Busy or Bust: Foreign Investment Awaits Myanmar Election Outcome
Soe Zeya Tun/Reuters
A girl wears National League for Democracy (NLD) stickers on her face as Myanmar pro-democracy leader Aung San Suu Kyi campaigns in her constituency of Kawhmu township, outside Yangon.
The 2015 Myanmar election has many on edge. With the ever increasing foreign investment, the pre-November period has seen a collective inward breath. The exhale to follow November 8.
Yet foreign and domestic economic investment has brought great change in Myanmar in just the few years of activity. New buildings dot Yangon, new business continue to flock to Myanmar, and new arrivals and figures continue to take great interest in the Golden Land. All these changes wouldn’t have been possible without the legislative change undertaken and executed by the Hluttaw.
The pre-election announcements of new special economic zones holds a very treat for foreign business. The move to create the zones, in part, appears to offset the continued attractiveness of Myanmar to the resource extractive sector. In particular it would be a boon for the processing industry, providing diverse employment.
Verity Lomax, CEO of the Australia Myanmar Chamber of Commerce, told Myanmar Business Today, “Given Myanmar’s history, Australian businesses are naturally approaching this emerging market with some caution.
“However there are a number of significant investors involved in infrastructure and resources for example that are all long term investments.”
She said, “Boards have already made investment decisions that indicate that they have clear aspirations for growth, which outweighs hesitations to invest. The rate of change in the country has been phenomenal with many legal and structural changes being made.”
The Chamber led a Working Group which reviewed the proposed mining legislation and resulted in a submission being made to the government for their consideration.
Yet a lull has come in foreign investment, with many looking to the horizon.
Lomax said, “Investors are excited about the opportunities for growth this emerging market presents, and of course are hoping the outcome will enable responsible foreign investment to continue to expand through greater stability and certainty.”
Australia, like several other nations, has stepped up to the plinth, to join in investing in the opportunities Myanmar presents. Extractives, banking, services, even import-export. Myanmar is a land of opportunity for the discerning.
Coffey, an Australian environmental consulting business, has worked extensively with the Myanma Oil and Gas Enterprise. It has previously pointed to issues with costly and drawn out approval processes which have hampered investment.
Although they too have pointed to the difficulties Myanmar faces, constructing mechanisms for FDI from virtually the ground up. Yet the machinery of state has paused, as the election rolls on.
Dr Nicholas Farrelly, director of the Myanmar Research Centre at the Australian National University, told Myanmar Business Today that the elections pose both a risk and a great reward for Myanmar.
He said Myanmar “is likely to go on and surprise us and do all sorts of stunning things, but it will happen in a context where there’s always the risk it could go quite badly wrong.”
The fate of 1990 hangs low in the air for international partners. Indeed, the US government has warned the future of sanctions against Myanmar depend on the integrity of the election process and transparency in formation of a new government.
Damien Kingsbury, professor of International Politics at Deakin University, is travelling to Myanmar to act as an independent observer for the elections.
He told Myanmar Business Today, “The elections are fundamental to the future of the country, all other pressing issues hinge on the outcome of the process.
“If the elections go well and are seen to be free and fair, then there’s a real opportunity for Myanmar to go down the reform path, and that includes political liberalisation as well as economic development.”
Professor Kingsbury’s take reflects a commonly held view on the dangers – and opportunities the election presents.
So with that, all that remains to be seen is the play out of the elections.
