Young entrepreneurs thrive in Myanmar
Post date : 12/25/2012 13:53
By Gwen Robinson in Yangon
At midnight on the roof terrace of The Street Bar & Restaurant in central Yangon, a DJ mixes rhythmic Myanmar rap with western club vibes. The fashionably-dressed clientele, local and foreign, lounge on sofas, sipping exotic cocktails.
The buzz at this popular new hangout reflects remarkable changes in the city’s atmosphere since President Thein Sein took office early last year, ushering in new freedoms alongside economic reforms. Before then, this area, like many parts of the former capital, was deserted by 9pm.
More significant are changes embodied by The Street’s five young owners, all locals in their 20s, who pooled their savings to start the business. After graduating in business management in Singapore, the five returned to Yangon to establish companies ranging from consumer goods distribution to IT services.
They launched the bar last December “for a bit of fun”, says Thet Naing Min, 25, one of the partners, who also runs a pharmaceutical distribution business. “Call me Robin,” he adds, in perfect English.
But The Street quickly became more than a sideline. “It just got too busy: we hired professionals – and it has really paid off,” he says. The pharma business has also taken off, he adds.
His fellow graduate, Myo Zaw Win, 25, who introduces himself as Michael, urges other young people to seize the moment. With a business partner, he borrowed capital from relatives to launch a bakery chain; the investment, he adds, “is very affordable”.
Recent reforms, such as looser requirements for company registration and import-export licences, have encouraged young entrepreneurs and driven a surge in business registrations. Membership of UMFCCI, Myanmar’s main business group, has risen from 19,000 several years ago to more than 25,000.
“Young people are vital to that growth,” says Thaung Su Nyein, vice-president of the Myanmar Young Entrepreneurs’ Association, part of the UMFCCI.
A decade ago he returned to Yangon from New York with just $5,000. Now Information Matrix, his software and media company, employs 300 people.
“It’s still hard for young people to access credit and convince investors to give them a chance – but it’s definitely much easier to register a company, from months to less than a week now,” he says.
Indeed, says Wai Phyo, the association’s president and head of Cho-Cho, Myanmar’s biggest instant noodle maker, “continuing reforms are clearly inspiring young people to try business. Our association is still small but about one-fifth of the UMFCCI’s members are under our age limit of 45 – so it’s conceivable that one day, we might rival its total membership.”
Like the young executives who head the association, many new entrepreneurs were educated abroad. But increasingly, locally educated people are setting up companies. “There’s a new, can-do atmosphere,” he adds.
This new generation is less politically involved than the young activists of the 1990s, who were targeted by the military regime.
“Young business people don’t care that much about activism. There’s little emotional attachment to politics – we’re here to do business, though we want to see reforms,” he says.
Robin and his friends describe themselves as “pragmatists” rather than ideologues. They are not active supporters of Aung San Suu Kyi, although they admire the opposition leader.
“Many of us basically support any government that will help business, but this one, which has made such important changes, deserves time,” says Phyo Thu, who at 23 runs a juice distribution company and a successful education consultancy.
Many young entrepreneurs acknowledge an inbuilt advantage of family support for overseas education and help with start-up funds. But there are still many obstacles.
“The single biggest hurdle for young entrepreneurs is access to credit and meeting start-up costs,” says U Moe Kyaw, who also goes by his western name, Peter Thein.
A joint secretary of UMFCCI, Mr Thein runs a market research firm MMRD and led an earlier wave of entrepreneurs. “Seniority still matters and it’s hard for young people to gain trust from investors, let alone easy credit. Now, there’s more hope,” he says.
In a reformist environment, however, “anything is possible”, says Nelson Rweel, who runs NELC, Myanmar’s biggest chain of language schools.
Mr Rweel is a model for self-starters in the “new Myanmar”. After gaining a British Council scholarship to study English in Yangon, he worked as a tour guide in his native Shan state. In 2005 he started his first school with life savings of $7,000, and now runs eight schools with a combined annual turnover of $1m.
After decades of economic mismanagement, some foreign investors now see young entrepreneurs as key to the future.
Alisher Ali, founder of Silk Road Finance, which recently launched a $25m Myanmar venture capital fund, is focusing on the emergence of “knowledge intensive” industries. “The sector barely exists now, but we’re excited by its growth potential – and the quality of young entrepreneurs driving it”.
