Dec 5, 2011

Myanmar's forecast economic growth of 8.8% in 2012

Myanmar's moves toward democracy earned an appointment with Hillary Clinton this week, the first visit by a US Secretary of State in more than half a century.

Investors are hoping the removal of US trade sanctions against the country may eventually follow.

Such is the growth of Myanmar since the release of pro-democracy leader Aung San Suu Kyi from house arrest a year ago and the granting of ASEAN chairmanship a month ago that Myanmar's forecast economic growth of 8.8 per cent in 2012 may outpace even that of its largest trading partner, China.

Foreign investment is pouring into power generation and investors are clamouring for the country's oil, gas and minerals. Infrastructure investments are also booming.

Singapore-based HSL recently completed a US$6 million (S$7.7 million) project in Kyaukpyu in the north-west of the country.

"There are several major projects coming up, one of which is the Dawei deep sea port and the special economic zone in the south-western part of Myanmar," said Mr Charles Quek, executive director of HSL Constructor.

Missing the boom is the world's largest economy. United States sanctions bar Americans from investing but hopes are high that Mrs Clinton's visit may clear the way for their removal.

That, however, will not happen until the US Congress is convinced Myanmar's political reforms are lasting.

"We're not at the point yet that we can consider lifting sanctions," Mrs Clinton has said.

And there is no guarantee anyway, that investing in this frontier economy makes good business sense.

Infrastructure and telecommunications are poor and investment risks are high.

"You are talking about 60 years of infrastructure catch-up that they have to do so that's one thing," said Mr Dane Chamorro, global risk analyst at consulting firm Control Risks.

"They currently run a two-tier currency regime. The official rate of the kyat and the market rate are radically different and they need to address that," he said. "They need to have a functioning financial sector and banking sector."

Source: Today Online