By Nick J. Freeman
A critical component of the reform process is the creating of a competitive corporate community out of one that has previously been dominated by a relatively small group of ‘connected persons’. To date, the normal approach of many investors has been to try and largely work around such individuals and their assets, with some sanctions still targeting their business activities.
But such an approach adds to the risks and transaction costs of investing in Myanmar, and as such, runs a real risk of being counter-productive. In cases where such ‘connected persons’ can be motivated to become responsible members of ‘Myanmar Inc.’, this should be encouraged.
This is primarily because, for some time to come, they will offer some of the most effective delivery mechanisms for investment, job creation and income improvements 2 in the country. Capacity weaknesses in government institutions and the rest of the private sector in Myanmar mean that a pragmatic approach to business development – and poverty alleviation – is the best way forward.
*Nick Freeman is an independent consultant and Associate Fellow of ISEAS.