The head of the Japan External Trade Organization has voiced expectations that the rise of a middle class in Myanmar will boost opportunities for Japanese businesses in the country.
JETRO Chairman Hiroyuki Ishige, who recently hosted a tour of a new industrial estate in Yangon for Japanese companies, said Myanmar is attractive as an investment destination because of its high literacy rate and cheap labor costs compared with neighboring countries.
Myanmar is designated by the United Nations as one of the least developed countries in the world, but the expansion of its middle class "could spur the nation's consumer market," he said in a recent interview.
"I got the impression that many (Japanese) companies were seriously thinking about investing" in Myanmar, Ishige said.
During the tour of the industrial estate on the outskirts of Yangon, many participants asked questions, such as the type of fuel to be used for private electricity generators in case of power outages, he said.
Asked about the challenges in doing business in Myanmar, Ishige cited the lack of an adequate power supply and water services, chronic traffic congestion and difficulties in transporting workers to company offices.
Blackouts are frequent in Myanmar and factory operators are required to prepare in-house power generation systems, said Ishige, a former vice economy, trade and industry minister for international affairs who was appointed chairman of JETRO last year.
In selecting business partners in Myanmar, where economic sanctions imposed by the West have been substantially eased, Ishige advised Japanese companies to consult with Myanmar government officials to examine potential partners' trustworthiness.
Myanmar, which is rapidly democratizing after years of military rule, is considering releasing a list of local companies that have potential to become partners of foreign businesses, he said.
