Economic Interests

If you owe the bank £100, that's your problem. If you owe the bank £100 million, that's the banks problem.

The new world of Myanmar

Myanmar (or Burma as some people might know it) is a country located in Asia between China and India. Since the 1960’s Myanmar has been under military dictatorship, had the worst health care system in the world, had frequent human right violations reported against them and faced heavy sanctions from the USA and Europe. In short they are one the least developed countries in the world and have the record for the longest running civil war from 1962 -2011 (with a ceasefire only being signed this January). But things could be changing for the resource rich country as elections were held in 2010 and a civilian government was placed in power.

One of the least developed countries in the world.

The government has since taken a path of new reforms for the country including; the establishment of the National Human Rights Commission, new labour laws that allow unions and strikes, the loosening of press censorship and more regulation of current practices. These changes have lead to foreign investment in the country rising from $300 million in 2009/10 to $20 billion in 2010/11, an astonishing rise of 667%. GDP Growth was thought to around 5.8% in 2011 and unemployment is reported at a similar 5% rate, an impressive figure that beats countries like the UK for example. A new deep seaport costing around $58 billion is also expected to see Myanmar become a trade hub; connecting the Middle East, Africa and Europe to the rest of Asia. Myanmar also has one of the largest natural gas reserves in the world, giving it a big potential source of income that could fund domestic investment into the countries infrastructure.

The new planned seaport in Myanmar, showing how it could become a new trade hub.

Progress can be seen, with Hilary Clinton visiting the country recently, the first time a secretary of state’s has done so in the last 50 years. Economic sanctions also seem to be easing, with the EU agreeing in January to suspend Visa bans on leading politicians in Myanmar and have suggested further reforms could lead to less economic sanctions. The US added to this by stating it will begin the process of exchanging ambassadors and are allowing the IMF and World Bank into the country to help modernise their financial system.

Hilary Clinton meeting the president of Myanmar. 

One of the biggest reforms to go through without getting much attention however, has been the authorisation of the Internet at the start of 2011. Myanmar has lowered its firewalls and allowed access to social media sites like Facebook and Twitter, common tools to the rest of the world but completely new to the tech starved public of Myanmar. Their people can now learn about the world which they have been cut off from, connect with other countries and their people and more importantly for the government open up new channels for businesses. The internet has long been a key tool for advertising and now that the people of Myanmar are online, multinationals are going out of their way to gain new customers from a population of 58.8 million. Online transactions are expected to begin this year and we could see the internet liberalise a country that has been left out in the cold for far too long.

There is still a long way to go however. Looking at the authorisation of the internet, the main problem is that most of the public do not own a computer and internet connections are currently too highly priced for the common man, costing $850 just to set up a connection. The country still faces allegations of corruption and the elections of 2010 were accused of being rigged, with the elections this year set to see the true winner (with the main political opposition now allowed back into the race). The country has also yet to release all of their political prisoners and there are still questions over whether the army generals will ever face their crimes. Furthermore, the economy has a long journey ahead of it, where most of the public do not even own cars and the malls and supermarkets that are widespread in Asia are lacking in Myanmar.  The country still remains a hard place to do business as well; the exchange rate is split between a hopeful official statistic and a more realistic black market rate, a proper banking system is still absent in the market and a poor legal system means corruption is rife with Transparency international rating Myanmar 180th out of 183 countries.

Shows the table ranking countries on corruption 

So yes Myanmar is not quite there yet, in fact they seem a long way off catching their neighbours, but their progress is undeniable. The amount of reforms they have pushed through in such a short amount of time is truly impressive and potential of the country is limitless. They will need to take lessons from countries in Africa like Rwanda, Mauritius and Botswana who have focused on stopping corruption and making their countries a more reliable venue for business. But with new access to the internet and thereby the world; Myanmar will not be alone in their struggles.


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