Photo: Wikimedia Commons
Myanmar has been in the media spotlight recently for the election victory of Aung San Suu Kyi, the country’s opposition leader, which many have hailed as the nation’s first concrete steps towards democracy.It has led the U.S. and numerous European countries to consider lifting the economic sanctions that have been in place since the military junta took over in the 1990s, which has led to a glut of foreign investors flooding Myanmar in search of the next big thing. Could this be it?
Myanmar (or Burma) has a number of things going for it that make it a great target for foreign investment. It is rich in natural resources: coal, natural gas, timber, and precious stones; it occupies a geopolitically strategic position as an alternative shipping route from Asia to the Middle East, India and Europe; and it has the potential to become a great tourism hub, Moneyweek reports.
The civilian government is also introducing a number of political and economic reforms, including floating its national currency, the kyat, at a unified exchange rate to reduce corruption, and loosening regulations for foreign ventures, in a bid to regain the prosperity that was quashed by decades of socialism, draconian laws, and sanctions, according to The Economist.
Some countries are already moving in to not only harness Myanmar’s resources, but also supply the Burmese with everything they’ve been missing out on over the last two decades: only a lucky few own cars, and malls and chain supermarkets are almost unheard of.
British Prime Minister David Cameron is arriving in the country on Friday with a delegation of 10 businessmen. And companies from India, China, Japan, Thailand, and South Korea, who were not hampered by the sanctions, are already tapping into Myanmar’s huge potential, CNN reports. “Myanmar… could become the next economic frontier in Asia,” Meral Karasulu, an official at the IMF, told The New York Times.
But there are still hurdles ahead to gain investor confidence. The banking industry and legal system are seriously flawed, and it still remains to be seen whether the latest foray into democracy lasts, Julian Mayo writes in the Financial Times. Transparency International ranks it the fourth most corrupt of 183 countries. And poor schools mean lack of skilled labour.
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