News / Asia

Activists Worry About Investor Interest in Burma

A man uses an automated teller machine (ATM) machine at a shopping center in Yangon, Burma, May 27, 2012.A man uses an automated teller machine (ATM) machine at a shopping center in Yangon, Burma, May 27, 2012.
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A man uses an automated teller machine (ATM) machine at a shopping center in Yangon, Burma, May 27, 2012.
A man uses an automated teller machine (ATM) machine at a shopping center in Yangon, Burma, May 27, 2012.
Ron Corben
Burma is under pressure to implement broad economic reforms as the country still catches up with recently significant political change. This has brought both excitement and concern over reviving an economy that was once a commercial hub for Southeast Asia.

Reforms under President Thein Sein have largely ended the political and economic isolation that left Burma as one of the poorest nations in Southeast Asia.
 
But as investors and businesses look for opportunities, there remain significant hurdles for the political, legal and economic reforms necessary for growing businesses.
 
Sean Turnell, a Macquarie University economist in Australia and recent visitor to Burma, says many restrictions in business, some dating back to the British colonial era, remain in place.
 
"A lot of the old restrictions on the economy - a lot of that stuff hasn't been touched yet which I think is remarkable in that it's very much against the trend particularly in Asia - the trend is economics first and politics a begrudging second," Turnell noted.

Government ministers have set out an ambitious reform agenda including a new investment law, greater government transparency, plans for infrastructure development, and the creation of industrial zones.
 
There are also new labor laws, new tax codes as well as currency reforms.
 
But Turnell says the changes may not be coming fast enough for President Thein Sein.
 
"I think the President in particular seems to be a little bit frustrated that the reforms have not been to the extent that might be expected," added Turnell.  "In other words on that score I think we're likely to see many more soon along that front."
 
Burmese opposition leader Aung San Suu Kyi has cautioned investors about the significant changes still needed inside Burma. She told entrepreneurs in Bangkok at the World Economic Forum that jobs are the country's biggest need, calling the unemployment rate a "time bomb."
 
The caution is echoed by some activist groups. Debbie Stothard is spokesperson for rights group, Alternative ASEAN Network.

"That there's such a push for business and investment in Burma I think Aung San Suu Kyi's remarks were a reality check and a wakeup call to the business community and the world at large that they have to think through their situation and the impact on the local population," said Stothard.

An upbeat mood for the outlook of Burma, also known as Myanmar, was held by Association of South East Asian Nations (ASEAN) Secretary General Surin Pitsuwan, during the recent World Economic Forum.

"We do hope to have helped push the process along and for us now the two issues are extremely important; national reconciliation within the Myanmese body politico led by Daw Aung San Suu Kyi and President Thein Sein. We hope that this national reconciliation is going to go forward, is to bring peace and unity and reconciliation to Myanmar," said Secretary General Surin Pitsuwan.

Some foreign businesses who operate in developing countries have dismissed the caution as overblown. Joseph Stiglitz, an economics professor at Columbia University and recipient of the 2001 Nobel Peace Prize for Economics, believes Suu Kyi is being unduly pessimistic over the outlook for Burma and investors will push ahead.

"When we look at the judicial processes we will feel - we wish they were better, but I think that these will be an awareness of the desire and need to attract investors… so I thought she was excessively pessimistic maybe about this," said Stiglitz.

Enthusiasm from foreign investors has led to concerns among some analysts that rapid economic growth could impede further political reforms. Former Thai Senator Kraisak Choonhavan is a leading Burma rights advocate.

"The survival of the struggle in Burma for democratization and freedom has come to a slow - how would I say - slow death," said Kraisak Choonhavan.  "The entire effort now on all Western Countries and other countries are in the quick grab on the resources of Burma and investment spots, sort of like wagon trains, like a gold rush".

But others in Burma such as well-known comedian, Zarganar, who spent 11 years as a political prisoner, believe the country has entered a new era.
 
"This is very important time of our country - how can I say - this is the dawn of our country - we have to go to the day," said Zarganar.  "We don't want to go back to the dark. The three "D's" era - now we are standing in the dawn we have to go to the day. We don't want to go back to the dark."

The political reforms and investor interest in Burma's natural resources, young labor force and proximity to India and China have already led the International Monetary Fund (IMF) to raise its forecast for Burma's economy to six per cent in 2012.

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