Myanmar - Asia's New Frontier

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Does Myanmar, (formerly known as Burma), have the potential of becoming one of Asia's wealthiest countries? With its wealth of natural resources in oil and gas, an abundance of timber and other aspects such as the potential for tourism Burma has become quite an appealing prospect for the corporate world and investors alike.

For decades the country was ruled by a military dictatorship and was essentially in seclusion until 2011. The release from house arrest of opposition leader Aung San Suu Kyi and new parliamentary elections eventually led to the election to President Thein Sein (who had also been Prime Minister).

Aung Suu San Kyi's political party National League for Democracy boycotted the elections and classified the event as a sham. However, this eventually led to a civilian government that was sworn in on March 30, 2011.

This was seen as perhaps a step in the right direction by countries such as Britain and The United States who had imposed economic and other sanctions on Myanmar during the years of dictatorship. British Prime Minister David Cameron visited the country on the 13 April 2012 and American President Barack Obama did the same later in the year in November.

The European Union lifted its sanctions after its policy advisor Catherine Ashton met with Aung Suu San Kyi in April, 2012. The dictatorship changed the countries name in 1989 to Myanmar and Rangoon to Yangon. (I prefer to call it by its original names).

With the sanctions now being eased, foreign firms such as Americas Caterpillar, Coca Cola and Ford are considering or have opened offices in Rangoon as well as British Companies such as container manufacturer Rexam and financial services company Standard Chartered.

What can organizations wanting to enter the Burma market place expect and where are the best areas for growth? One of those areas is in the property market and not just in Rangoon.

I arrived in Rangoon and my first impression making my way into the city was the age and disposition of so many of the buildings. Most are of the old Colonial architectural style and while they are being inhabited many are in need of repairs. While the visitor will see new modern structures being built, mainly high rise apartments and offices, until recently little construction had occurred since the 1990's because of economic sanctions.

Now with the new influx of business and tourist travelers, there is an attempt being made to re-purpose some these old structures to accommodate the needed space. A good example of this is the popular Strand Hotel in the city of Rangoon. Originally built in 1901 and a favorite place for Rudyard Kipling and Somerset Maugham, the hotel became derelict for many years during the dictatorship only to be given a new life in the 1990's by local developers.

Today it's not only a hotel but a popular gathering spot at the bar for American and British expats. Walking around Rangoon is safe and easy, the people are gentle and kind. Not surprisingly with almost 90% of the population Buddhist beautiful gold pagodas are all around including the city's most famous landmark the Shwedagon Pagoda.

One important aspect I found in Rangoon and throughout Burma as I traveled is that it is a relatively clean country considering the amount of people living at the poverty level.

As expected with the large influx of business investors and tourists this has had a measurable impact on local prices. In a report published in the Wall Street Journal in 2012 Rangoon residential prices were already increasing by as much as 39%. Office space has also been hit with increases doubling since 2011 to 75 USD per square meter or 11 square feet.

Hotel rates have risen almost 65%. Land costs have been adversely affected with private equity investors reporting land prices at 5,000 USD to 7,000 USD. This is causing investors to turn away from development. The government has responded with increases in taxes and price caps to curb the rocketing prices.

After Rangoon I travelled by air to Mandalay in the central part of the country. Unlike other countries in the region with so much air pollution you cannot see the ground from a plane. Burma is a pleasure to witness from above. Very green and occasional mountains are easily visible. Air transport is readily available and flights are available daily to other locations in the country. The infrastructure in Burma varies from new roads and toll booths to those that still are antiquated and easily washed out after the rains.

Mandalay is the second largest city in Burma and has become an important tourist destination. From religious shrines, Buddhist monasteries to tours of the Irrawaddy River have become popular. Its location is welcome relief from the heat and humidity that is found in Rangoon.

Another important destination is the ancient city of Bagan. While Cambodia has Angkor Wat I think its safe to say that Bagan is going to become more popular. Pagodas and stupas from the 10th Century are easy to visit and very few restrictions on visitors with their cameras.

Boasting beautiful resorts and traditional Burmese living is the Inle Lake region in the Shan State. Most resorts are built on the lakes many tributaries offering excellent services and cottage-like accommodations. I took any number of boat rides throughout the lake area where most of the inhabitants live on homes above the water on stilts.

I suspect that tourism will become a major industry for Burma even if its location requires a lot of air travel. Hotels and other on going construction are easy to see in all of these locations.

While the attention being given to Burma by foreign organizations and the tourism industry are a boon to the local citizens there are still problems that need to be resolved. First is in the bank and credit sectors. ATM machines are just now becoming available for local banks and their customers. According to a report published in the local press outlet News-Eleven Myanmar this August 2013 Visa International, which entered the country last year expects that it will take almost three to five years to have debit and credit - services and systems fully operational.

Other problem areas include education and health throughout the for Burma's 60 million citizens. Most youngsters receive only a fourth grade education and then go to work for local family businesses or agricultural work on the many farms that exist throughout Burma. The University in Rangoon has been closed due to student protests in 1996 but there is hope that it will be re-opened soon.

This presents the obvious problems of finding qualified help for businesses with companies looking to neighbouring countries such as India and Thailand for qualified employees particularly in the IT/IS fields. Computer/internet use and ownership is limited to very few businesses and citizens. Those that do have internet service have to be wary of it being slow and perhaps censored.

Healthcare throughout Burma is extremely limited and as a result Britain has pledged to give Burma £60 million in aid each year towards modernizing its healthcare facilities, care services and for education as well.

My lasting impression of Burma or Myanmar is that of a country with enormous potential. Once it overcomes the obstacles that still exist with cost and government regulations the country could very well become one of Asia's best locations especially for investors.

source: Propertyshowrooms
http://www.propertyshowrooms.com/myanmar/property/news/myanmar-asia-s-new-frontier_312970.html