YANGON, Myanmar (AP) — Signs of a boom abound in Myanmar. Flights to Yangon are full, hotel rooms booked solid. Foreign bars are packed with well-fed Westerners in khakis and jeans, twenty-first century prospectors drawn to this golden frontier.
Myanmar got a further boost this week from President Barack Obama, who became the first serving U.S. president to visit the long-isolated state, an endorsement that has not gone unnoticed by global investors. But despite America’s leadership in welcoming Myanmar back into the international community, U.S. companies have so far not signed any big deals — a situation few expect to change soon.
Washington is unwinding its web of sanctions against Myanmar, but the suspension of most legal barriers to business in this nation of 60 million is unlikely to be a gold rush for American firms. Rolling back sanctions will take time, and concerns about corruption and political blowback at home complicate efforts by U.S. companies to move in big and fast. There is confusion about what is permitted, as well as onerous new reporting requirements, and lingering doubt about whether the changes, both in Myanmar and in U.S. policy, will stick.
What’s at stake is one of the last big untapped consumer markets, as well as access to significant natural resources, including oil and gas, hydropower, timber, gems and some of the most fertile land on earth. Sandwiched between India and China —the world’s fastest growing major economies — Myanmar today has some of the world’s lowest levels of internet and cellphone use, as well as a dearth of good roads, ports, hotels, hospitals, schools and electricity.
Underlying the debate about sanctions, which many companies would like to see lifted more decisively, are questions about what role American business should play in Southeast Asia’s poorest country. Speaking Monday at the University of Yangon, Obama said American companies must “lead by example.” His administration has sought to reinforce good business practices, encouraging transparency by requiring companies that invest more than $500,000 in Myanmar to report details to the State Department, which will make some of the information public. And Washington is banning U.S. firms from doing business with the country’s biggest, and most corrupt, businessmen.
Whether those strictures — which put American firms at a competitive disadvantage — will achieve their desired aim is a matter of debate, but the ideas they enshrine may prove valuable in the long run.
Thant Myint-U, an author and adviser to Myanmar’s reformist president Thein Sein, said that the biggest challenge facing Myanmar is finding a new economic model to support reform momentum.
“No one knows how to fix the economy after a half century of misrule in a way that’s going to raise incomes and create jobs in the way we have to to keep the reform process on track,” he said. Neither of the two dominant business models in Myanmar today — alliances between crony businessmen and largely Chinese investors or leftist isolationism — offers a good path forward for the country, he said. He hopes American businesses will help forge a third way.
The United States has taken a calibrated approach to easing sanctions, renewing or expanding some strictures even as it unwinds others. While this gives the administration leverage should Myanmar’s political reform lose momentum, it creates confusion for investors.