» 09/19/2012, 00.00
Energy, a key sector for economic growth in Burma
Foreign investments in capital and know-how fundamental. In 2012 record in foreign investment in the country, carried along by oil giants. By year's end the government will auction off areas rich in oil and natural gas. Indian expert: "Myanmar is largely underestimated."
Yangon (AsiaNews /
Agencies) - In the coming years, the energy sector will be crucial to the
economic growth of Myanmar, thanks to large investments of foreign companies
both in capital and in know-how and necessary operational skills for society. Considered
by many as the new "Asian tiger" after decades of brutal military
dictatorship, corruption and rampant exploitation of labor, the former Burma in 2012 has
registered a record in foreign investment, led by oil companies. And while corporate
interests are focused on the new government auction for the exploitation of vast
areas rich in oil and natural gas, by the end of the year, giants like
Coca-Cola will set foot for the first time in the South East Asian nation.
As pointed out by a senior executive of an Indian energetic giant, "Myanmar
is largely underestimated" and is fertile ground for research and
investment. Plans are underway to seek out "the largest reserves of oil
and gas, which is still waiting to be discovered" and are coveted by China and India. An interest confirmed by the
analysts of the International Monetary
Fund who, after 60 years of isolation, register an increase in foreign
investment of 40%, for a total value of 3.99 billion dollars. However, some
unsolved problems remain, including rampant corruption, lack of transparency in
business and the nation's wealth remaining in the hands of a small group,
mostly close to the military leadership. For this reason the scholars in the
field, among them Andrew Gilholm based in Singapore, point out that "a
secure and stable environment for investment is [still] a long-term
For the Asian Development Bank (ADB),
exports of natural gas have grown to touch the 3 billion dollars last year and the figure is
expected to rise in 2013. In
there are between 11 trillion and 23 trillion cubic feet of natural gas. At
present, the country produces 19,600 barrels of oil and 1,475 billion cubic
meters of gas per day, and the growth potential is 300 million cubic meters per
day, to be achieved within the next year, but there are still concerns related
to a massive exploitation . According to some, in fact, gas is being extracted
faster than it is being discovered, a factor that could lead to a partial
decrease in the production.
The growth target will depend on the implementation of the energy plan at
regional level in South-East Asia. Here the
role of ASEAN, an association that brings together 10 nations of Southeast Asia, will be vital for the promotion of a
network capable of overcoming the boundaries of individual countries. To date,
there are already networks that join Cambodia,
Vietnam, Laos and Thailand,
the goal is to create a large-scale project by 2020, with particular attention on
the link between Bangkok
Meanwhile, after a long court battle and three different drafts, the Burmese
Parliament has approved the controversial law that counsels foreign direct
investment (FDI). Lawmakers have abandoned the clause which fixed the minimum
investment of 5 million dollars, while the roof is 49% as a maximum amount of
property that can be owned by foreigners. A rule that will ensure the nation
maintains a majority stake in strategic sectors such as agriculture, livestock
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In April, more than 20 production blocks off the coast will be sold to the highest bidder. The Burmese government intends to attract capital from abroad, but also must deal with their own needs. With the old military contracts, about 80% of the production ended up abroad. Aung San Suu Kyi: economic reforms in tandem with the confidence of investors.
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