from Asia Unbound

The Myanmar Mirage

November 19, 2012

An employee stands behind a MasterCard logo during the launch of the international credit card issuer's first ATM transaction in Myanmar, in Yangon November 15, 2012.
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In advance of President Obama’s historic visit to Yangon this week, the U.S. government announced Friday the easing of yet another round of sanctions against Myanmar. The latest suspension will allow for goods made in Myanmar to enter the U.S. market for the first time in nearly a decade.  Since the Obama administration first began lifting economic restrictions against the one-time pariah in April, Western companies have been clamoring to enter Myanmar —an enormous (60 million) market that, because it was essentially closed to Western investment for decades, could be a sizable opportunity. Its abundance of natural resources and its geographically strategic location, between China and India, further add to its allure.

But in a new piece for Bloomberg Businessweek I argue that this land of golden promise may in fact be a chimera. The rapid transformation underway in Myanmar, though generally positive, has also ignited interethnic and interreligious conflict. This social instability, coupled with a tremendous  dearth of both physical infrastructure and rule of law, are among the many reasons why I argue that the Myanmar gold rush is wildly premature. You can read my entire piece on why investors should tread warily in Myanmar here.