“More companies have been registered in Myanmar in the past six months than the previous decade combined,” revealed, on separate occasions, directors of two market research firms in Rangoon. Since 2010, Burma recorded big jumps in its foreign investment stock, bringing in nearly US$25 billion, which account for more than all investment in the previous two decades. While the number of enterprises permitted to invest still remains low, a mere fifteen in 2011, the trend indicates both growth in volume and number. In addition FDI source countries are diversifying, with non-Asian countries taking greater interest in Burma.[1][2]
On a fact finding mission for several potential foreign investors eager to invest in Burma – the fourth one he’s done in the span of three months – Michael retells an account of a country he thought he knew.[3] “Foreign companies are preparing to enter the Burmese markets. They felt the economy is truly opening up and there are so many investment opportunities.” Thinn Htut Thidar, CEO of Universal Link Services Co., Ltd. – a Rangoon-based investment consultancy, echoes such optimism: “Myanmar is the last resourceful investment destination in the South East Asian Region and the country’s political and economic reforms have been attractive to investors.”[4]
Figure 1: Foreign Investment in Burma, 2007-2011
| Year |
2007 |
2008 |
2009 |
2010 |
2011 |
| FDI (US$ Million) |
205.7 |
984.8 |
329.6 |
15903.3 |
8464.8 |
| No. of Enterprises |
7 |
5 |
7 |
12 |
15 |
| FDI Sectors | Mining, Oil & Gas, Power | ||||
| Major Investing Countries | China, Hong Kong, Korea, Thailand, Singapore | ||||
Source: Central Statistical Organization, Ministry of National Planning and Economic Development (Burma)
Burma is attractive to foreign investors for its rich natural resources and cheap labor. William Tan, Singapore-based Pte Ltd. Managing Director, who has advised many foreign companies on investing in Myanmar for 17 years, says companies are searching for a less expensive location to expand or relocate their production base. “Myanmar is one of the options manufacturers are considering,” argues Tan.[5] Philex Mining Corp., Philippines’ largest gold mining company, is excited by the new opportunities: “Myanmar is opening up and a lot of businesses are really looking at that country. We do not want to be left behind,” says the CEO. The US has also released a website “Doing Business in Burma: 2012 Country Commercial Guide for US Companies” that provides an analysis of market opportunities and challenges for interested investors.[6]
Figure 2: Key Foreign Investment-Related Proposed Reforms[7]
| Proposed Reforms | Descriptions |
| Currency (kyat) | Managed float to improve efficiency and reduce corruption; harmonize currency value with black market |
| Enterprise ownership | Up to 100% foreignJoint-Ventures, at least 35% foreign |
| Land Leasing | Up to 30 years for foreigners with possible extensions |
| Employment of locals | 25% of skilled local workers employed after five years then increased to 75% after fifteen years; all unskilled workers employed must be citizens of Burma |
| Manufactured goods | No longer for exports only |
| Labor unions | Will be allowed |
| Labor strikes | Will be allowed |
| Taxation | Tax holiday for first 5 years; additional tax relief available |
Source: Myanmar Times, Reuters
The IMF, which has been aiding Burma in its exchange rate harmonization, was upbeat about the country’s progressive direction. “Myanmar’s real GDP growth is expected to increase to 5.5% in 2012 and 6% in 2013, driven by commodity exports and higher investment supported by robust credit growth and improved business confidence.”[8] Likewise, Maplecroft, a UK-based risk analysis firm, determines that 2012 is the year most Western nations will start untangling their overlapping layers of sanctions.
Political reforms, not economic, make the government’s commitment towards greater liberalization more credible. While several of the 1988 foreign investment laws have long been pro-business, at least on paper,[9] foreigners just couldn’t take the junta’s word for it. The tipping point came earlier this year after a series of high-profile visits by world leaders, and Daw Aung San Suu Kyi’s landslide victory in a by-election. The response from the West was positive and immediate. The US, the European Union and Australia, for example, began to ease some of the sanctions and establish greater diplomatic ties with Rangoon. The Japanese have also given Thein Sein a promise of new loans for development assistance.[10]
Locals are buying up properties, particularly condominiums, in the capital in anticipation for greater influx of foreign investors. U Than Oo, managing director of Mundine real estate agency in Kyauktada township, told Myanmar Times: “We are seeing strong sales interest in most high-end areas in Yangon…It seems evident that many of the deals are for properties to be used as company offices or businesses…[these] buyers are expecting foreign investment to arrive in the near future and are betting that more foreigners will want to stay in condominiums.”[11]
Potential pitfalls await foreign investors in Myanmar, however. Poor infrastructure, inadequate institutional capacity, low human capital and a lack of rule of law are causes for caution.[12] International Financial Law Review (IFLR) also warns that the country’s banking sector is not ready for an influx of foreign investment.[13]
But given the types of industry that will attract FDI, these shortcomings are unlikely to be insurmountable. As long as the government maintains its pro-investment environment and continues with the reforms, many interested investors will be undeterred.
[1] The author chooses to use the country name Burma to maintain consistency, except for direct quotations.
[2] Interview with Thinn Htut Tidar, CEO of Universal Links Services Myanmar, foreign investment consultancy (April 4, 2012).
[3] Michael is a fictional name of a foreign consultant in Burma. Due to confidentiality agreement, his actual identity cannot be revealed.
[4] Interview with Thinn Htut Tidar, April 4, 2012
[5] http://my.news.yahoo.com/businesses-invited-seek-investment-opportunities-myanmar-business-conference-100608580.html
[6] This website is somewhat hidden within the export website for Thailand http://export.gov/thailand/build/groups/public/@eg_th/documents/webcontent/eg_th_046039.pdf
[7] The new legislature has passed through parliament and is awaiting president’s approval.
[8] IMF press release. http://www.imf.org/external/np/sec/pr/2012/pr1225.htm
[9] The 1988 foreign investment law contains clauses such as no nationalization of foreign companies.
[11] Myanmar Times. http://www.mmtimes.com/2012/business/619/biz61912.html
[12] See detailed reports on this issue in the International Crisis Group, Reform in Myanmar: One Year On. http://www.crisisgroup.org/~/media/Files/asia/south-east-asia/burma-myanmar/b136-reform-in-myanmar-one-year-on.pdf?utm_source=myanmaremail&utm_medium=pdf&utm_campaign=mremail
and IMF
[13] http://www.iflr.com/Article/3009520/Myanmar-banking-sector-urges-foreign-investors-to-wait.html?LS=EMS63727
Speechless.
Quality comment or not?
0 
0
Surprise, surprise. The vultures have landed to join the hyenas in the feeding frenzy.
Burma might even be seen as part of the answer in solving their own recessionary crises. And we’ll have our own crises up a much higher and more modern level when the dust has settled. The Burmese Way to the New World Order. Up the smart generals! They are on to a win win scenario, stronger and more prosperous with assured membership to the billionaires’ club.
Quality comment or not?
0 
0
U Moe Aung,
Both yourself and Plan B might find this article interesting. Out today.
http://www.dictatorwatch.org/articles/monkeypaw.pdf
Quality comment or not?
0 
0
In that case Ohn here are my own tangentially related thoughts.
Quality comment or not?
0 
0
Thanks Stephen.
I find that roughly translated ” the best (workers ) democratic union is the lu-gyi-less ( no one to give about orders) one” to be so true.
Sadly the most celebrated “democratic one” in Burma (NLD) seems total opposite.
It bis true that people in unison can do horribly wrong things. Like the newspaper heading of second election of George W Bush “How can 31 million people get wrong?”
But the treatment for it in a democratic sense or the cause of it is simply manipulation of information, that’s where the election war chest comes in It was not because people feel the same with GW Bush as seen only a short 3 years later.
In Burma today at the time of intense necessity, true information, unbiased analysis and most of all inclusive discussion, debate and canvassing of people’s opinion are TOTALLY NON-EXISTENT.
And for the rest of world to applaud it as “democracy” is patronising at best (these Burmese should be grateful to get this much opening) or evil at worst (when they open up, before they realise it, lets go in and plunder).
Quality comment or not?
0 
0
Thanks Ohn and Stephen, spot on.
Double dip recession is now a reality in the UK under the wonderful leadership of the coalition govt some have dubbed the ConDem govt with their relentless deflationary measures in the public sector across the board on top of some chronic ‘salami slicing’ , and then banking on the private sector to step into the breach and pick up the pieces which will never happen so long as the orders and contracts from the state, a major purchaser, continue to decline.
I’m not sure you can call QE Keynesian. The man can’t defend himself and he’s had enough bad press over such a long time it’s beginning to look like Adam Smith being misinterpreted by posterity to suit their own agenda. Isn’t it more monetarist à la Thatcher albeit in the inflationary direction ‘printing’ so much money so often?
Burma could be the next Asian Tiger says the UN special adviser ‘U Nanbya’. Perhaps more in danger of becoming the next Asian Whore, no doubt with the bling and cheap makeup (like the ‘disco gold’ on our pagodas), under the current political management. More likely the rape of Burma will intensify exponentially in a free for all, everyone of course talking the visionary and green PC language while masking their greed. And China is certainly not out of the picture, far from it.
Whether the trickle-down will be substantial is quite another matter. What is certain is that the ruling elite (‘power sharers’ included, ethnic and Bamar) will be laughing all the way to the bank while we the peoples of Burma will be in deep hock to the IMF and all the world class Chettiars for generations to come.
As to democracy, direct democracy these days means e-petitions and referendums as well as ballots, and nowhere near workers’ self management. And of course conventional wisdom maintains that left wing ideology and democracy are antithetical. As are a ruling elite and mob rule.
Quality comment or not?
0 
0
Asian Whore, rape, disco gold, Chettiars, such bitter depiction of a country that gave you the name:
Ko Moe Aung
Still sentiments all maily base on misguided hatred for this preset government, now against Uncle Crusoe.
Choke on this one:
http://www.time.com/time/specials/packages/article/0,28804,2111975_2111976_2112089,00.html
The West finally realize without admission of guilt the useless careless policy’s effect on Myanmar Citizenry, thus reversing without approval from past fan like Zoe Phan and such.
“Whether the trickle-down will be substantial is quite another matter. What is certain is that the ruling elite (‘power sharers’ included, ethnic and Bamar) will be laughing all the way to the bank while we the peoples of Burma will be in deep hock to the IMF and all the world class Chettiars for generations to come.”
Such arrogance and disregard for the common Myanmar citizenry plight permanently make you and your ilks the same elitist(s).
Quality comment or not?
0 
0
Unless the West re engage fully in the next Decades in:
a) Education: The foundation of understanding basic undeniable freedom.
1) Which this government is ‘begging’ to be taken over.
2) Only conies can afford a true ed by sending the next generation cronies to Singapore to real education.
3) Zero exchanges that will strengthen the rule of law, medicine and true status of a Military.
b) Health Care:The desperation of dying from common causes/diseases unfathomable to the West, which promote fatalism must be reversed.
1) Presently Myanmar health care over all is not too far off from the end of the colonial days, overall.
2) Yet up to date brain and brawn exist only to the very few that can afford then.
c) Economics: Infra structure, Laws and Finance (to name a few aspects)
1) The # of public roads that b/t any major cities that are close to any country DOT standard, can be counted on only one hand.
2) All are built by the Chinese or the Korean. Quality to withstand the monsoon is never a factor as in Thailand.
Constant maintenance of every road is relegated to private parties ie Chinese on profitable route or the local villages if not important with tolls that are often used to feed the poor villagers.
3) Any unequivocal commitment to building road as well as improving power supply alone will open up every economic aspect as well as develop permanent ties to the West technologies thus foster reliance less on China and N. Korea.
The danger of this military government proceeding to Nuclear Energy development, for the right reasons or more as a cover for other activities is truly worth considering.
These are but a few rambling suggestions to ensure the “Booming Burma” do not become a “Busted One”
Quality comment or not?
0 
0