There has been renewed interest among investors in Myanmar following the National League for Democracy’s landslide election victory last November. While many risks remain, the success of some companies that had already invested in Myanmar in recent years underlines the country’s potential.
Back in 2011, many western investors closely watched economic and administrative reforms introduced after a quasi-civilian government came to power. The Central Bank of Myanmar initiated regulatory reforms which saw nine foreign banks awarded local branch licences, while legislative reforms came in the form of a foreign investment law to administer the liberalisation of the economy. Some large multi-national companies took the plunge but most decided to err on the side of caution. Read more
By Stuart Larkin of the Institute of Southeast Asian Studies
President Barack Obama’s visit to Myanmar this week once again puts a spotlight on the progress of the country’s opening up and political transition. But in a familiar refrain: it’s the economy, stupid.
The Thein Sein government’s lovefest with western donors over ‘Washington consensus’ policies risks intensifying resource-curse dynamics without delivering the infrastructure upgrade that Myanmar needs for labour-intensive manufacturing export competitiveness. Meanwhile, foreign investors struggle with local conditions and the very people who may be able to get big projects off the ground, Myanmar’s own tycoons, are often shunned by their president and precluded from western financing by US blacklisting. Read more
By Dan Gallucci
The economic modernisation of Myanmar continues at a rapid clip. In the critical sectors of telecommunications and banking, a combination of government and private sector efforts have set the foundation for the country’s next stage of growth. Nevertheless, significant challenges lie ahead.
Earlier this month Qatari telecom Ooredoo (ORDS:DSM), launched mobile phone and 3G internet services in greater Yangon, Mandalay and Naypyidaw. According to the company, the initial networks reach 7.8m people, about 15 per cent of the population. Norway’s Telenor (TEL:OSL) will open similar coverage in September. Read more
By Stuart Larkin of the Institute of Southeast Asian Studies
Following his “flipping the switch” on political reform, Thein Sein, Myanmar’s president, has embraced the international donor community – of bilateral and multilateral agencies led by the Asian Development Bank, the World Bank and the IMF – in an agenda of good governance and economic liberalisation. Early reforms have spurred economic growth to around 8 per cent and both government and donors have extrapolated this trend out to 2030 and the attainment of middle income status almost as if it is already in the bag. Not wanting to be seen as a spoiler, neither side has an interest in deviating from this new economic narrative. Read more
Last week Italy’s government hosted a high-level delegation from Myanmar promoting foreign investment in their rapidly changing “new Asian frontier” of some 60m people where, for example, only about five per cent own mobile phones.
All were wearing civilian clothes but their listed CVs revealed that the entire delegation, all men and including foreign minister Wunna Maung Lwin, were former members of the military that ruled the country for nearly 50 years until quasi-civilian rule was introduced in 2011.
“It is much easier to change clothes than the mindset,” commented Aung San Suu Kyi, Myanmar’s opposition leader and Nobel peace prize winner who arrived in Rome several days later and gave a news conference on Monday. Read more
By Richard Dobbs and Michael Spence
President Thein Sein of Myanmar (pictured) is making his first visit to Britain this week. He will be holding talks in London at a critical moment in Myanmar’s emergence from isolation.
Politics and ethnic tensions continue to cast a shadow over the broad sense of optimism about the business opportunity. But developing its economy is probably the major challenge facing Myanmar. Read more
By Christopher Wall and Aaron Hutman of Pillsbury Winthrop Shaw Pittman
A bold experiment has been launched in the realm of sanctions policy among developed countries. Since July 1, US companies and investors have been required to submit reports on their activities in Myanmar as a condition of making new investments there. Read more
One of the most visible symbols so far of Myanmar’s opening to the west was the recent launch of Coca-Cola’s new bottling operations at its joint-venture plant on the outskirts of Yangon. Less visible was the changing dynamic around the seemingly unstoppable surge of foreign investment interest in the previously secretive country. Read more
While some of the world’s biggest professional services firms have rushed into Myanmar to set up shop, the big management consultants have been conspicuously absent from the rush – at least, so it has seemed.
But, what do you know? McKinsey & Co, in typically discreet style, has trumped them all with a comprehensive report on the country’s prospects and policy suggestions, to be formally presented – gratis – to the government of President Thein Sein. Read more
Myanmar’s government on Tuesday took its first big step towards promised liberalisation of the country’s long closed telecommunications market, with a surprise announcement inviting foreign tenders for two national telecoms service licenses. Read more
A year ago, who would have thought Myanmar would be in the spotlight on the private equity stage? It turns out that those PE funds with an eye on geopolitics, are also seeing potential in the Middle East and north Africa in the wake of the Arab Spring . Read more
Myanmar used to be a major exporter of many products – from rice to clothing to its world-famous red rubies. But crippling sanctions left the country with few willing buyers aside from China and India who just wanted fuel or food.
That looks set to change with the US about to lift restrictions on exports from the country. But what might US consumers actually buy from Myanmar? Read more
By Udayan Chattopadhyay of Ergo
The US’s decision to suspend some key sanctions against Myanmar is the latest and perhaps most prominent endorsement received by that country’s new quasi-civilian regime.
Global interest has surged, due to Myanmar’s vast untapped natural resources, underexploited agricultural sector and huge underemployed labor force. While there is justifiable excitement – the IMF expects 6 per cent economic growth this year – those new to Myanmar will find that it is hardly virgin territory. Read more
After the debt, the deluge? Three months after Japan agreed to waive much of the money owed to it by Myanmar, clearing the way for normalised economic relations after a 25-year lending freeze, Japanese companies are beginning to make up for lost time.
On Tuesday Marubeni, Japan’s fifth largest trading house, said it had been awarded a contract to overhaul a gas-fired power plant it built seven years ago, before tighter Western sanctions took hold. Read more
After years of taking the hardest line against Myanmar of all European Union member states, the UK is clearly trying to make up for lost time.
Spurred, perhaps, by a growing sense of competition as business missions flood into Myanmar from various parts of the world, the British embassy in Yangon has taken the unusual step of putting out a “Burma business guide” – a thoughtful, 22-page run-down on dos and don’ts for aspiring investors and traders. Read more
Now that even opposition leader Aung San Suu Kyi is calling for sanctions to be suspended, the prospect of Myanmar opening up for western foreign investment seems tantalisingly close, as a report in Monday’s FTfm reveals. Read more
By Julian Mayo of Charlemagne Capital
I spent a few days in Yangon, Myanmar’s biggest city, just before this month’s elections. It was my first visit since 1985. Back then, there were one or two flights in a day from Bangkok on small planes. One could only stay a week and there were no more than 4,000 foreigners in the country at any time. There are still only 300,000 visitors a year, compared with 19m in Thailand.
This time I arrived on an Airbus 300, packed with western tourists and some Thai, Burmese and Chinese businessmen (all with local SIM cards) – and six saffron-robed monks. Read more
Myanmar’s “coming in from the cold” took another baby step forward this week – though you may not have spotted it.
Tucked in the beyondbrics inbox on Thursday morning was the most rare type of email: a Myanmar research note. In fact, it was Nomura’s debut note on the southeast Asian country. Read more