U Kyaw Kyaw Win, Chairman, New Star Light Group: Interview

Interview: U Kyaw Kyaw Win

Which infrastructure projects could spur economic growth and support cross-border trade between Myanmar and China in Shan State?

U KYAW KYAW WIN: The Shan State plays a central role in Myanmar-China commercial relations, with more than 80% of the trade between both nations taking place there. To handle the growing volume of commercial transactions, Myanmar needs to invest in infrastructure to turn the state into a more functional and efficient logistics platform. The country and its regional governments should therefore channel funds to upgrade the existing transport links, particularly the Mandalay-Lashio-Muse highway, which connects the Myanmar-China border city, Muse, to Myanmar’s second-largest city, Mandalay, an important economic centre. The current road condition and its capacity impose severe limitations and delays on the increasing number of trucks circulating that area.

On June 1, 2017 the local business community welcomed the decision made by the Economic Committee to provisionally approve a proposal for the development of an airport in Muse. The city is one of the busiest trading areas of Myanmar and is the main gateway for Chinese imports and exports. For that reason, public authorities should channel more financial resources to upgrade the 105-mile import-export zone in Muse. The trading zone occupies an area of around 48 acres and is reaching its capacity limit, preventing it from responding effectively to future demand increases.

How can challenges in construction be overcome to increase the supply of affordable housing?

KYAW KYAW WIN: The union and regional governments should work on developing much needed spatial urban master plans that identify the different development areas within a city. Rolling out such plans would be an important step to bringing down land prices, which is one constraint to the development of affordable housing. At the same time, the government should create more incentives for property developers by reducing land taxes for affordable housing projects. Once those incentives and master plans are in place, the government needs to build the necessary institutional capacity to enforce them. Like with any project, property developers need to own land to start construction, which means that for an extremely price-sensitive market such as affordable housing, having access to land at a reasonable cost is essential in preventing high consumer prices. A good master plan would also support the creation of projects that integrate residential areas within commercial spaces. In other words, you cannot just build an affordable housing development in the middle of nowhere. There must be good accessibility to city centres, industrial zones, public services, and commercial and leisure zones. Lastly, governmental investment in basic infrastructure – water, electricity and waste treatment – is also essential in supporting the development of affordable housing.

Considering the slowdown of Yangon’s construction market, what growth prospects do other regions offer to local and foreign construction companies?

KYAW KYAW WIN: The slowdown of the construction market in Yangon has been felt across the country. In many ways Yangon can be seen as the barometer of the country’s economy. Despite its obvious economic importance, there are some interesting investment opportunities in other regions too. If you look at Mandalay, there is potential for the development of infrastructure projects, commercial zones, mixed-use development projects and affordable housing. The issue is that these developments depend on the proactivity and financial capacity of the regional governments. While there are good ideas ready to be developed, the most pressing problem is the lack of financial resources, particularly during a time when regional governments do not have the ability to raise much fiscal revenue and are dependent on transfers from the government.