The joint announcement by the US and Myanmar Government regarding the lifting of sanctions against Myanmar is great news for the country. It is a timely decision that will usher in a new phase of political and economic transformation.
While many expected the list of “specially designated nationals” (with whom business dealings are effectively prohibited by the sanctions) to be pruned, the axe has come out instead. Once President Obama issues the requisite Executive Order, all previously sanctioned individuals and the businesses they control will effectively be de-listed, and there will be few remaining restrictions affecting US persons conducting financial and trade transactions with Myanmar.
New overseas investment has effectively been on hold for a year while the transfer of political power took place and the new NLD led government considered the focus of its economic reforms. Combined with the recent announcement of its economic policy priorities, Daw Aung San Suu Kyi’s decision to request the US government to lift the sanctions programme sends a very strong signal that the Myanmar government is driving a strategy of investment and growth to achieve prosperity.
It’s now time for a new wave of responsible investors to engage with the opportunities Myanmar offers - the door is open not only to US investors, but also investors from other countries and regions who were indirectly impacted by the sanctions, such as the UK, Europe and Japan. Their investments will help Myanmar rebuild and unlock the resources and potential that is here and provide the long-term, inclusive growth the country needs.
Investment is required in so many sectors – energy, infrastructure (road, rail, ports, logistics, urban infrastructure), real estate, agriculture, mining, education and training, healthcare, technology and telecommunications, financial services, manufacturing, tourism – and right across the country. All of it needs to be financed – hundreds of billions of dollars worth – and most of this must come from the private sector, often in partnership with the public sector.
The opportunity is there to justify the investment – Myanmar is forecast to have among the highest levels of sustained growth in the world, and is at the centre of the fastest growing region. It is resource rich and fertile, has a large and youthful population and is undergoing positive political and social change under its democratically elected government.
Significant challenges remain – uncertainty in the legal and regulatory framework and inconsistent respect for the rule of law are high among them. Doing business here requires a careful approach and a strong, long-term commitment. The importance of taking proper advice locally is paramount. But the investment climate is improving quickly and more fundamental reforms are on the way, including a new Companies Law and Investment Law. These will provide more of the certainty that investors need as well as a robust framework for better corporate governance and responsible business conduct.
International law firm BLP welcomes the announcement by the US and Myanmar Governments on sanctions. Our experienced Yangon-based team is pleased to be supporting the development of both the business law framework and the investments that our clients are making in Myanmar’s success.
Please contact us to find out more about doing business in the new Myanmar.