Has Myanmar crossed the diplomatic Rubicon?

By any other name, it seems, Myanmar would be just as captivating. Whether you chose to call it Burma or Myanmar, now that the once-isolated Southeast Asian nation has officially become approachable by US investors for the first time in 15 years, it must be agreed that the presence of foreign businessmen plying name cards across Yangon and Naypyidaw bodes well for the success of reforms.

That agreement on the country’s name lacks international consensus stirs curiosity further, as well as confusion over how to interpret this coming-of-age nation. Indeed, international media consumers scouring for news of the country effectively operate a politically charged switchboard, toggling between identities the industry uses to define the patchwork of ethnic groups that comprise the vast nation whose shape oddly mirrors Thailand to the west.

For the BBC, the choice to call the nation “Burma” is one done so out of a desire to maintain consistency and efficiently communicate with their audience, seen as a way to continue the legacy of coverage started by the BBC Burmese Service in 1940. For others, such as the New York Times and the UN, the name Myanmar was accepted and etched into style guides in 1989 when the military government officially announced the change — a move hotly contested by the NLD whose election win was revoked a year later.

This publication has chosen to call the nation Myanmar, which we believe reflects the societal preference within the country, as well as what local experts and international corporations are interpreting as a crossing of the diplomatic Rubicon with the US.

Myanmar watchers are now excitedly following the day-by-day changes that are at times too fast for the country to keep up with itself. A local expert that frequents Naypyidaw echoes this sentiment, telling Inside Investor that government officials were unaware of the extent to which sanctions had been eased until they were given a presentation a few days later.

When the Obama administration stopped restrictions on financial transactions and investment by US companies (setting notable limitations, such as any interaction with the Ministry of Defense) on July 11, a number of businesses were already seriously plotting strategies for entering what has been called the last significant “frontier economy” in Asia. Then, days after the sanctions were eased, GE became the first US company to sign a deal with Myanmar, involving the delivery of medical equipment to hospitals in Yangon. The Coca Cola Company now has plans to continue business after a 60-year hiatus; Ford Motor Corp, General Motors, Chevron, Caterpillar, IBM, Procter & Gamble, Dow Chemical and Mastercard are among the companies sending business representatives.

Though often obstreperous ethnic groups on the peripheries of the country may continue to give the nominally civilian government reason to continue ruling with an iron fist in the name of stability, GE in particular considers the revival of economic relations with Myanmar to be permanent. “We believe there is no turning back”, Head of GE’s Asia Operations Stuart Dean recently told the Star Tribune. Sources from within the country told Inside Investor that government officials have indeed begun expounding tenants of transparency with regards to business deals made with foreigners.

Yet for all the potential presented by the still largely agrarian nation – a sector in which 70 per cent of Myanmar’s 60 million citizens subsist off of – investors will have to battle the privations of near non-existent banking infrastructure and neglected transport networks. For example, tracks on Myanmar’s railway system have not been replaced since British rule, and it is estimated that lack of maintenance has stifled freight trains to a maximum speed of 24 km/h.

Transport and energy infrastructure investment in Myanmar, however, is perceived as having the greatest potential for producing attractive dividends because contributions here would effectively establish the backbone of the economy.

What’s more, Myanmar is replete with natural resources, such as off-shore gas reserves in the Bay of Bengal. Myanmar currently exports raw gas to energy-thirsty neighbours Thailand, China and India, but there are plenty of possibilities to turn the country into a downstream production base, creating more value-added gas products, including propane, ethylene, butane and the like.

In a recent interview with the Financial Times, President Thein Sein outlined the economic opportunities he believed his country possesses. “One of our strong focuses right now is to try to create the sort of labour-intensive industries that can provide employment “, Sein told the FT. “We have more than 3 million migrant workers in nearby countries and it’s important to try to create jobs for them – that means investment in labour-intensive industries at home… such as textiles”.

To catalyse an economically sound Myanmar, investment and industry know-how will be crucial. Despite the whirling whims of typical Southeast Asian politics, one thing can be for certain: The more companies come in, the more the ruling government will stand to lose.