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FROM OUR CORRESPONDENTMYANMAR


The Freight Co moves its first Myanmar project cargo, destined for a power plant, through narrow streets.


The promise and the pitfalls


Ian Matheson, our roving reporter in


MYANMAR


The business community is considering the opportunities that may stem from the remarkable opening up of Myanmar, making it the last major Asian country to connect to the world economy. Ian Matheson considers the promise – and the potential pitfalls – and is left wondering whether investors, as well as their partners in the project cargo supply chain, need to proceed with caution.


t is hardly surprising that Myanmar, with its large domestic market and population of around 60 million, as well as massive, apparently proven, reserves of gas, oil and minerals, is under the spotlight for potential foreign investors. Estimates vary, but according to the US Energy Information Administration,


I www.heavyliftpfi.com


Myanmar’s proven oil and gas reserves are 50 million barrels of oil and 10 trillion cu ft of gas. Following the suspension of sanctions in respect of Myanmar by various jurisdictions and the installation of a civilian government, international companies may now be able to participate in the


development of those mineral reserves. April’s announcement of a licensing round for 30 offshore oil and gas blocks and 18 onshore blocks, by the Ministry of Energy in Myanmar, has seen large international oil and gas entities showing interest in participating in the bidding round.


However, HLPFI is left wondering how successful those companies will be given that it was Malaysian, South Korean, Thai and other Asian companies that supported Myanmar during the sanctions era.


Shortcomings


In addition to oil, gas and minerals in abundance, investors are equally interested in what Myanmar lacks – and that is just about everything else. Years of state control, economic isolation and lack of investment have left the country with a scarcely functioning financial sector and a telecommunications sector that was heavily restricted by the old military regime. Transport infrastructure is very limited and roads often become impassable in the monsoon season. The Customs system is outdated and heavily regulated. Power supplies are at best intermittent, say commentators, with the World Bank estimating that only 25 percent of the country’s population has access to electricity and that ‘brown-outs’ are becoming increasingly common in Yangon. Having neglected the education system, the


July/August 2013 39


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