On September 14, President Obama met with State Counsellor Daw Aung San Suu Kyi and announced plans to lift U.S. sanctions on Myanmar. The announcement is a major and historic step forwards for Myanmar.
The three page Executive Order was issued by The White House. American sanctions had been authorised under what was known as the National Emergencies Act – note that this was introduced in May 1997. This is a major change and huge plus for Myanmar.
“By the authority vested in me as President by the Constitution and the laws of the United States of America…….I hereby determine and certify that it is in the national interest of the United States to waive, and hereby waive, the sanctions…….. This order is effective at 1:00 p.m. eastern daylight time on October 7, 2016.
“It is the right thing to do in order to ensure that the people of Burma see rewards from a new way of doing business and a new government” President Obama.
“We think that the time has now come to remove all the sanctions that hurt us economically, because our country is in a position to open up to those who are interested in taking part in our economic enterprises. We would like to invite all of you to come to see our country, to see why you should invest there, and see how you can invest there in such a way that you will benefit from it as much as we can.” Daw Aung San Suu Kyi. She added that economic development was essential to bring peace to the country. “Unity also needs prosperity, because people, when they have to fight over limited resources, forget that standing together is important…We want to make sure that our people are better off materially in order to strengthen our political initiative.”
Clearly The Government in Myanmar seeks and will now benefit from investments from the USA. The sanctions had been designed to block individuals and companies. The speed and scope of the changes have surprised some observers. Some sanctions had been lifted in 2012 and US firm GE quickly established a presence in Myanmar (see below, GE’s view on Myanmar). Now there is a level playing field for investors and this will be especially helpful for small and medium sized companies in Myanmar. American companies also benefit as they now have a wider choice of business partners in Myanmar.
You may have seen our recent blog that reports on Singapore as now the premier investor over the historic funding source leader, China. The removal of these sanctions will further bolster investments from countries in addition to China and also broaden the range of companies to whom funding will be available. There was a pattern of Government projects being funded by China. Now with a much broader range of funding sources more projects will emerge for funding within commercial sectors.
The 2016 IMF financial forecast for Myanmar growth of 8.6%, the fastest growing economy, has already been attracting investors. Now, it is hard to think of any other one change that could do more to ramp up further the speed of economic growth in Myanmar.
This really is a huge step and improvement for Myanmar and must surely remove any vestiges of hesitation for any firm viewing Myanmar’s lucrative economic future.
This is exactly the forecast we had planned and hoped for when FocusCore opened in Myanmar in February 2014. Legal and tax reforms have continued to enhance growth, forecasts and results. Our objectives, to help companies start their business operations in Myanmar and offer our full range of specialist and corporate support services will now also be able to assist more direct investments from the USA.
*In the words of GE (General Electric) “Myanmar is the new sweet spot for growth in ASEAN…” (Association of Southeast Asian Nations).
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