Thanks for the article. My takeaways:
1). It's always a good sign when great powers are fighting for the right to build infrastructure for you, especially if they assume most or even all of the cost.
2). The rapid build out of instrastructure bodes well for your economy, which in turn will make Myanmar even more desirable.
3). In many aspects, Myanmar already behaves like a Western country. Protests to block infrastructure projects over environmental and social issues? Is this Myanmar, or San Francisco?
I hope the US is clever enough to get in on the action. If Myanmar can at least be kept out of China's sphere of influence, it provides both of us good options in the future. I disagree that Myanmar's growing relationship with India provides an opening for the US, however. India has made clear, for decades, that it does not regard an alliance with the US as desirable, so I wonder at the journalist's reasoning behind that assertion.
- Concern for the environment and its conservation is not the sole preserve of the West. But, yes, it is quite a progressive stance by the government to allow these protests to hold influence. IMO it was both an electioneering strategy to win favour for Thein Sein (which in itself is promising as it signals that the next election in 2015 will not be outright crooked) and as a way of showing China that we are not a client state.
- I agree that it was quite bizarre of the article to suggest that better relations with India is an opening for the US but as a rejoinder I would say that America's Asian proxies (Japan and Korea) are the channels through which the US is engaging indirectly with Myanmar under the radar of official sanctions. Japan's policy in Myanmar has been long regarded as being influenced by the US. Here is an interesting article on the subject:
What Myanmar Means for the U.S.-Japan Alliance - Carnegie Endowment for International Peace
Here is an article about the nascent income/wealth gap that liberalisation has brought:
http://online.wsj.com/articles/meet-the-new-richin-myanmar-1409756369
YANGON, Myanmar—On this balmy Saturday evening at Yangon's Wardan jetty, dock workers have momentarily stopped loading and unloading crates from rickety fishing boats. Vegetable sellers that line the dusty road by the Yangon River are sitting quiet, and trishaw drivers, too, have stopped shouting out at passersby to offer them rides.
Instead, they are watching amused—and confused—as socialites from Hong Kong, London and beyond hike up their flowing skirts and gingerly tread on the dirt track, careful that their heeled shoes stay clear of potholes and muddy patches. Avoiding the oversize rats burrowing through garbage nearby, this sampling of the world's beautiful people is heading to Transit Shed 1, a rusting industrial warehouse whose corrugated iron roof and green exterior blends in seamlessly with the ramshackle jetty that surrounds it.
Yet the scene inside Transit Shed 1—or TS1, as its creators prefer it be called—is a world away from the rest of Myanmar, the poorest country in Asia after Afghanistan and Nepal. Contemporary art work featuring children with Burmese mythical dragons lines one wall, while a Who's Who of Myanmar society—everyone from former political prisoners to ambassadors—sip champagne with a host of young, wealthy, globe-trotting compatriots.
It is opening night at the venue, part exhibition space and part retail venture. The brainchild of Ivan Pun, the 29-year-old Oxford-educated youngest son of one of Myanmar's richest tycoons, TS1 hopes to inject a new hip glamour to this decaying city that has undergone a celebrated political and economic transition in recent years after almost six decades of military rule.
And with hip, comes some eye-opening price tags. In an adjoining room, a bench made of teak from Myanmar's Shan state sells for $2,500. Blouses and other gifts carry labels for TS1's signature brand, MyanmarMade. Coming soon: The retail space will host a high-fashion showcase including designers like Proenza Schouler, purveyor of thousand-dollar satchels, and Prabal Gurung, the Nepalese-American fashion designer whose designs have been worn by the likes of
Michelle Obama and
Kate Middleton.
"We want to see if Myanmar is ready for something like this," Pun said later after the event, dressed in a black T-shirt and skinny jeans. "There is a thirst in consuming and buying that is not being satisfied."
Pun's vision is just the beginning of a new Myanmar, featuring glam and glitz that is funded, spearheaded and enjoyed by repatriates that escaped the country during its days under brutal military control. That dictatorship ended in 2011, when a new, nominally civilian government assumed power, and since then its leaders have loosened restrictions on public gatherings and opened the doors to foreign investment, leading Western governments to lift most economic sanctions. Now that Myanmar is embracing Western-style consumerism for the first time in more than a generation, Pun and his compatriots are playing tastemakers.
It doesn't seem to deter them that the country's gross domestic product per capita works out to only $1,700 a year, compared with $62,400 in Singapore or $52,800 in the U.S., according to the CIA World Factbook. Just behind the TS1 retail space, children prowl through garbage looking for toys to play with.
People in Myanmar "have not yet developed taste as consumers," Pun says. It's like starting from scratch, he says. "Some markets are set in their preferences—like India and Indonesia—but here we can curate our offerings and bring designers that are interesting to fashion editors in London, New York and Paris rather than what is commercially available."
“This vision is just the beginning of a new Myanmar, featuring glam and glitz that is funded and enjoyed by repatriates that escaped the country.”
CUT OFF FROM the outside world for so long, tropical Myanmar is following a trail blazed earlier by countries such as Russia, Vietnam and China that unlocked new wealth when they embraced elements of capitalism after decades of isolation. Their openings spawned scores of first-generation millionaires and billionaires—some through legitimate businesses, others through corrupt or illegal means—and experts expect Myanmar to be no different.
The country's economic reforms are creating big new opportunities as authorities issue licenses for everything from banking to oil-and-gas exploration to mobile-phone networks. Wealth-X, a consultancy that specializes in tracking the rich, says there are currently only about 40 individuals considered ultra-high-net worth in Myanmar, with a net worth of over $30 million. But it says this number could grow by more than seven times in the next decade—the fastest such pace of growth anywhere in the world, the consultancy says.
Signs of a New Money boom are already appearing. After prohibiting imports of foreign vehicles for years except for top generals, the government has eased restrictions, and now showrooms boast black Rolls Royce sedans and Jaguar sports cars. Residents see Ferraris, Bentleys, Porsches and even a Bugatti Veyron—the fastest street-legal car make in the world—alongside rusty taxis that would look more appropriate on a scrapheap.
Prices for prime real estate in Yangon, Myanmar's commercial capital, are skyrocketing. A modest two-story, four-bedroom house in the exclusive Golden Valley neighborhood rents for as much as $10,000 a month, real-estate agents say. Families with older colonial-era bungalows are tearing them down and replacing them with colonnaded mansions, while their 20-something kids gather in nightclubs ordering Johnnie Walker blue label whisky.
Myanmar also is popping up on the radar screens of private wealth managers and luxury-goods brands hungry for a new source of growth at a time when China is slowing down. Myanmar residents spent only about $1.9 million on wine last year, according to consumer-market research firm Euromonitor International, but sales are expected to more than double by 2018. After that, the sky's the limit. Myanmar is "the last economic frontier in Asia with significant growth potential," Euromonitor says.
"Even I did not realize how much wealth there was here," says the young Pun, whose father, a property and banking entrepreneur named Serge Pun, has seen his estimated net worth swell by $100 million to $600 million over the past year, according to Forbes magazine. "When you look at mass gatherings, weddings especially, and see the lines of Ferraris and BMWs outside—people are not shy to show off."
A big question is whether Myanmar can absorb this new wealth without seeding the kind of class tensions that at times have threatened to destabilize other emerging markets, including some of those—like Russia and China—that eschewed displays of wealth in earlier times. Just a few years ago, Myanmar's leaders frowned upon conspicuous consumption, and the few families that held significant financial assets mostly tended to squirrel them away in overseas bank accounts rather than flaunt them at home.
“A big question is whether Myanmar can absorb this new wealth without seeding class tensions.”
Now, locals say benefits from the country's opening are accruing often to elites with ties to the former military junta. Some Myanmar business leaders are still targeted by Western economic sanctions because of alleged ties to drug trafficking, corrupt government contracts or wasteful extraction of natural resources.
"All the black money that people were hiding is now coming out," says Cheery Zahau, a democracy activist from Myanmar's Chin state whose work with the United Nations has been recognized by the George W. Bush Institute. For the rich, Zahau argues, it is a competition—one buys a Ferrari, and the other buys a Bentley, one builds a five-story mansion, and the next family, a six-story mansion. "It is sick. We don't need the World Bank or the IMF, we need these people—these very, very rich people—to spend money in a way that is not ignorant."
The country's newly-rich say the picture is a little more complicated. After all, they say, can people be blamed for wanting to splurge a little after so many years of privation?
Brazil for the World Cup. In the U.S., he says, he will have the opportunity to check in on a pop-up shop in the East Hamptons, where products from his MyanmarMade brand are being sold all summer.
Pun says he has "a certain level of taste" from his time around the world that allows him to bring a variety of concepts to Myanmar. Growing up almost entirely in England, he was educated at the Cranleigh School, a boarding school in the county of Surrey, until he was 18. After making his way into Oxford University to major in Oriental studies, he dropped out in 2007—the major "didn't quite interest" him, he says—to pursue fashion and music. This brought him to Condé Nast in midtown Manhattan, where he worked on special editorial projects at Vogue magazine and another, now-defunct publication run by
Anna Wintour.
He returned to Asia in 2009, working for a while in Beijing on a menswear line with some friends. Eventually he was lured back to his homeland of Myanmar in 2011, working for his father's conglomerate, which also has interests in manufacturing, retail and virtually every other major sector in the country. His last gig was in corporate development, before he broke off to set up Pun+Projects.
Last year, he hosted a private screening of the "Great Gatsby" in Yangon attended by his friend, Baz Luhrmann, the movie's director. Next, he says, he might consider inviting Wes Anderson for a similar private screening of his latest movie, "Grand Budapest Hotel," or organize a larger film festival.
When W Magazine staffers made a trip to the country last year to produce a 20-photo spread by photographer Tim Walker, Pun was, of course, in the loop. The series, titled "Gilt Trip," featured model Edie Campbell wearing Lanvin-label clothes near the sacred Golden Rock, a Buddhist pilgrimage site south of Yangon, and jumping with Kayan tribal "long-neck" women with brass rings around their necks.
Later in the day, Pun rides in a large white
Toyota 7203.TO -1.61% minivan to TS1, replying to emails on his phone in the back seat—an impressive feat considering that Myanmar's primitive telecom system doesn't support such services in most places. It's OK, though, because the van is kitted out with its own Wi-Fi.
At TS1, he inspects products from its new retail offering, including furniture from the avant-garde, Chinois-style luxury brand Lala Curio, a Hong Kong-based interior designer. He sits on a $3,600 couch and picks up a decorative item of peacock feathers stuck on a wooden block, checking its retail price. It is $65.
His hope, he says, is that he helps create an environment that "isn't just for Yangon, but is about what we believe is cool, and are bringing here to Yangon." And it certainly doesn't feel out of place in such a rough-hewn country, he says.
"It is not too early to start thinking about this" in Myanmar, he says, leaning back in his chair. "Wages are increasing, wealth is increasing—we don't know how long this is going to take, but it will happen.
Write to Shibani Mahtani at
shibani.mahtani@wsj.com
Corrections & Amplifications
A new restaurant to be opened by Myanmar entrepreneur Ivan Pun will be called Port Autonomy, and the price of a couch he was sitting on during an interview was US$3,600. A previous version of this article incorrectly said the restaurant would be called Port Authority, and that the price of the couch was US$16, 500. Also, Mr. Pun went to Cranleigh School, a boarding school in the county of Surrey. A previous version of this article referred to Surrey as a town. Additionally, the consultancy Wealth-X considers ultra-high-net-worth individuals to be those with a net worth of over US$30 million. A previous version of this article said that those individuals needed to have over US$30 million of investible assets. [Sept. 4/5]
Quite why the WSJ is making judgements on how people should be spending their money is beyond me but it does raise a point about the growing trend I'm seeing w.r.t the proliferation of the nouveau riche in Yangon. When the wealth/income gap not only increases but noticeably increases then it tears apart the social fabric leading to higher rates of crime and the deterioration of traditional values.
Yangon’s murder rate surges past last year’s level, police say - Eleven Myanmar | Eleven Myanmar
Yangon’s murder rate surges past last year’s level, police say
Published on Tuesday, 14 October 2014 22:04
Crime rates are surging in Yangon Region, with the number of reported murders and robberies already surpassing the numbers for all of last year, according to the Yangon Region police.
From January to September this year 148 murders were reported, compared to 130 for all of last year. The number of robberies is also up, though it is believed this crime is vastly under-reported. Thirty-seven robberies were reported in the January to September period compared to 33 last year.
Police said that 125 of the 148 murder cases are before the courts, while 23 remain under investigation. Half of the robbery cases are now before the courts, they added.
The number of reported rapes in the first nine months of the year was 110, police said. They did not provide a figure from last year. Twenty home burglaries were also reported during the first nine months of the year, they said.
Although arrests have been made in most cases, the perpetrators of at least two double homicides remain at large, including one in Mingalardon Township last year, on November 19. The killer of a 36-year-old woman and her nine-year old child has also yet to be apprehended. Both victims had their throats slit.
More than 2,600 criminals have yet to be apprehended for crimes. The Yangon Region Police Force aims to arrest half of them within six months time, according to Lt-Colonel Myint Htwe.
Crime rates are rising because more people are living in abject poverty and struggling to survive, Myint Htwe said.
