It’s probably not an unfair stereotype to say that, generally speaking, the French are pretty particular when it comes to food, and that is heightened all the more when it is their own cuisine they are consuming. With that in mind, there are few stronger recommendations for a French restaurant in Yangon than one that is popular among the city’s French residents.

The Alamanda Inn, a peaceful and well designed restaurant bar nestled into leafy Golden Valley, wins that accolade.

The setting itself couldn’t be much further from Europe and feels much more like something from Bali than the centre of Paris. With its calm atmosphere and large thatched covering that offers almost total respite from the heat – and sometimes the rain – Alamanda is one of few options in Yangon that offers a break from the city without the unnatural hum of air conditioning.

It’s not just the atmosphere that makes Alamanda such a good choice, as the food is impressive both in terms of its range and its quality. Starter options include Croque Monsieur (K3,000) and a range of hot and cold tartines (priced between K2,500 and K3,000), but, as a personal choice, their salads are an excellent starter with the Cretoise Salad (K6,500) – including marinated peppers, eggplant, feta cheese and black olives – the standout dish.

Hardly surprisingly given the French theme, the baguettes and crepes are enjoyable, too, with options of the latter including blue cheese with potato slices, mushrooms with cream, as well as the more basic lemon and sugar, but where the Alamanda Inn really excels, particularly for dinner, is in its beef and fish dishes – again, a personal favourite is the Steak Tartare.

The restaurant also offers some small hotel rooms for a quite reasonable price and is a beautiful place to spend the day, either to have some lunch or for business meetings in the evening. Give it a try.

Inya Myain Road, Bahan Township, Yangon

Importing goods is vital for nearly all of those seeking to profit in the recently opened Myanmar economy. Understanding the proper procedure to follow is essential as the unwary may face fines, seizure of the goods and even imprisonment. The correct procedure will vary based on the business activities of the foreign investor, whether the investor has established a local entity and if a local entity was in deed established, whether that entity has obtained an investment permit from the Myanmar Investment Commission (“MIC”) under the 2012 Foreign Investment Law (“FIL”).

Import Procedures for a Company without an Investment Permit

The procedure for importing goods into Myanmar by a company without an investment permit from the MIC can be broken down and classed into two main categories. Either the goods to be imported will be used by the entity importing them, or the goods to be imported are to be sold within Myanmar.

If the goods to be imported are to be used by the importing entity, for example a construction company desirous of importing heavy machinery to complete construction works, then the procedure is fairly straight forward. First the entity must obtain an exporter-importer card from the Ministry of Commerce. Once the exporter-importer card is obtained the importing party must apply for individual import permits for every shipment of goods to be imported. Care should be taken so that the goods as described in the permit are the exact goods that arrive at customs in Myanmar or the goods will not be allowed into the country.

If the goods to be imported are to later be sold within Myanmar, the procedure becomes more complicated as foreigner parties at present are not permitted to engage in trading (selling) activities. This then requires a foreign party to engage a Myanmar citizen or 100% Myanmar invested entity to act as a middleman to facilitate the desired sales. The intermediary will either be classed as an agent or a distributor based on the contractual relationship between the parties. An agent will act on behalf of the foreign party taking the goods on consignment and selling the goods within Myanmar on the foreign party’s behalf. Alternatively, the intermediary could be a distributor. Whereas an agent takes the goods on consignment, a distributor purchases the goods directly from the foreign party and sells the goods for the sole benefit of the distributor. In either case, the intermediary will be the one with an exporter-importer card and will be required to apply for import permits as needed.

Import Procedures for a Company with an Investment Permit

As part of the application for an investment permit, a foreign investor must detail those goods which are to be imported for a given investment project, and any changes thereto are required to be reported and approved by the MIC. As the MIC must approve all goods to be imported, the applications for an exporter-importer card and import permits are mere formalities. These will in practice always be granted.

The Cost of Import There are generally four separate costs which will be incurred on the import of almost all goods. These include customs duty, import duty, commercial tax and, of recent vintage a 2% advance payment of income tax.

Customs duty is payable at the applicable rate as stipulated in the Myanmar tariff schedule of 2012, which utilizes the Harmonized System Convention rates used by many countries throughout the world. The rates range from 0% to 40%. It should be noted that as a member of the Association of South East Asian Nations (“ASEAN”) Myanmar is obliged to comply with the reduced tariff schedule stipulated in the ASEAN Trade in Goods Agreement of 2009 for goods imported from other ASEAN members.

Import duty is levied at the rate of 0.5% of the assessable value, which is equal to the sum of the cost of the goods, insurance over the goods, freight charges and any landing charges imposed.

There is no value added tax in Myanmar at present but, there is a commercial tax which is levied on the importation of most goods at the rate of 5%. There are however 18 specially designated goods on which the commercial tax rate on imports will range from 8% to 100%, though these are typically luxury items such as automobiles and “sin” items such as cigarettes and alcohol.

The final cost which may be incurred on importation of goods is the newly minted 2% advance payment of income tax levied on the “customs assed value” of the goods. If the amount of advance tax collected is greater than the overall tax liability for the company in a given year then a refund will be granted by the Internal Revenue Department of Myanmar.

If the importing company has been granted an investment permit from the MIC then all of the above costs may be eliminated or reduced. The elimination or reduction of these costs is not automatic and will be granted in the discretion of the MIC during the application phase.

Moving Forward

For many years all goods to be imported into Myanmar required an import license however, in an effort to liberalize trade the Ministry of Commerce last year eliminated the need to obtain an import license for 166 different goods. These goods for which an import license is no longer required include various types of construction materials, foodstuffs, toiletries and more.

In addition to making it easier to import goods legally the Government has begun to crack down on illegal imports. Thus far the targeted goods have only included alcohol and petroleum products, but Government sources have indicated this will be expanded going forward.

While further changes are needed to Myanmar’s import policy, the Government’s action of late is a clear sign that change is coming. How that change will look like is anyone’s guess, but based on recent events it can be surmised that all further changes will be made with an eye toward further liberalizing trade.

While the world focuses on BRIC – Brazil, Russia, India and China – global investors may be missing agribusiness opportunities in ASEAN. Since its launch in 1967, ASEAN is consolidating as a credible, rules based trading bloc.

ASEAN´s relatively low profile is attributed to “mutual ignorance” in its relations with global markets. With the exception of Singapore, which establishes itself as a financial and trading centre, economic activities are broadly local or regional. Media attention on Myanmar’s poor human rights record and, in a number of its member states, the incidence of corruption and calamities downplay its opportunities. Wedged next to China and India’s markets, where 46% of humanity lives, ASEAN is understandably overshadowed.

The forthcoming publication of the book by Dr Rolando Dy2 – “Food for Thought: How agribusiness is feeding the world” – offers to correct this “mutual ignorance”. First, by informing the world about what ASEAN can offer in agribusiness; and second, what ASEAN needs to know about its own opportunities.Dr Dy argues for agribusiness as a motor for growth and as a pillar for ASEAN´s leadership.

Agribusiness – why is the world “missing” its allure?

The success of ASEAN countries in service industries serves as inspiration for its industrial aspirations: Malaysia’s tourism success paints a positive view of ASEAN. The Philippines´ business process off-shoring remains resilient, globally ranking it second only to India – a country fifteen times its size. Thailand and Vietnam are feeding the world with their agricultural exports, while Indonesia is becoming ASEAN´s lynchpin in global geopolitics through its G20 membership.

The importance of agribusiness to ASEAN belies its 13% to 15% GDP contribution in most ASEAN countries, with the exception of Singapore, Malaysia and Brunei. In spite of its fundamental role in nation-building and self sufficiency in food, agriculture suffers from benign neglect by governments and investors. In polite society, ASEAN agribusiness is “Cinderella” waiting to emerge in the ballroom with her prince.

So, why is the world missing its allure? I suspect the reasons are several, among which are: a) agriculture’s perceived status as a marginal activity; b) educational bias for “white collar” jobs; and c) corrupt and inept delivery of government services. Let us take each of these factors in turn.

The caricature of ASEAN agriculture is deeply ingrained. It is depicted as a farmer toiling their land with their bare hands, assisted by a water buffalo. While a tranquil life amidst the rural landscape is a welcome sight, the picture conveys subsistence farming as an accepted industrial model. Without linkages to logistics, technology and markets, agriculture indeed will remain subsistence, killing any hopes of ASEAN becoming the bread basket of the world.

Education is geared towards professional qualifications, rather than vocational skills. Farming families aim to send their children to universities to escape a life of servitude in agriculture. However, with graduates exceeding local demand, labour migrates to seek opportunities outside their home countries. Hence, it is not uncommon for qualified professionals to take on jobs requiring skills below what they were trained for – medical doctors work as nurses, accountants as care-givers, or teachers as domestic help.

How about governments … what roles are they playing in this dismal saga?

Flawed agricultural policies such as land reform in the Philippines, heavy regulation in Malaysia, and outdated tenancy arrangements condemn agriculture to subsistence living. A product of the 1960s agrarian reform, the Philippines distributes land for the landless. Without access to capital and entrepreneurial temperament, new landowners are largely incapable of matching previous agricultural output and productivity. With former landlords deserting agriculture, it was not long before farming fitted perfectly the caricature of a subsistence farmer.

After 44 years of failures, is it time to dump a policy that only produced misery?

Distribution of land resembles arbitrary sequestration, coupled with mob rule, with “beneficiaries” who never tilled the land queuing for the largesse. Inadvertently, in the midst of such chaos, bureaucrats commonly broker land transfers and payments, arguably for their own financial gain. Again, this is not unique to the Philippines. However, the country is unique in persisting with failures – hoping that the future will resolve itself while the present postpones its day of reckoning.

Recently, there has been a lot of chit-chattering, specifically after the Third Plenum, about the pace, scope and direction of reforms in China. Specifically, everybody seems to be debating the pace of the opening up and innovation in local capital markets. If we focus specifically on the Chinese stock market, both the domestic Yuan A shares segment and the overseas depositary receipts (mainly HKD-denominated H shares in Hong-Kong and NYSE/Nasdaq listings) it is no mystery Chinese equities have been, for the most part, horrendous for most of the last 6 years.

In fact, we had the popping of the bubble on the Mainland in early 2008 from which domestic shares never really recovered. Up to that point, China was engulfed in a mega 90’s-style stock-frenzy that, predictably, ended up in tears and anger. Since then, A-shares had had their ups and downs, but for the most part they lagged behind every other exchange on the planet, except maybe the most derelict Southern European Bourses. The Hang Seng China Enterprises Index (CEI from now on), the benchmark for the H shares which traded at a huge discount during the boom years, have fared a bit better but not by a wide margin.

There have been some temporary and localised bubbles, particularly in consumer goods names between 2009 and 2010, but overall Chinese stocks have been largely catastrophic. We all know how the story goes: around 70% of the CEI is made up of state-owned enterprises operating in energy and heavy industries complexes or banks. Notoriously not exactly the best sectors of the Chinese economy in terms of earnings prospects & visibility and quality of management and corporate governance. Basically, the market there has not reflected the rise, symbolised by the explosive Internet revolution of the last 3-4 years, of the Chinese consumption story.

Plus, there is the issue of the sketchy accounting and IPO practices that have led to a recently lifted ban on mainland IPO’s and a derating of the multiples for companies listed in Hong-Kong and elsewhere. For example rarely do HK listings obtain forward P/E higher than 11-12, while for instance, a Taiwan or Malaysian listing can go up to above the 14 threshold.

Still the Chinese stock market is not dead; in fact, instead of a Nikkei generational slump, we might be close to a turning point. Why would it be so? If you think about it, the decision to allow companies to go public again in Shanghai/ Shenzhen might reek of desperation, as state-owned enterprises (SOES) could be stuck with a refinancing mountain to climb. It is calculated that between paper maturing and interest, the Mainland corporate bond market has a 2.9 trillion dollar liquidity problem to solve. We all know how there isn’t a truly liquid secondary market for this kind of securities in China, where basically corporate bonds are another tool for state-owned banks to circumvent their lending limits to SOES.

Therefore, it isn’t strange that it’s mostly SOES apparently jumping on the bandwagon of the new IPO open tap. In a recent article Bloomberg pointed out how there are 760 companies in China with plans to go public, most of them still being SOES.

Is it all a pump and dump scheme? Apparently, the market has decided so far to trust the promises of reforming the state productive apparatus of the country — it isn’t maybe too coincidental that the biggest (and most successful) H shares IPO last year in Hong-Kong, was for Cinda Asset Management Corp., the bad bank created in 1999 to clean up the balance sheets of the major financial institutions of the country. The management of the company expect to bring in a big deal of fresh, new business, thanks to the inevitable clean up of the bank books after their post-2008 Great Keynesian Lending Extravaganza. Basically, China is bracing herself for printing lots of new Yuan to well, fix a mountain of bad debt. American QE taught us how this will be an opportunity for immense profits.

So the market doesn’t appear to be so closed-minded about SOES stocks anymore, despite a very difficult year for emerging markets. On top of that, China is now increasingly recognised as almost a safe haven among emerging nations, due to her enormous manufacturing, political and financial power (and military too, but that’s another story), to the point that China is scarcely a developing nation anymore, it’s more akin to a developing super-power.

During the toughest days of the pre-September FOMC meeting the fairly illiquid Dim Sum market suffered a bit, but the Renminbi (whose bandwidth has been recently expanded) has remained remarkably stable among a rash of emerging FX volatility. With a deeper debt market and a currency fast-approaching world reserve status (China this year will conduct around 17% of her foreign trade in Yuan), it is not so strange that, going down in the capital structure to equities, we are finally finding some firmer ground.

Even more interesting, the situation appears to be outside of the beleaguered SOES complex: in fact it has witnessed a stellar bull run for the most competitive Chinese firms riding the explosion of consumerism in the country: we don’t need to remind our readers how stocks like Baidu, Great Wall Motor or Tencent have sailed through 2013.

True SOES financial difficulties remain, and it’s possible in 2014 that we will see the first corporate bond default in the history of China, which will test investors’ nerves. At the same time, both domestic and international players are not averse to Chinese companies; they’re just averse to bad Chinese companies. They’re even willing to give many competently run SOES the benefit of the doubt. In fact, when it comes to good private enterprises, they can’t get enough of them, sending their stocks to embarrassingly high multiples.

This is slowly but surely creating an environment of confidence: many IPO’s are carried out nowadays with a cheap price tag. This encourages more sector rotation and successful listings on the stock market, which in turn attract more attention over the whole Dragon equity supply. Needless to say, if and when an Ali Baba listing will happen, it could be a watershed in Chinese financial history.

In fact, there’s a good chance in a distant future that we will look at the previous national stock bubble as a proto-capitalist experiment, where authorities tested the mechanisms of modern securities markets with some state companies and some chump change carved out of the enormous endowment of national savings. After a few years, the real history of the Chinese stock market is about to begin.