Burma Financial Infrastructure Assessment

Overview This is a unique opportunity to work with the great people of Burma. We view this opportunity as a collaborative effort. The Heartland Institute and key members of the Burmese people need to work together as Heartland has a great deal of expertise in Financial Education, and the key members representing the people of Burma have a great understanding of the needs.
We understand this project to have several major components: 1. Educating the people of Burma on the basics of the financial opportunities in a developing country. This will start with basics of budgeting, saving, and the reality implications of debt. 2. Educating the successful population of Burma on what types of insurance protection and investments are available in the developing and developed countries. 3. Educating business-minded people on the opportunities and challenges of establishing financial service companies in a developing country. 4. Educating the government authorities on what type of political and economic environment will create the most productive and growth in the financial service sector of their developing country.

I. Our Approach Our approach will be to find the right individuals and organizations to partner with to deliver the major components as listed previously.
Given our current understanding of the opportunity to add value to the Burmese government and its people on growing investor population, we see the following: Step One--Provide educational opportunities to the Burmese Government officials on how to lay the base foundation of a financial commerce infrastructure.
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Step Two--Educate businessmen on what the opportunity is in establishing a financial services industry. Step Three--Educate the upper class as to the products that could be created under a new Rule of Law, highlighting the benefits of safety and access to international markets. Step Four--Start the process of creating the first insurance company and first commercial bank. Step Five--Create products for the wealthy, and then create products for the average Burmese person. Step Six--Start the education process for all Burmese people. Mainly starting with what is a credit card and how to use it without creating financial disaster for them. Then educate them on a basic savings product.

II. Education Of The Workforce In the past, Burma had a tradition of strong education of its people. That emphasis has not been a priority for the last several decades. The result will be the need to educate a workforce to be able to provide the product and services required to start up the new financial services industry.
This very well may require the importing of certain skills and knowledge to help transfer that knowledge to the Burmese people entering the workforce. These skills include education on the basics of finance such as budgeting/cash flow management and the concept of building savings. This education will provide the knowledge that is necessary to prevent common pitfalls regarding credit card and debt issues that have affected other developing countries.

III. Products Our understanding of the current economic situation in Burma has resulted in two extreme economic classes: the wealthy and everybody else. There is no real strong middle class inside Burma.
So priority one is to build a financial product for those who have an immediate need, the upper class in Burma. Certainly one very effective product would be an investment vehicle like a variable annuity which allows the underlying assets to be invested in the USA and other
Heartland Institute of Financial Education: 2851 South Parker Rd. Suite #1100 Aurora CO 80014 O (303) 597-0197 F (303) 369-3900

international markets. This will give the Burmese upper class access to the returns and growth opportunities in other countries. In addition, with the assets in an insurance company operating under the supervision of the government, this will provide the sense of comfort to the clients that their money is safe from corruption and theft. The growth of the middle class will be a key development in coming years. Certainly one of the key factors of the real growth of the USA was the free enterprise system and the emergence of a middle class. With businessmen operating under a structure of progress, the rich got a lot richer; and, the poor emerge into a middle class status. The rise of the middle class brought forth the opportunity for them to achieve their dreams and acquire the goods and services that added value to their lives. It was this emerging middle class that had additional fuel for business growth. The products for the emerging middle class will mirror those of the early 1900s in the USA. These Industrial insurance policies created small death benefits and some cash accumulation. These products are sold person to person and premiums collected on a weekly basis. These product lines established base benefits to protect families and created significant profits for insurance companies for many decades.

IV. Establishing Financial Services Companies There are many issues to address for businessman in establishing financial companies that will create insurance and financial products for the emerging Burma Society. One such issue is the ability to attract the right individuals with the skill, knowledge, and experience to lay that foundation with the establishment of companies that will have the right products and services for the people.
Another is the lack of an individual identification system. If we are to establish a life insurance company, we do need to have a verifiable system to ensure we know who we are insuring and when that person dies. Investment opportunities for the insurance company need to be established. To make the investment attractive, some access to international markets must be made available. That said--it would seem to be very beneficial for the government to create bonds at a nominal rate of return to ensure that some of the monies stay in Burma to help it grow to the next level.

V. Rule of Law Educating Government The starting point is to establish laws and regulations that will encourage investment into the country. This would include the establishment of laws in:
Heartland Institute of Financial Education: 2851 South Parker Rd. Suite #1100 Aurora CO 80014 O (303) 597-0197 F (303) 369-3900

A. B. C. D.

Banking Securities Insurance Tax Laws

Our approach is to take the laws and regulations from the USA not the current laws and regulation rather from a point in time that encouraged entrepreneurs to start new businesses and create jobs and not be subject to significant regulations and red tape. An example is the adoption of the USA IRC (Internal Revenue Code) of 1954 versus trying to copy the current USAs tax code. The key here is that many of the current laws are designed to manage and control the mature USA financial system. Those regulations make it much more difficult for businessmen to start up new companies. This is beneficial for both the business side and the individual side. Issues like estate transfer rules and tax rates need to be established. This will create revenue streams for the Burma Government.

Conclusion
This is a major initiative and one we do not take lightly. Our respect for all of the people of Burma is the driving force for our desire to lend our unique expertise to help build a path to success and prosperity for all Burma Citizens. The Heartland Institute of Financial Education is the perfect partner to play a significant role in building this path to success. We feel the best way to move forward is to encourage an open dialogue between players in order to establish mutual goals. We do not want to make any recommendations that may be based on our misunderstanding of your short-term and long-term objectives. We are available to engage in that dialogue at your earliest convenience.

Heartland Institute of Financial Education: 2851 South Parker Rd. Suite #1100 Aurora CO 80014 O (303) 597-0197 F (303) 369-3900