A major Japanese business delegation of around 140 officials, including top executives of big firms, has returned from a six-day tour of Myanmar and Cambodia.
Their focus was chiefly on strengthening relations with Myanmar, but some businesses appear hesitant about entering the country, which is seen as Asia’s last untapped market and a target for businesses from China, South Korea and the West.
Japanese business leaders are fully aware of the country’s potential, with its population of around 60 million.
“Yangon, which is Myanmar’s largest city, is 30 years behind Thailand’s Bangkok and five years behind Vietnam’s Hanoi in economic development,” said Shiro Asahina, chairman of the Japanese Chamber of Commerce and Industry in Yangon.
After years of isolation, Myanmar has long been left out of the region’s economic growth, but this means it has ample room for development.
Hiromasa Yonekura, chairman of the Keidanren business association and leader of the delegation, expressed optimism about the opportunities at hand.
“Using the comparison of climbing a mountain, the country is just about to start scaling a peak,” he said.
One of Myanmar’s attractions is the high literacy rate of more than 90 percent, which Asahina said will make it easier for Myanmar to accelerate growth.
He believes the country “can catch up with others in half the time” if it strengthens vocational training such as in business documentation.
President Thein Sein told the Japanese delegation on Feb. 5 that his country is the world’s best investment destination. The economy and industry ministers spoke passionately of plans to expand power plants and industrial parks.
But Japanese businesses have traditionally been slow to invest in Myanmar. Japan accounted for 0.5 percent of the aggregate investments made in Myanmar from 1989 to 2011. This compares with around 35 percent for China and 7 percent for South Korea.
Hesitance stems in part from skepticism. “Is Myanmar really counting on Japan?” a delegate asked. Skeptics say China had friendly relations with Myanmar even when it was ruled by the junta and will overwhelm businesses from other countries through aggressive pricing and other tactics.