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Opportunities for growth as Myanmar opens
Publication Date : 21-04-2012
Myanmar's April 1 parliamentary by-elections have proved to be fruitful as far as the country's re-joining the rest of the world is concerned.
The latest positive reaction came from European Union, which has indicated it will suspend all sanctions against Myanmar for one year.
The EU measure is seen as a carrot for the regime in Myanmar, which for the first time in decades decided to by-elections and release a large number of political prisoners.
The opposition National League for Democracy (NLD), led by Aung San Suu Kyi, won most of the constituencies in the by-elections, paving the way for her party to enter Parliament, which has over 600 seats, most of which are still controlled by the military under the leadership of pro-reform President Thein Sein.
The EU's suspension of sanctions is conditional upon the sustainability of reforms promised by the regime, and there will be a review after six months. Yet, the move will allow all economic and related activities between the EU and Myanmar, except arms sales, to resume, meaning that around 800 European firms will be able to return to do business with Myanmar. This will be a potential bonanza for many European firms hit hard by the recent euro-zone debt crisis.
Suu Kyi herself has endorsed the conditional suspension of sanctions.
Besides the EU, the US also has removed some financial restrictions on Myanmar, and Americans are now free to make financial transactions in the country for projects that "meet basic human needs" or promote democracy.
Last year's visit by US Secretary of State Hillary Clinton marked the start of Myanmar's reforms, with the April by-elections being the first major event. The next milestone will be Myanmar's hosting of the Southeast Asian Games in 2013. Afterwards, the country will chair the 10-member Asean grouping in 2014.
The following year, Myanmar will join the Asean Economic Community (AEC) as one of four new members, including Laos, Cambodia and Vietnam. In 2015, reforms will be in an advanced stage as Myanmar plans to hold its first-ever open general election in decades.
For Thailand, the opening of Myanmar can be seen as a great opportunity to re-balance the Thai economy, as Myanmar can be a major source of cheaper labour, raw materials and natural resources as well as a major market with its population of over 60 million.
Some of Thailand's labour-intensive manufacturing industries will be more competitive once they relocate to the neighbouring country, while Thai firms will have convenient access to a large market which is expected to grow rapidly in the coming years. In other words, Myanmar has the potential to be the next major Asian economy.
As members of the AEC, both Thailand and Myanmar, along with Vietnam, Cambodia and Laos, can form a competitive mainland network of the AEC single market and production platform. This is evidenced by the emerging east-west and north-south economic corridors.
From east to west, the Dawei deep-sea port and industrial development zone on the Thai-Burmese border serves as one of the key links that will allow businesses and industries to tap the economic potential of India, Burma, Thailand, Vietnam, Laos and Cambodia.
From north to south, economic integration starts from southern China down to Singapore, encompassing Myanmar, Thailand, Vietnam, Laos, Cambodia and Malaysia. China's proposed high-speed railway project, criss-crossing most of the Indochinese countries, is among the major mega-infrastructure links.