Australian firms are being tipped to take up the challenge of investing in Myanmar following the early June announcement by Foreign Minister Bob Carr to lift all remaining travel and financial sanctions on the country.
In Yangon, the lobbies and bars of the city’s high-end hotels have transformed into impromptu offices for foreign investors – including a new stream of Australians – seeking their fortune in the resource-rich country.
“Right now, Myanmar is a blank canvas,” one investor said. “And we’re the artists.”
A Yangon-based business consultant said some Australian construction and agricultural firms are already exploring investment opportunities in Myanmar.
“There’s been interest from a Brisbane-based property development and construction company specialising in modular building systems that could possibly service Myanmar’s huge demand for hotel and serviced accommodation,” he said.
He added that representatives from oil and gas giant BHP Petroleum recently visited.
“BHP have been revisiting the previous onshore opportunities in the oil and gas sector and no doubt eyeing the lucrative offshore market,” the consultant said.
“And if you’ve got BHP Petroleum coming in here then it would be highly likely BHP Billiton will be hot on their heels.”
Australia’s mining expertise, he added, could provide essential technology to help exploit Myanmar’s rich resource reserves.
Nestled between the heavyweight economies of India and China, Myanmar has proven natural resources, including oil and gas, minerals, gems and forestry, and vast potential for new agricultural projects.
Recent political and economic reforms by President U Thein Sein’s government have been rewarded as many Western nations – including the United States, Europe and Australia – suspended or lifted sanctions restricting trade and investment and stepped up aid and development budget commitments.
Myanmar economy expert and professor at Macquarie University Sean Turnell said Australian expertise in areas such as agriculture was in high demand.
“Australia has a lot to offer Burma as we are a big, rich resource/agricultural-led economy while Burma is a big but poor resource-rich agricultural economy,” Prof Turnell said.
He added that Australia could step up its presence in Myanmar as an alternative to Chinese or Asian investment.
“The biggest players here are other Asian countries and in that there is a bit of an upside for Australia.
“There’s a real hankering for connections with the West, mostly the US because it’s the most visible, but in a sense Australia could profit from that.”
However, Mr Turnell said many investors had been surprised by how difficult it was to do business in Myanmar. Limited infrastructure and restrictive legal and economic conditions are the main hindrances to international investment, he said.
U Myat Thu Winn, managing director of Shwe Minn Tha Enterprises Co, a family-owned group of real estate, media and printing companies, said foreign investment in the construction and tourism sectors could give a much needed shot in the arm to the country’s economy and provide jobs for thousands.
“I understand that if you’re a businessman you’re trying to make money, but I encourage new foreign investors to think of how they can also contribute to the community,” U Myat Thu Winn said.
Tim Harcourt, former chief economist of Austrade, the Australian government’s trade and investment arm, said investors have much to offer Myanmar.
“Australia could help Burma develop its rural industries as well as in education and training in tourism in much the same way as in Vietnam, Laos and Cambodia.
“The emphasis will be in capacity building and helping people to reach their potential. But it would be a ‘softly, softly’ approach provided the pro-democracy reforms continue.”
Source: Myanmar Times