Claridon are the first privately owned European company to open a wholly owned office in Myanmar and are working closely with both the Myanmar and EU Governments and Chambers of Commerce to help promote opportunities for manufacturers and exporters to this new and exciting economy, which represents long term opportunities for almost all business sectors.
The “Golden Land” officially known as the Republic of the Union of Myanmar and formerly as Burma, has undergone dramatic and sweeping changes in recent years under the administration of President U Thein Sein.
The incredible transition from a military junta to and open economy embracing democracy has surprised the global community and will see Myanmar assume the ASEAN chair for the first time during 2014, a quite remarkable achievement. Wedged between the world’s two most populous countries, India and China, Myanmar is the 40th largest nation in the world with a land area of 676,578sq.km The UK’s in comparison is 241,930 sq.km.
Myanmar is the 2nd most populous country in SE Asia with a young and growing population of more than 60 million people which represents incredible opportunities for companies in almost all business sectors.
Myanmar’s recent democratic reforms have driven many countries to re-assess their stance on the South-east Asian nation, and some have already fully reversed their position. The powers that helped close Myanmar’s doors to international cooperation are now the ones rushing to get in as they re-open. Where there were once strict sanctions, there now comes development capital, partnerships and political support from some of the previous regime’s harshest critics.
At the beginning of 2013, a huge and unprecedented debt restructuring with Japan, the Asian Development Bank (ADB), the World Bank and Paris Club members cleared over $6bn, or 60% of the total owed by Myanmar. Japan itself was responsible for writing off $3.58bn, Norway cancelled $534m and other nations followed suit as the World Bank and ADB immediately issued new loans worth a combined total of over $1bn.
The move is not only an encouraging nudge towards democratic reform, it has also led the way for increased business cooperation and smoothed the path for some of the largest foreign conglomerates to enter the market. The week after the debt cancellation, three of Japan’s largest firms announced their intention to enter the Myanmar market - Dentsu, the public relations giant; Nissan, one of the world’s largest auto manufacturers; and Mitsui, a leading Japanese conglomerate.
Japan’s leading stance in the debt cancellation has put it in a good position to enhance cooperation with Myanmar, and its interests in the country run deep. Japan’s help in the Thilawa Special Economic Zone has attracted the interests of Mitsubishi, Marubeni and Sumitomo, who are all conducting feasibility studies to determine whether they could make use of the zone.
The US and EU have so far been left slightly behind Japan in terms of development aid and political and business cooperation; however, efforts are steadily being made to rectify this situation. In February 2013, US sanctions on financial transactions were lifted for four Myanmar banks that had been designated as having connections to criminal enterprises and thus restricted under US law. Two private banks, Asia Green Development Bank and Ayeyarwady Bank, along with two state-owned banks, Myanma Economic Bank and Myanma Investment and Commercial Bank, are now able to allow American businesses to legally remit funds into and out of the country.
The announcement came days before a 50-company American delegation arrived in Myanmar for the first time, looking for the next market in which to expand their enterprises, including Starbucks and McDonalds.
In April 2013, the EU agreed to lift all remaining sanctions on Myanmar and re-instate the generalised system of preferences, demonstrating its commitment to long-term cooperation with the new pro-democracy government. Additionally, although Norway’s contribution in the Paris Club restructuring was modest compared to Japan’s, the EU’s financial contribution was sweetened later in the year when Finland suggested that the new Myanmar president could be a strong candidate for the Nobel Peace Prize.