OBG talks to U Kyaw Lwin, Minister of Construction

Interview:  U Kyaw Lwin

How has the construction industry evolved in recent years given rapid development of the economy?

U KYAW LWIN: Since Myanmar began undertaking political and economic reforms, there has been a growing interest from foreign investors. The construction industry is one of the key sectors benefitting from such interest. There is now a huge market for investment in improving and upgrading our underdeveloped infrastructure. Foreign and local investment in the construction industry is expected to accelerate the sustainable development of our nation's economy.

Around 80% of Myanmar’s cement is imported from Thailand. What can be done to manufacture cement domestically on a greater scale?

KYAW LWIN: Myanmar uses over 6m tonnes of cement each year, but our current production capacity is only 3.5m tonnes per year. So, half of the total 6m tonnes must be imported from neighbouring countries. Based on GDP growth of 5.5% to 6% per year, it is estimated that cement consumption in Myanmar will increase 10 ?20% per year. Myanmar has abundant natural reserves of gypsum necessary for the production of cement. As such, the government is encouraging both local and foreign investors to invest in cement production. Foreign firms Siam Cement Group and Indonesia Top Cement have shown interest in establishing new cement production facilities in Myanmar.

What lessons can the local construction industry learn from Myanmar’s neighbouring countries as it expands its economic activities?

KYAW LWIN: As most of our neighbours have good infrastructure, we should learn from their experiences in developing our construction industry and improving its management, especially via public-private partnerships. We can also learn how to implement affordable housing projects for low-income groups so we can upgrade living standards. We need to learn from our neighbours’ shortcomings so as not to repeat mistakes.

What trends can we expect to see in the property development sector in the next few years?

KYAW LWIN: Myanmar is implementing economic and political reforms. With the world entering Myanmar for business, the property development sector has begun growing rapidly, hiking up the prices of land and property. Knowing that this is an unfavourable condition and a big obstacle for our country’s new economic development and foreign investments, the government is seeking ways to solve the problem. Alongside the government, our ministry is implementing low cost and affordable housing schemes. These are especially targeted at low-income people and aim to introduce better housing financing mechanisms to strengthen the property development sector in Myanmar.

How has the lifting of sanctions affected the cost of labour and raw materials?

KYAW LWIN: The lifting of sanctions has had a positive effect in attracting foreign investment from Western nations. With more foreign investment entering the country, there are better employment opportunities.

However, greater competition is inevitable, thereby leading to rising costs of labour and raw material. However, the price fluctuation is not as severe when compared to before the lifting of sanctions. Local firms are trying to be more competitive and more productive.

What regulatory framework is in place to ensure urban planning and architectural consistency?

KYAW LWIN: For the last two decades our urban planning and construction sectors have developed quickly due to rapid urbanisation. However, our regulatory framework for urban planning is still in the infancy stage. We are now updating our urban planning system with the establishment of an urban planning framework, drafting of spatial planning law, as well as urban planning guidelines and control mechanisms to ensure architectural consistency. We are establishing licensing regulations to ensure proper architectural practice.