Burma: the next big investment story

Jan 13, 2012

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Burma is one of Asia’s poorest countries due to decades of Western sanctions and isolation. But now change is in the air, says Ben Bland in the FT. The ruling military junta handed power to a “nominally civilian” government last March, since then the new president Thein Sein “has unveiled a series of tentative reforms”.

Foreign businesses have noticed and are hoping the trend towards liberalisation is irreversible. “If the government goes back on the recent changes, it will lose the trust of the world for good,” reckons a Burma-based Lebanese steelmaker. Most US firms are “working on” establishing a presence in Burma, says the US Center for Strategic Studies.

Burma’s assets include a young population, relatively high literacy rates, and natural resources including oil, gas and minerals. It’s located on global trade routes between China, India and the rest of southeast Asia that would help a nascent export sector thrive.

But there’s a long way to go, with poor infrastructure and cronyism among the key obstacles. If reform continues, it could present “the same kind of investment story that we have seen in many other Asian economies over the past few decades”, says Cris Sholto Heaton in our free MoneyWeek Asia email.

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  • 1. Boris MacDonut

    (16 January 2012, 01:58PM)  Complain about this comment

    Average income per head in Burma is around $850 so it is better off than say Bangladesh,Cambodia or even much of Pakistan. It has some oil ,but is most known for precious rubies and sapphires. The most likely outcome of ending the boycott is to flood the western jewellry industry with inevitably cheaper gems. Cartier and Bulgari look out! It also grows half the teak in the world so we'll get cheaper good quality furniture too. Its main advantage is as a crossroads culturally and geographically between India and China, but it could equally become a bone of contention between these two bigger powers.

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