Myanmar: the new Asian investment frontier

MasterCard and Visa have already entered the country, together with multinationals such as Nestle, CocaCola, Uniliver, Total and Suzuki.

When Nobel prize laureate Aung San Suu Kyi arrived at the Italian ministry of foreign affairs this week after visiting the Pope, she walked into the room with six little roses in her hair and many question marks over the future of her country of 60m inhabitants. She always calls it by the pre-regime name of Burma, crystallising in five letters her role as opposition leader and her 15 years spent under house arrest.

Only a week before, a delegation of the country’s officials that included foreign minister Wunna Maung Lwin were in the same building to illustrate the economic reforms aimed at attracting much-needed foreign investments into the nation they instead called with the official name of Myanmar.

The different choice of name was echoed in the western suits and ties of the government representatives, followed by the traditional Burmese dress worn by Ms Suu Kyi. “It is easier to change dress than mindset,” she said, stressing that “there are no economic reforms without political reforms”.

So, what’s for foreign investors out there? The pile of papers illustrating the economic measures enacted since 2011 contained the CVs of the delegation, with no intention to hide their links to the military.

Nobody seems to be too bothered either by the call by international observers in the room to link reforms with a fully democratic process. According to a representative of the Organisation for Economic Co-operation and Development, a member of the delegation defined The Lady – Ms Su Kyi - “an inspiration”.

The source of the inspiration, however, warned the international community over the danger of overestimating the democratic opening the country is experiencing and urged to call on the  Myanmar government to change the constitution, which prevents her from running for president as a mother of foreign children. Currently, 25 per cent of seats in Parliament are reserved for the military.

For now, the government has set a target of almost 9 per cent growth by next year, saying it will prioritise poverty reduction, industrialisation, the development of the energy sector, telecommunications, education and the health sector.

MasterCard and Visa have already entered the country, together with multinationals such as Nestle, CocaCola, Uniliver, Total and Suzuki.

Italian energy giant ENI was among the winners of several onshore energy blocks and is already considering  Myanmar  its “new Asian frontier”, thanks to its strategic position and richness in raw materials, especially natural gas.  

“There have been only 150 explorations in the country so far, as much as in the  US  every two days,” ENI ‘s chief executive Paolo Scaroni said during the conference.

“Half of the population has no electricity and there is no economic development without it. Now, after decades of isolation,  Myanmar  could become a bridge between Southern Asia, the Asiatic Southern East and  China,” he added.

The main challenges however relate to uncertainty over future political stability and the possibility to proceed with the creation of a safe business environment. Doubts that have only began to ease following the endorsement in 2011 of the United Nations Guiding Principles on Business and Human Rights.

Myanmar delegation presented its packet of certainties offering a five-year tax holiday, the same rate of income tax between foreigners and  Myanmar  citizens, no taxes on imported machinery or raw material. The government also ticked the box of no nationalisations or expropriations, together with the right to repatriation.

Enough for the multinationals that have already expanded into Myanmar, while the challenges are still significant for smaller enterprises and range from an undeveloped banking system and a lack of capital market, to poor infrastructures and an inadequate insurance system.

In the words of the Myanmar delegation, this is not a nation ready-made for investors, but a bet on the future. A bet that UK investors are already supporting: if China tops the ranking, Britain is the fifth foreign investor and the first Western country, with twenty times the enterprises of the second foreign investor France and some 7 per cent slice of the total cake. 

As more stakeholders take the first steps into post-sanctions Myanmar, the focus ahead of the 2015 elections is not so much if the name, but if the mindset will change and who will benefit most from the forecast economic growth. 

 

Aung San Suu Kyi during a press conference in Italy. Photo: Getty

Sara Perria is the Assistant Editor for Banking and Payments, VRL Financial News

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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