Name: Jeremy Kloiser-Jones
Company: Bagan Capital Limited
Position: Founder & CEO
Brief Background Summary:
Jeremy Kloiser-Jones is the Founder and CEO of Bagan Capital, a Myanmar dedicated investment and advisory firm. Prior to founding Bagan Capital, Jeremy held senior Asia-based roles with a number of global financial institutions focusing on principal investing, corporate advisory, derivatives and convertible bonds. He holds degrees in Law and Economics from the University of Sydney and undertook postgraduate studies in Law at Kyoto University as a Japanese government Monbusho Scholar. He is a CFA Charterholder.
mi. When was the first time you visited Myanmar?
JkJ. Around five years ago.
mi. What was your experience back then?
JkJ. I initially came to Myanmar as a tourist and fell in love with the country, visiting a number of times in that one year. I came across some wonderful people and came to believe that my experience and business skills would allow me to make a serious contribution to the nation’s development. Of course, there were no traffic jams then.
mi. What are your impressions of the country now and what you see in its future?
JkJ. Myanmar has an amazing energy all around. The changes the government has put in place are extremely positive and carry great momentum. This shows in the optimism of the people, something that was missing a few years back. Of course, many obstacles remain to be negotiated, but I believe that Myanmar is at take-off point and it will succeed in harnessing the abundant human and natural resources to live up to its potential. The country has a very exciting future.
mi. Initially, did you foresee more opportunities than problems in Myanmar, or vice versa? Have your opinions now changed?
JkJ. Real opportunities are invariably accompanied by significant challenges. We accepted from the beginning that we would face challenges here in Myanmar as the country re-integrates with the global economy, and this is certainly the case. There is much that Myanmar needs to learn about business outside its borders, while there is also much that foreignors wishing to do business here need to learn about Myanmar. The important issue for us is that the appetite to bring in foreign investment and to tap into contemporary know-how remains strong and that laws and mechanisms for that to happen are constantly being developed or upgraded. A lot has been accomplished by the current administration in a short space of time and we believe that opportunities will continue to grow.
mi. How did you end up stationing full time in Myanmar?
JkJ. I decided early on that if I were to be seriously involved in Myanmar’ s reemergence I would need to have a genuine presence here and not simply do something by remote. Bagan Capital’s on-the-ground presence has been important in establishing the company’s credentials as an authentic, Myanmar-focused enterprise with real understanding of the country’s business environment. We opened offices in Yangon, Naypyitaw and Mandalay in 2012. In addition, through our microfinance company, BC Finance, we have offices in eight states and regions.
mi. How does working in Myanmar under the present business climate compare with other Asian countries, and what do you see as the major challenge(s) going forward?
kJ. The business climate in Myanmar today is positive compared with many other Asian countries. The government’s reform agenda is clearly on the side of encouraging the foreign investment that is needed for economic development. While the regulatory framework is neither perfect nor complete, changes are in the right direction. Going forward, a major challenge remains the capacity of the administration. Given all the legislative changes, there is a major administrative burden associated with developing new ordinances under enacting legislation and establishing and disseminating internal work rules. Administrative “bandwidth” may actually get worse before it gets better in this environment, something one has to accept as unavoidable in current circumstances.
mi. What, if any, are the challenges with the local workforce? Is the ability and motivation there for them to be able to succeed and compete over the next 5-10 years? If there is a problem, what would your solution be?
JkJ. Employees who are experienced in working in an international business environment are obviously in short supply. This is particularly so in terms of the financial sector. My impression is also that incentives and rewards for good work performance may not have been such a feature of the Myanmar work environment in recent years. Consequently, foreign enterprises, especially, need to be prepared to offer training to employees (which Bagan Capital is glad to do) to upgrade their core skills, which may include things we take for granted, such as information technology competencies, as well as urging them to strive for improvement by encouragement and incentives. That said, vocational education and human resources development are set to remain serious issues in Myanmar for some time to come and present as key areas to which foreign governments and aid organisations seeking to help build capacity might direct assistance.
mi. What does doing business in Myanmar now offer most for your company? Do you see these benefits as short or long term?
JkJ. Our company is solely focused on Myanmar and on bringing quality capital here. We are here for the long term and seek to build strong relationships and value while on this journey. Our intention and commitment is to traverse the road to growth, with all its challenges, in company with the Myanmar people and local businesses, with a view to sharing in the rewards which increasing prosperity will yield.
mi. Which sectors offer most business opportunities in Myanmar and Why?
JkJ. It is difficult to find a sector in Myanmar that does not offer opportunities but regulations do give rise to significant disparities. As is widely known, foreign banks and insurance companies cannot currently access licences to operate in Myanmar, which restricts investment opportunities in the financial sector, while the most tested regulatory regime for foreign investment in Myanmar is that relating to oil and gas, which partly explains the relative popularity of that sector. The hotel and tourism sector is also an obvious one to mention, and we happen to be working on a number of projects in that sector at the moment.
mi. What effect do you think that the sudden influx of foreign companies/ nationals will have on the country and its people/culture? How is the local workforce responding to it?
JkJ. I am not sure that I am qualified to comment on the effects on Myanmar culture but I suspect that the exposure of the Myanmar people to inputs from other cultures will have a positive impact in the longer term. It’s important to keep in mind that there is likely to be a considerable mix of cultures represented, so that there appears little risk that western cultural norms, for example, are likely to suddenly overwhelm local mores. One thing that is likely, however,is that an increase in the number of foreigners in Myanmar will lead to some new restaurants and drinking establishments that may offer people a wider variety of culinary experiences (although, frankly, I love Myanmar food – particularly curries and anything with dried fish and plenty of garlic in it!). As far as the domestic workforce is concerned, I would hope that interaction with expatriate personnel is seen as an opportunity to enhance their skills and bed down future career prospects, since all the major investors with whom I have spoken have expressed a commitment to promoting local employees wherever possible, irrespective of any regulatory requirements to do so.
mi. If anything could be introduced quickly (for example, over the next 6 months) to improve doing business here, what measure(s) would you choose to implement? Conversely, what long term changes are key to development that need to be implemented now?
JkJ. Foreign investors need the ability to plan their investments and budget accurately for future expenses. Greater security of tenure and predictability of costs which would arise from increasing the maximum term of residential and commercial premise leases is critical and a relatively easy thing to implement. This is needed now. In the long term, I would say that all the changes happening to a whole swathe of laws currently is heading in the right direction. Drawing on the common law legal history that exists in Myanmar and building on this offers a fantastic opportunity to benefit from the experience of Hong Kong and Singapore, whose commercial success owes much to the legal system. I believe that this can be an area of distinction between Myanmar and many other Asian jurisdictions.
mi. How are you enjoying present day life here in Myanmar? What do you like/dislike about your life in the country?
kJ. I like to be in places where I can feel the energy, and this is particularly true of Myanmar today. I enjoy strolling around downtown Yangon and admiring the heritage architecture and I often visit Shwedagon Pagoda to try and soak up a little of the country’s spirit. Relaxing over a glass of Myanmar Beer, I like to look out at the hustle and bustle of Yangon and try to picture how the city will change in the coming years.
On the downside, it is clear that the telecommunications infrastructure still requires some work. Too frequently, one experiences ‘busy’ lines and areas out of reach of cell phone towers, but the situation has improved markedly compared with a few years ago. The days of not being able to be found in Myanmar are almost gone, though I’m not sure whether this is a good or bad thing. Sometimes a little forced solitude is good for us.