There was just one international cashpoint in Myanmar this
summer and it was broken.
The stock exchange was stillborn on its launch 15 years ago,
and just 1% of all Burmese have a bank account. Fewer than 0.1%
of people own a mobile phone and for good reason: the
feeble network often fails completely, and until recently, a
SIM card cost over $5,000.
And yet its hard to move in Yangon these days without
tripping over business delegations. Every week seems to bring a
new troupe of global corporates to Myanmars largest city,
each keen to tap into the potential riches of this rejuvenated
south-east Asian country.
In early July, the cream of the UKs business community
rode into town, led by Standard Chartered, Shell and BP. The US
delegation came next, spearheaded by secretary of state Hillary
Clinton and backed by 70 of Americas largest
corporations, including Coca-Cola, Google and Ford.
France followed, then Germany, Italy and Australia. Each
delegation appeared to meld into the last, with only the dates,
accents, tongues and corporate names changing. There were
and are good reasons for these corporate
Myanmar, formerly known as Burma, is opening up after 60
years of mostly self-imposed isolation, and international
corporates are desperate to be the first to fill this breach
and offer the countrys 60 million people shampoo, blue
jeans, mobile phones and air conditioners.
As an official from the US state department told
Emerging Markets over a coffee: Get a global
copy of the Fortune 500 list and go down it, ticking the names
off. Each was here, is here, or will be here. Theyd be
stupid not to be.
But four facts, in reverse order of gloominess, should be
well remembered by corporate and capital investors as Myanmar
opens up to the outside world.
First, this remains a desperately backward place, despite
the investment that has continued to flow in western
sanctions notwithstanding from China, Singapore and
According to the IMF, the average Burmese earned $832 last
year, placing the country alongside Tajikistan and Zimbabwe on
the lower rungs of global wealth.
LACK OF CLARITY
That makes Myanmar less an emerging market than a frontier
nation and a basic one at that. Last year, Singapore
consultancy Vriens & Partners ranked Myanmar 19th and last
among all south-east Asian nations in terms of corruption,
political stability and the rule of law. The World Bank
couldnt rank Myanmar in its global 2012 Doing Business
report: there simply wasnt enough reliable data
Second, economic, social and political progress, though
rapid and even astonishing in its speed and scale since the
accession of the reformist Thein Sein to the presidency in
March 2011, can easily be reversed.
The US eased sanctions against American firms investing in
the country this July.
Europe, Australia and Canada followed suit. US president
Barack Obama praised
Myanmars significant progress along the path to
democracy, following the release of Aung San Suu Kyi and
the approval of independent trade unions.
New laws loosening the states grip over the media and
boosting foreign direct investment are expected by the end of
But sanctions and reforms, at this stage in a countrys
development, are fragile concepts, dependent on a host of
national events, not least elections.
For this reason, says Thura Soe-Paing, managing director of
All Myanmar Investment Partners, a $50 million private equity
firm jointly owned by Singaporean and Vietnamese investors,
everyones eyes are on the general elections in 2015.
If as expected voters turn against the Union Solidarity and
Development Party (the militarys political wing) and
elect a fully democratic government, the military has two
choices. It can either accept defeat and become part of the new
economic firmament but with a diminished role, or cast aside
the reform process and revert to full military control.
Only then, believes Soe-Paing, will we know
if these reforms are for real.
This creates a conundrum for foreign investors: to jump into
the frontier state feet first, as General Electric and
Coca-Cola are, picking up the rules as they go along, or to
wait until 2015, when the countrys future for
better or for worse is clearer.
Most here believe that current reforms are for the best
even many USDP advisers who, interviewed for this story,
insisted the army has given up the fight and
just wants to become a normal part of a normal
country. Others arent so sure. All these
reforms are reversible very easily, says Gareth Price, a
senior research fellow and Myanmar expert at Chatham House in
But Myanmar has vast potential. Virtually no one here owns a
branded product or has a bank account, but that is precisely
what makes the country so exciting to global corporates,
particularly those searching for the next emerging-markets
Plus, it is rich in other ways. Energy minister Than Htay in
August estimated the countrys recoverable oil reserves at
more than 200 million barrels, and its natural gas reserves at
22.5 trillion cubic feet, a figure that would catapult Myanmar
into the energy-producing big leagues.
Other treasures lie in and under the countrys rich
soil, from copper and iron ore to timber, agricultural products
and precious metals.
If Myanmar does all the right things setting out laws
to attract FDI and then working alongside foreign firms
economic growth could purr along at over 8% annually for the
next decade, reckons the Asian Development Bank.
The final point is more nuanced. In his 2011 book Monsoon:
the Indian Ocean and the future of American power, Robert
Kaplan depicts Myanmar as a global hinge vital to
Asias and the worlds prosperity, acting as
Indias buffer against China, and a natural barrier
between the Gulfs leading energy producer and
Beijings oil-hungry model of state capitalism.
The outside world, it seems, needs Myanmar just as much, if
not more, than this country of 60 million people needs
reciprocation. After six decades of isolation, global
corporations are inundating Myanmar, one of the worlds
last great untapped frontier nations.
Time will be the only arbiter of their investment decisions.
But for now at least, Myanmar is the hottest ticket in town.
I wouldnt be anywhere else, says Soe-Paing,
born in Yangon, educated in America and Britain and back home
via a corporate job in Beijing.
Myanmar is the only place to be, he says.
We have waited 60 years for this opportunity. We
arent going to let it slip through our fingers.