Legal Reform Deemed Vital for US Investment
By May Lay 18 July 2012
RANGOON—Burma requires economic and legal reform in order to become competitive in a 21st century environment, an industry expert tells dozens of leading US companies in Rangoon.
A total of 38 US firms—including Coca-Cola, Google and Halliburton—met senior White House business officials in the former capital to discuss investment opportunities in the wake of last week’s lifting of economic sanctions.
Frances A. Zwenig, of the US-Asean Business Council, told a press conference on Monday that Burmese businesses must learn to adapt to modern practices quickly after decades of isolation.
“Burma’s economy was closed for so long,” she said. “As a result, people don’t know how to deal within a 21st century economic context. US companies are willing to invest in Burma. They will also bring Burma to be better place but Burma is a very complicated place to do business.
“Laws on the books are not up-to-date and cannot support business development and economic reform,” added Zwenig. “A lot of information is not available yet about the economic situation.”
After President Barack Obama allowed US businesses to invest in Burma on July 11, a total of 38 companies arrived at the weekend to observe opportunities and potential benefits. But they also saw many weaknesses in the financial system, interaction between government departments and infrastructure.
“US companies will become involved in financial services, energy, consulting, manufacturing, automobiles and aerospace,” said Anthony Nelson, associate director of the US-Asean Business Council.
“Without using credit cards, it will be difficult to do business here,” he added. “How we will move money quickly? It is one of the essential things for developing a business environment.”
American manufacturing giant General Electric became the first new US investor in Burma on Saturday with the signing of a deal to provide medical equipment worth US $2 million to Pan Hlaing and Baho Si hospitals in Rangoon.
“As you know, Coca-Cola talks about the consumers in Burma and what they can do here. Google Software Company will also open its branch in Burma,” said Nelson.
The US delegation focused on exploring the business environment and gathering information on the government’s economic programs, and observers say that Burma’s lucrative oil and gas industries were attracting the most attention.
“The US only eased sanction. We should accept their investment as they can bring high technology and products. They will create job opportunities and we can get the tax on their export products,” said a spokesman for the Union of Myanmar Federation Commerce and Chamber Industry.
The 38 US companies present as the business conference were: Chevron, Caterpillar, Abbott, ACE, Baker & McKenzie, Baxter, Boeing, Chartis, Coca-Cola, Conoco Phillips, Dell, Deloitte & Touche, Dow Chemical, Emerson, ExxonMobil, Federal Express, Frod/RMA group, Freeport McMoRan, General Atlantic, GE, General Motors, Google, Halliburton, IBM, Jhpiego, KPMG, MasterCard Worldwide, McDermott, McLarty Associates, MKW Capital, Merck/MSD, Ogilvy, Price Waterhouse Coopers, Procter & Gamble, Qualcomm, Time Warner, TE Connectivity and Visa.
In 1990, Washington imposed economic sanctions against Burma’s military government which prohibited exports to the US and crippled many sectors of the economy, especially the then-flourishing agricultural and textile industries.