Burma – Back in Play
Burma, or Myanmar, depending where one stands politically, is re-emerging. On the cusp of becoming a hot market in the 1990s, a military coup d’état deposed the freely elected president, Aung San Suu Kyi. That insurrection and subsequent concerns about human-rights abuses and state-sanctioned business practices involving the trafficking of narcotics, people and guns led to the country’s ostracism. Trade sanctions hit the country hard for nearly two decades. Most countries chose not to engage what officially became the Union of Myanmar.
Change however is wafting across the country, thanks largely to reforms initiated by president Thein Sein, who came to power as many of the junta’s generals retired. Ms. Suu Kyi, a Nobel Laureate, remains key to this positive trend. A long-standing critic of the junta, she was released from house arrest and embarked upon a goodwill tour across the US. The erstwhile president cum dissident now cooperates with her former adversaries. Burma accordingly seems to be opening for business. Countries and companies are taking notice.
Why the change and what are the implications for FDI and marketing dynamics?
The simple answer is the old saw that autocratic state-planned economies tend to be inefficient, corrupt and do not meet the needs of the people. This was and in many respects still is the case in Burma. In the absence of capital, technology and ideas from Europe, the US, Australia and developed Asia, China quickly filled the vacuum by helping to build infrastructure and tapping Burma’s natural resources. The junta meanwhile sputtered along and lined the generals’ pockets, while doing little to enhance the well-being of many Burmese. Burma’s internal policies were of little interest to China, so long as the generals permitted China to achieve its objectives. Cracks in the relationship eventually emerged, as the Chinese were focused on extractive industries and could not or would not share ideas and technologies to develop an array of Burmese sectors. This became increasingly apparent during a multibillion dollar project to dam the Mekong River. The Myanmar government therefore is switching course and reaching out to the rest of the world.
Burma is endowed with natural, cultural and human resources. It has a largely undeveloped, albeit quite poor, consumer market of about 50 million people. Whether Burma can claw its way to becoming a “Tiger” – a term frequently used to describe rapidly emerging economies in Southeast Asia – is not yet certain. Sweeping reforms are required to develop human resources and a more civil society — and to ensure that development is sustainable and just rather than rapacious — but the signs from Yangon and the buzz among diplomats and investors indicate that Burma is now back in play as an emerging market with considerable investment potential.