- RON CORBEN AAP FEBRUARY 24, 2014 6:21PM
AUSTRALIAN businesses face challenges in investing in Myanmar, with analysts afraid that political and economic reforms are slowing ahead of a 2015 general election.
Australian business, notably in mining and energy, have joined in the rush to Myanmar as it opens to the world since reforms in 2011.
Sean Turnell, an economist at Sydney-based Macquarie University, says the resource sector leads strong foreign investor interest.
“If one was to look at where’s the hard cash going, it’s that one,” Mr Turnell said.
“(It) just dominates beyond measure and the big player in that context is Woodside.”
Woodside Petroleum, which recently reported a 17 per cent fall in annual profits, says Myanmar is part of its long-term growth strategy.
Analysts say significant numbers of companies are bidding for new oil concessions, with Australian interest in mining and exploration.
“There is really big, serious money there. So that’s where the real money is on the table,” Mr Turnell said.
But in a warning to investors, Australia’s Department of Foreign Affairs and Trade says Myanmar’s long entrenched military remains influential, especially in oil, gas and timber.
Australian companies taking a stake in Myanmar include ANZ Bank, with a representative office in Yangon and hopes of a full banking licence once reforms take hold.
Foreign banks are still prevented from conducting banking business in Myanmar, leaving many waiting on the 2015 vote.
Myanmar’s booming tourism sector, with visitors increasing by 30 per cent a year, has drawn attention from Australian advisory services and joint ventures.
Bangkok-based lawyer John Hancock lists education, mining, natural resources, land titling, mapping and supporting legal reforms as opportunities for his fellow Australians.
“You’ve got the whole legal system, which needs a total overall, and the land structure … needs major reforms,” Mr Hancock said.
All land is nominally owned by the state.
Other concerns lie in implementing the broad range of laws that have been passed by parliament, said Mr Hancock.
“There’s a lot of new laws coming through but the actual detail, the quality of the drafting, the clarity of those laws and the infrastructure within the government to implement them is just really, really strained,” he said.
Observers fear the reform process may have stalled.
Mr Turnell says, on land reform, “we’ve actually seen regression rather than any progress”.
Aung Zaw, editor of The Irrawaddy newspaper, said many in Myanmar fear reform’s honeymoon period is over.
“It has been more than three years,” he said.
“People in Burma said they have seen a regression on every front, particularly with the ‘gold rush’.
“(Investors) were fooled by this reform process. Investors are going in and the government is good at manipulating everyone.”