In order for any burgeoning economy to find its feet and work for the country, political stability is key. And nowhere more so than in Myanmar. After so many decades of military dictatorship, the economy is new, delicate, and growing rapidly.
According to EU ambassador Roland Kobia in an interview with The Myanmar Times, the importance of the country’s political stability can’t be underestimated.
It’s particularly vital to attract investors from Europe and the rest of the world to Myanmar. As the new government has been in power for a relatively short amount of time, Mr Kobia says that longer is needed for the right policies to be constructed and launched. They then need time to bed in and show themselves to be working for the country.
Not only is Myanmar dealing with a new economy and democracy, the country is still trying to weather the storm of inter-communal tensions, illegal networks, protectionism, extremism and other problems from the changes in the regime.
All of this has to be tackled because these political problems and issues all impact on investments. There is no doubt that overseas investors are looking at the political situation just as closely as they are at the country’s infrastructure and economic environment, before they decide whether or not to invest.
Investors are, of course, hesitant to plough their money into areas that are perceived to be somewhat unstable politically, as they simply don’t want to risk their investment. Without security, calm and a peaceful political background, it’s extremely difficult to grow any kind of worthwhile, working and beneficial economy for a country.
Mr Kobia uses Rakhine as an example of an area that European investors are unlikely to be interested in. While it may seem sensible to people within Myanmar that European companies invest in the area and offer opportunities for the region to improve, the volatility of the state preclude this. Even homegrown companies hesitate to invest there due to the tensions, outbreaks of conflict, police and military operations, poverty and low levels of development.
Rather than investors taking a risk on a country they’re not sure about, it’s actually up to the country to provide the safe, stable environment investors want to be part of. Rakhine is one area that struggles to attract any investment due to its political instability, but there are others. Areas like Kachin and Shan suffer similarly, and it’s not until political factors are fully taken into consideration along with economic ones that investment will flood in.
It seems that politics and the economy go hand in hand for Myanmar, just like any other country. The challenges are many, but the opportunities are there. It remains to be seen how these challenges will be tackled by the new government, and what the results will be for overseas investment in the country.