BANGKOK/TOKYO – As Myanmar emerges from a half century of isolation, Asian companies with a high tolerance for risk are sizing up business opportunities in what was once one of Asia’s wealthiest nations.
Singapore-listed Yoma Strategic Holdings last week announced plans to develop a project known as Star City, near Yangon, that will include housing estates and shopping malls.
It is just one of many Asian companies poised to move following three months of the most dramatic changes in the resource-rich country since the military took power in a 1962 coup in what was then Burma.
While many Western multi-nationals remain cautious about the investment prospects of a country entangled in United States and European sanctions, Asian firms hope to fill the void.
“Myanmar presents a relative low-risk, high-return proposition that is hard to ignore,” said Mr Krishna Ramachandra, head of corporate finance and investment funds at law firm Duane Morris & Selvam in Singapore.
“I’ve had queries from corporate clients in infrastructure and construction who are keen to explore Myanmar for the simple reason it presents a compelling high investment growth strategy,” he added.
Japanese businesses are among those looking to expand, and the two governments agreed last month to start talks on an investment pact.
But opaque foreign investment rules and a weak judicial system could keep some investors on the sidelines.
“Myanmar needs to harmonise its foreign exchange rates and create a foreign investment code similar to other countries in South-east Asia,” said Mr Douglas Clayton, CEO of private equity fund Leopard Capital.
“Investing now is essentially speculating that a package of reform measures will be implemented, which will help make Myanmar’s economic revival sustainable. More cautious long-term investors will prefer to wait for new laws to be passed.”
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