Coca-Cola plans to return to Myanmar after a 60-year absence as a result of the US government’s decision to relax investment sanctions.
It originally entered Myanmar in 1927, but left in 1962 when the military seized control of the country.
Coke has a history of being the first to re-enter markets. Expelled from China in 1949, the company shipped 20,000 cases from Hong Kong in 1979 after full diplomatic relations were established.
Only North Korea and Cuba remain as countries where the company does not do business.
Coca-Cola’s re-entry is reflective of the swarm of foreign investors seeking to establish a presence in what is being called Asia’s last frontier market.
Myanmar’s transformation began in March, 2010 when Senior General Than Shwe, who led the junta for nearly two decades, ceded power to the current government, reasoning that he was ready for retirement.
In November 2010, peaceful but restrictive general elections were held, ultimately leading to now-president U Thein Sein assuming office in March, 2011 and the commencement of democratisation of the country.
The government then embarked on a series of political and economic reforms, among them lifting the house arrest of pro-democracy leader Aung San Suu Kyi, releasing political prisoners, instituting new labour laws that permitted unions, easing censorship, relaxing currency regulations, and allowing Suu Kyi’s party, the, National League for Democracy, to participate in the by-elections to fill vacant parliamentary seats. It won 43 of the 45 available seats.
The reforms have resulted in extremely positive consequences.
Following the by-election, the European Union and Australia suspended sanctions, prompting the US to restore diplomatic relations with Myanmar in January this year and subsequently loosen sanctions in May.
US Secretary of State Hillary Clinton visited Myanmar in December, the first visit by a US secretary of state in more than 50 years, meeting separately with the president and Suu Kyi.
Clinton recently said :“Today we say to American business: invest in Burma”, and President Obama nominated Derek J Mitchell to be the first American ambassador to Myanmar since 1990. The ASEAN members have approved Burma’s bid for ASEAN’s chair in 2014.
The most promising investment opportunities in Myanmar include agriculture, natural resources, tourism, manufacturing, and importing products to the 55 million potential consumers who until now have been isolated from the outside world.
During British rule, Myanmar was the second-wealthiest country in Southeast Asia and the world’s largest exporter of rice. Rice production is estimated at well over 50 million tonnes, covering 60 per cent of the country’s total cultivated land area.
The country produces 90 per cent of the world’s rubies and is a large producer of other gems such as sapphires, pearls, and jade.
Myanmar’s recoverable crude oil reserves are estimated at 3.2 billion barrels. It has abundant natural-gas resources with proven recoverable reserves of 18.012 trillion cubic feet (TCF) out of 89.722 TCF’s estimated reserve of offshore and onshore gas.
Foreign investment comes primarily from China, Singapore, South Korea, India and Thailand, but that is set to change dramatically with the recent lifting of sanctions in the US and Europe.
With a great deal of attention shifting to Myanmar, Cambodia may garner less attention, and Myanmar is clearly competing for investment dollars.
Anthony Galliano is chief executive of Cambodian Investment Management. Contact Anthony at [email protected]