In August 2013 print edition http://www.irrawaddy.org/archives/42299
YANGON – As founder of Myanmar’s only listed business and head of a commercial network spanning over thirty companies, Serge Pun is more used to winning than losing.
That habit is well-attested to by the swanky surrounds of the family-run Pun Hlaing Country Club – a six hundred and sixty acre golf and residential retreat complete with hospital and shopping mall – across the Hlaing river from the honking traffic and, in places, run-down squalor of downtown Yangon.
However this time – less than a week after Norway’s Telenor and Qatar’s Ooredoo won two keenly-contested mobile network licences – the Chinese-Myanmar entrepreneur found himself speaking from the losing side.
He was the local focal point of a three-pronged bid – along with Irish-owned telco Digicel and billionaire Hungarian-born speculator-cum-philanthropist George Soros – in a pitch thought to be among the front runners for the high-risk-but-likely-lucrative mobile provider gigs, in a country where only between four and nine percent of the population are connected to the network.
While congratulating the two winners, Serge Pun conceded that the deep pockets of the oil and gas-rich wealth funds backing both Telenor and Ooredoo might have decided the outcome, despite the high-profile of the Digicel/Soros/Pun pitch.
“I’ve a feeling they bid a lot for the licence fee, which ensured them pole position, but congratulations to them, ” he smiles, speaking from an office decorated with reminders of the Cultural Revolution in China, when the young Serge Pun spent around a decade in a hard labour camp, an experience he describes in retrospect as “a blessing.”
“It probably moulded a lot of how I see things,” he recalls, pointing to a series of paintings that he says allegorise the destruction wrought by those 1960’s upheavals.
But back to the present, and the future. With Myanmar still a telecoms black spot, Serge Pun says there are plenty of opportunities in the sector, which needs around US$45-50 billion investment through to 2030, according to consultancy McKinsey.
With such outlay needed, there will be opportunities for well-placed businesses, even those who were passed over in the licence announcement.
“We still intend to play a very significant role in the telco industry,” says Serge Pun, citing the “huge number of tower site, as many as 5,000,” where the network providers can quickly stand-up towers, he believes.
And while the high risk, high investment promises a windfall to whoever can operate successfully in Myanmar’s untapped telecoms market, it is a sector where that burnt-out old economist-jargon “trickle-down” surely applies.
Mobile phones have changed lives and livelihoods in poor countries in Africa and in south Asia, Serge Pun says, and for Myanmar, the sector is critical to future development prospects, he believes.
“Telecommunications play a totally essential part in economic development. This goes down to the very poor farmers as you will see in India, Bangladesh where it helps farmers know prices and know the market.”
But before the mobile network is improved and ahead of any pervasive economic take-off, the Myanmar government will enact a series of much-needed economic reforms – facilitating the creation of an independent central bank and a stock market, for example.
Such legislative gaps mean – hyperventilating Burma boom-time headlines aside – the country’s economic reforms are really just starting, reminds Serge Pun.
“Before last November, and the foreign investment law, you hardly saw an economic or financial reform,” he says, coughing gingerly between staccato pulls on a cigar.
“That’s why, when these sceptics say that two years have gone by, and people are not seeing fruits of this reform, I feel that is distorted, as the reforms made so far are political and social.”
And those changes – such as freeing up of a long-stifled press, holding free and fair by-elections, seeing robust exchanges in what is albeit an military-shadowed legislature – have “trickled down,” says Serge Pun, fuelling his optimism that, in time, the same will apply to the economy.
“We can now say anything we want, read anything we want, thats evidence of a reform measure tricking down. If you are talking about labor law, it is trickling down, workers have new rights and new protections,” he says – though at time of writing Myanmar’s newly-found media freedoms are stalling amid a stand-off between the Ministry of Information and the Interim Press Council over a publishing bill that journalists feel is redolent of old military-era curbs.
As for the economy, while broadly optimistic for Myanmar’s economic future, Serge Pun concedes that there are “bottlenecks” that for now will hinder any Asian Tiger type take-off .
Criticising what he sees as short-term profiteering thinking prevalent in Myanmar, he cautions that Myanmar’s speculation-driven land prices are too high, admonishing that people should not “try to make a profit on the land.”
That bottleneck, as Pun sees it, could undermine Myanmar’s potential, if the government does not rein in land prices. And while he says it would not be such a big ask for one million manufacturing jobs to be created in Myanmar in the near future – “we are talking about one thousand factories with one thousand jobs in each” – he worries that “it is not feasible for an industrialist to start a manufacturing plant under such prices.”
Land prices are driving up the cost of scarce office and hotel space in Yangon, with the dearth of rooms threatening to hold up a possible tourist boom, with the Ministry of Tourism
In time that lack of rooms will be offset by new hotels – developments that Serge Pun hopes will not see the destruction of Yangon’s famed old colonial buildings, many of which are now disused, mildewed relics of military-era neglect and mismanagement.
Serge Pun says he hopes ground will be broken after the rainy season at a landmark new development in downtown Yangon, a project which he says will fuse tinted-glass progress with the vintage postcard aura that permeates Yangon’s downtown.
The now tatty-looking red-brick railway building will be the hub for a modern five-star hotel – what Serge Pun hopes will be a seamless blend the of the new and the old.
“When we finish, it will be a living operating museum and also one of the worlds best hotels,” he says.