The Freeland File
Global Market Data
Tales from the Trail
Lucy P. Marcus
David Cay Johnston
The Great Debate
Jack & Suzy Welch
Macro & Markets
Lipper Awards 2012
Personal Finance Video
Our best photos from the last 24 hours. See more
Images of April
Iran attack decision nears, Israeli elite locks down
17 May 2012
South Carolina woman battles flesh-eating bacterial disease
17 May 2012
Facebook fizzles in debut, shares skirt IPO price
Shorting Facebook on first day: Tough even for the gutsiest
Insight: Who got Facebook IPO shares? Fairness may not come into it
Germany’s Merkel dealt heavy blow in state vote
Iran attack decision nears, Israeli elite locks down
Weary warriors favor Obama
A look at the UK’s most beautiful face
Thu, May 10 2012
Surfer rides 78-foot wave to world record
Fri, May 11 2012
Violence rages on in Syria
Thu, May 17 2012
Wealth and Investing Center
Our day's top images, in-depth photo essays and offbeat slices of life. See the best of Reuters photography. See more | Photo caption
Transgendered contestant Jenna Talackova takes part in Miss Universe Canada. Slideshow
Strange and unusual
Our photographers sometimes capture moments that are strange and offbeat. Here's a recent sampling. Slideshow
U.S. firms eye Myanmar as sanctions suspended
U.N. chief calls for end to fighting in Myanmar
Analysis & Opinion
Compliance officers face multiple options for credentials
Now is the time to not only maintain pressure on Iran, but increase it
United Nations »
U.S. to suspend Myanmar sanctions, but keep laws on books.
Thu, May 17 2012
Myanmar: Now open for business
1 of 3. U.S. Secretary of State Hillary Clinton (R) speaks to reporters next to Myanmar's Foreign Minister Wunna Maung Lwin after their meeting at the State Department in Washington May 17, 2012. (This photograph was refiled to fix nationality to Myanmar)
Credit: Reuters/Yuri Gripas
By Andrew Quinn and Alison Leung
WASHINGTON/HONG KONG |
Fri May 18, 2012 8:43am EDT
WASHINGTON/HONG KONG (Reuters) - The suspension of U.S. sanctions barring investment in Myanmar in response to political reforms in the poor Southeast Asian state opens the door to U.S. firms queuing to scout for business in one of the last frontier markets.
U.S. firms are expected to join those from Asia and Europe that have already moved into a market of up to 60 million people in the former British colony. Analysts and experts have said there will be opportunities for foreign companies across the industrial landscape - from energy, mining and construction to agriculture, finance and tourism.
General Electric Co, the biggest U.S. conglomerate, said on Friday it was working with the Myanmar government on possible infrastructure projects and opportunities in the healthcare and energy sectors.
"We are looking at healthcare. We are working with the government on energy. Eventually we will look into all of the infrastructure businesses," GE Vice-Chairman John Rice told Reuters in Hong Kong.
"We are looking at Yangon's power needs, working with the ministry and the government to figure out how we can help reduce some of the shortages," said Rice, who runs GE's global operations and visited Myanmar in April.
U.S. Secretary of State Hillary Clinton announced the suspension of sanctions at a news briefing on Thursday with Myanmar Foreign Minister Wunna Maung Lwin, on his long-isolated nation's first official visit to Washington in decades.
"Today we say to American business: invest in Burma and do it responsibly," Clinton said.
Nabil Barakat, CEO of Wamar International, a U.S.-based energy services firm, met Myanmar government officials this week to discuss projects including repairing gas-fired power plants in Yangon, media reported.
Myanmar, also known as Burma, has huge gas resources, but a dysfunctional power grid, with nationwide rolling blackouts.
A spokesman for automaker Ford Asia told Reuters: "It's very encouraging to see the rapid and positive developments ... We are sure Ford will find opportunities to participate in this ongoing transformation."
The International Monetary Fund has estimated Myanmar's gross domestic product at a little more than $50 billion. Neighboring Thailand, with a population of about 67 million, has a GDP of $348 billion.
SANCTIONS SUSPENDED, NOT LIFTED
Clinton said Washington would issue a general license to permit U.S. investments across Myanmar's economy, allowing U.S. energy, mining and financial services companies to look for opportunities in an economy which is rapidly re-opening after having been run down by five decades of military rule.
But she stressed the laws underpinning U.S. sanctions on Myanmar would remain - as leverage while pushing the government further on democratic reforms.
"We are suspending sanctions. We believe that is the appropriate step for us to take today," Clinton said. "We will be keeping the relevant laws on the books as an insurance policy, but our goal and our commitment is to move as rapidly as we can to expand business and investment opportunities."
Myanmar welcomed the announcement.
"It is excellent," Industry Minister Soe Thein said in an interview with Reuters in the capital, Naypyitaw. "This morning I heard the news and I am very, very happy.
"For the investor, financial sanctions are very important. Because of them, I haven't been able to move ... The U.S. can invest in a lot of areas."
Soe Thein, who met Rice in Naypyitaw last month, said GE was interested in leasing generators to supply electricity to Yangon. An official in Yangon said the project would consist of four generators of 25 MW each.
President Barack Obama, elaborating on the policy shift, said Washington would work to "ensure that those who abuse human rights, engage in corruption, interfere with the peace process, or obstruct the reform process do not benefit from increased engagement with the United States".
Myanmar's reformist, quasi-civilian government took office a year ago and has started overhauling its economy, easing media censorship, legalizing trade unions and protests, freeing political prisoners and agreeing to ceasefires with ethnic minority rebels. Nobel Peace Prize laureate and pro-democracy leader Aung San Suu Kyi has a seat in parliament.
"TOOL TO MAINTAIN PRESSURE"
Suu Kyi's National League for Democracy, Myanmar's biggest opposition force, won a 1990 election by a landslide but the military refused to cede power and for two decades suppressed the party's activities, jailing many of its members.
In response, the United States and other Western countries imposed sanctions that drove the country closer to China. Now, Derek Mitchell, the State Department's coordinator for policy towards Myanmar, is to be nominated U.S. ambassador.
Pro-democracy advocates have urged the United States to move cautiously, saying sanctions are an important tool to maintain pressure on the government to follow through on pledges of greater democratic openness.
Illustrating those concerns, the United Nations is investigating reports of possible weapons-related deals between North Korea and Myanmar, according to a confidential report seen by Reuters.
In preparation for a likely wave of foreign investment into the resource-rich economy, Myanmar's central bank said it would seek to weaken its newly floated kyat currency and prevent further rises that could derail economic reforms.
"In the near future there will be a massive inflow of foreign direct investment, and as a result Myanmar's kyat is expected to appreciate. We will do our best to prevent this," Nay Aye, a deputy central bank governor, told Reuters in an interview.
Hans Vriens, a Dutch consultant and adviser to European companies and the Myanmar government, said the economy was "desperate for foreign investment and especially for Western investment" as it didn't want to be "a client state of China".
"The regulatory system is completely outdated," Vriens told Reuters. "It's difficult to import, difficult to export. They need to modify that most of all. The government means well and they're very open to asking for advice, but you need to remember that the government is staffed by former generals.
"They know how to fight an insurgency, but they don't know how to run an economy," he said.
Some human rights activists remain wary.
U.S. Campaign for Burma, which opposes wholesale lifting of sanctions until the government makes deeper reforms, said Myanmar's army continued to wage a campaign against the Kachin ethnic minority in northern Myanmar and the new U.S. policy would do little to stop it.
Bill Davis, Burma Project director of the group Physicians for Human Rights, said Kachin and other ethnic minority groups whose homelands hold Myanmar's natural resources told him in interviews they were "still afraid of the government".
"If the people of Burma do not trust their government, the U.S. administration should not either," he said.
(Additional reporting by Matt Driskill in SINGAPORE, Henry Foy in MUMBAI, Alison Leung in HONG KONG and Jason Szep and Aung Hla Tun in NAYPYITAW; Editing by Robert Birsel and Nick Macfie)
Related Quotes and News
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Back to top
New York Legal
Support & Contact
Connect with Reuters
Our Flagship financial information platform incorporating Reuters Insider
An ultra-low latency infrastructure for electronic trading and data distribution
A connected approach to governance, risk and compliance
Our next generation legal research platform
Our global tax workstation
About Thomson Reuters
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.