One of the biggest emerging market stories in 2012 was Myanmar. Sanctions were rolled back and outsiders finally had the opportunity to invest in the resource-rich nation.
Jefferies' Sean Darby wrote that Myanmar will be the next major global trading hub.
But ethnic clashes between Buddhists and Muslims, which has now
spilled over to Malaysia, has cast a specter over the country in the
minds of many investors.
While tensions between the two have existed for years, riots broke
out following the rape and murder of a Buddhist woman, which locals said
were perpetrated by Muslim men. Hundreds have died and over 140,000 people have be displaced since last year's riots. And the UN thinks Rohingya Muslims are one of the most persecuted minorities in the world.
Certain human rights groups argue that Western countries should be more careful about lifting sanctions too soon. But for now it appears that no one is keen to reimpose or extend them.
"It is a problem that has simmered for a long time and will probably
require harsh military measures to quell," Mark Mobius Executive
Chairman at Franklin Templeton Investments wrote in an email interview.
"To the extent that western nations understand the problem, there
should not be any [reinstating] of sanctions."
Mobius has previously said investors should be cautious but that there is "a lot of potential" in Myanmar.
That being said, investors tend to be antsy about political
uncertainty, especially when it concerns a country that has opened up so
recently.
A report from McKinsey titled 'Myanmar's Moment'
argues that it's economy could quadruple by 2030 to $200 billion, but
it could also disappoint. And one of the reasons it could, is the
ongoing communal tension:
"Much uncertainty remains. Investors are
actively considering Myanmar, but many want reassurance that the
government can resolve ethnic and communal violence, maintain its
momentum towards political and economic reform, and ease constraints on
doing business.
"Those political and economic choices
will determine the sustainability of change and the level of interest
from investors and supporters—and therefore the success of Myanmar’s
economic transformation."
Referring to the violence against Muslims in Meiktila earlier this
year when 40 people were killed and thousands were displaced, Mobius
says the spreading violence is cause of concern, especially because of
Meiktila's central location.
"Meiktila is in the center of the country and is strategic. That is
why it is home to Myanmar Air Force’s central command and the Meiktila
Air Force Base as well as the country’s main aerospace engineering
university." But he doesn't expect the impact to be severe unless "the
situation worsens."
Commodities guru Jim Rogers also continues to be optimistic on Myanmar.
"We in the U.S. had numerous problems as we were rising toward
becoming the greatest success of the 20th century: civil war, many
Depressions in the 19th century, few human rights, little rule of law,
collapse of 1907, etc, etc.," he said.
"Yet we went on to great success," he wrote in an email interview.
"...I am very optimistic on Myanmar, but expect and welcome the various
corrections which will come. There will be more."
source: Business Insider
No comments:
Post a Comment