Burma: An Old Civilization Opens to New IdeasJune 9, 2014
Doug Barry is a Senior International Trade Specialist in the International Trade Administration’s Global Knowledge Center.
Burma is opening up as a nation and an economy after decades of isolation. As the nation develops, there are numerous opportunities for U.S. companies to support the nation as it grows, modernizes, and brings in new products and services.
Commerce Secretary Pritzker completed a commercial diplomacy trip to Burma and other members of the Association of Southeast Asian Nations (ASEAN) along with a delegation of U.S. CEOs and the U.S.-ASEAN Business Council to solidify the commercial relationship between the United States and the region.
The International Trade Administration’s Commercial Service is also opening an office in Rangoon to support U.S. businesses looking for opportunities in this new market. Our staff will help companies understand market trends, navigate Burmese regulations, and find qualified business partners.
Commercial Officer Mike McGee is based in Thailand, but has worked with companies doing business in Burma for years. He spoke about the U.S.-Burma commercial relationship and path forward with Doug Barry of ITA’s Global Knowledge Center.
Barry: You commute regularly between Bangkok and Rangoon. Since we spoke a year ago about the easing of sanctions and the opening of the country to U.S. investment, in what ways have things changed?
McGee: Burma still has a wealth of need. After more than 50 years of stagnation and isolation, the country and its people need just about everything—from consumer goods to housing to a functioning electrical grid. So there is a huge opportunity, and there’s almost no sector that does not have tremendous need for bringing in new companies and products.
Barry: There is great internal and external pressure to open up more and to reform. How’s the government doing?
McGee: It depends on who you ask. I think it’s accurate to say that a lot of progress has been made in a short time, but much more needs to be done. We feel strongly that there can be a commercial connection to further recognition of human rights, and that will be a key focus of our work here going forward.
U.S. companies that are on the ground now fully support this approach. They are not here to extract and leave. They want to help the Burmese prosper, be free, and contribute to the well-being of the entire region. We are in this for the long haul, and much patience and engagement on every level is needed.
Barry: How do political and business leaders in Burma view the United States?
McGee: Very positively. We hear over and over again how the United States is the “Gold Standard” for just about everything.
In the area of energy production, especially electrical, the government invites greater participation by the U.S. private sector. They’re also interested in our LNG and wind power technology. Some earlier energy contracts have gone to UK and Chinese companies, but in future contracting rounds I think we’ll see much more U.S. participation.
Barry: U.S. economic sanctions have eased but not disappeared.
McGee: That’s true. If the reforms backslide or don’t continue forward, there needs to be consequences. The government is in uncharted waters, and there is much that we don’t understand about its workings.
That said, the United States is engaging with the Burmese on a variety of fronts. The U.S. Agency for International Development has programs in economic development and creating a civil society. The Peace Corps is setting up shop. Treasury and Agriculture people are here. The U.S. Commercial Service will open an office soon to help U.S. businesses spot opportunities and find buyers.
Barry: Burma is not a rich country, and “grinding” is an apt word to describe the poverty in the countryside where most Burmese live.
McGee: It’s not rich, yet. Burma is one of the most underdeveloped countries in the world, so it’s very difficult to try to introduce new technologies and new programs, partly because of the lack of a regulatory infrastructure, a legal infrastructure in place, but also just the poverty that exists.
The good news is that this is in many ways, a very wealthy country. It is very rich in resources and will have huge bearing for many years in the Southeast Asia and East Asia Pacific.
Barry: It’s a pretty exciting prospect for U.S. companies to get in on the ground floor.
McGee: Yes. What we have been largely advising is that companies find distributors and begin to get their products into the country. We can help, and will be even more helpful when the Commercial Service office opens in the U.S. Embassy later this year.
Barry: How do you help U.S. companies find partners?
McGee: We help with the due diligence process because there still is a fairly sizeable list of people who are prohibited for us to do business with. We offer a service called International Company Profile in which we make sure that their intended partners are the best choice in every sense of the phrase.
Increasingly, there are traders who are looking for the best businesspeople with the best price on the products the people need and want in the country. One of the things that I’ve been very surprised at is how vibrant the commercial environment is despite all of the prohibitions, despite all of the obstacles.
The Burmese are very resourceful, and they are very kind and friendly people.