninor.” Uninor rebid for licences in late 2012 for six telecom circles covering eight states in India with a market of over 600 million people. It works with 300,000 retailers. In the interim the company kept up its marketing and maintained strong relationships with its trade partners. The result is even though Uninor had to bid on some different markets, it still has 30 million customers, which the company is pleased with given the period it went without a licence.

“Even though several of these markets look saturated, I think we haven’t even scratched the surface in India,” said Mr Bawa. “Several of these rural areas didn’t even have much mobile penetration before, and the next step is to develop and offer mobile internet to our subscribers. “We hope you’ll be seeing us in the Guinness Book of World Records because in April this year we opened 367 stores on the same day. Uninor plans to build on that number in the future.” “On behalf of the Telenor Group in India, we would like to thank the Norway-Asia businesses that awarded us this honour for valuing the passion, patience and perseverance we put into our work.”

Grand Dinner and 25 April 2014 at Man

d Award Ceremony ndarin Oriental Hotel

Deputy Minister of Trade and In The primacy of trade in Norway By Eric Baker and Ezra Kyril Erker

tarting out the Saturday sessions for the Norway-Asia Business Summit, H.E. Dilek Ayhan, Deputy Minister of Trade and Industry for Norway, underlined the importance of Norwegian trade in Asia. “Norway has a clear mandate to support business conditions abroad and ensure a stable framework for Norwegian companies that work overseas,” she said. Norwegian companies stretch across a vast swath of Asia, from Japan to Indonesia to India, said H.E. Dilek Ayhan. They contribute 125 billion NOK worth of trade to the economy, more than double the figure from a decade earlier, and employ up to 50,000 people. “These human resources are a part of our relationships with other countries,” she said. “Innovation Norway has over 30 offices around the world working on strengthening our connections abroad.” Norway exports 9.8 billion NOK worth of seafood to Asia, and H.E. Dilek Ayhan said the country wants to solidify its position in markets where it sees growth. Norway believes there is more trade potential to be gained in Asia, and as such it is continuing trade negotiations with India, Vietnam and Malaysia, she said. H.E. Dilek Ayhan noted Thailand and Myanmar were priority ports of call for her on this trip, adding she has already learned about how Norwegian companies conduct business in Thailand. “Norwegian chambers of commerce abroad are an important resource for companies and they are invaluable for the government in understanding what is happening on the ground,” she said. “Norway appreciates the value of cultural diversity and competence, and we aim to build on local expertise and training. “I want you to be inspired by one another at this summit. You are setting an example for numerous Norwegian companies back home that will follow in your footsteps at some point.”

Thai-Norwegian Chamber of Commerce

In Myanmar, H.E. Dilek Ayhan continued in a similar vein. Norway is especially reliant on foreign trade, she said, with exports accounting for 42% of GDP, compared with 25% for the EU and 29% for China. It is therefore highly vulnerable to changes in the global economy, oil prices and exchange rates. With industrialised countries investing more heavily in emerging economies, competition is high, and an early and positive presence in Myanmar may make a big difference for the future. Fifty-seven years previously on April 28, Thor Heyerdahl set sail on the Kon-Tiki raft to try to shed some light on Polynesian migration patterns, H.E. Dilek Ayhan pointed out. While his findings remain disputed, it was indicative of Norwegian adaptability and the spirit of adventure that modern-day companies are also engaged in, especially in emerging markets. “Our international relations are very important to us. Amongst them is our relation to Myanmar,” she said.

“Norwegian chambers of commerce abroad are an important resource for companies and they are invaluable for the government in understanding what is happening on the ground,”

“Myanmar is a country of tremendous natural resources, a young population and a strategic location in Southeast Asia.” Ties between Norway and Myanmar are very strong, as Norway was among the first nations to recognise Myanmar’s reform process and lift sanctions and write off debt. Norway has provided aid and development assistance to build capacity, encouraging an atmosphere of amity and goodwill. President U Thein Sein made Norway his first stop on his first official trip to Europe.

ndustry, Dilek Ayhan y’s relations with Asia

From left to right: Telenor’s Per Erik Hylland, UMFCCI’s U Aung Win, H.E. Dilek Ayhan and Telenor Myanmar CEO Petter Furberg gesturing their intention to win. Photo: TNCC

While institutions, laws and infrastructure remain inadequate in some cases, Norwegian companies can help solidify the long-term transition “from military rule to democracy, from armed conflict to lasting peace” as Myanmar enters the regional and world communities.

corruption, to respect the environment, human rights, working conditions and social responsibilities, to maximise transparency and help reduce poverty, and to promote local capacity building and productivity. Responsible business will benefit Myanmar.

“The Norwegian Government encourages the international orientation of Norwegian companies,” she said, though investment in Myanmar may involve a high level of risk and challenge. It is encouraging to see companies such as Jotun, Telenor and Statoil already gaining footholds in the country, she said, and others such as SN Power, Jacobsen Elektro, Eltek, DNV-GL and Yara showing a commitment to enter the market.

“A dynamic private sector is crucial for Myanmar in order to achieve long-term, sustainable poverty reduction through productive jobs,” she said. “Trade and foreign investment will strengthen local capacity and promote local competition. And better living standards will contribute to further democratisation.”

H.E. Dilek Ayhan added, “The government expects no less of Norwegian companies operating abroad than it does at home.” This includes a responsibility to combat

And with Norway’s economy so reliant on foreign trade, it is a relationship that in the long term can greatly benefit both countries.

Thai-Norwegian Business Review

Creating Value in a High-Cost En Lessons from Yara By Eric Baker

howing customers the value they derive from its products is not just a marketing gimmick for Yara, the global leading fertiliser company. Based in a country with a high cost level, creating value is a necessity for the Norwegian company. Egil Hogna, the head of downstream for Yara, spoke at the Norway-Asia Business Summit of the specifics about how the company works with farmers to boost their yield. He acknowledged farmers in Vietnam and China often overuse fertiliser, which then runs off into the environment. “At Yara, we try to grow our sustainability by improving the farmer’s profitability,” he said. “We teach the farmers which kind of fertiliser to use for their soil and how much. We create value by doing field tests with the farmers in their field to determine an optimum nutrition plan. “Most of our competitors don’t do this, as they are commodity-based fertilisers focused on low price points and mid-quality products. But for each country where we sell our fertiliser, we develop a crop plan pamphlet printed in the local language, or sometimes just with easy to understand symbols. “In Thailand alone, Yara has 2,300 crop clinics and farmer meetings per year. We undergo retail staff training, build demonstration plots and use farmer testimonials to communicate with 85,000 farmers a year. “For example, take Suwat Khonmanee, a longan farmer here in Thailand. He has five hectares and once he started using our crop plan, his fruit was larger and firmer with a smaller seed. He had 11% more premium quality fruit accepted from buyers, and he was able to make US$1,800 more per hectare, enabling him to buy a new tractor.” Yara also undertook a project in Vietnam to deal with the highly acidic soil and aging coffee trees that developed rust, which can decrease the yield. Vietnam is the world’s secondlargest coffee exporter and top producer of robusta beans, used for instant coffee. “Our venture educated the roasters, traders, marketers, distributors and growers on the proper methods to increase

Thai-Norwegian Chamber of Commerce

Yara’s Head of Downstream, Egil Hogna addresses the Norway-Asia Business Summit. Photo: TNCC

yield—everyone along the value chain,” he said. “We even partnered with Nestle to make this a sustainability project. The result was bigger berries and a higher yield.” Another method Yara uses to create value is technology. It has several apps and websites to make farmers’ jobs easier. The CheckIT app supports farmers in identifying nutrition deficiencies and converts this to crop-specific advice to farmers, and Yara also uses Facebook to share knowledge and build networks. DiscoverIT helps farmers check if the Yara bag is genuine and can locate nearby dealers and products. ImageIT measures the leaf coverage and based on a database of thousands of images the system use a calibration tool to estimate how much nitrogen is being absorbed and how much more is needed. Though ImageIT

nvironment

don’t reach their brain or height potential. We estimate that 40% of the children in South Asia are stunted. So our goal is help farmers improve profitability by growing more highervalue crops and improve access to markets. Another challenge for a high-priced product is counterfeiting and competition in foreign markets. “Yara’s brand and especially its company logo of a Viking ship are well known in East Asia,” said Mr Hogna. “In Thailand, we had a long-term relationship with a distributor that did a good job of brand building. But unfortunately it didn’t want to conduct any communication with farmers,

“Southeast Asia presents one of the greatest challenges in the future as global food production will need to increase 77% by 2050 to keep up with population increases.” and as this is a major part of our strategy, we had to break that arrangement.

has been available in Europe for a couple of years, it could a solution that will be made available for certain crops in Thailand. Mr Hogna admitted the region will provide a stern test for Yara. “Southeast Asia presents one of the greatest challenges in the future as global food production will need to increase 77% by 2050 to keep up with population increases. The problem is the weather is likely to be more severe because of climate change, as there has consistently been less rainfall in the region since 2009. This means our fertilisation methods need to use as little water as possible. “There are still more people hungry in Asia than any other continent,” he said. “When children are malnourished, they

“This Thai distributor then tried to create a brand with a very similar logo, and we had to take the matter to court. “The paradox of the copycat problem is that in China, where the counterfeit problem is the worst, the legal system is not very useful but farmers have become experts at spotting fakes. The price premium is the highest in China of any market, so farmers there want to make sure they are getting what they pay for.” This example demonstrated the true value Yara creates for its customers, he said. “The reason we can charge a higher price for our fertiliser is we go to the farmers and show them how much more profitable they can become using our product.”

Thai-Norwegian Business Review

Using Team Norway to Add Valu Businesses in Asia By Eric Baker

he concept of Team Norway is an initiative led by the Norwegian Ministries of Trade, Industry and Fisheries to enhance Norwegian businesses abroad through closer cooperation between embassies, Innovation Norway, and various support and sector-related organisations. The Thailand portion of the Norway-Asia Business Summit finished off its second day with a roundtable discussion of how competitiveness can be enhanced by Team Norway for Norwegian companies in Asia.

“The best models are when embassies, Team Norway and businesses all follow the same strategy for a market,” said Finn Kristian Aamodt, acting president and CEO of Innovation Norway. “We need to ensure there is good collaboration with Innovation Norway offices as well. In addition to small businesses, large firms like Yara and Telenor are also clients of Innovation Norway, so it’s important we have a plan for every type of company.

“Not too long ago we had a guy come into our office who said he wanted to make T-shirts. We said ‘Okay, but a lot of people like to make T-shirts. What makes yours different?’ He said, ‘We put a tractor on them.’ And after Moods of Norway became successful, the guy came back and told us, ‘There were only two people who believed in my business: my grandmother and Innovation Norway.’ So I think this serves to remind us sometimes we have to be a little bold in our projects.”

“Thailand, Brazil and Japan are examples of markets where the Team Norway concept is really excelling, and the key to their success is having competent local people.”

Anne Lene Dale, the director for economics and commercial affairs at the Norwegian Ministry of Foreign Affairs, noted as part of Team Norway, the government has decided to use the Foreign Service as an instrument to promote Norwegian businesses abroad. The Norwegian government opted to emphasise the energy sector, but she said the priority was to be able to adapt quickly to changes in economies.

Kristin Skogen Lund, director-general of the Confederation of Norwegian Enterprise, pointed out there is not a blueprint for Norwegian companies investing in Asia, as the markets and businesses can vary so greatly. But she noted the main worries of companies considering investing in Asia are the high level of competition, lack of local knowledge, the ability to find the right local partner, and horror stories like what happened to Telenor in India.

“When I grew up, I was taught in school thrives by producing oil and gas and exporting seafood,” she said. “But 40 years ago Norway didn’t have an oil and gas industry. And as recently as 20 years ago the country didn’t have a sophisticated seafood industry, nor was the internet prevalent. That’s why I look at what Telenor is doing today and just marvel. Norway is moving from selling goods to high-value services and know-how.

Mr Aamodt noted most Norwegian companies tip their toes in the water in Denmark, the UK and Germany, but then do not expand into major markets beyond that.

“Another goal for us is making Norway an attractive destination for foreign investment and expansion. Most of the focus is on Norwegian companies expanding overseas, but foreign investment in Norwegian industry has increased 90% in the last decade.”

“Of the 55,000 Norwegian exporters from 2003 to 2011, only about 5,000 continued on into the BRICS countries, and these were the companies that were really successful across all parameters,” he said. “Ms Skogen Lund said

earlier that most Asian markets were mature markets, but most Norwegians looking at investing here don’t look at them as such. We need to remember that it is a big step for small- and medium-sized Norwegian companies to invest in Asia, but sometimes they produce the most fantastic results.

Thai-Norwegian Chamber of Commerce

The Norwegian government has also shifted its stance on development aid, deciding private sector contributions

ue to Norwegian

“You need to convince buyers your product is higher quality and will last longer. GIEK helps finance trade if the buyer of Norwegian exports doesn’t have a strong enough balance sheet for credit. This can take many forms, and even large multinationals like Yara utilise GIEK for assistance in developing markets. “We have used GIEK in countries like Ecuador and the Ivory Coast where there may be one buyer placing a massive order, especially if we are new to the market and don’t have the local relationships built up,” said Egil Hogna, head of downstream for Yara. “In some instances, it can also be useful to use Team Norway to deliver news to stakeholders.”

From left to right: Telenor’s Sigve Brekke, Innovation Norway’s Finn Kristian Aamodt, Kristin Skogen Lund and Egil Hogna debating. Photo: TNCC

need to make up the core of this segment. Sigve Brekke, the executive vice president and regional head of Asia for Telenor Group, as well as the moderator of the roundtable, made the point that Telenor contributed in five years worth of tax payments to Bangladesh what it would take the Norwegian government 200 years to equal at current rates of development aid. This brought up the thorny issue of whether foreign companies should have a say in the way massive tax payments are spent by governments. Terje Normann, first vice president of the industry and energy division of GIEK, the Norwegian Export Credit Agency, said Norwegian companies have a responsibility to try and tell the quality story. “There will always be Asian companies selling whatever you have for cheaper,” he said.

Christian Chramer, the regional director for Southeast Asia for the Norwegian Seafood Council, agreed Norwegian companies needed to continue to sell the quality story to importers. He said in addition to Team Norway, he has found a support system in Asia among company contacts in industries other than seafood that he meets at business roundtables, so he encouraged more of these meetings. Mr Chramer also advocated using more fresh graduates as trainees and utilising the research opportunities offered by overseas BI Norwegian Business Schools. Final suggestions for how Team Norway could improve were welcomed, and Mr Hogna said there needs to be better dialogue in Norway. “Denmark has aligned its Aid and Development, Foreign and Trade and Industry Ministries, and we could benefit from better alignment among these fields. Sometimes we receive initiatives from these ministries in Oslo that don’t necessarily match,” he said. Ms Skogen Lund noted that most of the success stories for Norwegian companies overseas revolve around cultivating local talent, so this should be a priority. And Mr Normann called on exporters to bring GIEK more projects with credible counterparties, no matter the size. “We have a policy for our projects that size doesn’t matter, and I think many of us on this stage would agree that’s a good rule,” he said.

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Closing Remarks and Summary from the Bangkok Summit By Eric Baker

orwegian companies looking to invest in Asia need to have a good understanding of local conditions and preferably a local presence, said Norway’s Ambassador to Thailand, H.E. Katja Nordgaard, as part of her summary of the Norway-Asia Business Summit. “Whether this means using a local partner or having a good understanding of local practices, it is clear from the presentations that being local is paramount,” she said. “It is also important that companies have a long-term perspective on their investments. It takes time to get started and to understand the local dynamics. By engaging with different stakeholders locally and by operating in a sustainable manner, you will also build up goodwill for the bad times, which normally come to every business.” Ms Nordgaard also reiterated the importance of doing your homework to understand a market before testing the waters. She pointed out that Norwegian companies should have contact with the embassy and/or Innovation Norway and

“Some 80% of summit survey respondents indicated they feel there could be more cooperation between private and public organisations abroad” the local chambers of commerce in order for them to get to know each other. In this way, if the company runs into trouble, it will be easier for the authorities to assist. “Some 80% of summit survey respondents indicated they feel there could be more cooperation between private and public organisations abroad,” said Ms Nordgaard. “We have also heard during the summit that Team Norway works fairly well abroad, but that there is a need for better and more coordination between the institutions back home in Norway. I would also like to add that I find Norwegian companies operating abroad need to be better at supporting each other – the big helping the small, the experienced ones helping the

H.E. Ambassador Katja C. Nordgaard addresses the Norway-Asia Business Summit. Photo: TNCC

newcomers. That is why it is important for companies to join the local chambers of commerce. “Asia faces a number of challenges, as we have been informed by the various presentations the last two days. There is a looming food crisis, an environmental and climate crisis, widespread corruption, enormous inequalities and a lack of adequate education—and Norway is well positioned to contribute in almost all of these areas. This goes for both political initiatives as well as private companies.” Ms Nordgaard expressed her relief and joy at the end of the successful Thai portion of the event. “I feel so proud at the end of this summit – it’s been a great success – and it is time to thank all the wonderful people who worked so hard in the days and months leading up to it,” she said. “This is a real product of Team Norway at its best! I heard from several people that in addition to interesting speakers and discussions, they were also very pleased with the networking opportunities at this event as well as the amazing surroundings. “Let me conclude by thanking everyone at the chamber and the embassy for their hard work, the ministers and the speakers for their contributions and last but not least, you the participants for participating in the summit 2014.”

Thai-Norwegian Business Review

Ambassador Ann Ollestad: Respo Help Myanmar’s Reform Process By Ezra Kyrill Erker

mbassador of Norway to Myanmar H.E. Ann Ollestad described some of Myanmar’s new challenges, and some of the challenges of doing business here, in her opening address at the Norway-Asia Business Summit. With Myanmar in the midst of a fundamental reform process on three fronts – towards multiparty democracy, transforming the economy and consolidating the national peace process – it has become more important than ever to be on the spot to take stock of the developments and provide help where needed. The embassy in Yangon was established in November last year for that reason.

“The establishment of a full-fledged embassy in Myanmar with a resident ambassador is a symbol of the high importance the government of Norway places on the relationship with Myanmar, and of the political commitment to bringing the cooperation between our two countries forward,” said Ambassador Ollestad. Relations between the countries are strong, she said, due to Norway’s support for the democratisation movement and civil society organisations during military rule. The Nobel Peace Prize awarded to Aung San Suu Kyi, and support for the Democratic Voice of Burma, based in Oslo, “contributed significantly to putting Norway on the map for many Myanmar people”. Norway was also quick to recognise government reforms and to lift sanctions and cancel debt when the country began to emerge from military rule in 2011. President U Thein Sein visited Norway on his first official visit to Europe and asked Norway to take a leading role in coordinating international support for the peace process. “This leadership role is a high priority for the Norwegian government and my team at the embassy in Yangon,” she said. Development assistance, especially in natural resource management, energy, environment and capacity building, has recently become an important part of Norway’s engagement with Myanmar.

Thai-Norwegian Chamber of Commerce

“The country is in the midst of a fundamental reform process, affecting each and every sector,” the ambassador said. This involves parallel reforms from a one-party state system to multi-party democracy, to liberalising the economy and moving the peace process forward in minority ethnic areas. The results have been tangible, she said. The three-yearold parliament has become an influential balance to the power of the executive, restrictions on media have been relaxed and political prisoners are being released. There is commitment to the peace process.

“Operating a business venture in Myanmar requires careful manoeuvring in a complex political landscape. Understanding the cultural sensitivities and how to operate in a conflict-sensitive manner is of utmost importance.”

Constructive steps have been taken to liberalising the economy, with the Foreign Investment Law of late 2012 removing a lot of red tape and boosting international interest in investing here. “Myanmar’s vast natural resources, combined with its strategic location and geopolitical importance, make Myanmar an emerging market of high potential,” she said. With her background in the energy sector, and as a previous ambassador to India, the ambassador is well placed to suggest that given Myanmar’s location and wealth of resources the potential for growth in the economy and in its prominence in the region and the world is high.

onsible Business Practices Will

H.E. Ambassador Ann Ollestad addresses the Norway-Asia Business Summit. Photo: TNCC

“Implementing wide-reaching reforms and institutional change takes time,” she added. Many challenges remain, including a weak judiciary that compromises law enforcement and a banking sector in its infancy. Those with a vested interest in the status quo may continue to challenge, even undermine, reforms, and there is no guarantee that the reforms will be lasting. “Operating a business venture in Myanmar requires careful manoeuvring in a complex political landscape,” she said. “Understanding the cultural sensitivities and how to operate in a conflict-sensitive manner is of utmost importance.” International business may have an important role as a catalyst for economic and political development, and Norwegian companies will need to be a source of knowledge, support and capacity building. As an early

supporter of the peace process and political reforms, and a provider of humanitarian aid, Norway is well placed to build on the reciprocal goodwill. Engagement should continue to leave a positive imprint, the ambassador insisted, with attention to ethics, corporate conduct and environmental sustainability. “Pay taxes,” Ambassador Ollestad said. “Follow good business practices. We want to attract responsible businesses, who integrate the concept of social and environmental sustainability into their business model.” In a parting comment during the later round-table discussion, Ambassador Ollestad reminded the business delegates to make use of the new embassy. “The embassy is here to serve you, and to promote Norway-Myanmar relations.”

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programmes do not directly measure, requiring students to reflect on their growth in areas such as leadership, community service and global citizenship. Through the GCD, a student without top grades could demonstrate to universities that he led an initiative to solve development problems in a small rural village. Another could showcase the photography project she undertook to raise funds for abused women in a neighboring country. All too often students like these are measured by a numberâ&#x20AC;&#x201D;a number that says nothing about their capabilities or potential for success. The GCD gives them the opportunity to tell their stories and reveal what makes them unique as learners. Since its creation the GCD has generated a positive reaction from universities. More

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Shwe Dagon Pagoda Welcomes Summit Delegates

Allison Morris on the Complexit By Ezra Kyrill Erker

llison Morris, of Yangon advisory firm West Indochina, spoke about the unique challenges faced by international companies in Myanmar in terms of recruitment and human relations. “HR here is complex and changing, and you need to be on the spot to understand the market,” Ms Morris said. While multinationals are looking for local managers in a rapidly emerging market, local firms are looking for expatriates in order to expand operations. “Everyone is hiring,” Ms Morris said. “There is a demand spike for executive talent, especially general managers, sales managers, HR managers, finance managers – the core team that companies need.”

“Don’t advertise, don’t cold call. Networking will be more successful. The Myanmar situation is unique. Adjust your expectations and understand what talent you can develop.” The problems are numerous and often unique to Myanmar. Having a market closed for decades means some skill sets and industries have not been developed. The teaching of managerial and leadership practices has been neglected in the public education system. Local executives don’t have previous experience working with multinationals, like others might in Vietnam, Singapore, Thailand or other countries in the region. It’s a unique situation where companies must align expectations and be creative when recruiting among the three main candidate pools: local, expatriate and repatriate workers. Local talent with the requisite skills might be recruited from the NGO sector but would probably want

Thai-Norwegian Chamber of Commerce

West Indochina’s Allison Morris addresses the Norway-Asia Business Summit. Photo: TNCC

a significant pay rise to make the switch. Expatriates might initially look forward to the challenge but then grow increasingly frustrated and homesick. The repatriate category comprises Myanmar nationals living abroad, such as in Singapore, who might be willing to return home for the right opportunity. The latter two pools, though, might have reservations regarding health and education for their children. “The candidates are also assessing the company,” Ms Morris said, “and what you are trying to achieve in the country.” Having a solid brand may help in this respect, or developing a long-term plan that is easy to relate to. Ms Morris leads the executive search practice at West Indochina, advising multinational and local businesses on how to attract senior executives for their Myanmar operations, and is also a co-founder of Project Hub Yangon, a business incubator to help local entrepreneurs start sustainable businesses. She is thus well placed to offer advice to businesses on how to be creative in order to get around the dearth in executive talent and also what pitfalls to avoid.

ties of HR in Myanmar

“Don’t advertise, don’t cold call. Networking will be more successful,” she said. “The Myanmar situation is unique. Adjust your expectations and understand what talent you can develop.” Strategic HR is still a new concept. Some candidates, for example, might have administrative experience that can be trained. Candidates with versed in law, risk management or corporate affairs will be hard to find. Develop a training plan instead. In her written presentation Ms Morris offered two examples of creative recruitment. In one, an American manufacturing firm needed to hire a country manager for a planned factory. The firm ended up hiring a local manager with local business

and government contacts, as well as a repatriate project manager with manufacturing expertise and an international communication style. In the second case study, a regional investment firm needed a managing director to find local investment opportunities and manage the fund. The firm eventually hired a repatriate with experience working for investment firms abroad. “Take your time to understand the country and the market, and to recruit your team,” Ms Morris recommended. “Adjust your expectations, be realistic and get creative. Hire for attitude and then supplement technical skills.”

Vicky Bowman on the Need for Myanmar By Ezra Kyrill Erker

s a former UK ambassador to Myanmar and as the current director of the Myanmar Centre for Responsible Business, Vicky Bowman was well placed to speak on responsible business practices in Myanmar, often a difficult task in a country emerging from decades of military rule.

“I first came to the country in 1990 as second secretary at the UK embassy,” Ms Bowman said, “and came back as ambassador in 2002 to 2006, the heyday of the debate about sanctions.” With the rapid changes of recent years and a legal framework in its infancy, it has become more necessary than ever to make assessments and offer guidelines on how to conduct business responsibly. Ms Bowman has directed the Myanmar Centre for Responsible Business since July last year. The MCRB has funding from six European governments and was founded by the Institute for Human Rights and Business and the Danish Institute for Human Rights, with a stated objective to “provide an effective and legitimate platform for the creation of knowledge, capacity and dialogue concerning responsible business in Myanmar, based on local needs and international standards, that results in more responsible business practices”. It can be a tall order. The MCRB tries to raise awareness by engaging companies directly, but in cases where there are minimal regulations or oversight, she said, foreign companies should apply responsible business practices on their own initiative, be engaging on policy, assess social and environmental impacts and apply international standards. Simply obeying the law may not be a sufficient moral defence in situations where no applicable law exists. The country lacks water, noise and dust pollution laws, for example. “There is little accountability here,” Ms Bowman said, “but people are starting to complain. Communities want more engagement through direct contact with the company and more sharing of benefits.”

Thai-Norwegian Chamber of Commerce

Land issues are very complex. “Land is the most important asset for rural communities, but tracking down who owns the land is a real challenge,” she said. Social investment programmes are a growing trend, but are often not developed appropriately. From her experience, Asian companies often had less pressure applied on them from their home governments. Norwegian and European companies can thus play a leading role, especially in issues of equal opportunity for women and ethnic minorities, or capacity building in rural communities. There are 960 trade unions in the country, she added, but all are at enterprise level. With such wide variation in respect for labour rights, their first aim should be productive social dialogue. “Equal employment and non-discrimination need proactive attention with respect to women, ethnic

“There is little accountability here, but people are starting to complain. Communities want more engagement through direct contact with the company and more sharing of benefits.” and religious minorities and the disabled,” she said. Expats might be oblivious to ethnic frictions, however, both in the workplace and the broader communities. Before directing the MCRB, Ms Bowman led mining company Rio Tinto’s policy approach to transparency, human rights and resource nationalism issues, and understands the pragmatism that sometimes needs to apply. The MCRB’s activities include sector-wide impact assessments on tourism and oil and gas, transparency surveys, and partnering the Myanmar Coalition on Aid in establishing CSR offices beyond Yangon. It aims to guide

Responsible Business in

MCRBâ&#x20AC;&#x2122;s Vicky Bowman addresses the Norway-Asia Business Summit. Photo: TNCC

local business, governments, civil society groups and media on responsible business, international standards, stakeholder engagement and human rights. It advises foreign investors on policy and regulation, and is engaging on environmental and social impact assessments. There were several questions posed to Ms Bowman on the latter points, such as how a business could demonstrate its green or corruption-free credentials to corporate clients or individual customers in the West. Neither the MCRB nor anyone else was able to certify this, she said, and for many businesses such as jewellery design, which often must procure materials from murky distribution chains, such a claim would be difficult to make. Many large businesses such as airlines and breweries in the country have ties to the former military government or figures once on the sanctions list, so what constitutes a clean business might depend on the information available or vary among sectors.

But some of the centreâ&#x20AC;&#x2122;s findings from the oil and gas sector would be relevant to most international businesses that want to start operations in Myanmar. Communities want more information on a companyâ&#x20AC;&#x2122;s plans, Ms Bowman said, and more direct engagement rather than via government authorities. Complaints and grievance mechanisms are mostly absent countrywide, so installing these would be very proactive. And while social investment programmes are a growing trend, they are not always developed in collaboration with communities and may not ultimately be what they need; in any case communities want more sharing of benefits, such as companies employing locally and improving local and surrounding infrastructure.

Thai-Norwegian Business Review

Tragedy, Tyranny and Beauty: Pr Energy Options for Myanmar By Ezra Kyrill Erker

ndrew Westwood and Dr Per Christer Lund, from the classification society DNV-GL, gave loosely connected presentations bearing the same unconventional subtitle: “Tragedy of the NOR, Tyranny of the OR, Beauty of the AND”.

Mr Westwood made a case for greater development of intermodal and waterway transport, which in a country of 3,200 kilometres of navigable waterways and 5,400 kilometres of existing rail makes good sense. Without government intervention, he argued, the default emphasis will be on roads and trucking, which have far greater negative health, environmental and accident repercussions. Dr Lund discussed the challenges of providing quick and reliable energy to the 45 million people in Myanmar currently in need of a stable supply. While there are large gas reserves and sources of renewable energy and hydropower, it will be difficult and time-consuming to establish a reliable grid and meet the expected rapid growth in demand. An easier route may be combinations of top-down and bottomup, on-grid and off-grid solutions, which can be developed simultaneously and without big government strategies, for both the short and long terms.

Westwood on logistics A senior vice-president at DNV-GL, Andrew Westwood spoke about logistics in the region, emphasizing the attractiveness of waterway transport. The World Bank in recent studies has highlighted the high cost of logistics in Indonesia as slowing growth there, Mr Westwood said, and has recommended greater use of waterway transport in Vietnam in order to drive growth. The problem is the natural tendency to focus on expanding road transport. “If no government intervention is taken,” he said, “freight transport and infrastructure development is drawn to trucks and roads.” This results in greater pollution, heavier traffic

Thai-Norwegian Chamber of Commerce

DNV-GL’s Andrew Westwood addresses the Norway-Asia Business Summit. Photo: TNCC

and a rise in accidents and fatalities. “Shipping is by far the most efficient way to transport freight.” Vietnam is a case in point. With 7% growth over the past decade, road traffic has risen rapidly. In developing countries in general, transportation demand grows at twice the GDP, he said. In Vietnam the average speed on the roads is dropping, the number of road fatalities has grown to 11,000 a year and the cost of logistics exceeds 20% of GDP, far higher than the global average. “The lessons from Vietnam can be transposed here,” Mr Westwood said. In Myanmar, a similar trend has begun to emerge. The number of road accidents grew by 38% in one year, with over 500 deaths last year in Yangon alone, not to mention thousands of serious injuries. Worldwide, over 90% of road fatalities occur in low- and middle-income countries. Road transport produces much more CO2 and uses almost 10 times as much fuel as shipping does. Some of the more serious costs, however, are less tangible. Seven million deaths a year are linked to air pollution. The sea level is rising, endangering coastal communities. Extreme weather

rogressive Transport and

events are occurring more frequently. “The frequency of typhoons has gone up 40% in the last decade,” he said. Despite all these subsidiary costs to freight transport by road, the majority of Asia Development Band or public funding for logistics goes into road transport. “Roads are the lifeblood of transport but also consume resources and have negative side effects.” The World Bank report on Vietnam, published in January this year, recommended that Vietnam develop water transport as an alternative. The report concluded that greater use of inland waterway transport and coastal shipping, particularly when linked to other transport modes, would significantly reduce transport costs, not to mention travel time, accidents and fatalities, and environmental degradation.

“If no government intervention is taken, freight transport and infrastructure development is drawn to trucks and roads. This results in greater pollution, heavier traffic and a rise in accidents and fatalities. Shipping is by far the most efficient way to transport freight.” In Myanmar, the 3,200 kilometres of waterways and 5,400 kilometres of rail mean that the potential for intermodal transport – combining ships, barges, trains and trucks – is very high. Inland Water Transport, a body under the Ministry of Transport, was established in 1865 and already operates 413 vessels transporting 15 million passengers and 2 million tons of cargo a year. “River vessels can easily be built to transport trucks and trailers,” he said. “Trucks can be loaded onto railway wagons as in India. It’s a win-win situation.”

Privately, Mr Westwood admitted that government support for their proposal in Myanmar, and the ADB backing that might bring, would help DMV-GL develop vessels and facilities in Vietnam as well. Vietnam and China opened up sooner, but Myanmar can avoid some of their mistakes regarding logistics. Looking into alternative transport and utilising existing waterways more in Myanmar would also benefit such efforts across the region. “We don’t have to reinvent the wheel,” Mr Westwood said. “We don’t have to make the same mistakes here as China and Vietnam did. Strategy is about making tough choices. Lives depend on leaders making the right choices.”

Lund on energy “Provide power to the people, to local societies and to the nation,” said Dr Per Christer Lund, principal consultant at DNV-GL’s Clean Technology Centre in Singapore and an expert on energy needs in Asia. Electricity is an essential part of the social infrastructure, he argued, “necessary for growth, regarded as a social good, but also a tradable commodity”. In Myanmar now, 74% of the population lacks a stable electricity supply, he said. Some sources are unreliable due to poor infrastructure and seasonal variation in hydropower generation. “Myanmar is exporting a lot of gas to China now that can be used domestically,” he added. The dual challenge is to provide 45 million people with electricity within 10 to 15 years while meeting a 12% annual demand growth of those connected. Luckily, Myanmar has great potential, Dr Lund said, with large natural gas reserves, hydropower resources, renewable energy sources and a young, eager population. To provide power to the nation, he recommended a combination of topdown and bottom-up methods. The former would involve megawatt-scale power plants run on hydro, gas, coal or nuclear power, with electricity distributed through a highvoltage transmission grid. It needs centralised operation and

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Continued from page 47

DNV-GL’s Dr Per Christer Lund addresses the Norway-Asia Business Summit. Photo: TNCC

planned distribution, reliable supply and a national growth strategy. The bottom-up method would involve individual or community systems. Homes could be powered by inexpensive solar panels. Village-sized micro-grids could run on biogas, biomass, micro-hydro, wind and other sources. It would be affordable and easy to install and maintain. Such micro-grids could plug into one another to meet organically growing demand, and could be developed without a big government strategy. Shops or motorbike batteries could charge mobile phones and small appliances. The two methods can be developed simultaneously and use what technology is available, he said. Asia has huge energy needs, and Myanmar is situated between India the China, the world’s most populous countries. Creating an electricity market might be one way to attract investment and increase efficiency, but a fullfledged wholesale market wouldn’t make much sense for Myanmar at this stage, Dr Lund said. And while it might be tempting to subsidise energy to boost growth and avoid social unrest, such subsidies distort the real cost of energy. In the larger Asian electricity context, power in the future will flow from cheaper to more expensive markets, and strategic planning for that can be made now, he said. We can facilitate organic growth and micro-grids in local communities to alleviate some of the immediate energy needs.

Norwegian companies produce many of the kinds of small-scale generators, energy storage and backup units, appliances and services that can link Myanmar together. “We can make a Team Norway laboratory,” Dr Lund said. “Let’s see if it works.”

The commonality DMV-GL is the world’s largest ship and offshore classification society, a technical adviser to the oil and gas industry and expert on efficiency and renewable energy. The result of a merger late last year, it is a new entity but with 150 years of history, most of that including Asia. Dr Lund has over 20 years’ experience in the energy industry, Mr Westwood even longer in the shipping and offshore sectors. Their arguments, gleaned from professional experience, were convincing. The common subtitle of the two presentations implies that focusing on one course (road transport alone or one source of energy), or dividing resources to one method or another, is less efficient and ultimately less viable than employing many means to the same end, all working in tandem. Intermodal transport can take some of the burden off of roads and save lives, and not all energy solutions have to be centrally organised in a top-down manner. In such collaborations lies the beauty of the “and”.

Thai-Norwegian Business Review

Connecting Myanmar Petter Børre Furberg on the Cha By Ezra Kyrill Erker

elenor Myanmar was awarded one of two telecommunications licences last year, in a selection process by the Myanmar government that was hailed by observers as professional, open and transparent. It was a boon for Norway but it will be a great undertaking and responsibility to build a nationwide telecom network for a largely unconnected population of over 60 million people.

CEO of Telenor Myanmar Petter Børre Furberg spoke about the selection process and how the company plans to connect the sprawling and underserved country within five years. Mr Furberg has been with Telenor since 1998, and worked for 10 years in two periods with DTAC in neighbouring Thailand, which have helped him adapt to Myanmar over the past nine months. “It was the toughest telecom licensing process in the world,” Mr Furberg said. The government debated in parliament, brought in international experts, and whittled 91 interested telecom companies down to a shortlist of 11. “It was a professionally transparent, fast process,” he said. “The government has a long-term perspective. It was a 15-year licence with a 15-year renewal.” The two winners were announced in June, and the new telecom law was passed in October. One factor in Telenor’s licence was no doubt its experience in the region. While it began as a public service unit in Norway, it now serves 12 countries and over 160 million subscriptions, 90% of them in Asia. In India and Bangladesh, Pakistan and Thailand, among others, it has developed strategies to connect not only the urban upper-middle class but those in far-flung, poorly connected regions. Its mandate in Myanmar as well will be to not only connect the cities but all walks of life in all parts of the country. “Yangon does not represent Myanmar,” Mr Furberg said. In order to see some of the challenges first-hand and understand the conditions in rural Myanmar, he accompanied an employee on one of his trips home to

Thai-Norwegian Chamber of Commerce

the far north, sampling bus transport on poor roads, river ferries, even ox carts, to reach a village unconnected to the electricity grid. “There were no roads,” he said. “Of the 4 or 5,000 people in the village, maybe 40 had mobile phones. You had to walk into the river to get any signal.” Myanmar is an underserved market. Other developing countries such as Pakistan have around 72% mobile phone penetration. Bangladesh has 41%. Myanmar only around 10%. Mr Furberg is convinced that Telenor will be the better of the two telecom operators in terms of mass market, distribution and open culture. “We’re going to sell SIM cards for $1.50,” he said. “You have to be relevant for the people

“It was the toughest telecom licensing process in the world, but it was a professionally transparent and fast process.” in the villages, and we have a distribution model in Asia that we think will work.” The model entails having some 60 distributors regionally, with only one layer separating the company from the small shops that will sell its SIM cards. “We’re building a network,” he said, “and we’ll win by distribution – with our 100,000 points of sales.” They will launch 2G and 3G services so that farmers and the rural poor can afford the cheaper handsets that use them. Myanmar has a high literacy rate but local internet content is low, so internet pricing must also be affordable and easy. “We are mass market and want to serve the poorest,” Mr Furberg said. “The cheapest handsets are still 2G, and cost $8 to $10. A farmer has to be able to afford both the phone and the SIM card.” Once the SIM regulations are fixed, Mr Furberg predicts that the market will be flooded with cheap mobile phones from bordering China.

allenges for Telenor Myanmar

Deputy Minister of Trade and Industry, H.E. Dilek Ayhan visits Telenor Myanmar: Photo: Telenor Myanmar

For the company it is important to be socially responsible, he added, to apply the same standards as anywhere else and to do it the right way. “We’re here to build future leaders,” he said. “Our values are compatible. We come in with respect and humility.” They also make donations to orphanages and the elderly. There are still many risks and uncertainties, he said, especially in terms of institutional capacity, legal framework, corruption, land issues, health and safety, and ethnic conflict. “It is operationally very challenging but we come prepared.” After overcoming the considerable difficulties in Bangladesh and India, the company feels it has the experience needed for the task in Myanmar. “India was the toughest lesson we’ve ever had,” he said. Income is lower than Bangladesh, and the experience of working there will make Myanmar possible. Mr Furberg related how the first shipment of office chairs got stuck in customs. Rather than pay a bribe, they waited, paid their stamp duties, and in the end helped to design a cleaner import process. “Some of our competitors can

move faster, but we want to do it right, applying the same standards as elsewhere.” They are still waiting for the legal framework and the new telecom rules before beginning operations, but they will be light in terms of capital expenditures, sharing towers in order to minimise risk and using local partners for distribution and installation work. They will use extensive outsourcing, but 1,000 people will be directly employed by Telenor Myanmar. The 60 expatriates they employ must all have prior experience of working in Asia. Telenor’s role in Myanmar was a prominent discussion point throughout the Norway-Asia Business Summit, as other Norwegian companies can potentially piggyback off of its success or be tainted by its failure. In a later round-table discussion Mr Furberg said, “We have an obligation to give back to the community. We will learn and share our experiences with other companies.” Such scrutiny places the company under greater pressure, but its success will link the country’s businesses and serve as a catalyst for growth.

Thai-Norwegian Business Review

Investment Capital: Discussing B By Ezra Kyrill Erker

n April 29, the 60-odd strong Norwegian contingent visited Myanmar’s capital, Nay Pyi Taw. They had been warned to expect some inevitable glitches in the itinerary, and they duly arrived. The chartered Embraer jet from Yangon turned out to be a standard propeller plane, and one of the two buses carrying delegates to their meeting with Myanmar ministers broke down, causing further delays for half of the group. However, the glitches were solved and soon forgotten. The meetings themselves were very productive. Minister at the Office of the President U Soe Thane answered most of the early questions, in his direct but affable style. Remembering several of the delegates from previous visits, he asked why they hadn’t begun operations yet or assembled their workforce. “We want not only training but to create jobs,” he said. To one slightly vague proposal, he responded, “Materialise your ideas.” And at one point when discussing the future of hydropower in the country he lamented the lack of patience in the population: “People are expecting too much from democracy.” A number of government representatives spoke and responded to questions, including Deputy Minister of Transport U Han Sein, Deputy Minister of Energy U Aung Htoo, Deputy Minister of Livestock, Fisheries and Rural Development U Khin Maung Aye, and Deputy Minister of Trade and Commerce Dr Pwint Hsan. U Aung Naing Oo, deputy director general of the Directorate of Investment and Company Administration (DICA), spoke the longest. His office served as the gateway to business in Myanmar, he told the delegates. In the future, the bureau would become autonomous from any ministry and would relocate to Yangon, the country’s obvious business centre, in order to make investment easier. “Myanmar is a resource-rich country with many opportunities for business,” Aung Naing Oo said. “Located between two giants, with a population of 60 million that’s highly

Thai-Norwegian Chamber of Commerce

concentrated in the Yangon area, it is a good market for investment.” At the moment there are two gateways for foreign investors, he said, the Foreign Investment Law and the Special Economic Zones. The FIL was established in 2012 and the SEZ law was upgraded earlier this year. The Foreign Investment Law provides a five-year tax holiday that can be extended, he said; if the business involves manufacturing for export, further tax incentives are provided. He also said that investors can import essential equipment with no customs duties, and that due to some problems in the past the government now won’t terminate any contract once it has been approved.

“We want not only training but to create jobs. Over three million Myanmar citizens are working outside the country. We need to create more opportunities for them at home.” Aiming to boost training and skilled jobs for Myanmar citizens, the law dictates a move towards local management in seven years, he said. In the first three years, 75% of whitecollar workers can be expatriates, followed by 50% in the next two years and 25% two years after that. Now land can be leased anywhere, for up to 70 years. To a later question posed by SN power’s Bjørn Holsen, he responded that the 50+10+10 land lease law could be extended by another 10 years for hydropower projects. Most investment in the past was resource-based, he said, with China at over 30% of the total. “In five to 10 years, Japan will overtake China, especially in the Special Economic Zones.” In 2011 to 2012, foreign investment was $4.6 billion, though all but 300 million of that was

Business in Nay Pyi Taw

firms, set to finish in June or July next year. The third is Kyaukphyu, Myanmar’s gateway to Yunnan, with an oil and gas pipeline and possibly a rail link to China in the future. “Over three million Myanmar citizens are working outside the country,” he added. “We need to create more opportunities for them at home.” At lunch the group was joined by Minister of Transport U Nyan Tun Aung, Minister of Trade and Commerce U Win Myint, Deputy Minister of Agriculture and From left to right: H.E. Dilek Ayhan, H.E. Minister of President’s Office U Soe Thane, Kristin Shogen Irrigation U Khin Zaw and Deputy Lund (NGO) and H.E. Ambassador Ann Ollestad. Photo: TNCC Minister of Electric Power U Maw Thar Thwe. Delegates from various sectors were seated next to officials the result of one Chinese hydropower project. In 2013 from the relevant ministries. DNV-GL’s Andrew Westwood, to 2014, foreign direct investment amounted to $4.107 for example, later said that this was an informal and billion, from a variety of projects, sectors and countries, effective way of advancing his pilot scheme to design ship he said. “We expect more investment and are trying to models for Myanmar’s inland waterways, which needed diversify countries and sectors. We want more investment government approval before the ADB could be petitioned in real estate, telecommunications, manufacturing and for funding. others, not just resources. Telecommunications were run by the government before; now we’re happy to open In the afternoon the group moved on to the vast parliament it to outsiders.” He mentioned specifically promoting complex for a tour. A series of elaborately decorated investment in the garment, electronics and value added buildings contained the chambers for the upper and lower industries, and that heavy industry will follow later. “We houses, along with expansive meeting and dining halls. are encouraging investment in infrastructure promotion. Nobel Peace Prize laureate Daw Aung San Suu Kyi’s seat in We’ve reformed the legal framework for investment, and parliament was especially popular with the delegates. are still updating, streamlining and simplifying.” Three special economic zones are currently under construction, the first of which will be in operation next year, he said. Dawei is a Thai-driven deep-sea port with a connecting highway to Bangkok that will take about three hours to drive. The deep-sea port of Thilawa will be a half-hour drive from Yangon, developed by Myanmar and Japanese

The complex is linked to the town centre by a 20-lane road that lies largely empty. In the years to come, as Myanmar grows in prominence, those lanes are expected to be far busier.

Thai-Norwegian Business Review

Melvær&Lien The Idea Entrepreneur Photo: Tom Haga

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Thailand’s economy Thailand’s Economy at a Glance at a glance

Thai Consumer Price Index

Thai GDP Growth (%) 10.0

8.0

6.0

4 3

4.0

2.0

-2

Stock Exchange Index (SET)

Nov13 Dec13 Jan14 Feb14 Mar14 Apr14

0 -1

2008 2009 2010 2011 2012 2013 2014p

Q1/14

Q4/13

Q3/13

Q2/13

-4.0

2014p

2013

2012

2011

0.0

Exchange Rates 7.00

1,800 1,600 1,400 1,200 1,000 800 600 400

6.50

THB/NOK

6.00 5.50 5.00 4.50

Bilateral trade 2013

Manufacturing Index 2000=100 200

600

180

400

160

Import 1,550 (1,743) MNOK Export 2,494 (3,378) MNOK

800

200

140

Others

Semi-manuf

Machinery

Cars

Food

Computers

Sep13 Oct13 Nov13 Dec13 Jan14 Feb14 Mar14

2007 2008 2009 2010 2011 2012 2013

Sources: 100 Basic Figures: BOI. Comparisons: Wikipedia. GDP/Capita and Thai Population: Wikipedia/IMF. Thai GDP and CPI: Bank of Thailand. Quarterly GDP: NESDB. SET: Stock Exchange of Thailand. Exchange Rate THB/NOK: OANDA. Manufacturing Production Index: Thailand’s Ministry of Commerce. Bilateral Trade: Statistics Norway. Petrol and BigMac prices as of 23 May 2014

Electronics

120

Pulp

7.54 15.76 12.84 40.00

-2

Other

Other bits and pieces Petrol/litre (95 E10) NOK: TH Petrol/litre (95 Octane) NOK: NO McDonald BigMac price NOK: TH McDonald BigMac price NOK: NO

-4

Mill

Fish

69.9 mill 5.0 mill 10,300,000 875,000 71/76 79/83

Female

0801 0807 0901 0907 1001 1007 1101 1107 1201 1207 1301 1307 1401

Male

Chemicals

80+ 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4

0501 0507 0601 0607 0701 0707 0801 0807 0901 0907 1001 1007 1101 1107 1201 1207 1301 1307 1401

Geography Geographic Area: TH 514,000 sq. km Geographic Area NO: 385,199 sq. km Highest peak TH: Doi Inthanon 2,565 m Highest peak NO: Galdhøpiggen 2,469 m Inland water areas TH: 2,230 km Inland water areas NO: 16,360 km Coastline TH: 3,219 km Coastline NO: 25,148 km

MY CN TH ID PH VN LA IN KH MM

-2.0

Some comparisons

Demographics Population TH: Population NO: Population Bangkok: Population Oslo: Life expectancy M/F TH: Life expectancy M/F NO:

2010

Top 10 Exports 2013 %/value USD bill Motor Cars and automotive 10.7%/24.4 EDP equipment 7.8%/17.8 Refined fuels 5.6%/12.7 Precious stones/jewellery 4.4%/10.1 Chemical products 4.0%/9.1 Polymers etc. 3.9%/9.0 Rubber products 3.7%/8.5 Rubber 3.6%/8.2 Electronic integrated circuits 3.2%/7.2 Machinery and parts thereof 3.0%/6.8

100

NO US SG KE TW

10-20% 10-15% 7% 0-35%

Thai Population 2012

120

2009

Corporate income Tax Withholding Tax Value Added Tax Personal income Tax

GDP/Capita 2013 (TUSD)

2008

Export Growth 2012 3.1% Export Growth 2013 projected 7.6% Trade Balance USD 6.0 bill Current Account Balance USD 1.5 bill International Reserves USD 181.6 bill Minimum wage (Bangkok) Baht 300/day

Engineering

Basic Figures Thailand (2013)

Thai-Norwegian Chamber of Commerce Thai-Norwegian Business Review

Membership Directory

Honorary member H.E. Mrs Katja Nordgaard Ambassador Royal Norwegian Embassy Tel: +66 (0) 2204 6500 Fax: +66 (0) 2262 0218 Email: emb.bangkok@mfa.no

Honorary member and Senior Advisor to the Board Dr. Kristian BĂ¸ 234/237 Discovery Place, Soi 23 Khlong 7, Pathun Thani, 12110 Thanyaburi Tel: +66 (0) 2957 0111 Fax: +66 (0) 2957 0222 Mob:+66 (0) 8 9129 9993 E-mail: kristbo@truemail.co.th

Board of Governors President Ms. Vibeke LeirvĂĽg Felicia (Thailand) Ltd. Tel: +66 (0) 2637 6981 Fax: +66 (0) 2637 6997 Email: president@norcham.com

Vice President Major Choakdee Dhamasaroj Nera (Thailand) Ltd. Tel: +66 (0) 2664 1464 Fax: +66 (0) 2664 4002 Email: choakdee@neratel.com.sg

Vice President Mr. Axel Blom Blue Business Solutions Ltd. Tel: +66 (0) 2627 3040 Fax: +66 (0) 2627 3042 Email: axel.blom @blue.in.th

Vice President Mr. Sigvart Voss Eriksen Total Access Communications PLC Tel: +66 (0) 2202 8000 Fax: +66 (0) 2202 8828 Email: sigvart@dtac.co.th

Thai-Norwegian Chamber of Commerce

Treasurer Ms. Aina Eidsvik Aibel (Thailand) Ltd. Tel.: +66 (0) 3300 4040 Fax: +66 (0) 3300 4041 Email: aina.eidsvik@aibel.com

Mr. Gunnar Thoresen Jotun Thailand Ltd Tel: +66 (0) 3821 4450 Fax: +66 (0) 3821 4373 Email:gunnar.thoresen@jotun.com

Ms. Piyanuj (Lui) Ratprasatporn Tilleke & Gibbins International Ltd. Tel: +66 (0) 2653 5555 Fax: +66 (0) 2653 5678 Email: lui@tillekeandgibbins.com

Mr. Gunnar Bertelsen Telenor Asia (ROH) Ltd. Tel: +66 (0) 2637 4700 Fax: +66 (0) 2637 4726 Email:gunnar.bertelsen@telenor.com

Bent Axelsen Yara Thailand Tel.: +66 (0) 2664 9498 Fax: +66 (0) 2664 7488 Email: bent.axelsen@yara.com

Mr. Jon Anders Aas-Haug WebOn Tel.: +66 (0) 2206 4120 Fax: +66 (0) 2207 2525 Email: post@webon.no

Dr. Paisan Etitum, Ph.D Thai Transmission Industry Co., Ltd. Tel: +66 (0) 2678 6640 Fax: +66 (0) 2678 6649 Email: paisan@tti-mail.com

Thai-Norwegian Business Review

Summit Visit to Nay Pyi Taw