Nikkei Asian Review: “Myanmar’s coming elections spell r-i-s-k for investors”

August 12 | Paul Vrieze

YANGON — The lead-up to Myanmar’s general election, scheduled for Nov. 8, has ushered in new political uncertainties, and the electoral results could stall the country’s democratic transition after decades of military rule.

Rapid economic reforms since a quasi-civilian government came to power in 2011 have led to dramatic economic growth, spurred by the liberalization of the private sector and new opportunities for foreign investment.

But as elections and the subsequent challenge of forming a new, more politically inclusive government loom, economists and executives are reporting a decline in investment, notably in real estate.

Some believe the complex political situation will worsen an already unpredictable business environment. For example, vociferous opposition by the nationalist Organization to Protect Race and Religion, known locally as Ma Ba Tha, recently forced the government to cancel a $300 million real estate project because of its proximity to the revered Shwedagon Pagoda, a glittering gold-plated structure that towers over this city.

While experts say it is unclear how the first free general elections in 25 years will shape the economic agenda of a future government, most are expressing cautious optimism that Myanmar will continue reforms that have boosted growth and investment.

   “There is some apprehension in the business community and among foreign investors,” said Nyantha Maw Lin, managing director at political consultancy Vriens and Partners Myanmar. “Businesses like certainty, and this election and the formation of a new government that will follow the vote is new ground for Myanmar.

     “But … I don’t detect that they are overly concerned, and rightly so. Our reading is that regardless of the outcome of the vote, the next government of Myanmar will generally follow the economic path the country has been on for the last few years.”

 

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