Importing Cars into the Developing World

Submitted by Arden Reynolds
on 03/05/18

My parents do international development work, and I have spent much of my life living
overseas, attending international schools in Africa and Asia. For the past 5 years I have
lived in the Southeast Asian country of Myanmar, often called “the Golden Land” for its
thousands of golden pagodas, and long an outcast among nations because of its harsh
authoritarian rule. When I moved here, the country had been cut off from most of the
international community for almost six decades. Except for very wealthy people who could
get around loopholes, it was impossible to import a car into Myanmar after the mid-1970s.
Therefore, there were essentially two types of vehicles on the roads – old, beat-up jalopies
from the 1960s or early 1970s, with holes in the floors and plastic chairs bolted down in
place of the long-worn-out original seats; and the super-deluxe power vehicles of the small
group of unbelievably wealthy “cronies” – Lamborghinis, Ferraris (a girl in my grade got a
cherry red one for her 14th birthday), Bugattis, and Rolls Royces. (Myanmar is the world’s
the main source of rubies and there is a Rolls Royce in town finished with a paint made of
crushed rubies). These cars mostly sat in their owners’ multi-car garages, as the roads were
so bad they would trash the undercarriage in a few short miles of driving.
But in 2012, the government began a process to transition from a half century of isolation
to connect to the world economy; one key move was to make it much easier to import and
own private vehicles. Since 2012, the number of vehicles on the roads of the commercial
capital, Yangon, has exploded, and the car-crazed habits of the elite have spread to anyone
who can afford to import a used vehicle. Used car lots pop up all over town seemingly
overnight. Just down the road in my leafy residential neighborhood, a mechanic shop
specializing in high-end vehicles recently opened, and deluxe and ordinary cars constantly
fill the bays and parking area. Half a mile in the other direction you can sit in a tiny pink
plastic chair at an open-air dealership while you contemplate if you’d like to purchase a
humble Toyota Probox, a sporty BMW, or a stately Bentley.
The result of the change in importing regulations has been a tremendous economic
opportunity for vehicle importers, for businesses that rely on mobility, and the many new
taxi drivers (there are reportedly more taxis on the roads of Yangon than in New York City,
but unfortunately many of these new taxi “drivers” barely know how to drive, only having
obtained their automobiles within the past year or so!). But this move to greater access to
cars has also come at a substantial cost: traffic has become a time-draining ordeal
(foreigners who have been here as long or longer than my family speak of having arrived in
country “pre-traffic”) and the once-clean air is now choking with smog. In addition, most
used cars in Myanmar are imported from Japan, as this is the easiest and least expensive
used-car market in the region. Cars in Japan drive on the left side of the road, so steering
wheels on are the right. Myanmar traffic, however, drives on the right side of the road, so
steering wheels of cars here should be on the left. Instead, almost all cars now on the road
in Myanmar are driven by drivers who can get a good look at the shoulder of the road, but
who do not have a clear view of how far away there are from oncoming traffic. Right-hand drive
cars driven on the right side of the road are a clear safety hazard, yet Myanmar is
suddenly flooded with such automobiles, thanks to the importation almost exclusively of
used cars from Japan.
Each of the four developing countries I have grown up in has realized substantial benefits
from used-vehicle imports, but as noted, this progress comes at a substantial cost.
Developing countries in Africa, Asia, and Latin America offer a unique business opportunity
to a company like A-1 Auto Transport: By facilitating mobility and business opportunities
in these countries, A-1’s core service of vehicle shipping could contribute a much-needed
boost to developing economies. In Myanmar particularly, A-1 could contribute significantly
to increased road-traffic safety by offering favorable pricing or other incentives to
individuals or businesses that import vehicles with the steering wheel on the appropriate
side. In addition, if A-1 offered incentives or preferential pricing for importing fuel-efficient,
hybrid, or electric vehicles throughout the developing world, the company could make a
significant contribution to the health and environment of developing countries, as well as
expanding the impact of the A-1’s Green Initiative.

Submitted by Arden Reynolds
on 03/05/18

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