Myanmar – The next economic frontier?


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I mentioned in an earlier post that East Timor is looking forward to a brighter future but arguably the sleeping giant of Myanmar has even rosier times on the horizon. Economically and diplomatically isolated from the Western world for decades, the country has started to take small strides towards engagement and integration with the wider world. Sandwiched between the regional powerhouses of China and India, Myanmar has the potential to join the economic boom of Asia and reverse the suffering from years of stagnation.

Downtown Yangon

Downtown Yangon

Since the country held elections in November 2010 the government have tentatively pushed through with pledges working towards making up for the years of lost development and tumult for its people. Perhaps the most salient of these was the release of the pro-democracy opposition leader Aung San Suu Kyi from house arrest later that month. She has helped bring global attention to her home nation with a high profile visit to Europe and has recently attended conferences at the United Nations in New York.

As a result of these forward moves the USA and the European Union have eased decade-long sanctions against the country which will help open up Myanmar to much needed overseas trade and foreign investment. Although still in the early stages, many of the world’s leading companies are keeping an eye on the situation and realise the potential such a new and untapped market could bring. Along with a population of around 60 million new consumers the country also has large underexploited natural resources including gems, oil and gas (Myanmar currently produces almost 90% of the world’s rubies). Its strategic location between India and China is also a positive for potential investors. There are still many hurdles to overcome, however, and Aung San Suu Kyi has cited the issue of transparency being a key one. In Transparency International’s 2011 corruption index, Myanmar was ranked third from bottom out of 182 nations.

Can't beat the real thing!

Can’t beat the real thing!

Perhaps the most famous global brand of them all, Coca Cola, has already entered Myanmar – for the first time in 60 years – which now leaves only Cuba and North Korea as the only two countries on the planet where the soft drink cannot be legally purchased. Here is an interesting BBC article highlighting this – http://www.bbc.co.uk/news/magazine-19550067. PepsiCo will soon be following in their footsteps and other global mainstays such as General Electric and MasterCard Inc are in the process of securing deals. Plans are also afoot for auctions to conduct exploration of oil and gas, which if successful could see huge investment from the world’s leading companies in this sector, as well as their expertise and technology. Maybe even McDonald’s will be on street corners in the coming years!

So with all this in mind I was looking forward to my first visit to Myanmar last week. I arrived at Yangon Airport welcomed by billboards for Coca Cola and Pepsi before heading north for a couple of days break in Mandalay and the ancient city of Bagan, both on the banks of the Irrawaddy River. I hired bicycles to get around; a great way to introduce myself to the country, but there was very little evidence of foreign investment, although this was to be expected. The local people are oh-so-friendly and many that I spoke to were aware of the possible future opportunities if the expected wealth to come filters down through the whole country. Taxi drivers were saying that a tangible positive change is already noticeable on the street.

Ancient Bagan

Ancient Bagan

After exploring the rich and wonderful history of magical Bagan I then flew south to Yangon, the former capital of the country and hub of all things economic. Forget about using a credit card for now though as only a handful of the top hotels accept them and this is very much a cash economy. And by cash I mean pristine US dollars! I arrived with enough US dollars to cover my expenses but had a real headache getting rid of any notes with a slight fold, tear or blotch on them. I would assume that if the government continues to make forward progress towards democracy, and therefore a greater foreign presence, that this is a situation that will change in the future and it will become less and less a cash economy, but for now it is too early to tell.

An outlet of the clothing chain Mango has opened in Yangon, and there are several electronic leaders such as LG and Sony with showrooms but little else at this stage. It would be fascinating to visit the country again in a few years’ time to see how much the anticipated investment changes things. For now though I’m back in the UK researching my next trip which will take in the likes of Togo, Cameroon and the Democratic Republic of Congo.

About wanderingmark

World traveller, researcher, photographer, collector of interesting facts and cost of living data research for ECA International (www.eca-international.com).
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