U Soe Thane said in our interview that that the past two years have been about the reform process, and that this year is the year of implementation. In your opinion is this implementation year going as planned? And are you beginning to see the initial reactions to the reform process?

You have to bear in mind that we have been cut off. We have been away from the international community for the past half a century, since 1962. We call this era the period where the eyes and ears were closed. It wasn’t the fault of the people themselves, but because of the previous regime. Under the pretext, at the time the minority states were demanding federal separation, similar to ex-Yugoslavia. If you look very carefully U Nu had more vision than the others, and he must have had cause for concern to want to bring in the military. The military presence was a plan to unify the country. Following which, we made a grave mistake of nationalizing all the private banks, and consequently all the private enterprises; this put an end to the private sector and put our country in a form of a blackout. The country was then transformed in twenty years from being the richest country in South East Asia to the poorest. As you know, in 1988 a series of disturbances led to a new government of a military nature. They believed that Myanmar should return to a market oriented economy system. A road map was established in three stages with regards to the banking sector. The first was to straighten the private banking system, the second was to establish joint ventures with foreign banks, and the final stage was to invite the foreign banks to open branches in the country. But unfortunately this was not achieved and we were back to square one. Now with the new government you can see that there has been a great deal of transformation. We invited foreign bankers to guide us through workshops and partake in symposiums; it contributed to the changes that we have seen in the past two years. Myanmar is also now a member of ASEAN, and no longer an awkward member of the organization. Another thing I realize, after working with the government for nearly two years, I realize that despite them being ex-Generals, they have changed their way of thinking and are beginning to enjoy the fruits of democracy.

One of the issues that have come up several times in our interviews, and at the World Economic Forum, is the concept of trust. Trust from the international community that the reforms process is going to continue. Trust from the people’s side that the government is going to do as they say. Do you feel like that trust is being justified at this point?

When I was in Japan last March, some of the Japanese businessmen said that when the Chinese market opened up, under the open-door policy, they gave a lot of concessions. So the Japanese went and invested in the country, bringing in technology and know-how. After ten years they changed the law with regards to taxation and foreign investments. According to the new law, the Chinese government can collect taxes back; retrospective effect. This led to outrage from Japanese investors, but as they have already committed there is nothing they can do. I informed them that the Myanmar mentality is not like that and would never do such a thing. We are changing and the country is transparent, you can even watch the parliament proceedings on TV. Overall we are grateful people, whatever you have done for our country or ourselves, we always want to pay those individuals back.

A recent ADB study is very bullish on Myanmar. They are very positive about the country, but they warn that the tax reforms need to continue and need to be rapidly brought into the implementation stage, and of course there needs to be greater financial autonomy for state enterprises. Are you seeing those sorts of concrete results this year? Are you feeling positive of what’s happening this year?

The new Central Bank law is definitely going to give the Central Bank more autonomous power. Although, in terms of independence there are degrees of autonomy, and we are not saying that it should have complete independence at the moment. This is mainly because the Central Bank itself needs to build up capacity; for the past fifty years we lost a lot of able bankers. This takes a little time. Therefore, while they build up capacity and restructure the banking system, the Central Bank will directly be accountable to the President. We are going through this learning process, and want to give the assurance to the investors that we have this new law, instead of replacing the old foreign exchange regulation of 1947. This new law gives incentives to the foreign investors, the right and the feasibility, as well as the rapidness for the repartition of capital and profits. All of these laws have been discussed transparently in the parliament. Some people think that the parliament is fighting with the President, but they are not, there always needs to be a check and balance system. Within the past two years there have been a lot of check and balance processing going on very rapidly. The message the President has given to the negotiating team with regards to the reforms is that without political reform and stability we cannot move along to economic and financial system reforms.

International communities are frequently reading about getting the political groups into the fold and are worried about potential violence. This government is so determined, that they are essentially giving carte blanche, explaining that whatever needs to be done, should be done.

The government has given political priority to the minority groups, to negotiate and sign agreements. They have signed quite a few already and quite rapidly at that, because the President has given his negotiating team headed by U Soe Thane and U Aung Min two messages. One, that the minority groups cannot break away from this union, and the second being that they should be given everything that they demand, since they have suffered already so much in the past. So when they came to Yangon they gave a lot of conditions and a list of what they wanted, and when they put it forward to the negotiating team they agreed. Then what could they do? There was no point for further negotiation because all their demands were met, so the agreements were signed. You can see from this process how much the international community can trust the transformation this country is experiencing; we have a genuine desire to change. We have all suffered so much in the past that we don’t want to look back; therefore, there is no point in rolling back.

One of the interesting things that you have said in previous interviews, is that despite the fact that your sector is one that will be most influenced by international competition you are not afraid of competition. Why is that?

When the UMFCCI complained to the government about how we, as companies, could compete with foreign enterprises since they are way ahead of us. We have our old foreign investment law and a national investment law, so we want to have protection under the national investment law. I told them that the two laws should converge. I asked them why they were afraid of the foreign companies, there are opportunities where we can work with foreign corporations and work through joint ventures or partnerships. Even if you did not work together, they would bring with them technological know-how, employment, training, capital injection, to name a few and these are the things that the country will enjoy. This is why we shouldn’t complain about foreign companies coming into the country, and instead should compliment each other. Kanbawza Bank has recently signed an agreement with the Japanese bank SMBC , and according to the terms of this agreement the Japanese are going to assist us in our capacity building process. They are training our people abroad, and are sending our people to teach the basics at the bank branches. This is the main challenge that we are facing, capacity building. So in our terms when the SMBC clients are coming to Myanmar seeking investments we are going to help, because Kanbawza Bank has the most branches than any other bank. We have a lot of contacts with the high authorities; therefore we can help them to settle in more easily. We will also have MOU agreements with other banks in the future; this is how we will compliment each other. This is how we will be able to compete with other banks in the region.

One of the things that our readers, in particular those in the financial sector, are looking towards in terms of partnerships is finding potential partners in Myanmar that have the same set of values and priorities. What kind of progress is being made in terms of anti money laundering activities? Are you getting help from the international community for capacity building at that level?

When we were black listed several years ago, the Financial Action Task Force paid us a visit, as they investigated all the banks. KBZ being the biggest bank they came to us first. We told them of our transparency and that we only have one book. The accounting system is so that a lot of these books are written in English, so if anyone wanted to investigate them at anytime they could, and that way see if anything was wrong. In terms of money laundering, we have formed anti-money laundering committees in each and every bank, and it is their responsibility to see if anything pops up, illegal money coming in to our bank. We have been helped by experts in the region, as well as the world bodies, who came along and trained us how to detect suspicious transactions, to a certain extent. We also invited the law enforcement agencies, like the Ministry of Home Affairs, to come and teach us their expertise. So I am not afraid of this issue.

The group has expanded into tourism with airlines. Is the group going to continue to diversify into other areas of the economy?

Actually we wholly own two airlines, both AirKBZ and Myanmar Airways. We are negotiating with Boeing for more aircraft. We recently acquired two new aircraft from France and we are delighted to be able to add planes to our fleet now that the sanctions have been lifted.  We are also expanding into the insurance industry now that the law has been changed. We have already established the insurance company this year and plan to expand very fast. We want to take that company public in the future. We are still trying to determine the exact timeline for that activity, but we are definitely expanding quickly.

Congratulations on your recent corporate governance award. Does recognition from your fellow Myanmar businesspeople as well as the international community provide you and your Chairman with great satisfaction?

Actually our Chairman is a very humble person. Our priority is honesty – we communicate honestly with our clients, our shareholders and with our employees. We only keep one financial record, unlike other companies! We also believe in being honest with the government and with our fellow Myanmar citizens, which is why we are the largest tax payer in the country even if we are not the largest company. We have never wavered in this honesty. Right now we are in contact with several of the big auditing firms, including Deloitte, with whom we are considering doing business in order to conduct due diligence up to international standards on our company.

Your level of expertise is vital for our readers. In 2012, you cautioned potential investors to wait for the final touches on the investment law. That law was subsequently passed. Should they be coming now?

There are still a number of challenges for FDI to come in. Last year I was more cautious. When you see the FDI law, it cannot be complete until other complimentary laws are also in place. One example is international property rights. Now we have the several laws in parliament that will affect FDI. We have also been bringing up the competition law, which is in the pipeline. We also have the new Central Bank law, which has been passed. These are all important to the foreign investor.  U Soe Thane is right, now is the time for implementation. However this process does take time. Another concern for the investors is the religious conflict, but we are working together on interfaith dialogue and are trying to avoid a Bosnia scenario. Both the Speaker of Parliament and the President, as well as civil society leaders, are looking forward to a positive future. The more investors enter the country, throughout the country, the more economic development there will be, the people will benefit, and then there will be less reason for conflict as well. Business can help the country to achieve peace. The good thing about our Myanmar people is that we are not obsessed with the past. We look forward and let the past alone.