Myanmar, Cambodia emerge as high-growth investment destinations

Money changers exchanging Myanmar kyat bank notes into US dollars

By Avelyn Ng
Channel News Asia
Posted: 30 December 2011

SINGAPORE: By some measure, Myanmar had a spectacular 2011. Endorsed as chair of Asean for 2014, and a high profile visit from the US secretary of state - reward for recent political reforms that have elevated confidence in an economy barely emerging from years in the dark.

Andrew Rickards, CEO of Yoma Strategic, said: "The country that is perhaps being held back in development, that is perhaps being held back for the last 40 or 50 years, suddenly tries to reintegrate with the world economy.

"There's an awful lot of catching up to do, challenges from basic infrastructure mobile telephones internet access to hotel rooms and getting flights... You could imagine that the whole place is creaking a little bit at the seams as it is suddenly being put on people's radar for the first time."

Singapore-listed Yoma Strategic is deeply entrenched in Myanmar, with 95 per cent of its revenue derived from property and other investments in the country in the latest half-year. It is well positioned to benefit from further reforms, even though the country still carries the weight of trade sanctions by the US and Europe.

With Singapore being Myanmar's 4th biggest trading partner in 2010, historic business ties count for a lot.

Ho Meng Kit, CEO of the Singapore Business Federation, said: "In the case of Myanmar, it will be more difficult, a little bit more unknown... The key really is the extent of the reform that is happening, whether this will be followed through, and whether it will then lead to an improvement in the business environment there.

"Then again, its a lot more opportunities so for some companies who do have links, have the intelligence there (and) have the partnership there, those risks can be managed."

Neighbouring Cambodia is also reforming its ways, although it is more established as an investment centre than Myanmar. It will chair Asean in 2012.

Danish manufacturer Jebsen & Jessen said the ease of doing business is propelling a potential US$650,000 investment in the country.

Fritz Graf Von Der Schulenburg, Eexcutive Vice Chairman of Jebsen & Jessen, said: "Small for its population, but very much open in its policy to attract new investors and it is easy to settle down there, it is very easy to build up business relationships."

Mr Ho said: "Cambodia has been reformed, has been in the market for a long time, has been a member of WTO since 2004. So of course from the risk point of view, I think Cambodia represents far lesser risk and because our companies have been operating there more recently."

Dr Mark Mobius, Executive Chairman at Templeton Emerging Markets Group, said these frontier markets are now in their "take-off stage", where self-sustaining development is taking place, thanks to high consumer spending at home.

-CNA/ac