Since the National League for Democracy (NLD) assumed power in Myanmar in 2016, the country which was once shut out from the rest of the world, has been continuously opening up and integrating into the international community. However, while Myanmar's economy is rapidly developing, Western countries are taking a wait-and-see attitude when it comes to investing in the country, slowing the turnaround in economic fortunes after years of stagnation.
That's why Sean Turnell, special economic consultant to Myanmar's State Counselor Aung San Suu Kyi, recently said, "No action, only talk," in an interview describing Western investment in Myanmar. "The thing about Western investment is not that it has stopped flowing, actually it never came," Turnell said.
The US and Europe have their political considerations and economic calculations behind the rhetoric without action.
As a relatively poor and underdeveloped country, Myanmar needs US and European investment more than the West's reliance on Myanmese markets.
The reluctance of the West to venture into Myanmar for business will profoundly affect the Southeast Asian nation's development. Nay Pyi Taw cannot say no to foreign investment. In the end, Myanmar will need to adopt more measures to attract investment from the West.
In this context, it can be said that if Myanmese politicians kowtow to the West, Washington and Brussels may provide the nation more benefits. Otherwise, there will be no real investment, but only "would-be investment." For the moment, the US and quite a few European countries are dissatisfied with the Myanmese government's handling of the Rohingya crisis. Their political logic behind "no action, only talk " is hence quite obvious.
Of course, capital follows profits. The current market in Myanmar does not meet the requirements of US and European investors. The International Monetary Fund said in a November report that its medium-term outlook for Myanmar's economy is favorable, but armed conflicts in the northern regions, the stalled peace process, Rohingya crisis and the strife in Rakhine State undermined the West's willingness to invest in Myanmar.
The business environment in the country remains of concern despite improvements in recent years. Yet "the Myanmar narrative is so bad right now," according to Ken Tun, chief executive of the Parami Energy Group of Companies, adding "even for us in the private sector, the first thing that springs up is 'Rohingya.'"
In the last two years since the NLD-led government took power, Myanmar has become one of the best performing economies in Southeast Asia, with 6.4 percent growth in 2017 and "an expected 6.8 percent in the current financial year," Bloomberg said. The World Bank even forecast a 7.2 percent growth over the medium term.
Despite the growth, investors are concerned about the government's ability to turn around the economy and social indicators as well as implement regulations and restrictions. For instance, I once heard an entrepreneur complaining that the new government did make some difference, yet the business environment in the country is largely the same. Incomplete laws and regulations in the field of company legislation, e-commerce and land are influencing the business environment.
The West's reluctance not to walk the talk shows its foreign investment is connected to political priorities. Divergences between the US, Europe and Myanmar over the Rohingya crisis remain.
The author is a research fellow with The Charhar Institute and director of the College of ASEAN Studies at Guangxi University for Nationalities.
Courtesy Global Times