09/19/2012, 00.00
MYANMAR

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 project."

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 Myanmar, 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 and Naypyidaw.

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 and fishing.

 

 

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