May 30, 2013

Aussies look to Thailand for help investing in Myanmar

With foreign investment flowing into Myanmar, Australian companies are keen to find Thai partners to gain a solid investment foothold in the previously military-ruled neighbor, particularly in areas that are closed to foreign firms in Thailand.

Leigh Scott-Kemmis, the Australian-Thai Chamber of Commerce's new president, said many businesses could enter these areas in resource-rich Myanmar if Thailand acted as a facilitator for eager Australian firms.

Apart from the two countries' closeness to each other, the Thai government and Thai companies have established connections with their Myanmar counterparts.

"Thailand is the perfect hub for a number of reasons. Thailand has a strategic location to initiate investment projects in Myanmar. Thai corporations also have a healthy relationship with Myanmar, so sometimes the best way to invest there is through Thai connections," said Scott-Kemmis.

He said working with Thai partners to penetrate Myanmar is part of Australia's "survival strategy".

This means Australian entrepreneurs can break away from business restrictions in Thailand, notably in the mining industry, and direct their investment towards Myanmar's lucrative resources, said Scott-Kemmis.

But he pointed out that Myanmar has been isolated and inactive for 34 years, so basic infrastructure needs a lot of improvement.

The country still lacks adequate skilled labour compared with other Asean countries.

Regarding the internationalization of the yuan, Scott-Kemmis urged Asean countries, particularly Thailand, to initiate direct currency swaps with China like Australia did last month.

With the ongoing sovereign debt crisis in Europe and financial woes in the US and Japan, the emergence of the BRICS economies, particularly China and India, is a testament to this switch.

"The Bank of Thailand's current reserves are heavily invested in the Australian dollar as well as the euro and the Singaporean dollar, so the trend has shifted to holding a basket of currencies, not just the US dollar, for efficient trade and investment," he said.

"But the yuan doesn't have an open exchange account, so it's a long way from a common trading currency."

Source: Mizzima