Expectations Shattered: Reflecting on Myanmar

After traveling through Southeast Asia for winter break, just over 6 weeks, I had the opportunity to experience different cultures and countries through food, nightlife, human interactions, celebrations, natural beauty and historic sites. At the end of my journey, I had several peers ask me, “which one was your favorite?”

Before our Global Immersion Program (GIP), I would have had pros and cons for each country and said I loved them all. However, after spending two weeks diving into a country that was shut off for decades from the rest of the world, Myanmar has enthralled me. Through its benevolent people, mind-blowing advancement and beautiful townships, everything I had thought about this country has been completely turned upside down.

Our GIP team during a river boat cruise. The night ended with some amazing karaoke

As a preface to what follows, I want to highlight an important fact that we often forgot during our trip. Our pre-travel and GIP were centered around the Bamar (Burmese) and Shan populations in the dry areas of the Shan State, Mandalay region and Yangon. Myanmar has been in conflict for decades, currently the longest running civil war. On the border states to the North and West, there are conflict zones with different ethnic groups that have been fighting the government and military since 1948. Particularly of interest, in the Rakhine state, there is a genocide occurring of the Rohingya people. Most Burmese people we encountered did not give the crisis much thought. Even the most intelligent of our speakers, local and foreign, seemed to defend the government’s actions at the very least calling the conflict complex and at most likening it to the Israel-Palestine conflict. I undoubtedly believe that the conflict is complex, therefore when I refer to the country and people of Myanmar in this post, I want to be clear that I am talking about the Burmese and Shan people, which comprise almost 80% of the population, and the development occurring within this area of Myanmar. Ultimately, the Burmese people are not directly involved in the conflict and the terrible burden lies on the government. Therefore, I want to turn the focus to the future of the country and the Burmese people.

People

Never in my life, have I felt so safe in a country so foreign. When I first stepped off the plane in Yangon to transfer to the Heho airport, I was cautious and reticent. I was mindful of everything I did, less I get locked up by the government for misspeaking or offending a citizen. These actions could not be more laughable now. The hope, love and optimism the Burmese people display is unmatched. Everywhere we went, we were greeted with admiration and politeness.

A waitress at Inle Lake that taught us about the sunscreen makeup that you often see on Burmese people

If asked if you wanted to buy something or a take a taxi, a simple “no thanks,” would suffice and the conversation would be done. No heckling. No pressure. If you’ve ever traveled in other parts of Southeast Asia, this is a complete shock.

Every single service counter, whether it was a convenience store, restaurant or hotel, you would be greeted with a genuine grin from ear to ear and a look that said, “how can I help you in any way possible?” Even when a mistake was made, YOU felt bad as they apologized profusely and immediately corrected the error. One classmate hilariously described riding in a taxi that was clearly cut-off by another driver and for the remainder of the ride the taxi driver would apologize sincerely about every 10 seconds.

At Myanmar Imperial University, we were welcomed with a traditional Burmese dance

When we asked a foreigner that had been living in Myanmar for several years why the people were so happy, he summarized it with one word: hope. Hope that Myanmar will become a better country. And every day their lives are improving. Four years ago, no one had a cell phone. Today, they are live streaming sports and movies on their smartphones at speeds faster than most of the United States. Yet another expectation shattered.

Technological Advancement

Throughout our company visits, we continuously heard the same phrase used to describe the technology and way of life in Myanmar. The Leapfrog Effect. It is an amazing case study of a country that had shut its doors for decades and finally opened them up to discover a world 50 years ahead of where they were. I have written in another blog post about how this amazing phenomenon has changed the lives of countless Myanmar citizens. Godfrey Tan, the CEO of Frontiir (the leading internet service provider in Myanmar), summarized it beautifully, “if they go out and buy cell phone service for 78 cents per person per day, and I sell them internet at 13 cents per day, I am giving them the opportunity to take that 65 cents and buy a meal. They no longer have to choose between food and internet.”

Frontiir HQ in Yangon, Myanmar

Godfrey was born in Myanmar, educated in the US, worked for many years and gained his citizenship, but eventually returned to his home country to bring technological advancement to the people of Myanmar. He saw an opportunity when he realized the country had only 1% landline penetration. Obviously, it would be incredibly costly to install lines in every single home to provide internet, so instead he developed a system of routers that line the streets of Yangon and Mandalay that give WiFi to those that sign up for his service. Through a box in their home, they can receive 4G internet at a price significantly lower than his competitors. This technology only exists in Myanmar, nowhere else in the world.

This example, and others like Wave Money, have revolutionized what was thought possible in emerging markets. With a cellular infrastructure to support apps like Instagram, YouTube, etc., one wonders why although their technological advancements are ahead, tourism is falling behind.

Beauty

As we rode through Bagan and were surrounded by over 2,000 beautiful Buddhist temples erected during the 12th century, I wondered why there were so few tourists. At Inle Lake, when we stayed at a well-known hotel, we were baffled by the realization that we were 6 of maybe 15 people staying in the hotel that could hold hundreds of guests.

Riding scooters through Bagan

Although the Rohingya conflict is likely a major deterrent for tourists, it is still astounding to be in places with such natural and historic beauty and feel like it was carved out specifically for you.

The conflict aside, most people usually think of Thailand when planning a trip to Southeast Asia. I would make the argument that tourists should change or supplement their itinerary. Myanmar is a must-visit country in the region. It is a shame to see such a beautiful country lacking in tourism. Words and pictures cannot describe the adventure of hopping from village to village and shop to shop on Inle Lake with a group of close friends. As you fit into a narrow canoe , an Inthar native will drive you around a thriving population that lives on stilted homes and makes crafts like silver jewelry, cheroot cigarettes and lotus-weaved scarves. Fishermen pose for photographs in an iconic manner and Karen tribe women with long neck jewelry will peacefully wait while people come and visit them.

Our pre-GIP crew riding through the villages of Inle Lake

Even Bagan, the more popular tourist destination, felt like an adult playground that was abandoned long ago. After renting E-scooters you can bop around from temple to temple, climb on a few and become mesmerized by some giants. If you opt for a more expensive balloon ride on a clear morning you are stunned by the beauty of the peppered temples across the landscape. Unlike Ankor Wat or other temple compounds, there is a vibrant community of mainly farmers that live in the area and pray at the temples. The old and new represented and preserved in the middle of Myanmar.

A beautiful scene of farmlands, hot air balloons and temples we witnessed from above

Future

As I reflect on ancient Burma and the present Burmese people, it is my hope that this country continues the path towards democratizing their government and advancing the lives of their people. The people deserve a country that will bring them wealth and prosperity. They deserve a future for themselves and for their children. My hope is that the world sees the diamond in the rough that is Myanmar, pulls it up from the ground and polishes it to demonstrate its brilliance.

I joked a few times with classmates that they might see my LinkedIn page in a few years and notice I’m working somewhere in Myanmar. After talking with several expats who have thoroughly enjoyed their lives there, the idea is becoming less and less far-fetched. Regardless, I truly hope that whether or not I’m living there in 5 years, Myanmar has earned what it deserves. In a country where Buddhism is so important, after suffering bad karma for so many years, good karma is finally due.

Oliver Salman (’19) is an MBA Candidate at Columbia Business School

The Rise, Fall, and Rebirth of Myanmar

“If you look on the banks of the Irrawaddy, you can see the combination of land, labor, and capital that developed from the time the British empire took control of Burma and transformed it to the largest rice exporter in the world by the beginning of the 20th century,” Sean Turnell says as he points to several British colonial buildings in Yangon’s commercial sector. You can clearly see what he means as taller buildings sprouting up across Yangon have dominated the skyline shared with cranes peppered in every direction as more infrastructure development looms.


“For 10 years, I was on the blacklist by the government and couldn’t come here. But since 2010, the development of this city has been incredible.”

Sean Turnell is an Australian economist that has worked in Myanmar for the better part of his life. His path was not straightforward, but through a series of different economic roles, he finds himself in a seemingly important position. While simultaneously working for the Myanmar Development Institute (MDI) as a senior adviser, he also holds the position of Special Economic Consultant to the State Counselor (essentially the Prime Minister of Myanmar), a role created specifically for Aung San Suu Kyi.

Aung San Suu Kyi, the de facto leader of Myanmar

Sean painted a picture of colonial Myanmar under British rule as one of the major cities of the empire, appropriately dubbed the “rice bowl of the British empire.” It thrived under British rule and created a dominant player in Southeast Asia.

However, after receiving independence, the country transformed into an authoritative military regime. Sean described what followed: “when the military took power, they destroyed all the universities. After the 1988 demonstrations, they dispersed the faculty. They never wanted students to congregate together. They reduced the standards across the board and corrupted the system.”

The fight between reformers and the military regime has been going on for decades, only recently seeing an opening of the country to the rest of the world with the election of the National League for Democracy (NLD) led by Suu Kyi. Because of these policies, Myanmar has seen an influx of foreign direct investment and tremendous growth. Last year, the country experienced 6.2% GDP growth, putting it at the 10th fastest growing economy in the world and 2nd in Asia. “Basic fundamentals are in place, which makes Myanmar a very promising market,” says Nevcan Gungor, a CBS alum who holds the position of Chief Investment Officer for an infrastructure conglomerate Shwe Taung Group. She goes on to explain the recent laws benefiting privately-owned companies: “The 2016 Arbitration law was crucial to the opening of the country. Having a basic rule of law and contract enforcement has really helped the business climate and contractual systems.”

Nevcan continued to say that the current government is trying to find the right balance between economic development versus social and sustainability development. The NLD feels that in a lot of other developing countries, economic development came at the expense of social development. So, the Myanmar government’s focus is to balance these two and enable growth while taking these considerations into account.

Last year in 2018, the NLD released the Myanmar Sustainable Development Plan (MSDP) which lays out the framework of where the government sees the development of the country. This has largely been received with positive reviews, but there still remains a number of challenges to accomplish this plan. Among those are political stability, lack of institutional infrastructure to support investment, economic policy uncertainty, and access to sustainable/long-term finance.

Particularly within the financing component, there is significant foreign exchange risk. Most of the financing is done in USD, but businesses operate using the Myanmar Kyat. Any fluctuations in the exchange rate can greatly expose companies.

For example, a recent drop in exchange rates hurt JJ-PUN when they purchased a stockpile of working capital thinking they would expand rapidly, but lost over $1 million and nearly all their profit from 2018 within that sector.

A joint venture between Jebsen & Jessen and Serge Pun Associates, JJ-PUN is a conglomerate that operates primarily in Myanmar within the agriculture space. Alex Spitzy, a managing director with the group, spoke to us about these challenges that Myanmar still faces.

Alex explaining their distribution model of agricultural chemicals with dealers and farmers

When explaining the process of bringing new products to Myanmar, he said the government is still a big hindrance to companies trying to compete in Southeast Asia. In order to get products approved, like safer chemicals for farming, companies have to wait 2 years for experimental registration and 10 years for full registration. He has proposed to the government that if the US, Thailand, and other countries have an approved product, why not expedite the registration process for that product? They seem to disagree. 

“I think the current government is too afraid to fail. They are micromanaging and analyzing everything…If you want to get a country from the bottom and raise it up, you have to be daring,” Alex says with passion as he speaks to our group.

He goes on to speak about their mission, “our vision as a company is building a better country for the Myanmar people. We want to upgrade Myanmar…as Serge Pun says, if you do something good for the country, the money will come.”

Burmese students from the Shan State flocked to take pictures with us at Inle Lake

Although there seems like many obstacles are in the way for a complete rebirth of Myanmar as a significant player in Asia, one cannot help but feel optimistic for where the country is headed. The Burmese people have proven to be genuine, kind, empathetic and loving.

Many companies like Proximity Designs also believe in the future of Myanmar and its people. They are a quasi-NGO focused on providing products and services to the rural communities of Myanmar. They work closely with farmers with a hands-on approach of teaching them efficient farming methods.

Jim Taylor speaks with our group at their modern headquarters in Yangon with a panel of employees from each business line at Proximity

“We saw a massive market that was terribly underserved. It’s been neglected by private companies, the government, public services, and even the aid sector which left farmers on their own,” Jim Taylor, co-founder of Proximity Designs, says to our group during the company visit. “If you look at the neighboring countries in Southeast Asia and their transformation, Taiwan, South Korea, Indonesia, Vietnam, and even Bangladesh…the key to rebuilding a country is a strong rural sector.”

The future is bright for Myanmar, as long as the current political trajectory does not falter. People like Sean, Nevcan, Alex and Jim have faith in what this country can and will become. After our first two days of company visits, we are beginning to see the light on the horizon as well.

Oliver Salman (’19) is an MBA Candidate at Columbia Business School

The Real Spanish Economy 🇪🇸⚖️💶

A thriving start-up, a world-renowned economist, a country’s largest airline and most powerful bank. These are just some of the different perspectives that we got to hear from this week in Madrid. Each Spanish leader we had the chance to meet with offered different financial insights about the Spanish economy and how it affects their work.

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CBS with Daniel Lacalle – By Patrick Sofen

The economy of Spain is the world’s fourteenth-largest by nominal GDP, the fifth largest in Europe, and it is also one of the largest in the world by purchasing power parity. It is however often cited for high unemployment and taking off the entire month of August. In our first meeting with TV analyst Daniel Lacalle, we quickly learned that this unemployment number (occasionally in the 20 – 25% range) is actually much lower based on how they calculate full-time employment and the underground employment. For example, the current unemployment rate of 17% would actually be 12% if calculated the same way as the US.

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CBS & Geoblink CEO Jaime Sánchez-Laulhé – By Patrick Sofen

Geoblink, led by Jaime Sánchez-Laulhé, a CEO with an MBA, also touched on the differences of trying to make it as a start-up in Spain versus Silicon Valley. He noted 2 key differences in working in Madrid versus the Bay Area. One, wages for software engineers are much lower and less competitive than SF making it more sustainable to be a start-up. Secondly, there is much stronger company loyalty in Spain. Because of government regulations that make laying off employees very expensive, people then do not regularly switch companies because the hiring process is much more difficult. He, in fact, has only had one employee leave in 3 years with the company and a staff of 40.

It’s been exciting to learn about the pride and power of the Spanish economy.

That’s it for now.

¡Adios!

-Patrick Sofen ’19-

Brazil Tour Conclusion

Joe Qiao ’17

Sitting in the hotel room in Rio and listening to the waves hitting the shore, it is hard for me to believe that our Brazil Global Immersion trip is over. Our 7 day trip was so packed that I felt I have been in Brazil for a much longer time. We ended up completing all 8 company visits and a site visit to Rio Metro Control Center. The schedule was intense but I think we achieved what we wanted for the trip. The company visits were well designed. Even with 9 visits, I can still tell what we have learned from each company.

To conclude how our trip went, I’d like to share with you our experience from 2 angles- the business professional aspect and the social/ cultural/ entertainment aspect.

I think the company visits were so well planned that I can hardly give constructive feedback (I probably still will come up with something so that Prof. Singh doesn’t give me a P on this class). I really enjoyed the Natura, Azul, Suzano, BNDES visits. These companies all have their presentations updated for our trip and the presenters were very knowledgeable about their business. I am surprised that we had good communications given the language barrier. Our peer classmates asked so many interesting questions that we almost always ran out of time during the presentation, not to mention Prof.Singh’s double-shot questions made it impossible to finish the session on time (kidding).

The big surprise for me was how well organized the companies in Brazil are. Before the trip, I imagined that for a developing country which is deeply into recession, the companies must be struggling to keep their forms. The reality was that the companies we visit acknowledge the recession but all had very long-term view on the economy and outlook. For example, Natura has a strong sense of being environmentally-friendly despite of the downturn. Azul has an aggressive growth plan and is looking to capture more market share. Suzano is innovating to be more efficient. I see a lot of potential in Brazil after the company visits. However, I also noticed many obstacles that Brazil has to overcome before it develops further.

Our stay in both Rio and Sao Paulo was good. We went to fine dining and did sightseeings. However, after talking with local tour guides, I realized that what we saw in Brazil was just a tiny piece of the pie. We did not really feel how the “regular” Brazilians live. Some of the old and deserted buildings in downtown area reminds me that the country is not equally developed. Many parts of the city is so well-developed that if you told me that I was in California, I would believe it. However, looking up into the mountains, we saw favelas. That immediately reminds me of the famous movie- City of God. We probably will get a more balanced view of Brazil if we watch the movie after the company visits. I think the inequality really created a world of problems to Brazil- violence, a lack of spending power despite a decent average income level, and poverty. There is also another problem with Brazil (similar to Greece) – expensive pension and labor protection. The country pays too much to workers and the high labor cost stole away the companies’ profit. The labor protection also kills people’s motivation to thrive.

Overall though, I do think that Brazil will continue to grow in the long-run and remains an attractive investment choice for international investors. You can either pay 27 times P/E for a company listed in the US or you can pay a 5 times P/E for a company in Brazil. I would place my bet on Brazil!

 

 

 

Brazil Company Visits

Joe Qiao ’17

I would like to first respond to my presumptions from my previous blogs. One of my observations during the weekend was that Sao Paulo was a quiet and calm city. I wanted to see if the city will become hectic on workdays like other similar size cities around the world such as Tokyo or Shanghai. After two days touring around the city, my observation tells me that Sao Paulo is indeed a calm city. We had traffic but nothing like those in New York. We saw people on the street but nothing like those seen in Beijing. We see some high-rises but nothing like those in Hong Kong. Like I said, Sao Paulo has its unique charm from the relax and calm environment. I do have a question. Where are the 20 million people? !

The second observation was that Brazil does have a large income gap between the rich and the poor. Brazil’s GDP/ Capita is slightly over $10k, which is almost doubling that of China. However, the rich part of the city looks like any developed countries around the world whereas there are still many slams in and around the city. I can see why it is such a priority for the Brazilian political leaders to address the inequality problem in the society. I was told that Sao Paulo and the Southern states are considered the wealthiest part of the country. The Northern states and Northeastern states are in very bad shapes.

Back to the topic of company visits. I have previously attended world tours in a few cities but I have to say that the company visits in Brazil so far are the most professional and well-prepared. The company presentations were full of interesting content. For example, we had so many questions during our Natura and Suzano visits that we run over our schedule in almost every session and had to rush through our plant tour. Sadly we didn’t even get to shop at Natura after all the talks about their all-natural and environmentally-friendly products. We had a great time regardless. I was pleasantly surprised that the companies were so willing to receive us and spent a lot of effort giving us the best experience. The CEOs of both Natura and Suzano gave us warm welcome and high level company officials gave speeches and took us on the tour. We asked so many questions during the presentations. Of course the best questions always came from Professor Singh’s “I have two questions for you”.

My favorite experience was seeing the wood logs turning into packaged A4 paper at Suzano’s factory. Learning about how the company became so efficient made me wonder if I still want to work in Finance after graduation.

We also had a great time at Ambev and learned a lot about beer market in Latin America. We had a happy hour in their office and enjoyed some good food and beer. One of my takeaways was the Zero-Alcohol beer taste just like a regular beer!

And of course, I have to show off my favorite picture from today!

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Great experience so far and I look forward to seeing Rio tomorrow! Stay tuned.

First Day in Brazil- Downtown Sao Paulo & Best Steak in town

Joe Qiao ’17

After 6 hours of flight from Bogota, I arrived in Sao Paulo International Airport. It was 12am and I found the ATM machine in the airport charging an eye-opening 24 $R fee for withdrawing cash… Not a good first impression, at least not yet.

Our group met up at 2pm and went on a city tour. I have to say that Sao Paulo is far more calm and charming than I expected. Maybe the Bogota experience was too hectic but I found Sao Paulo is like a relaxing giant. The streets are busy but not overly crowded for a city with 20 million population. I will have to confirm my feeling tomorrow since today is Sunday.

The downtown Metro Catholic Church is a landmark. I was surprised that such a beautiful historical district is deserted. It is different from many of the “Plaza de Armas” in other Latin America countries. It is calm and beautiful. Our tour guide Lee did a great job explaining the history and how coffee made a huge contribution to the wealth of people in Sao Paulo.

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We also went to the Batman Alley (Beco de Batman). Many street arts, bars, and tourists gave Sao Paulo a more lively image and strong contrast to downtown area. We spent half an hour taking the perfect pictures here.

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We had dinner at well-regarded Figueira. The steak was amazing and I really regret having had a heavy lunch. I still managed overdosing both beef and watermelon though. The dinner ended with a few of us playing some high-intensity drinking games. Overall, a great start and we look forward to the first day of company visits (not so excited about getting up at 6am).

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Chazen Brazil GIP Read more

CBS visits Bavaria’s Capital City

The CBS Chazen Germany tour started off with a Segway/electric bike tour through Munich. The group made its way through the city center and maxvorstadt.  During the tour they saw the Eisbach wave, various museums, TUM, and other landmarks. This was followed up by a three-course welcome dinner at Kafer Schanker.

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On Sunday, the group woke up bright and early to rent some BMW performance cars and drive out to the Neuschwantein Castle about 2 hours outside Munich. After a guided tour through the castle, the students then headed out for a tour of the BMW Welt and Museum- a multi functional customer experience exhibition facility where customers can experience the automaker’s various model lines and even take delivery of their cars.  The students learned more about BMW’s history, the company’s focus on design and the driver, as well as the architecture of the Welt itself.  The day was capped off by a visit to the Hofbrauhaus (Munich’s oldest beer hall).

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Professor Farrokhnia and Dr. Helmut Schonenberger speak to students before entering the Makerspace

The next day, began  with a morning trip to the Technical University of Munich’s Garching Campus for a visit to the UnternehmerTUM -the university’s center for innovation and entrepreneurship.  The students toured the Makerspace- a unique facility that allows the public to rapidly build and prototype.  The space features woodworking facilities, 3D printers, and textile stations. The Columbia students along with TUM Engineers then participated in a design sprint -led by Professor Farrokhnia-designing the perfect remote control in 2 hours.

 

 

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3D Printed Race Engine Mold at EOS

The group then visited EOS – a leader in 3D printing and additive manufacturing. The group learned more about the company from Head of Sales- Denis Demirtas- they sampled 3D printed items such as a titanium Formula 1 Pedal.  They then toured the company’s headquarters, and observed a range of polymer printers and metal 3D Printers before returning to Munich.

 

 

 

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Testing out the equipment at eGym

In the evening, the group visited eGYM- one of Europe’s fastest growing startups focused on the fitness hardware and software space. After a brief presentation by Chief Engineering Officer- Christian Schraml- the group tested out the gym’s tech-enabled gym equipment and enjoyed dinner while mingling with team members and investors.

Overall a great first city to visit during the trip. Now onward to Stuttgart

Diego Cuenca ’16 Germany 2016