Zaw Min HtweCPRSouth6: ICT & Economy9-10 December, 2011, Bangkok

Yatanarpon Cyber City (Myanmar): Making it work

Introduction

ICT Parks have proved a vital element for economic improvement in developing countries

Yatanarpon Cyber City (YCC) was established, inviting local and foreign investments

It is estimated that US $ 52 millions were invested for YCC establishment (Digital Review Asia-Pacific 2009-2010)

Why ? Are the incentives of YCC attractive ?

Are the facilities of YCC adequate ?

Are the human resources qualified enough ?

Are the Foreign Investment Policy of Myanmar conducive or restricted ?

Research Issue

No Foreign Investments have been found yet as of early 2011

Presentation Outline

Introduction (research issue & questions)

Methodology

Findings

Policy Implications

Conclusions

MethodologyPrimary Data- Questionnaires were distributed to 35 out of 50 selected

companies in Myanmar Info-Tech (MICT Park); - Multiple Choices & Open type questions were used in the

survey. For instance, - “What about the the availability of qualified HR ? (a) Highly

Available & Qualified enough (b) Limited Available & Qualified Enough (c) Highly Available & Not Qualified (d) Limited Available & Not Qualified”

- “What will be the challenges for foreign investors doing business at YCC ?”

- “Do you have any plan to expand business in YCC ?”

Interviews with 5 local companies, currently operated business at YCC; 7 key persons from the Professional Associations, Implementing body and other successful companies

Questions, For instance, - “What are the major reasons for expanding business in YCC ?”

- “What are the major drawbacks of YCC ?”

Secondary Data- Government official data from Central Statistical

Organization 2009, Reports, Journals, Websites, Newspaper, and previous research

Methodology: cont’d

Findings & Policy Implications

1. Incentives are not favourable to investors, particularly in tax incentive for IT related businesses.

Incentives QTSC (Vietnam)

YCC (Myanmar)

Corporate Income Tax

10% 30%

Value Added Tax NO VAT 0%-200%

Source: Quang Trung Software City, Directorate of Investment & Company Administration, DICA

Table 1 : Tax Incentives of QTSC and YCC

Desirable tax incentive programs should be introduced for ICT related foreign investments

Findings & Policy Implications: Cont’d

2. Facilities are adequate in terms of telecommunication and space availability but lack other facilities to facilitate One-Stop Services

Collaborative actions among the domestic and international Organizations should be practiced to facilitate One-Stop Services.

Facilities QTSC (Vietnam) YCC (Myanmar)

Telecommunication Broadband Internet, GSM, VOIP

Broadband Internet, GSM, CDMA, VOIP

Location & Space Availability

HCMC & Limited POL & Abundant

One-Stop Services Available at HCMC Not Yet Available

- Obtaining the licenses

YES NO

- Logistical Supports YES NO

- Banking YES NO

- Visa Application YES NO

Source: Quang Trung Software City, Yatanarpon Teleport Co., Ltd, and Survey Results

Findings & Policy Implications: Cont’d

3. Qualified Human Resources are limited;

Institutions # of Graduates/Year

Quality of Graduates

Computer Universities

7,469 Not Industry Ready

ICTTI (Japan Funded) 160 Industry Ready

IMCEITS (India Funded)

200 Industry ReadySource: CSO 2009, University of Computer Studies, Yangon, and Survey Results University-Industry collaboration

programs should be introduced to produce more industry-ready HRs while taking advantage of low-labor cost

CountryAnnual IT Labor Wages (USD)

China 19,674

India 13,592

Indonesia 7,017Myanmar

1,200 – 8,400

Philippine 8,816

Thailand 21,117

They can be hired at low cost

Table 3: Annual IT Labor Wages in some Asian Countries

Source: ZDNet Asia IT salary benchmark 2010; Yatanarpon Teleport Co., Ltd;

Survey Results

Findings & Policy Implications: Cont’d

Findings & Policy Implications: Cont’d

4. Foreign Investment policies are conducive to some extents despite no investment in YCC

Source: Central Statistical Organization 2009

1990-1991

1995-1996

2000-2001

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

0

1600

3200

4800

6400

8000

9600

11200

12800

14400

16000

Chart 1 : Foreign Investment in Myanmar (US$ in millions)

Sr Sector No. Of Enterprises Total Investment (USD in Millions)

1 Agriculture 4 34.3512 Fishery 25 324.3583 Mining 60 1395.8864 Oil and Gas 88 3,357.4785 Manufacturing 154 1,628.8966 Power 2 6,311.2227 Transport 16 313.2728 Hotel & Tourism 44 1,049.5619 Real Estate 19 1,056.453

10 Industrial Estate 3 193.11311 Construction 2 37.76712 Others 6 23.686

  TOTAL 423 15,726.043

Source: Central Statistical Organization 2009

Table 4: Total Foreign Investment by Industrial Sector as of March 31, 2009

Special adjustments, designed for IT development, need to be made. YCC should be entitled as Special IT Development Zone with supporting industries.

Findings & Policy Implications: Cont’d

ConclusionIncentives offered by the YCC are not favourable for investors, particularly in tax system Corporate Income Tax & VAT should be adjusted

Facilities in terms of telecommunications and space availability are adequate but lack other facilities Collaborative actions among the domestic and international

organizations should be practiced to facilitate OSS

Availability of Qualified Human Resources is limited University-Industry collaboration programs should be introduced to

produce more industry-ready HRs

Foreign Investment policies are conducive to some extents despite no investment in YCC Adjustments, specially designed for IT Development, need to be

made while designating YCC as Special IT Development Zone along with supporting industries.

For further information and/or comments,

please contact me at: zmhtwe@iuj.ac.jp

Thank You !