As Myanmar Opens Its Doors to Foreign Investors, Reform Could Face Obstacles
Since 2011 the Southeast Asian nation of Myanmar has pursued political and economic reforms that include a new law allowing foreign ownership of businesses. Although the country offers big opportunities, political stalling and weak public institutions could impede its development.
Matt Davies knows firsthand how much appeal Myanmar holds for global investors. “People are very interested in their chance to get involved in the new frontier of Asia, as demonstrated by how hard it is to get a hotel room in Yangon these days,” says Davies, the International Monetary Fund’s mission chief for the Southeast Asian nation, after a recent visit to its financial capital.
Ruled by a military dictatorship for almost 50 years, Myanmar is better known for its breathtaking Buddhist pagodas than for its warm investment climate. But since taking power in 2011, President Thein Sein has launched a series of political and economic reforms in his long isolated and impoverished but resource-rich country of 60 million. The quasicivilian government recently passed a law allowing foreign ownership of businesses. “It seems to set a good environment for investors to have some security for what they bring into Myanmar,” says Washington-based Davies, who notes that mining, telecommunications and agriculture offer big opportunities.
When it comes to keeping the momentum for reform, he thinks the big risks for Myanmar are political or bureaucratic stalling and obstacles created by its public institutions’ current weak capacity. “As long as the commitment remains, those are surmountable,” Davies says. “There’s every reason to believe the future’s quite bright.”