Post-election, as Myanmar recovers from the effects of a second pandemic lockdown, we examine the country’s economic prospects and how investors may support its continued development and growth.
As a long-term private equity investor in Myanmar, Ascent Capital strongly believes in the long-term potential of the country. Obviously, the domestic and global impact of the Covid-19 pandemic is a strong headwind in the short term, but in the mid-long term, we believe that Myanmar’s prospects remain very positive.
To unleash the potential, the next government will need to act decisively. We believe the next five years will be a crucial period for the Myanmar’s economic transformation. In particular, to attract much-needed foreign investments, it is vital that the country accelerates implementation of its various strategic plans, such as the new Myanmar Economic Recovery and Reform Plan (MERRP).
Since the country opened up its economy, the focus has been on overseas investments from traditional sources such as foreign corporations and developmental finance institutions. Now, as Myanmar regains its footing in the wake of lockdowns caused by the Covid-19 pandemic, the time is ripe to pursue other sources of investment capital such as private equity (PE) and venture capital (VC) firms. Besides being a source of timely funding, they could be catalysts for strategic sustainable development.
How PEs and VCs Assist Development
- Offer Autonomy and Market Expertise for Nation-Building
Myanmar’s economic reforms over the last seven years have been impressive. Still, challenges persist on many fronts. As firms focused on funding sustainable growth, PEs and VCs have the expertise and strategic knowledge to identify the sectors that best support the needs of an emerging market like Myanmar. They also have the autonomy to direct capital where it can achieve maximum results.
- Support Local Businesses through Strategic Networks and Operational Support
When investing in local companies, Ascent Capital does not seek to control operations. It typically takes a minority stake and acts as a contributor to support transformation and improvement. To that end, we provide valuable knowledge, market and sector expertise, and international networking.
For example, when we help traditionally managed businesses upgrade their operational systems, we leverage our digital expertise and network in the regional technology sector. With these tools, we collaboratively devise strategies for digital technologies, transforming and improving procedures for future growth.
- Improve Business Environment and Creating Job Opportunities
Our investment approach is closely guided by both the Myanmar Sustainable Development Plan (MSDP) and the United Nations Sustainable Development Goals (UN SDGs) of No Poverty, Quality Education, Gender Equality, and Decent Work and Economic Growth. This aligns with our vision to generate measurable positive social, economic or environment impact, alongside financial returns by investing in sustainable businesses. This is why sectors that develop Myanmar’s human capital, such as healthcare and education are among Ascent Capital’s target sectors for investment
Moreover, PEs and VCs like Ascent Capital can play a crucial role in creating more job opportunities as our investments enable local businesses to expand.
Our presence also fosters awareness and practice of good governance and corporate culture, based on international best practices customised to Myanmar’s unique circumstances. These cultural shifts, in turn, improve benefits and human resources development, including competitive wages, an emphasis on employee well-being, and opportunities to enhance skills and knowledge.
As Myanmar assesses the ruling party’s landslide election victory, Ascent Capital looks forward to the next stage in this country’s exciting development. With companies steadily gaining a better understanding of private equity, we are confident that we can help support long-term economic growth with the Ascent Myanmar Growth Fund.