Checking out Southern Africa

We're headed to Namibia, South Africa, Botswana and Zambia on April 23 to check out great places to visit, the best hotels, camps and lodges, and wine and food pairings for a group trip in May or June of 2015.


After a ghastly flight from Denver to Frankfurt to Johannesburg to Walvis Bay, Namibia, we'll be thrilled to finally drag ourselves into our rental car and head to a village on Namibia's Skeleton Coast where we'll spend a couple of days sea kayaking and touring the 2 national parks along the Coast, reported to be magnificent.  Will let you know.


From there, we move on to Namibia's splendid red dunes near Sosusvlei for 2 nights in a desert lodge where we expect to sleep on the flat roof of our "kulala", a canvas and thatched cabin overlooking the dunes (you can also sleep inside if the bugs bother you).  With minimal electricity, traffic, noise and pollution, the stars should be unbelievable and the sounds of the desert ever-present.


We'll return to Cape Town, one of the most beautiful settings in the world, to select the hotel we prefer for our trip next year and to visit the key tourist venues such as Table Mountain and Robben Island, Nelson Mandela's prison for 2 decades.  Next year, we'll add in a day of business visits to learn more about the political and economic life of South Africa and a boat trip to the seal islands, swarming with seal families and overwhelming you with their potent odors.  We'll drive in our rental car to Franschhoek, in the heart of South Africa's wine region and report back on South African wines and food.


Next to the enormous Okavango Delta of Botswana to check out 3 different types of camps.  Because the Okavango Delta is flooded during the rainy season and quite dry during the dry season, we wanted to see what the camps were like in 3 different ecosystems, along a river, over the water and in the savannah.  The wildlife is extensive in the Delta, so we're excited about watching the animals and birds on our boat and jeep safaris.  Hope to ply you with some wonderful photos.


Our final stop will be at Victoria Falls in Zambia.  These are spectacular falls, which we've visited before.  Next year, we'll expect to spend 2 days at the Falls to allow plenty of time to enjoy their beauty and the nearby town of Livingstone.


I'll be blogging with photos whenever internet access is available, so stay tuned for the sights and sounds of Africa and for an extraordinary Southern Africa trip next spring.

Investing in Myanmar

We met with a private equity company while we were in Myanmar and learned a lot about the history and sociology of the country as well as the investment environment.


In 1988m the U.S and Myanmar were very close, with senior military officers studying and training in the United States and active intelligence cooperation.  According to the people we talked to, the CIA even helped Myanmar start its drug trade.  At the time, the U.S. perspective was all about containing China.


When the U.S. changed its policy towards Myanmar, China saw an opportunity and moved into Myanmar in a big way, coming to dominate its economy.  China was easy for Myanmar to engage with because China didn't worry about democracy or human rights, key issues for the U.S.


Now, the government wants Western investment.  There is corruption in Myanmar, but not as bad as in other Southeast Asian countries like Indonesia.  But, you must have the right local partner to do be successful in this country.  You have to be clear that bribery is not something you'll engage in.


To be successful, a company must commit people and time to Myanmar.  If you're not on the ground, showing a commitment to the government or a local partner, you won't get what you need from either to be successful.


Land is almost entirely owned by the government.  In 1962, the Burmese Socialist Party nationalized everything, allowing very few families to keep title to their property. So, today, if you want to invest in a real estate project, you can get a 50 year land lease from the government with 2 10-year extensions, not too different from doing business in China.


It's very difficult to establish title to property since there is no single land registry.  A land title document becomes the asset.  If you want to invest, you must see proof of ownership and the actual dimension of the land you want to buy or lease. 


Myanmar is an entrepreneurial country with lots of small shop owners.  When Burmese ex-pats decide to come home, there will be a tipping point in terms of entrepreneurship.  In the past, large conglomerates have been favored, but now small and medium sized businesses are becoming important.


Coca Cola is creating 6000 jobs in Myanmar and has donated $2 million to women's and children's programs, a lot of money in Myanmar.  While there are some environmental laws, it will be NGO's that have the biggest influence on environmental protections in the future.


Most of the construction materials come from Singapore.  The cost of renovation is cheap, but it's important to closely supervise the work.  Staffing is a big problem since Myanmar is new to the concept of hospitality and customer service.  While there is a small union movement, there is no understanding of what a union really does.


There are the first stirrings of civil institutions and a free press.  The press is just beginning to write about injustice and courts are now being forced to address injustices.  The rule of law is present.


A political transition is taking place.  The 2015 elections will be very important to investors.  There is a big need to create laws to ensure investments are protected.  Aung San Suu Kyi's party is weak and many question if she is able to become a leader, but she is very popular.  The constitution would need to be changed if Suu Kyi were to become prime minister because the current constitution prohibits anyone with foreign ties to hold the highest offices (and Suu Kyi's husband was British as are her 2 sons).  But, this is an exciting time to be in Myanmar and a good time to prepare to invest.

Myanmar's Ford dealership

Our group atop a popular Ford truck in Yangon

I'm going to get back to my blogs about Myanmar, such a beautiful and fascinating country.  Our trip there was last fall, so I'm a bit behind, but next I'll move on to our completely business-oriented trip to Southeast Asia in January.  Next round--our planning trip to Southern Africa (Namibia, South Africa, Zambia and Botswana) in April.


While we were in Yangon, we visited a brand new Ford dealership, solid evidence of the turnaround in U.S. policy towards Myanmar as it slowly makes political changes.  But, don't expect rapid democratization yet.


It is very expensive to buy cars in Myanmar because of the hefty duties and taxes.  A Rolls Royce is over $1 million US.  People pay cash because, as yet, there are no banks that can handle the foreign exchange needs.  So, imagine who has the money to pay $1 million for a car--not your average shopkeeper or farmer.  People actually pull up to the Ford dealership with a trunk full of cash to buy a Ford, which is very popular.  Their average car costs about $70,000 US (for a Ford Focus).

A favorite Ford in Myanmar

It's impossible to quote a price on a car until it actually arrives on the showroom floor because the duty may change.  Right now, Nissan is planning to build cars in Myanmar, with the Azusa already assembled there.  That puts Ford at a price disadvantage.


We've driven on the best roads in Yangon, but once you get outside the city, there are huge potholes.  The biggest car repairs are suspension related and, since Ford has a very strong suspension, it is popular.  They can't keep their cars in stock.


Highway safety is not a priority yet, though no doubt will be soon as driving is hazardous.  Because more people can buy cars today, the accident rate is way up.  Many cars have no lights for night driving and some drivers who do have lights use their high beams because they can see better, but they don't understand the impact of their brights on oncoming drivers.  Road etiquette is still in the future.


This Ford dealership is a joint venture, where Ford's partner owns the land.  Average wages are $200 per month, good for Myanmar.  Ford is focused (no pun) on teaching its employees key skills, from English to how to read a manual to the technical parts of Fords to mechanics.  The Burmese are highly motivated and work hard to learn the skills they need to be successful.  Because they have such a big need for trained people, this dealership is training people in 4 weeks for jobs that take 4 years training in the US.  This means that there must be at least 1 very strong technical person in each area to oversee and train employees.

Southeast Asia Trip

Midday traffic in Manila

We just returned from 2 weeks of extensive meetings and site visits in Southeast Asia, as you can see from my 3 most recent blogs.  We organized nearly 40 meetings and visits for the executive team of a national trust bank, the fourth such trip we've set up for them to learn more about the global economy and emerging markets as part of their commitment to making better investment decisions for their clients.

I'll be passing on some of the information we gained from meetings with CEO's, central banks, law firms, universities and government officials over the next few blogs.

Our trip started in Manila, bypassed Bangkok because protestors made it impossible to even get to our hotel, much less to all the meetings we'd scheduled, included 2 days in rainy and flooded Jakarta, a week-end at Angkor Wat in Cambodia and 3 days in bustling Singapore.  In the process, we learned a lot about the economies of the Philippines, Indonesia and Singapore--not to mention a bit about the Khmer culture of Angkor.  And, of course about the remarkably clogged streets of Manila and Jakarta, where traveling only 5 miles can take and 1 1/2 hours and our last 2 kilometers to the Jakarta airport took 2 hours.  Those with money use helicopters.

When we decided to cancel our trip to Bangkok, we went to Subic Bay instead, the site of a huge former U.S. naval base, and now an economic development zone, and Clark, another economic development zone situated on the old U.S. Clark Air Force Base near Subic Bay.  We were greeted there by a police escort who roared ahead of us through traffic lights and around slow traffic.  A little more than we needed.  But not a surprise in a country whose infrastructure staggers under its burden of vehicles and people who think they're important (and some even may be) want to get places fast.

Clark police escort

When the U.S. military left these bases, they also left behind an incredible infrastructure that included water and power systems, excellent roads, ports and airports, docks and oil storage tanks, schools, hospitals and much more.  The Philippines has used these to great advantage to create their development zones and to attract foreign companies that have invested significantly in these two areas.  What a windfall.  And one that is greatly appreciated by Filipinos.



Panorama of Subic Bay

The Trials of Travel

protestors surrounding our hotel

 

When you're traveling, sometimes things just get messed up.  It helps when everyone is flexible and good-humored as you go about fixing things.  And that usually works.

We just returned from our SE Asia trip with 13 people.  My last blog talked about bypassing Bangkok, to our great regret, due to the massive demonstrations there.  But, except for the Grand Hyatt Erawan Hotel, all our other service providers refunded our money since it was clear to all that going to Bangkok in the midst of huge protests (and now a state of emergency and several deaths) was folly.

The Grand Hyatt nonetheless has persisted in saying we could have reached the hotel, despite the mass of protestors surrounding the hotel and blocking access to both the hotel and the sky train, the only way to reach the center of the city given the blockaded streets.  So, be warned.  This is a hotel to avoid.

Angkor Wat just before sunrise

Our next misadventure was on our departure from Siem Reap, Cambodia, home of the magnificent temples of Angkor Wat.  We had reserved our seats on Malaysia Airlines months in advance for our onward travel to Jakarta via Kuala Lumpur.  However, Malaysia Airlines gratuitously canceled 5 of our reservations (which we found out when we tried to check in), probably because they'd overbooked the flight.  So, 8 of our group went on to Jakarta as planned while I scrambled to get the remaining 5 of us there as well.

Malaysia Air offered no assistance at all, but one of their contract agents helpfully suggested I try Bangkok Airways to see if we could get to Bangkok and then on to Jakarta.  There was a Bangkok Airways flight leaving for Bangkok in 45 minutes, a bit tight to make all our arrangements, but a wonderful Bangkok Airways manager dragged me off to her office where she booked us on the flight to Bangkok. 

Then she called her office in Bangkok to see if they could get us a connecting flight to Jakarta, which they did, on Garuda, the Indonesian national airline.  Next she held the Bangkok flight for a few extra minutes so we could get our bags aboard.  Fortunately, I had stacks of cash with me to cover all our tips, because there wasn't time to process a credit card in Cambodia.  Now, there's incredible service.  If you ever need help at the Siem Reap airport, ask for Monorom, a wonderful and very competent young woman.  Despite all the hassle, we reached Jakarta only 3 hours after our scheduled arrival.

So, now I'm trying to get both the Grand Hyatt in Bangkok and Malaysia Airlines to do the right thing and reimburse us.  I'll let you know the outcome in case you have plans to travel to SE Asia.

Meanwhile, the rest of our trip was exceptional.  More to come about that.

Bangkok Reroute

Unfortunately, our Bangkok portion of this SE Asia trip fell victim to the protestors, to our great dismay.  While we weren't worried about our safety because the protests are mostly peaceful, we were concerned about just getting to our hotel, which was right at the central intersection of the protests.  Even more than that, we knew that we would not be able to drive our various meetings around the city.

Consequently, we are still in Manila, headed to see the huge former U.S. Naval base at Subic Bay, now a major Philippine Economic Development Zone.  The Philippines kicked us out of Subic Bay when our lease was up, but our other stop in the area, the former Clark Air Force Base, was devastated by ash from Mt. Pinatubo, which forced our retreat.  Today, it, too, is an economic development zone.  We will visit there tomorrow before driving back to Manila and flying to Siem Reap, Cambodia to see Angkor Wat.

Fortunately, we had friends on the ground in Bangkok who were walking through the crowds and could keep us abreast of events.  They at first suggested we take the sky train from the airport to our hotel, but, when it became clear that movement was virtually impossible, and we would be scrambling down from the elevated train to the street with all our luggage, and then trying to drag it all many blocks to our hotel, they suggested we visit another time.
 

 

 

We learned so much from a series of excellent speakers here in Manila.  I'll report on what we learned next.

Manila--American War Memorial

American World War II cemetery--Manila

My father, who is now 97 years old, was in the U.S. Navy during World War II, stationed much of the time in the South Pacific.  He was in and out of the Philippines and headed to Japan for the American invasion when his fleet learned of the Japanese surrender in 1945.
While I was growing up, my father read us the history of the U.S. naval battles in the Pacific.   Although I had been to the Philippines several times before, I had never been to the American cemetery and war memorial here until yesterday.  What a moving experience, 70 years later.
Our Philippine guide was in tears as he told us about the American battles to free the Philippines from the Japanese and the enormous American sacrifices to win in the Pacific.  All this is recorded and memorialized at the Manila American Cemetery and Memorial.

Star of David amidst crosses

There are 17,097 graves of American soldiers and airmen at the cemetery.  The colonnade surrounding the memorial contains the names of the 36,286 servicemen missing in action.  It is sobering to see and to remember how many Americans who died serving our country in World War II died alone and were never found.  Here they are all remembered.

In the cemetery, there are 164 Stars of David amidst all the crosses.  Twenty sets of brothers are among the dead as well as 29 recipients of the Congressional Medal of Honor.  We owe so much to these men and some women, civilians, Filipinos, soldiers and airmen.
The Memorial has astonishing mosaics documenting the key Navy battles in the Pacific, the Battle of the Coral Sea and Midway (which turned the course of the naval war in the Pacific in favor of the Allies by destroying so much of the Japanese Navy).  They picture the submarine war and the remarkable logistics of the Navy battles that raged so ferociously.  They also describe the astonishing flow of U.S. arms, planes, food and other material and equipment to Russia, not to mention Europe and China, that enabled the Allies to defeat the Axis powers.  The world would have been a different place without the enormous American war production effort.

                                                       Mosaic of the Battle of Midway

It is important for Americans who visit the Philippines to see this reminder of the huge cost of winning World War II.  It is also incredible to see how so many Filipinos feel about America all these years later--not just gratitude, but a real connection to America and deep emotion about what America did for them and others in the Pacific region. 

 

Memorial to U.S. servicemen