After decades of ruthless and oppressive leadership,
Myanmar's (Burma's) ruling military junta is all of a
sudden increasingly willing to modernize and liberalize its laws
governing both its people and its economy.
In the past year, President Thein Sein's government has
undertaken a
serious commitment to reform
, including the release of hundreds of political prisoners and
ending high profile democracy-advocate Aung San Suu Kyi's 30-year
house arrest.
These reforms are not confined to the political sphere; newly
proposed economic reforms by Thein Sein's administration will
attempt to catalyze Myanmar's stunted growth. As outlined by the
Financial Times
,
new economic initiatives
include:
"provisions for foreign businesses to set up in Myanmar
without local partners, as previously required; government
guarantees against nationalisation; easing of restrictions on
private land use and repatriation of profits; and a five-year tax
exemption for foreign companies."
Further, the government will start a
"managed float"
of the nation's currency - the kyat, starting April 1, in order
to both gain control over the troubled currency and instill
confidence for potential foreign investors.
Unlike previous, disingenuous reform rhetoric that went
nowhere, these attempts to change Myanmar for the better are
proving to be legit. The international diplomatic community has
strongly approved of President Thein Sein's liberalization,
evidenced by Secretary of State Clinton's late-fall
visit to Myanmar
, the first by an American Secretary of State in over 50
years.
Diplomatic approval is important for American investors in
order to gain access to Burma; the U.S. government first has to
repeal the sanctions that prevent American investors from putting
new capital into Myanmar. With Norway
removing its investment restrictions
in January, and the European Union strongly considering
repealing their economic sanctions
, it's reasonable to assume the American government is strongly
mulling the possibility too.
In terms of development, due to the aforementioned sanctions,
the nation has fallen far behind neighbors India, China, and
Thailand. However, because it sits at a crossroads of major 21st
century powers, its potential for growth is enormous.
With its abundant
natural resources
and unspoilt landscapes, Myanmar could become a hub for oil and
gas, transportation, and tourism - and a boon for investors.
Because of the embargo, no Burmese stocks trade on U.S.
exchanges.
Investors looking for exposure to neighboring countries in
southeast Asia
that will benefit from Myanmar's liberalization can look to
country-specific ETFs such as those for Vietnam (
VNM
,
quote
) and Thailand (
THD
,
quote
).
