Is Burma Asia's Next Investment Goldmine?

Southeast Asia has been lauded for its robust connectivity and commerce within sectors ranging from manufacturing to tourism to technology for the past few decades. And, in light of recent events, Burma (also known as Myanmar) seems to be following the same trend. Last month, more than 22 companies announced they will move manufacturing facilities into Burma’s Thilawa Special Economic Zone (SEZ). The initiative is one of the first steps President Thein Sein took to reintegrate Burma in the global economy. When fully-functioning, Thilawa will be able to employ 70,000 workers and manufacture goods, consumer products, and construction materials for the domestic market, while also supporting export-oriented goods such as apparel, textiles, and automotive parts.

Multi-national corporations and smaller entrepreneurs have been flocking to Burma since 2010, when the first general election was held in nearly two decades. For the past four years, direct foreign investment has almost tripled, rising from $901 million to $2.6 billion. Furthermore, economic forecasting projects growth to reach 7.8% this year with a specific focus on commodity exports.

Not only does the country have arable land, clean water, and an abundance of natural resources, but it is also nestled between India, China, and Thailand. According to the McKinsey Global Institute, by 2025 more than half of the world’s consumers with incomes above $10/day will live within a five-hour flight of Burma. However, the country seems to be struggling with political transparency. The leader of Burma’s opposition democratic movement, Aung San Suu Kyi, claimed that the country’s military rulers used constitutional schemes to thwart her presidential bid in 2012. It is possible that developed economies have been “overly optimistic” about political reform and investments might have a higher risk metric than originally thought. Attracting foreign investment and turning it into domestic opportunities should be at the forefront of Burma’s economic priorities.