Richard Welford, the chairman of CSR Asia talks about the how best to leverage business in Myanmar and examines how companies can increase profits by focussing on economic, technological and social capital.
Last year the Asian Development Bank predicted a GDP growth of 6.3 percent for Myanmar in 2013-14 and some see the potential for this to be even higher. There is little doubt that political and economic changes have the opportunity to create wealth for businesses and for the people of Myanmar. The challenge is to ensure that everyone benefits from economic growth and development.
Myanmar’s strategic location within Asia (40pc of the world’s population can be found on its borders) and the lifting of sanctions from the West mean that there are huge opportunities to service the domestic economy and for export-led growth. New consumer markets and growing business-to-business opportunities emerge as interregional trade increases. However, businesses face huge challenges with underdeveloped infrastructures and struggle to identify local partners in Myanmar.
Networks of businesses interested in leveraging Myanmar’s economical capital and working responsibly are key to long-term sustainable development. Many such companies are now looking at how they can work with other businesses and civil society partners to create opportunities for economic success.
Business success in an international competitive marketplace will not come easy. Companies investing in Myanmar will soon come to learn how incomplete infrastructures will impact their business activities especially with respect to insufficient transportation,
cumbersome distribution networks, unreliable electricity supply and underdeveloped communication infrastructure.
Responsible businesses will engage with local authorities, institutions and business peers to identify the economic barriers to growth and to invest in the physical and social infrastructures around their operations.
An important part of the social responsibility of any company will be to ensure that the value it creates is distributed fairly and equitably. Businesses are realising that by creating value for people they are creating the consumer markets that will ensure long-term success. In order to make economic development inclusive and in particular help to reduce poverty, businesses will need to look at their own economic contributions and consider ways in which they can create jobs, new small business opportunities along value chains and local clusters of economic development.
Technological Capital: Technology is an indispensible organ for value creation. Myanmar is in need of new technological investment and investment in the human resource skills.
Businesses will have to expect low technological skills in the short run, but will see that it will be to their advantage to invest in human capacity. Import of, and investment in, technology is urgently needed and responsible businesses will be part of a process of creating clusters of technology and technological development, including cooperation with universities and research centres on research and development.
A responsible business in Myanmar may not always want to invest in the most advanced technology imported from the West, which is often aimed at reducing jobs. Myanmar is in need of appropriate technology and know-how transfer that enhances local skills and capacities and generates jobs, incomes and wealth.
Investment in appropriate technology will ensure that there is new employment, training and development opportunities for people and that people can increase their incomes by being more efficient and productive.
Social Capital: Social capital is a very important asset in Myanmar and relationships are key to creating the economic networks that can encourage responsible business and create value for all people.
For businesses coming to Myanmar and those already operating here, it is vital to establish networks, for capacity building and value creation.
Industry associations, chambers of commerce, local clusters of business and networks involving government and civil society organisations will be vital to encouraging responsible and inclusive business in Myanmar. Because civic reciprocity and social cohesion are deeply rooted within Myanmar’s society and people’s beliefs, the private sector will find that investments in socially responsible and inclusive business will be recognised and rewarded by stakeholders.
An important part of the social capital development of Myanmar will relate to respecting, promoting and advocating international human rights in the country.
Responsible businesses will need to develop policies and guidelines as well as educate their staff and business partners. Responsible organisations will be monitoring their value-chain performance to ensure they are not complicit with human rights abuses.
As part of their risk-management approach, organisations need to track and understand social and ethical conflicts and include findings in their strategy, plans and activities.
SOURCE: Myanmar Times