Monday, May 21, 2012

ITD breathes sigh of relief over easing of sanctions

Thai companies preparing to invest in Myanmar including Italian-Thai Development Plc (ITD) are expecting windfalls from a decision by the United States to suspend most sanctions barring American investment in the impoverished neighbour.
Business leaders praised the sanction suspension, saying it will help lift Asean's image, pave the way for more direct investment to flow into Myanmar and encourage international financial institutions to extend loans to the country, which has embarked on political and economic reforms since last year.

US Secretary of State Hillary Clinton announced during a visit of Myanmar's Foreign Minister Wunna Maung Lwin last Thursday that the US would issue a general licence to permit American investment in Myanmar and that US energy, mining and financial services can search for business opportunities there.

It also named current special envoy to Myanmar Derek Mitchell as its first ambassador to the country in 22 years, pending endorsement by the US Senate.

"That's a very good sign, and we hope it will be easier for us to convince international institutions to extend loans to support our project," said Kiwamu Honda, a senior adviser to the chairman of Dawei Development Co, an ITD unit.

Mr Honda, who is also an adviser to ITD's president, earlier said the World Bank and the Japan Bank for International Cooperation are keen to extend loans to ITD's massive Dawei project in southern Myanmar, but progress has been slow due to the sanctions.

"I think the announcement by the US will speed up investment from every country into Myanmar," said Mr Honda. "The US wants to be there to exercise its strength against China's domination of Southeast Asia."

Arin Jira, a vice-chairman of the Federation of Thai Industries, agreed that easing US sanctions will make international banks more willing to lend money to Myanmar and the ITD project.

Thai businesses, thanks to the country's long border and good bilateral ties with Myanmar, are poised to gain, but more hard transport routes including rail lines must be developed to service more investment and trade between the countries.

"Myanmar is slated to chair Asean in 2014, so that will also help its image," said Mr Arin, who is also chair of Thailand for the Asean Business Advisory Council.

Somhatai Panichewa, Amata Corporation's chief business officer, said the move by the US came earlier than expected after the EU suspended sanctions against Myanmar for a year and Japan's partial write-off of its debts.

Amata, Thailand's leading industrial estate developer with presence in Vietnam, has looked for opportunities to invest in special economic zones in Dawei and Thilawa.

"Certainly American investors will be quick to explore investment opportunities in Myanmar. However, like the EU and Japan, they'll remain cautious while seeing how smoothly reforms proceed," she said.