Thu 13 Feb 2014
Filed under: Business / Trade,International,News
Although Myanmar’s economy is still closely tied to the military, the country’s cautious strides towards democracy have been paving the way for foreign investment. German companies, however, remain reluctant.
A stack of bills in Myanmar
“The minister had taken off his military uniform, but I still managed to recognize him,” said a German businessman in Yangon, Myanmar’s largest city and former capital. “I often had dealings with him when he used to wear his uniform.” The entrepreneur, who spoke to DW on condition of anonymity, was involved in business transactions with the country’s military junta in the 1980’s.
But all of this changed in 1988 when the regime opened fire on students who had taken to the streets demanding more freedom and democracy. As a result, the international community imposed sanctions on the regime, forcing the German entrepreneur to withdraw his business from the Southeast Asian nation, formerly called Burma.
Nowadays, he is back in the country looking to restore contact with his former acquaintances. With a smile on his face, he says he is confident and that the “well-connected” minister has already arranged a few contacts for him.
A handout picture provided by the Myanmar News Agency (MNA) shows Myanmar president Thein Sein (R) talks with German President Joachim Gauck (L) during the meeting at the president house in Naypyitaw, Myanmar, 10 February 2014.
German President Joachim Gauck recently met with Myanmar’s President Thein Sein
Under the presidency of Thein Sein, Myanmar has been striding cautiously towards democracy. The government has loosened its tight grip on the media and almost all political prisoners have been released.
Moreover, the formerly banned National League for Democracy (NLD) and its general secretary Aun San Suu Kyi – who was placed under house arrest for years – are represented in parliament. However, military officers are guaranteed a quarter of the seats in the assembly; a blocking minority enshrined in the constitution by the powerful generals seeking to protect, among other things, their far-reaching economic interests.
Grip on the economy
According to Georg Braun, Honorary President of the German Chamber of Industry and Commerce, the military’s network, which spans many sectors of the economy, remains intact. And this won’t change anytime soon, the businessman believes. Braun argues that the far more pressing question is whether the military will allow foreigners, for instance, to invest in the country’s energy sector, which is still in the hands of the military.
He says that his company, B. Braun Melsungen A.G., is one of the few German firms with an office in Yangon despite the many investment opportunities for mid-size businesses in Myanmar.
“The infrastructure dates back to colonial times,” he says. There is also much work to do in the agricultural sector, where there is a lot of fallow farmland due to a lack of government investment, he adds.
The European Union has lifted all sanctions against Myanmar with the exception of an arms embargo. The US government, however, has not followed suit, thus prompting US companies to remain cautious. This has created a window of opportunity for German businesses, the main competitors of which are Chinese, Japanese and Malaysian firms.
Hesitation to commit
Nonetheless, members of a German business delegation to Myanmar remain prudent. One of them, the head of a firm, told DW that the Burmese had shown great interest in German investment, but that he himself wanted to wait a bit longer. Elections are set to take place next year in Myanmar and many legal issues regarding investment protection and legal compliance remain unresolved. Furthermore, the modernization of the country’s infrastructure hasn’t been completed.
But despite the problems and political uncertainties, another entrepreneur working in the healthcare industry said he was relaxed and optimistic about the future. Speaking to DW on condition of anonymity, the man stated that one shouldn’t compare Myanmar to Afghanistan or Somalia, two countries in which his firm also operates.
This kind of optimism is precisely what gives hope to former political prisoner Shell. The 40-year-old is of the view that foreign investment is “extremely important” for the country. “There is so much abject poverty here; people are in urgent need of jobs.” Other nations have to support the democratic transition process with investments, otherwise, he says, people won’t be able to profit from the democratic changes they fought so hard for.
This picture taken on October 4, 2013 shows tourists on the beach in Ngapali, the country’s remote major resort near Thandwe, in Myanmar’s western Rakhine state.
The toursim sector has been developing rapidly in Myanmar
Shell spent a total of 14 years in prison. He was last arrested in 2007 for allegedly smuggling out of the country video footage secretly recorded with other activists of the so-called “Burma VJ” group. Five years later, the government granted him political amnesty and Shell was released.
But he remains wary of the democratic change, fearing setbacks, and perhaps even new waves of arrests. He is confident, however, that the former military rulers will be more attentive and play according to democratic rules as long as there are Western investors in the country.