In For The Long Run

Text by Serene Ashley Chen
Photo by General Electric

General Electric (GE) was the first American company to enter Myanmar after US sanctions were suspended in 2012 despite a host of challenges plaguing the country. As large companies think broader about their corporate objectives, GE’s recent move into Myanmar reflects a deeper purpose about how an inventor of great products is leading the way for companies to evolve into creators of great social solutions.

In June 2013, General Electric (GE) and the GE Foundation announced a US$7 million commitment in Myanmar to donate healthcare equipment and support significant training and capacity building efforts to strengthen Healthcare, Energy Infrastructure, Leadership Development and Rule-of-Law in the country, making it the first American company to invest in Myanmar after years of absence.

Myanmar began seeing an upsurge in foreign direct investments after a series of dramatic political and economic reforms and the subsequent suspension of several trade sanctions by the European Union and the United States against the country in 2013, two years after the end of the military junta regime.

Myanmar further announced its decision to refinance public debts owed to the World Bank and the Asian Development Bank, a move that signalled a strong intention to accelerate the country’s economic reform and poverty reduction.

As Myanmar works towards integration with the global economy, a number of issues continue to confront the country’s developmental efforts.

With a land mass that is the second largest in Southeast Asia after Indonesia, Myanmar is home to 52 million. To power Myanmar’s economic ambition and serve the needs of Myanmar’s growing population, demand for electricity will continue to rise. Today, demand for electricity is already outstripping supply.

Despite being rich in natural resources notably in hydropower and natural gas, over 70 percent of the population had no access to electricity in 2013, the World Bank reported. The National Electricity Master Plan study estimates that by 2030 the demand for electricity in Myanmar will be 5 to 8 times the level in 2012.

Myanmar also has the highest infant mortality rate (48 per 1,000 live births) and mortality rate for children under the age of five (62 per 1,000 live births) in all of Southeast Asia, according to a 2013 UN Children’s Fund (UNICEF) report.

Even so, Myanmar is often said to be last frontier in Asia with tremendous growth potential. After a hiatus of many years, GE resumed its commitment in Myanmar following the country’s transition to a civilian government.

“Myanmar is a market that has huge opportunity for growth. We are focused on expanding our investments and contributions as the government continues to make progress in its social and economic reform agenda to boost Myanmar’s global competitiveness,” said GE’s CEO ASEAN, Stuart Dean.

GE’s investment has been focused on healthcare, energy infrastructure, aviation, and capacity building as these business sectors address critical areas of basic human needs faced by the people of Myanmar.

Following a proposal made during GE Chairman and CEO, Jeffrey Immelt’s visit to Myanmar in 2014, GE and Myanmar Electric Power Enterprise (MEPE) signed a collaboration agreement in November 2014 and agreed to work together on a new commitment to help in repowering and upgrading existing gas turbines in Yangon. This initiative will result initially in approximately 25 megawatts (MW) of additional power for Myanmar, which is needed to help the country continue on its rapid development path.

“GE had made a good effort in powering up Myanmar since the re-entry into the country in May 2013. I look forward to continuing to work with GE on these power plants repowering project to get Myanmar up and running with the electricity plan,” said U Htein Lwin, Managing Director of MEPE.

To address the high incidence of maternal and infant mortality rates, GE Healthcare launched a rural healthcare pilot project in partnership with the Myanmar Ministry of Health. Under this project, GE will supply both training and technology which includes the Venue 40 ultrasound, infant warmers, LED phototherapy, patient monitors and other equipment.

Beyond focusing on critical needs faced by the people of Myanmar, GE has also been working on capacity building within Myanmar. Through the Myanmar Executive Leadership Program (MELP), 27 leaders from business, government and private sectors in Myanmar had received training on leadership skills at GE’s corporate training center in Crotonville, Ossining NY. In addition, the GE Foundation is supporting an undertaking by the International Senior Lawyers Project to help train civil society advisors on rule-of-law concepts as they engage with government officials on policy matters.

“It was a pleasure to have been involved in the first Myanmar Executive Leadership Program which provided me with deep insights about GE’s best practices in leadership and innovation across its various operations all around the world. I have also taken away a number of eye-opening experiences and inspiration from the site visits conducted during the programme,” said H.E. U Aung Than Oo, Deputy Minister, Ministry of Electric Power, who was part of the first batch of Myanmar leaders in GE Crotonville in March 2014.

“The Myanmar Executive Leadership Program represents GE’s continued commitment to contribute its expertise, technology and solutions to help both government and local private sector companies solve the tough challenges faced in Myanmar. We hope to be able to inspire, connect and develop Myanmar’s leaders of today and tomorrow as part of our aim to help Myanmar make progress in its social and economic reform agenda and boost its global competitiveness”, said Stuart Dean, CEO of General Electric, ASEAN.

As a societal leader, GE has stayed competitive for over 100 years through continued investment in research, development and innovation. Yet, GE’s investment into Myanmar is not without risk. In a study published by the McKinsey Global Institute, it was noted that companies investing in Myanmar could run “a major risk of disappointment”.

“Foreign investors are afraid to invest in the country because there’s no guarantee for them, because we still lack rule of law and infrastructure here,” said Myanmar opposition leader Aung San Suu Kyi at the World Economic Forum in 2013.

Despite numerous issues that present risks of varying magnitude, GE remains unwavering in its commitment to support economic development and also broader capacity and capability development in Myanmar.

“The risk of not going in early to help the country far outweighs what some would see as impediments to doing business in the country. The time to invest in this country is now and it is for the long-term,” said Stuart Dean.

***

Note: Catalyst Asia is a content platform that is produced and owned by the Institute for Societal Leadership (ISL). At Catalyst Asia, we believe that real life can only be captured at a particular moment in time. Everything you read here is accurate at the point in which it was recorded. We do not expect details to stay the same and we hope that they don’t. No part of this publication may be reproduced without written permission from the Institute for Societal Leadership at the Singapore Management University Administration Building located at 81 Victoria Street Singapore 188065. To get in touch, please drop us a line at serenechen@smu.edu.sg.