Hillary Clinton is treading new ground this week in Myanmar, also known as Burma. Her three-day visit that starts Wednesday signals a thaw with Myanmar’s semi-civilian government, which is playing host to a U.S. secretary of state for the first time in decades. A military coup in 1962 pulled down the curtains on Myanmar, a once-prosperous British colony that slid into penury while the rest of Asia joined capitalist hands with the West. Now the smart money reckons that Myanmar has turned a corner and is opening up at last. As a result, it could be the last frontier in Southeast Asia for foreign investors, though this is far from a done deal. Western sanctions still stand in the way of increased trade and investment, as do the threat of consumer boycotts on multinationals. Clinton isn’t in a position to immediately lift U.S. sanctions, while Congress may not be minded to break bread in an election year, so the administration’s diplomacy can only go so far. Myanmar’s reforms are still half-baked. Ongoing fighting between government troops and ethnic minorities cloud the outlook for a lasting peace. Hundreds of political prisoners are still in jail, though Clinton is due to meet the most famous ex-prisoner, Aung San Suu Kyi.
Just over a year ago, Ms. Suu Kyi was under house arrest. Now she’s preparing a run for parliament. Advocates of greater engagement with Myanmar point to this breakthrough as a sign of political change. For the U.S., there’s also a whiff of realpolitik. Myanmar is a?strategic country that has been pushed into China’s arms by Western isolation. Its military chiefs forged ties with North Korea that set off alarms in Washington. But to call it a rogue state is probably a stretch. Clinton will definitely raise these security issues and press Myanmar’s rulers on their human rights record. U.S. and European companies are hoping that the detente continues and paves the way for economic liberalisation, even if s! anctions linger. Myanmar’s government can help itself by fixing its wonky currency regime and amending its investment laws.
How about getting a jump start on Myanmar’s investment opportunities? The Wall Street Journal has a crack at what’s on offer for the small investor who wants to bet on a Burmese renaissance. Slim pickings, it seems, but keep an eye on what comes next.
For Westerners, investment choices remain limited. Individual investors can, however, get some exposure to the country through publicly traded stocks outside of Myanmar.
One choice is Singapore-listed Yoma Strategic Holdings, which has property development and biofuel plantations in Myanmar. Though its market capitalization is just around $50 million, it is thinly traded and also has exposure to China��s property market. Italian-Thai Development PLC, listed in Bangkok, is the lead contractor on a multi-billion-dollar ports and infrastructure project that would make Myanmar an entry point for goods to the region, though progress on the project remains uncertain.
Large multinationals have Myanmar angles but their investments tend to be only a small part of their global operations. These include France��s Total, China oil giant CNOOC, listed in Hong Kong, and South Korea��s Posco, whose Daewoo International unit has operated garment factories there for nearly two decades and has gas exploration interests. Thailand��s oil giant PTT is another name.
There are other caveats. Many inside the country fear a backlash from military hardliners that could snuff out the latest reforms. And some exile groups say the latest changes are a ruse to get sanctions lifted to further enrich the country��s military. Activists say the government continues to keep hundreds or more dissidents behind bars, while many fear cronyism will keep reserving the best bits of the economy for selected businessmen.
And investors from countries that have sanctions should consult a lawyer before investing. The rules a! re trick y. For instance, the U.S. forbids investments in companies outside Myanmar whose profits are ��predominantly derived�� from Myanmar business.
via Investing in Myanmar as Reforms Spread – Southeast Asia Real Time – WSJ.
No comments:
Post a Comment