Final reflections on Rwanda and Tanzania

We are now back on campus, back to our routines and the preoccupations of business school life. Career plans, recruitment, connecting with our fellow students, and everything that we want to get out and contribute during our second year at CBS. But over the last few days we also had time to reflect on the lessons we learned from our trip to Rwanda and Tanzania.

There were a few valuable business lessons. We saw how it can be challenging to operate in emerging markets (or even ‘frontier markets’, as sub Saharan African economies are often dubbed), as players like Zenufa or FabLabs showed us – production inputs are not as available as they would be in other markets, maybe their quality is not as reliable; financing is not as accessible as in countries with a longer history of venture capitalism and risk-taking; top talent is not always in strong supply. But when these challenges are overcome, success can be extremely rewarding – becoming a leader in a high-growth market and having tremendous impact on the lives of people. Businesses like Zipline have overcome some of these challenges and are literally saving people’s lives. Azam has become a powerful conglomerate catering to a booming consumer economy.

We also saw how it is possible to stick to your values and still operate a successful business. Azam is an example of this, with their commitment to running an ecological business and decision to not go into alcoholic beverages, even if this could be a very profitable move. They are preserving the values which are at the core of their group, and they are thriving.

It was interesting to see how can being ‘local’ and culturally charged can be a source of distinctiveness – Mara Phones is betting precisely on this, with their phones branded as ‘by Africans for Africans’. It will be interesting to watch how their brand develops.

And finally, it was inspiring to meet entrepreneurs who believe in their visions in the long-run, and decide to not sell or give up control even when the opportunities are attractive. Nala and Nuya Essence are examples of just this: They could have sold or opened up their capital but decided not to in order to further build out their businesses, and they were rewarded.

We also learned some impactful cultural lessons. If on the one hand we saw how differences among people, even when they only exist in our minds (and is this not always the case?) can be devastating, we also saw how a society can recover and rebuild itself from the darkest and most devastating past, as Rwanda did after the genocide.

It is also possible for emerging economies to commit to protecting the environment, even if they are on a long road towards development, unlike some large emerging economies often claim. Tanzania is an example of this, with their ban on plastic bags and green businesses like Azam, as is Rwanda – the cleanliness of Kigali will attest.

As I hope this and the previous posts made clear, this was a trip that taught us a lot, in a lot of different aspects. I’m sure the people in our group will become more globally minded and conscious leaders because of it, and I hope this impact will be lasting. I’m excited to see how Rwanda, Tanzania and its businesses and people will continue to develop.

A night view of Kigali

Pedro Anjos is a 2020 MBA Candidate at Columbia Business School

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

Myanmar: A Lesson in Leapfrog

Facebook has become the internet of Myanmar

Over and over again, at each company we have visited, we hear the same story about the incredibly high penetration of smartphones in the Myanmar population. The figures shared with us have been astounding, all above the 90% mark. Thura Ko Ko, a senior adviser to TPG Capital and co-founder of YGA Capital, talked about the phenomenon. “Around 2014, the percentage of Myanmar citizens with cell phones was about 8%. From 2014 to 2018, that figure has risen to almost 100%. What is even more impressive is that over 85% of those who have a cell phone, own a smartphone,” Thura says as he leans against the podium at Myanmar Imperial University.

Thura Ko Ko, a Myanmar citizen, spent his early years as a telecommunications investment banker in London. After a successful career in private equity in the United Kingdom, he finally decided to move back home. Using his expertise, he has advised or individually invested in several projects in Myanmar over the last decade. He spoke about the smartphone penetration phenomenon as if it happened by accident. When the government realized they needed to catch-up to their neighboring countries, they passed a law allowing foreign companies to build and operate cell phone towers. This brought rapid investments with towers sprouting up all over Myanmar. Suddenly, there was 4G available wherever you went and citizens leapfrogged the normal progression of cell phone purchases of flip phones to smartphones. Furthermore, Facebook has become the go-to search engine or means for any internet use whatsoever. It has defined and molded the way citizens conduct modern business.

“It’s crazy. I walk out of the plane in Munich and pop in my SIM card and barely get 2G service if I’m lucky. I’ll fly back to Myanmar and literally everywhere I go, there is 4G service and you can download videos, movies, anything you want,” Alex Spitzy from JJ-PUN told our group.

This leapfrog effect that Myanmar has witnessed in smartphone technology is not isolated to just this industry. Thura Ko Ko believes it will also happen in healthcare, finance and retail as well. With regard to retail, he mentioned that only 30% of the population live in cities with malls and the current infrastructure issues deter those with access to traditional retail stores from shopping there.

Myanmar Imperial University, the first private university in Myanmar, hosted us for a discussion and networking event at their brand new campus

“E-commerce and Fin Tech should do well because of the large population…the big guys are coming. Alibaba, Baidu, they’re all on the doorstep,” he says as he answers questions from MBA candidates from Columbia Business School and Myanmar Imperial University, “Financial access to banking is incredibly low. You will see us bypass the normal banking branches and head straight to Fin Tech.”

That’s exactly what Brad Jones, CEO at Wave Money, is doing in Myanmar. With an incredible story of Fin Tech penetrating Myanmar of mobile banking, Brad and his team have captured 95% of the market share. Wave Money has essentially become a cash transport system that can send money across the country in minutes. A customer goes to a Wave Money agent, pays in cash, the Wave Money agent sends this to a customer’s account, and that customer can go to one of any 38,000 active shops to receive the money. In an economy where there is only about 6% formal banking penetration and cash is king, Wave Money has become the go-to solution for Myanmar citizens who need to send money to families back home after earning wages in the major cities.

With all this rapid growth and the leapfrog effect coming soon, coupled with the high transparency in the country because of high-speed internet and high smartphone penetration, it is imperative for companies to also develop their social and sustainability programs. Large multinational corporations like Unilever, and smaller companies like Arao Company, are doing exactly that.

Trisha answers questions after the formal presentation

Trisha Mukherjee, the marketing director at Unilever for Myanmar, Cambodia and Laos, talked about the importance of building the next generation of Myanmar leaders through their “Leaders Grow Leaders” campaign. From 2014-2017 they sent 4 employees to different countries to work and learn better practices to bring back to Myanmar. In 2019, they plan to expand the program and send 6 more. Of the over 1,500 employees they currently employ, there are 30 managerial roles. 11 of those roles have been localized by Myanmar citizens and they have a goal to double that number to 22 in the next few years.

When asked about the 2018 Myanmar minimum wage increase to $3.60 per day (up from $2.50) and how they were paying their factory workers, Trisha said that the Unilever-only factory workers are paid substantially above minimum wage and the two joint venture factories are slightly above with monthly incentives and benefits.

Smiles from the factory workers come across their faces as we walk through the floor

Khaing Mie Mie Win, a Burmese businesswoman with an incredible story from rags to riches (see link for full story), has built Arao Company from the ground up to several large garment factories with over 3,200 employees. The factories have been modernized and the working conditions are well above expectations. Some workers are paid minimum wage, but most above the new Myanmar standard and all with compensation incentive packages.

Khaing Mie Mie Win discusses her incredible story as a widowed tailor to the employer of over 3,200 people

Not only are the facilities being modernized, but the systems and operations are being optimized as well. “Last year we were producing 35 pieces of garment per hour. After our factory manager rearranged the floor with a new system, we are now producing around 55 pieces of garment per hour. Our goal for the next year is to get to 65,” Khaing Mie Mie Win tells us at her factory.

Both visits to Unilever and Arao Company opened the discussion about gender biases and what the companies are doing to correct them. Unilever has created ads that break down the cultural norms about patriarchy and empower women with the knowledge that they can compete with men on every level. Both companies employ majority women in their factories (Unilever over 60%; Arao Company almost 90%). Khaing Mie Mie Win told us as she finished her compelling story, “that [this] become my motivation, to help these women have better lives.”

A woman in the Arao Company factory marks fabric samples

Although it seems like operational efficiencies have developed in some factories, there is still substantial room for improvement. “There is a lot of hand holding that has to be done in Myanmar operations. A job that would usually be done by 1 [person] is done by 3. The level of skill needed is still far behind other countries,” says Trisha.

Operational inefficiencies don’t just occur on the individual level, but on the corporate level as well. When asked about the potential for good investments in the airline industry, Thura Ko Ko scoffed at the idea. “We had 8 airlines in the country. Last year, 5 of them went out of business. We have 23 private banks in Myanmar. Not all of them will survive. Consolidation is not easy and will be challenging going forward,” he says as he wraps up the optimistic discussion with a bitter reality.

There is much work needed for Myanmar to become a major player in Southeast Asia, but with each visit, we become more and more convinced of the potential for success.

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

Myanmar: Growing Pains in Government and Industry

Sule Pagoda in Yangon next to the Supreme Court building and the Yangon City Hall

“Doing Business in Myanmar” is the title of our course for the upcoming Global Immersion Program (GIP) where almost 30 Columbia Business School students will throw themselves into the cultural aspects and businesses in Yangon, the country’s largest city.

Really Professor Khandelwal? You stuck with the generic title for the course? (Pretty sure the default for all GIPs is “Doing Business in —“) You couldn’t come up with anything better like “Leadership Expedition to Patagonia” or “Philippines: Asia’s Rising Tiger?” There aren’t even tigers in the Philippines! See above for a better title for next year’s trip.

All jokes aside, Doing Business in Myanmar seems like an appropriate title. Everything we have learned thus far about the country is how far it has fallen behind its neighbors and the struggle it has faced trying to move from an authoritarian military regime to a democracy that would eventually stimulate growth in their businesses and the rights of their citizens. So maybe a simple title for the course is appropriate. Focusing on the fundamentals of what is necessary to move from a broken country to a competitor within Southeast Asia.

What to Expect When You’re Expecting…Traveling to Myanmar?

Over the last four weeks, I have been traveling the region and keeping an open mind about the different cultural experiences and business practices I’ve come across. From the countryside and cities of Vietnam, to Bangkok and the southern islands in Thailand, a quick trip to Kuala Lumpur, Malaysia, and wrapping it up with a visit to Chiang Mai, I’ve tried to take in everything from local customs, customer interactions, government regulations and how citizens go on about their day to day lives.

The entire trip, I have thought about Myanmar, and specifically Yangon, and how they will compare to these places. I could be completely wrong, but I picture Yangon as a mix between Hanoi, Vietnam and Chiang Mai, Thailand.

Hanoi is full of amazing smells, annoying sounds, and delicious food that when combined with the old colonial French buildings makes it seem much smaller than a city with a population of 7.5 million. However, as soon as you see the Ho Chi Minh mausoleum and the nearby museum dedicated to the same man, you are reminded of the communist party’s control of the country. Albeit for better or for worse, one cannot deny that on the surface, the government has a much stronger presence and influence on its people than the surrounding countries.

Ho Chi Minh Mausoleum in Hanoi, Vietnam

Chiang Mai is a popular tourist destination in Northern Thailand that is home to over 300 Buddhist temples scattered throughout the city and the surrounding area. The people, mostly Buddhists, have been incredibly hospitable, friendly, and genuine with their actions. I found myself having to negotiate so frequently in Vietnam, that a classmate pointed out I developed a pattern whenever making a purchase. In Vietnam, I would frequently haggle the price and usually get the souvenir, taxi ride, or meal for much less. In Thailand, it went something like this:

Vendor: Friend, for you, I give you this [jade bracelet] for 100 baht.

Me: 100 Baht!?!? *Does math in head really quickly* (that’s like.. about $3) That’s… that’s actually a really good price. Okay, yeah…I’ll take it.

So that is how I picture Yangon. A city filled with kind people who are still feeling the weight of their government bear down upon them. A city, like Hanoi, that has a colonial past and an oppressive government in the present, with Buddhist temples scattered throughout. People who are trying to make ends meet and welcome tourists into their country which has historically suffered lower tourism rates that most (if not all, this is a blog post, not a research paper) of the neighboring countries in the region.

Most importantly, I’m excited for the company visits and hope to learn about the progress that has developed in recent years and the optimism (or pessimism) about the future of Myanmar and where business leaders think it will be in 20 years. Like most of the neighboring Southeast Asian cities, I’m interested to see the dynamic between the corporations vying for early positions in a developing city and the local businesses that would prefer cash to avoid taxes and can bend just about any rule to garner a sale.

The largest city in Myanmar, Yangon, which has struggled to maintain a 24-hour power supply as recent as early 2018 (something we don’t even come close to thinking about as an issue, literally taking for granted) will have surprises for us all. Doing business in Myanmar is more complicated than it seems.

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

¡España: Tapas y Fútbol!

Throughout our time in Spain, there was no shortage of two things: Tapas and Fútbol (aka soccer).

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Wyatt Marshall ’19 at Bernabéu

Each and every meal included some form of Tapas. One of our favorite cultural experiences in Spain was the way in which we ate.  The food was nothing short of amazing but the experience was what really made it. We truly enjoyed our meals and that’s because people really like to take their time when they eat and appreciate each other’s company and conversation. This is not to say service was slow, because it wasn’t. We had lots of smaller dishes which seemed like never-ending dishes at times… and our palette was not disappointed to say the least.

Our most notable meal was at El Bohío, just outside of beautiful Toledo, Spain. Course after course came in beautifully crafted flatware, specific to the dish. We even got to meet with the chef, Pepe Rodruíguez Rey, who is famous in Spain for his popularity on MasterChef. He loved hosting a group of business school students and even wore the CBS flag as a cape after we finished eating.

 

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Michelin Star Restaraunt with Chef Rey. Photo by Patrick Sofen

 

From an athletic perspective, we had the chance to attend an Atletico Madrid and Real Madrid soccer game along with an exclusive tour of the world-renowned Santiago Bernabéu Stadium, home of Real Madrid. The stadiums were filled with electric atmospheres and both resulted in lots of goals and wins for the home team (including a 4 goal hat-trick from Christiano Ronaldo!). It was the first European soccer game for most of us so the intensity and remarkable fan support were amazing!

-Patrick Sofen ’19-

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-

Barcelona: The Trip Before The Trip

Chazen trips really offer it all. A once-in-a-lifetime chance to meet with elite companies abroad, go on guided tours by classmates who are true locals, and endless opportunity to create life-long friendships.

But for those of us headed to Marid, Spain this week, it also opened up the door to one more thing: a weekend in Barcelona. The beauty of going to Europe for Chazen is the proximity of such an amazing city like Barcelona which makes the trip even more special. So a group of 6 of us decided to make the most of this trip across the Atlantic. Our last finals were on Wednesday so after getting our things together, we were off on a Thursday redeye to the Catalonian capital.

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La Sagrada Familia – By Patrick Sofen

Barcelona is a city that truly has it all: the beach, the mountains, the art, the history, the nightlife…you name it and they’ve got it. The city that hosted the ’92 Olympics does not disappoint. While the rest of the trip is organized for us, this was our chance to create our own itinerary and get lost in the meantime.

Our itinerary included a trip to some of Barcelona’s coolest cocktail lounges (one of which included a secret room that was through the kitchen and required a passcode that was hidden in the soap dispenser of a bathroom), a historical bike tour covering 12km of the city and of course a visit to the world-famous La Sagrada Familia. From tapas to papas fritas to sangria, there was no shortage of fun and laughter before our big week in Madrid.

 

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Fat Tire Bike Tours w/ Peter Brown ’19 – By Patrick Sofen 

 

We are now en route on the high-speed train to Madrid and are about to kick off the trip with a soccer game featuring world-renowned futbol club, Atletico Madrid!

¡Vamos!

-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.