False Starts for Investing in Myanmar
Since Aung San Suu Kyi and the National League for Democracy (NLD) came to power last year there was widespread hope that the economy would regain some its lost luster. Unfortunately, Ms. Suu Kyi has faced a variety of criticisms related to her handling of minority group rights, ongoing insurgencies, and Myanmar’s economy. Crucially, the country has yet to receive an expected boost of foreign direct investment since the US lifted economic sanctions in 2016, which prevented companies from doing business in the country.
Lack of Leadership
Domestic businesses complain that the lack of political stability combined with the ongoing ethnic fighting has created a climate where investors fear to tread. The political question has largely been answered, but the country’s 2016 investment law has not been fully embraced by the ruling NLD. Myanmar Rice Federation chairman Dr. Soe Tun, summed up the business attitude saying, “foreign investment could not significantly grow in Burma unless the National League for Democracy (NLD) government clarifies their 12-part economic policy.”
Ongoing Fighting Creates Uncertainty
The lack of clear policy preference at the top of the government combined with the ongoing sporadic fighting between the government and ethnic militias creates a climate of uncertainty where most western investors do not appear to tread. Indeed the last large scale investment project by a western firm was the development of the Yadana offshore gas field by the French conglomerate Total in 1992. While peace talks have continued in tandem with fighting since the conflict began over 50 years ago, the government needs to make progress to help the wider economy.
Myanmar was one of the most dynamic economies in the world following the Second World War, but years of isolation and mismanagement have left the country as a cautionary tale for others in the region. With a little bit of luck, and a strong dose of leadership, hopefully the country can resume its dynamism in 2017.
Tulane MBA Candidate 2017