President Barack Obama’s visit to Myanmar this week once again puts a spotlight on the progress of the country’s opening up and political transition.  But in a familiar refrain: it’s the economy, stupid. 

The Thein Sein government’s lovefest with western donors over ‘Washington consensus’ policies risks intensifying resource-curse dynamics without delivering the infrastructure upgrade that Myanmar needs for labour-intensive manufacturing export competitiveness.  Meanwhile, foreign investors struggle with local conditions and the very people who may be able to get big projects off the ground, Myanmar’s own tycoons, are often shunned by their president and precluded from western financing by US blacklisting.  Read more

The economic modernisation of Myanmar continues at a rapid clip.  In the critical sectors of telecommunications and banking, a combination of government and private sector efforts have set the foundation for the country’s next stage of growth.  Nevertheless, significant challenges lie ahead. 

Earlier this month Qatari telecom Ooredoo (ORDS:DSM), launched mobile phone and 3G internet services in greater Yangon, Mandalay and Naypyidaw.  According to the company, the initial networks reach 7.8m people, about 15 per cent of the population.  Norway’s Telenor (TEL:OSL) will open similar coverage in September.  Read more

“When eating an elephant, take one bite at a time”, US Army officer and Vietnam veteran Creighton Abrams once said. 

In his new book, The Rise of the New East, Ben Simpfendorfer does just that.  His elephant is “The East”, the group of almost 50 emerging markets ranging from Turkey to China that is home to well over half of the world population. 

Simpfendorfer gives his topic a thorough treatment.  While his insights seem logical and intuitive, taken together they give an impressive oversight of into key trends shaping the region.  beyondbrics noted five insights that particularly stood out.  Read more

Following his “flipping the switch” on political reform, Thein Sein, Myanmar’s president, has embraced the international donor community – of bilateral and multilateral agencies led by the Asian Development Bank, the World Bank and the IMF – in an agenda of good governance and economic liberalisation.  Early reforms have spurred economic growth to around 8 per cent and both government and donors have extrapolated this trend out to 2030 and the attainment of middle income status almost as if it is already in the bag.  Not wanting to be seen as a spoiler, neither side has an interest in deviating from this new economic narrative.  Read more

It is a truth almost universally recognised that internet penetration in the 10-member bloc known as Asean – the Association of Southeast Asian Nations – is low, even though the region is humming economically. 

Or is it? 

UBS has come out with some interesting research that will give the e-commerce crowd something to cheer.  The bank finds that Asean has a 32 per cent “internet penetration rate”, or almost 200m users, out of a total population of 620m.

This contrasts with market data apparently widely accepted – and cited by UBS – saying that penetration could be as low as 62m users.  Read more

Last week Italy’s government hosted a high-level delegation from Myanmar promoting foreign investment in their rapidly changing “new Asian frontier” of some 60m people where, for example, only about five per cent own mobile phones. 

All were wearing civilian clothes but their listed CVs revealed that the entire delegation, all men and including foreign minister Wunna Maung Lwin, were former members of the military that ruled the country for nearly 50 years until quasi-civilian rule was introduced in 2011. 

“It is much easier to change clothes than the mindset,” commented Aung San Suu Kyi, Myanmar’s opposition leader and Nobel peace prize winner who arrived in Rome several days later and gave a news conference on Monday.  Read more

On the plus side, Myanmar isn’t a mostly closed off military junta any more.  On the minus side, its recent opening up means more international trade, a dramatically worsening trade deficit, and a kyat that has weakened against the dollar significantly since major FX reforms this year. 

Should investors be worried?  Not really.  Just growing pains, say economists at Standard Chartered.  Read more

President Thein Sein of Myanmar (pictured) is making his first visit to Britain this week.  He will be holding talks in London at a critical moment in Myanmar’s emergence from isolation. 

Politics and ethnic tensions continue to cast a shadow over the broad sense of optimism about the business opportunity.  But developing its economy is probably the major challenge facing Myanmar.  Read more

There is some irony in the re-entry of BAT to Myanmar, to pick up where it left off more than a decade ago in producing and distributing cigarettes.  But back then, Myanmar was a pariah state and BAT was widely condemned for its links to a brutal military regime.  Now, with a rapidly expanding economy and growing foreign interest, investing in Myanmar is a feel-good story – despite growing concerns about the spread of racial and ethnic violence.  Read more

A bold experiment has been launched in the realm of sanctions policy among developed countries.  Since July 1, US companies and investors have been required to submit reports on their activities in Myanmar as a condition of making new investments there.  Read more

Energy policy sits at the heart of Myanmar’s political and social reforms, and will be one of the most important facets of change in this emerging democracy. 

Although just 26 per cent of Myanmar’s population has access to electricity, reforms are paving the way for a new era in the energy sector as the government looks to tackle the challenge of meeting increasing domestic demand from a growing population and industrialisation.  Read more

The decision by Myanmar’s government to award two fiercely contested national mobile communications licenses to Qatar’s Ooredoo and Norway’s Telenor Mobile Communications on Thursday raised as many questions as answers among Yangon-based analysts – not least due to an eleventh-hour effort by the country’s parliament to block news of the winning bids. 

At the same time, conclusion of the contest reassured a growing number of investors eyeing Myanmar that the country is capable of conducting a transparent, fair and efficient public tender.  Read more

Groups led by Norway’s Telenor and Qatar’s Ooredoo, the renamed Qatar Telecom, beat big name bidders including France Telecom and a consortium involving Digicel and George Soros to the licences, according to a statement from the government on Thursday.  Read more

One of the most visible symbols so far of Myanmar’s opening to the west was the recent launch of Coca-Cola’s new bottling operations at its joint-venture plant on the outskirts of Yangon.  Less visible was the changing dynamic around the seemingly unstoppable surge of foreign investment interest in the previously secretive country.  Read more

But, what do you know?  McKinsey & Co, in typically discreet style, has trumped them all with a comprehensive report on the country’s prospects and policy suggestions, to be formally presented – gratis – to the government of President Thein Sein.  Read more

It’s hardly a move to please China.  Myanmar, up to recently a loyal neighbour with seemingly endless willingness to open up its abundant natural resources to Chinese companies, is preparing to sign the awkwardly-named Extractive Industries Transparency Initiative. 

Norway-based EITI, which comprises governments, civil society, international organisations and resources companies, oversees a voluntary regime for the natural resources industry that has struck fear in the boardrooms of multinationals around the world.  Read more

Foreign direct investment into the Asean countries has risen strongly in the past few years and is now on a par with FDI into China.  As Hak Bin Chua, Asean economist at Bank of America Merrill Lynch writes in a report on Friday, this “is in sharp contrast to a decade ago, when there were widespread fears that Asean would be marginalised by China’s rise.” 

The change is partly a result of political issues such as recent territorial tensions between Japan and China which are diverting some Japanese investment south.  But is is also driven by social and economic factors such as demographics that will not change direction any time soon.  Read more