Tue, Sep 26, 2017 - Page 9 News List

Crisis dents Myanmar’s hopes of Western investment boom

By Yimou Lee and Marius Zaharia  /  Reuters, YANGON and HONG KONG

When officials from Myanmar’s commercial capital, Yangon, toured six European countries in June, they were hoping to drum up investment in transport, energy and education.

Instead, they were bombarded with questions about the nation’s treatment of the Rohingya Muslim minority, who have long complained of persecution by the Buddhist majority in the oil-rich, ethnically divided, western state of Rakhine.

“In each of every country, that issue was always brought up,” Yangon City Development Committee secretary Hlaing Maw Oo said after the 16-day trip.

The situation in Rakhine has worsened dramatically since then, with more than 400,000 Rohingya fleeing to Bangladesh to escape a military counterinsurgency offensive the UN has described as “ethnic cleansing.”

Western investment and trade in Myanmar is small, but there were hopes that a series of reforms this year would prise open an economy stunted by international sanctions and decades of mismanagement under military rule.

With most sanctions lifted, an expected flood of Western money was seen as a key dividend from the transition to civilian rule under Nobel laureate and Burmese State Councilor Aung San Suu Kyi.

Regional diplomats saw it balancing China’s growing influence over its neighbor.

However, Aung San Suu Kyi has been beset by international criticism for saying little about human rights abuses against the Rohingya, and lawyers, consultants and lobbyists say the European and US companies that had been circling are wary of the reputational risks of investing in the nation.

Louis Yeung, managing principal of Yangon-based investment firm Faircap Partners, said one of his business partners — a listed, US-based food and beverage company — decided to hold off its plan to enter the Myanmar market for three to five years, citing factors including slower-than-expected reforms and the Rohingya crisis.

“Their conclusion is that it wasn’t the right time for them,” he said. “They want to see more traction from the government and Rakhine is not helpful.”

The pressure has been growing in recent months, even on existing investors, with rights group AFD International calling on foreign firms to stop investing in Myanmar.

A small group of investors in US oil major Chevron filed an unsuccessful motion at its annual general meeting urging it to pull out of its production-sharing contract with a state-run firm to explore for oil and gas.

Meanwhile, Norwegian telecom Telenor, which runs a mobile network in Myanmar, issued a statement calling for protection of human rights.

Chevron declined to comment on its investment in Myanmar, while Telenor did not respond to several requests for comment.

Bernd Lange, chair of the European Parliament Committee on International Trade, last week said his delegation postponed a visit to Myanmar indefinitely, saying the human rights situation “does not allow a fruitful discussion on a potential EU-Myanmar investment agreement.”

Myanmar Tourism Federation vice chairman Khin Aung Tun said that global firms planning to hold conferences in Myanmar were considering other locations.

“People were just starting to see Myanmar as a ‘good news’ story,” said Dane Chamorro, head of South East Asia at Control Risks, a global risk consultancy. “Now you can imagine a boardroom in which someone mentions Myanmar and someone else says: ‘Hold on, I’ve just seen something on Myanmar on TV: villages burned down, refugees, et cetera.’”

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