Interview: Stuard Dean
What were the deciding factors that led to entering the Myanmar market? How does it differ from other emerging economies?
STUART DEAN: Myanmar is a market with huge opportunity for growth given the need for infrastructure development, advancements in transport, better health care facilities and power generation in urban and rural areas. Though pleased with our encouraging market position, 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.
Our focus is on growing with Myanmar and partnering with local corporates and government to solve the tough challenges faced in these areas. We have appointed a chief country representative of Myanmar origin and opened a fully locally staffed office in Yangon to drive our business in the country. Developing countries also need assistance in capacity building to help leaders in both the public and private sectors build an economic system that is transparent, meets global standards and will serve the people of Myanmar. In this regard, GE has made a $7m commitment to help this capacity building by focusing on health care, electricity planning, rule of law and leadership development.
How would you assess the region’s potential for building aircraft engines? What comparative advantage does ASEAN possess in this regard?
DEAN: According to data prepared by the UN’s population division, the population of ASEAN will rise from 633m in 2015 to 741m people in 2035. ASEAN economies have proven extremely resilient, bouncing back quickly from economic downturns in 1997, 2008 and the current global challenges. The region is one of GE’s key growth markets for aviation, with revenue in this area growing by more than 30% over the last few years. GE’s many recent successes in the region include booking orders with the Indonesian national railways, Vietnam Airlines, Air Asia, Lion Air, Garuda and several national power utility firms. GE Engine Services Malaysia, our maintenance, repair and overhaul centre in Subang that was established in 1997 as a joint venture with Malaysia Airlines, employs more than 250 people and serves over 30 airlines throughout Asia – a great example of how we contribute to the growth of supply chains in Malaysia. Its operations support employment in 156 local manufacturing companies that form a part of the supply chain, and it invested a total of RM6m ($1.87m) in purchasing materials from local suppliers in 2012. ASEAN’s growing population and middle class will provide demand for all kinds of products and services, not just aircraft engines, and we believe the region will be an attractive location for a variety of industries.
What challenges might the less developed nations within ASEAN face regarding the free flow of labour?
DEAN: For less developed ASEAN countries, especially Myanmar, there is no doubt they will need to import skilled workers in the short and medium term to develop the economy. Current wage rates are artificially high today so as to attract both the skilled and unskilled labour needed for domestic economic development. However, we are now starting to see higher-skilled Myanmar workers return home due to rising wages, which is a good trend for the country. On the other hand, we will see a high number of unskilled labour from such countries move to more developed markets, and there will likely be greater pressure on the availability of skilled workers in all countries. This situation could cause wages to continue increasing substantially to maintain their current workforce and attract new workers to ensure that they could sustain their development. Artificially high wages would bring high and unsustainable inflation, making things more expensive and increasing the already wide income gap within the country. Governments in these countries will have to be prepared for such an outcome. Their main challenge is to find an equilibrium that attracts needed labour while having the least effect on their fragile economies.
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