Burma’s business development prospects in 2015 are forecast to be mixed as the country grapples with a variety of problems ranging from domestic political uncertainty to outside economic influences beyond its control.
National elections this year will make some foreign investors hesitant to enter Burma until a clear outcome emerges, say analysts, and the unexpected collapse of oil prices in 2014 is likely to put plans to develop 20 offshore oil and gas blocks into slow gear.
Some major infrastructure investment decisions, notably the special economic zone at Dawei on the southeast coast, are anticipated, but not soon. Economic reform must be a continuing key issue for Burma’s leadership if the country is to follow its neighbors and integrate further with the international community.
Major obstacles to economic expansion in Burma in 2015 are the country’s inadequate banking and finance facilities plus rampant corruption at all levels.
This first quarter of 2015 should see the announcement of more final agreements in production sharing contracts (PSCs) between the state-owned Myanma Oil & Gas Enterprise and the foreign oil companies who won licenses to explore 20 sites in the Bay of Bengal and Andaman Sea for oil and gas.
Terms for investment and potential profit sharing have been complicated by the collapse of international crude oil prices over the last six months.
Major oil companies that won offshore licenses for Burma in March include Shell, Chevron, Total and ConocoPhillips. The national oil companies (NOCs) of neighbors Malaysia and Thailand, which have projects in Burma, have already announced expenditure cuts.
The continued lack of a deep-water port for Rangoon threatens to undermine manufacturing growth in Burma’s biggest city which is also the main commercial sea gateway into the country.
The Dawei port is located approximately 700 kilometers from Rangoon. Critics of the Dawei SEZ have said it would primarily benefit Thailand by giving it access to the Indian Ocean as an oil transhipment terminal, and to expand its petrochemical industries, which are stymied in the greater Bangkok region by environmental laws.
