General Electric, one of the largest U.S. companies, has signed a deal with Burma to supply X-ray machines to two private hospitals in Rangoon, in the first U.S. private business deal since the removal of sanctions.
The U.S. company signed the $2 million deal through a local company called Sea Lion for machines that provide cardiology and topography images.
The head of GE's Asia operations, Stuart Dean, said the company would expand into other sectors of the Burmese economy now that sanctions are lifted.
Dean said GE was working to finalize a deal on two 25-megawatt gas turbines, which the government promised to the public in response to protests in several cities earlier this year. It would also seek to upgrade technology sold to Burma before sanctions were put in place, it said.
GE was also looking at aircraft leasing as Burma is building a new international airport outside Rangoon, he said. The antiquated railway fleet also needs replacement, he said.
The deal was announced on Saturday during a visit by U.S. business leaders to Rangoon that included Robert Hormats, a top US State Department economic official.
General Electric is well positioned for doing business in Burma, which is in need of more electrical power systems and more healthcare technology.
“We're now good to go,” GE's chief executive for the Asean region said during a business conference attended by Burmese President Thein Sein on Friday in Siem Reap, Cambodia.
“Before it was a grey area, we didn't know if this was permitted or not. We would prefer it this way, to see the end user. If we gave a hospital 60 days to pay, was that financing and breaking sanctions? We weren't sure, but now that's covered by the licenses, so we're very positive,” Dean was quoted as saying on Business Standard website. He was referring to the removal of investment sanctions by the U.S. administration last week.
The U.S. business licenses cover provision of financial services and a reporting requirement and detailed disclosures to promote transparency, a move Obama said was intended to provide “immediate incentives to reformers.”
Electrical power outages are chronic in Burma, and GE is expected to reap immediate deals.
Three out of four people in Burma do not have electrical power, even though the country sells electricity to its neighbors China and Thailand.
Regarding electrical power stations, he said, “We continue to negotiate this, discussions are ongoing, but unlike healthcare equipment it's complicated, you have to connect to the grid and you need gas.”
“There's an urgency, we're working it hard, Burma’s working it hard, but they're inundated with other proposals and in terms of people who understand how to negotiate energy deals, they're limited.”
GE is in the initial stages of opening an office in the country, he said.
“We still have no feet on the ground. We're looking to hire by the end of the year – its one step at a time,” he said. “The real focus is, let's do healthcare and electricity well.”