Burma: Think small, think basic

“What Myanmar needs now are more 7-11s, not more Walmarts,” said Lex Rieffel, a senior fellow at the Brookings Institution. He was quoted by FT.

Garments, footwear, frozen seafood and other food products were among Burma’s main exports to the west until sanctions 10 to 15 years ago. Expect foreigners (think Chinese) to invest in these labour intensive businesses for a start.

 

A Chinese bizlady told the BBC: “In my factory in China, the salary of workers has been increasing steadily over the last few years,” she told me during her recent visit to Bangladesh to look for opportunities here.”It has reached around $400 to $500 (£250 – £315) a month per worker. If I continue to produce there, our business will disappear.”In Bangladesh the average monthly salary for garments workers is only around $70 to $100. If I produce here, price is much more competitive.”

She can now scout out Burma, next door.

Finally for this week, Myanmar launched its first debit cards on Friday, giving customers the chance to use plastic for shopping, dining and travel for the first time in the latest leap forward for its cash-dominated economy.

Even Chinese manufacturers are moving to Vietnam & Bangladesh

Earlier this week FT reported that an online Chinese retailer was trying out manufacturing in Vietnam. At about the same time, CNN reported that  Chris Devonshire-Ellis, founding partner of Dezan Shira & Associates in Beijing, which advises firms on foreign direct investment (FDI), as saying,”Companies are starting to think twice before building in China.”

He said the cost of running a factory in Dongguan, China with 300 workers would be about US$2.3 m. The same factory in Ho Chi Minh City, Vietnam would be US$650,000, and a similar factory in Chennai, India would cost about US$346,000.

“About 50 per cent of our work in Vietnam is setting up factories for companies which have relocated from South China because they want to add more (manufacturing) capacity (in the region), but they don’t want to have Chinese costs. Vietnam and Bangladesh are becoming subsidiary manufacturing nations to make goods for sale in China.”

Earlier this month, the Economist wrote, “Another manufacturing firm [making flags]moved its operations to Vietnam in 2004. “We have to migrate, like herdsmen chasing water and pastures”". Love the way moving to a cheaper place is described.

One way to get mkt to recover?

Rioting by investors worked in this case. Mkt up 15%.

Fearing further widespread protests, the government … relaxed rules for the banks and for individual investors so that they could borrow more money against shares.