Emerging Markets – Myanmar

Myanmar has many great things going for it and is the best positioned Asian country (being between India and China has it’s culinary benefits) to have great economic growth in the years to come. It is the fastest growing economy in the world. Despite widespread flooding and landslides its economic growth was 7.2% with 8.4% projected for this fiscal year. Here are some reasons:

Ain't she a beaut?
Ain’t she a beaut?

It’s government. 

I think a lot of westerners (myself included) take the great government structures we have for granted. We spend so much time complaining the x government isn’t doing enough to fix its economy. Well I’d argue that the very structure the government has and it’s legal and political environment is doing most of the economic heavy-lifting. Anyways, Myanmar elected it’s first democratically elected leader in March 2016 after decades of military rule, though the military retains some of it’s previous control. the past 5 years have seen easing of strict controls on media freedom as well. The state still controls the main broadcasters and publications. I can see that changing though.

It's a Hunch
It’s a Hunch

Its resource rich, and its citizens are well educated given it’s lack of development.

Myanmar is a country rich in jade and gems, oil, natural gas. It has a wide income gap from military corruption, and is still very undeveloped, ranking 148 out of 187 countries according to the HDI. Its GDP is equivalent to around 1,000 USD per year per person in Myanmar. So much great potential. It has an 89.5% literacy rate among its people (2014 Burma Census). English is taught as a second language from kindergarten.

Scarface
Myanmar, this is paradise, I’m telling you. It’s like a big chicken waiting to get plucked!

Right now, Myanmar is among the poorest nations in Southeast Asia. Foreign direct investment will help tons with this problem. In March 2012, a draft foreign investment law emerged, the first in more than 2 decades. Foreigners will no longer require a local partner to start a business in the country, and will be able to legally lease but not own property. 2 In March 2016 It’s stock exchange started.

Myanmar is the last true frontier for Capitalism. However, it will definitely have it’s challenges in the future. “Though economic reforms implemented since 2011 have had positive outcomes, Myanmar’s new government will face the challenges of advancing economic reform, addressing infrastructure and labor shortages, and making progress towards peace and social cohesion,” said Winfried Wicklein, ADB Country Director in Myanmar. “Moreover, intensified efforts are needed to connect and develop rural areas to improve access to markets and services, and to generate opportunities and jobs.” 3

Inflation is very high in Myanmar at 15%, which is a concern for anyone invested in its stock exchange. Another concern is its deep-rooted corruption, which won’t go away anytime soon.

How do I make money from this?

For proper investing in Myanmar, it is perhaps a little early. This is where the less conventional methods reign. If you have the drive and interest you can look into real estate there, as the laws have eased up on foreign condo ownership. Real estate prices are already skyrocketing!

Also, keep an eye on it’s stock exchange. And be wary of military owned firms, I have another hunch that the military isn’t really that popular there. Yes I know AT&T and Comcast are a thing. If you are going to invest in military owners, be sure to find the AT&T’s of their economy, not the Blockbusters.

Thank you for reading!