US firms eye Myanmar as sanctions suspended

Washington/Hong Kong:  The suspension of US sanctions barring investment in Myanmar in response to political reforms in the poor southeast Asian state gives a green light to US firms queuing to scout for business in one of the last frontier markets.

"Today we say to American business: invest in Burma and do it responsibly," Secretary of State Hillary Clinton said at a news briefing on Thursday with Myanmar's Foreign Minister Wunna Maung Lwin, on his long-isolated nation's first official visit to Washington in decades as ties between the two countries warm.

US 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, the biggest US conglomerate, yesterday said it was working with the Myanmar government on possible infrastructure projects and opportunities in the healthcare and energy sectors.

"We are looking at health care. 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 about a month ago.

Nabeel Barakat, CEO of Wamar International, a US-based energy services firm, met senior Myanmar government officials last week to discuss projects including repairing gas-fired power plants in Yangon, local media reported. Myanmar, formerly known as Burma, has huge gas resources, but a dysfunctional power grid, with nationwide rolling blackouts.

Positive developments

A spokesman for automaker Ford Asia told Reuters: "It's very encouraging to see the rapid and positive developments that are taking place in Myanmar. We are sure Ford will find opportunities to participate in this ongoing transformation."

The International Monetary Fund has estimated Myanmar's GDP at a little over $50 billion (Dh183 billion). Neighbouring Thailand, with a population of about 67 million, has a GDP of $348 billion.

Clinton said Washington would issue a general licence to permit US investments across Myanmar's economy, allowing US 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 US sanctions on Myanmar would remain — as leverage while pushing the reclusive country's 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."

Washington/Hong Kong (Reuters) In preparation for a likely wave of foreign investment, 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, deputy central bank governor, told Reuters. Nay Aye said foreign banks will be able to form joint ventures in Myanmar by 2014, a year earlier than expected.

Hans Vriens, a Dutch consultant to the Myanmar government, said the nascent open economy was "desperate for foreign investment".