Myanmar Attracts International Investment

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By Joshua Gill

Jun. 25 – Following U.S. President Barack Obama’s May 17 announcement that the United States would ease its sanctions against Myanmar, some American firms have begun to make efforts to expand into this newly available market. In his speech, President Obama declared that the suspension of the bans on the exportation of financial services and new investment in Myanmar would “facilitate broad-based economic development” and bring Myanmar “out of isolation and into the international community.”

On June 14, Coca-Cola announced that it planned to end its more than 60 year suspension of business with Myanmar and re-enter the market. The resumption of business includes a US$3 million grant to a women’s empowerment group as well as plans to begin importing Coca-Cola products from neighboring countries. Its long-term plans include partnering with local businesses to establish itself as a market leader in Myanmar.

While it is fairly easy for MNCs to quickly maneuver resources to new markets and supply chains, SMEs should not be daunted by such a move. The opening up of Myanmar presents a unique opportunity for growth in the already dynamic and growing Southeast Asian region.

Foreign firms can benefit from Myanmar’s membership in the Association of Southeast Asian Nations (ASEAN). Even under international embargoes, Myanmar found trade partners in its ASEAN co-members. Because these trade links are already in place, foreign firms looking to expand into Myanmar could base themselves in Singapore, Malaysia, or Thailand and benefit from the established infrastructure.

ASEAN members share a common free trade area that includes an agreement in the trade of goods, while frameworks for agreements on services and investment also underway. Additionally, ASEAN has free trade agreements with Australia, New Zealand, Japan, South Korea, China and India.

As a candidate for a base for trade with Myanmar, Singapore’s business climate makes it the most attractive ASEAN location for SMEs. In February of this year, a delegation of more than 100 businessmen from Singapore visited Myanmar to deepen the economic ties between the two countries. One of the sponsoring organizations of the trip, the Singapore Business Federation, signed a memorandum of understanding with the Union of Myanmar Federation of Chambers of Commerce and Industry to promote greater economic cooperation.

Foreign SMEs do not have to enter the Myanmar market with the bang and furor of Coca-Cola. Rather, sound investment and the prudent utilization of existing infrastructure can create a sustainable growth trajectory both in Myanmar, and in the greater ASEAN area. As the financial and business hub of ASEAN, Singapore is an ideal location from which to tap into the Myanmar opportunity.