Yangon, Myanmar, May 26 – June 2, 2013
INTRODUCTION & ARRIVAL
I was in Yangon for exactly one week on a study tour. I met locals and expats, toured most of city, and benefited from a local driver and guide, Mr. Oscar. What follows are some of my observations of a country in transition from a closed, repressive military government to an open, democratic government.
–So is it Myanmar or Burma? “Burma” was a mis-hearing of “Myanmar” by the colonialists, kind of like “Peking” for “Beijing.” “Rangoon” was also off target of the now-accepted “Yangon.” The people I met used Myanmar (as in My-en-mar) as the country name but Burmese as the adjectival form, as in Burmese food or Burmese language.–
One of the first things I notice driving from the airport into Yangon is the distinct lack of the familiar marks of globalization. No golden arches or Subway. No Starbucks. Coca-Cola’s logo pops up a few times, but only as often the local beverage brands: Revital. Shark (“Shark: The Powerful Bite.”) The road from the airport is a winding, two-lane road, lined with lush vegetation, palm trees.
Looking out on the streets and sidewalks I see men and women wearing longyis, long skirt like fabrics of different colors, and lines of vendors set up to wrap and sell betel nuts, lottery tickets, Chinese made trinkets. Despite the languid tropical humidity and 30 degree heat, there’s a distinct energy in the air.
The traffic thickens as we drive toward the city center. Our driver is Mr Oscar. About 50 years old, he comes from Yangon, has a full thick head of black hair and a constant smile. He speak English and drives with purpose, mazing through thickening traffic and seeing six steps ahead of everyone else.
Oscar tells me that the traffic is something new for Yangon, and that things are changing fast. I later learned that cars until recently were 75,000 USD; mobile phones, basic varieties, were 500 dollars. It was price and commodity controls from the military government. There were certain products on which the government levied exorbitant taxes. No more. Now, all I can see in Yangon are used Toyotas and Saumsung phones, and it seems that everyone has one.
I stayed at the Chatrium, one of the larger hotels popular for foreign visitors for its amenities, mainly meaning consistent internet connectivity (not really) and consistent electricity (yes). The Chatrium seems to be a choice of U.S. Secretaries of State—someone mentioned to me they hosted Secretary of State Hillary Clinton end of 2011. On my visit, I noticed former Secretary of State Madeleine Albright sitting in the lobby across from me. (She at one time was not permitted entry to Myanmar but this time she was in town to speak about Myanmar’s democratization).
In the hotel, the staff fawns over the guests and greets everyone with a smile and the Burmese phrase, “Mingalaba” which means Hello at any time of the day—it’s Good morning, good afternoon, good night. One couldn’t walk through the hotel without getting ten “Mingalaba’s.”
STREETS of YANGON
From the center of Yangon rises the 330-ft golden, Shwedagon pagoda, which the Burmese practicing Buddhism (90% of the population) consider one of their four holiest sites. The pagoda was supposedly built 2600 years ago to house a strand of Buddha’s hair. It was originally built at a much smaller height and over the years has grown taller and more lavish. Around the pagoda is a large cluster of smaller temples, smaller pagodas, hundreds of Buddha sculptures. Gold leaf covers much of the compound’s towers, giving them a glow under the sun.
When we went to the pagoda ($2 for foreigners, free for locals) we found it bustling with both tourists and locals, and teenage Buddhist monks with shaved heads and orange and red robes. We walked around the buildings to take it all in. People gather around the pagoda and its various surrounding temples to light incense, pray, take part in some ritual cleansing of some of the figurines. We stayed in the area until sunset, watching as the lights came on all around the base of the major, towering pagoda. As the sun went down, the rain rolled in, sheets of it.
[The week that we were there was rainy, rainy, and rainy. Like many of the countries at its longitude, Myanmar has three seasons: hot and dry (March to April), and rainy (May to October). There is the third, “cold season,” November to February, if you consider 70 degrees cold.]
The city of Yangon is home to 6 million people, making it the largest city in the country of 60 million. It is also its commercial hub. The city flutters with the activities of thousands of small shopkeepers. Seemingly everyone is hawking some kind of goods, from fried chicken to textiles, to Burmese amber. Most of the shops are minimal, a roof and four poles, or a bike with a cooking stove and an umbrella. The city was Myanmar’s capitol until 2005, when the government secretly moved all staff, ministries and operations to the inland city of NaPyiDaw.
The reasons I heard for the government moving the capitol were varied: either it was for security, or for safety from the elements, or to ease the traffic and population pressures, or maybe a combination of factors. One person I spoke to expressed relief that the removal of thousands of staff eased up some pressure on Yangon’s ever-worsening traffic congestion.
Burma’s colonial past under the British goes back about 200 years, and that legacy shows through in the old colonial buildings standing in downtown Yangon. Stately buildings, a mosque, a church, city hall, surround the massive Shwedagon pagoda, and those constitute the few buildings not deteriorating. Most building facades are crumbling, flaking paint, covered in loose electrical wires. Roofs are often patched with large corrugated aluminum.
Myanmar’s recent political history in fewer than 100 words: 1948, independence from colonial British powers and the Japanese occupation; 1962, overthrow of the government by the military and establishment of one-party socialist state; 1974, transfer of power to a People’s Assembly; 1987-1989, financial crisis and riots, National League of Democracy (NLD) leader Aun San Suu Kyi put under house arrest; 1990, democratic elections give landslide victory to NLD, shortly thereafter annulled. Continuous rule of the military followed, with periodic relaxation then restriction of political rights.
Momentum from political reform picked up around 2010-2012.
In 2010, the military government announced new election laws for the country, but tempered the news by reserving certain rights to the military. The government set elections for that year, which the NLD, the main viable opposition party, boycotted. Not surprisingly, the military-backed Union Solidarity and Development (USPD) party won, and Thein Sein assumed the presidency.
In April 2012, however, by-elections were held that changed everything. Those elections saw the NLD taking 43 out of 44 seats contested in parliament. The election proceeded freely and fairly, observers say. It was a startling turn of events to anyone with any stake in the country.
One Burmese person I spoke to said, “You have to realize that this change has been stunning to us. It’s unheard of that people who have been in power for 20 years are suddenly not. It’s not like Obama leaving office.” He called this transition the military regime’s “perfectly played end game.” The top military chieftains were able to pass off the reins peacefully, claim political enlightenment, and retire in obscurity. They didn’t have to meet the end of a Qaddhafi or Hussein, diminished and at the mercy of their people.
Those of us living outside of Myanmar may know the National League of Democracy best by the profile of its leader, Aun Sang Su Kyi, who has become known as one of the world’s most famous political prisoners. She came from a storied, political family. Her father was a military general who helped negotiate the country’s independence from the British, only to be assassinated by his rivals shortly before independence was fully realized. Her mother served as ambassador to India and Nepal.
Aun Sang Su Kyi studied philosophy, politics and Burmese literature abroad and was involved in UN work. In 1988, after many years abroad, she returned to Myanmar and became involved in the politics. By that time the country was beset by riots and subject to the rule of a military-led regime.
Her party’s victory in 1990 was annulled and she was ordered thereafter into house arrest. Her home then (and now) sits on the shore of Inye Lake, one of the large lakes in the city proper. It’s surrounded by large walls and barb wire. Her persona as symbol of resistance transcended the walls. In a few short years, she has gone from national taboo to talisman. Her likeness or the NLD colors, can be seen everywhere in Yangon.
In response to the government annulment of the 1990 elections, EU and U.S. levied targeted sanctions, an arms embargo, and severe restrictions on foreign direct investment as a punitive action against the Burmese military government. Consequently few global EU or American corporations conducted (or currently conduct) business in the country.
During the sanctions, financial transactions were difficult; no international banks existed in the country; no credit card processor did business; currency was severely controlled by the government. One company that did business here during this time told us that they were paid for their multi-million dollar construction equipment—in rice, which they had to exchange for hard currency on international markets.
[Before I left for Myanmar I read that they didn’t take credit cards, only hard currency and preferably kyat (pronounced “chyot”) or crisp USD. I took out 1000 USD from my bank before leaving but found that many of those bills were not accepted—the locals took only the crispest of crisp bills, almost hot off the mint. Fortunately I had just enough crisp bills to get me by for the week.]
Resource and mineral industries, combined with Myanmar’s logistically and strategically advantageous geography, puts a gleam in the eye of foreign governments, investors, and multinational corporations alike. There is a lot of hype now around the country. It is hype cut from the same cloth as the USSR in 1989, Tokyo in 1983, or China in 1994: Front page cover stories on the Economist, an explosive urban real estate market, and lots of well-attended seminars from think-tanks. There’s probably a clear timeline of developments modeled from newly opened economies for anyone inclined to stake a claim to the country’s future.
Over the past 20 years, China and to a larger extent Japan has been conducting business and engaging the military government. Japan has been the largest contributor of foreign assistance, while China has moved in with major investments. Some of the country’s largest projects have been Chinese-backed—in oil and gas (major pipeline) and hydropower. China has perception problems, however. The man on the street in Myanmar doesn’t always see China positively. I heard some grumblings from more than 1 local. One of them said, “Chinese investors often execute projects with entirely imported Chinese personnel, they take back all the profits, and don’t put anything back into the community.” The Embassy of China in Yangon has taken to Facebook (banned in China) to promote its image directly to the Burmese people.
There’s just no escaping China, however. Whether it’s the millions of pharmaceuticals lining the shelves, or the pipeline running from the Indian Sea to China’s Yunnan province, the country has an undeniable economic sway over its southern neighbor. At my hotel, I heard mandarin spoken everywhere, as much by groups of men sitting over laptops, as by families in straw hats and umbrellas.
Myanmar, now and for years, will depend on imports, foreign investment, and overseas aid. There is little in the way of a domestic, export-oriented economy, other than the resource extraction industry. There are some garment factories that have opened up recently in the constant race for lower wages, so perhaps the country will follow the path of Vietnam as the low-wage alternative to China.
For a quick survey of some of the homegrown, more handcrafted offerings, the new Bogyoge (pronounced “Bojo”) Market, which the British called the Scott Market, offers carved wood, lacquered and gold-leaf ceramics, and carved jade that Burma is known for (Jade and gemstones, in fact, were subject to trade sanctions from the U.S. It is also one of the countries known for the presence of amber, the fossilized tree sap.
Before I got to Yangon, I read the city wasn’t much for nightlife, or its restaurants. That was true. There are a few karaoke bars, a few bars catering to the western tastes, 50th Street and Monsoon. Most of the restaurants ranged from small shacks with tarp roofs and scattered stools, to mid-size restaurants with pages of Chinese and Thai menu items. We had asked our driver for recommendations for restaurants with Burmese food, and he said he couldn’t give a strong recommendation. Most of the time he brought us to Thai or Chinese restaurants. We did get Burmese food on a few occasions. While it wasn’t bad, it didn’t have a punch or the explosion of flavor. They like preparing pork or beef boiled in various broths, and mohinga, which is a soup mixed with hardboiled egg and crispy pieces, noodles, fried rice.
I did not find crab rangoon, in Rangoon. Here’s Wikipedia: “Crab rangoon has been on the menu of the “Polynesian-style” restaurant Trader Vic’s in San Francisco since at least 1956. Although the appetizer is allegedly derived from an authentic Burmese recipe, the dish was probably invented in the U.S.A. …[C]ream cheese, like other cheese, is essentially nonexistent in Southeast Asian and Chinese cuisine.”
One local custom is chewing betel nuts. While I heard of chewing betel nuts as a common habit throughout SE Asia and the S Pacific, I had never actually seen anyone chewing and spitting of the red betel nut juice until I went to Myanmar. In Yangon, I saw tons of people chewing and spitting out globs of the deep red juice. Alongside of the betel stained roads, vendors sell the leaf packets of betel nuts to passersby. I had to give it a try. I put the leaf packet in my mouth and started chewing. It was a little bit like chewing up dry and flaked corn kernels, fragrant incense, and a fresh oak leaf, all at once. Almost instantly my mouth filled with saliva, which I had to spit out in a big red stream. I didn’t experience much more than a slight numbing of the gums and a temporary staining of the teeth. I guess the attraction is whatever might attract someone to chew sunflower seeds in a baseball dugout. Something to do when you’re waiting.
Some of the locals wear a distinct yellowish face makeup. That’s thanaka, and is popular mostly for women but some men. It has a sun-blocking and skin-softening quality. It’s traditionally made by rubbing the bark of the thanaka tree on water against a stone, but it’s also more commercially available as a powder.
DOING BUSINESS IN MYANMAR
People doing business in Myanmar, local and foreign, have measured optimism about their prospects. Some had been in their field for 20 years, seeing virtually no sales of certain products, and find that within the last 2 years the tide has risen up around them. There is virtually no major homegrown manufacturing to speak of in Myanmar, so the majority of the manufactured goods on the market are imported. This goes not only for the common consumer goods but also for the B2B products. Healthcare equipment, pharmaceutical, and so on, are all imported from China, India, Thailand. A large ecosystem of companies has grown up on that business.
There are companies that have been representing few major European or North American companies that made inroads at all to the country (despite a common misconception, there was never any complete trade embargo). Those European and American products, however, had practically been untouched—they were too expensive, took knowhow that didn’t exist, didn’t inspire confidence that there would be the right customer support.
Now that expectations are high for economic growth, government expenditures are rising, and foreign investment is beginning to trickle in, these European and North American products are getting a serious look. Companies not present before want to be present before they are pushed out of the market. And this puts some of the local, professional distributors in a strong position. “It used to be we had to go out knocking on these [western] companies’ doors,” one medical distributor said. “Now we practically have to turn them away.”
The major challenge now is physical infrastructure investment. We personally experienced power outages in the middle of meetings. Telephone calls and internet connectivity was spotty. The roads could not accommodate the traffic at any time of the day. Water from the taps is not clean.
But the government budget is focusing on infrastructure and basic needs. A key example is the increase of government expenditures for healthcare from 30 to 120M USD. Ten years from now I fully expect that the road from the airport will be am 8-lane expressway, moving at a steady clip. The street vendors will have upgraded from tarps and umbrellas to polished storefronts under trademarked brand names. And the streets will be lined, end-on-end, with billboards for McDonald’s, Samsung, and Heineken.