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“Myanmar” is a Burmese word that refers to the country formerly known as Burma, its citizens, and the language they speak.
Personal relationships mean everything in Myanmar. Their entire culture works on a “first name” basis.
Recent unpublished interviews we have conducted with key government officials give us great confidence in Myanmar’s continued political stability and strong economic growth. Furthermore, we believe our optimism is accurate given the following relative facts:
Alone, any one of these accomplishments is difficult to achieve. Taken together, these achievements are representative of an effective working government capable of meeting rigorous performance standards. These aggregated facts indicate robust global confidence in Myanmar’s political and economic future.
In 2013, Myanmar’s government introduced their Framework for Economic and Social Reforms (FESR), a long-term strategy for achieving sustainable economic growth, increasing social development, and reducing poverty. The FESR strategy allows for an average growth of seven percent each year, over the next 20 years. Indeed, the IMF sees accelerating growth in Myanmar, with average growth projected at roughly 8.25% each year for the next several years. The IMF estimates long-term growth in Myanmar to be around 7%, which is in line with the experience of peer countries, underscoring FESR feasibility. Additionally, inflation is expected to be broadly stable in the foreseeable future due to increases in administered electricity prices and demand pressures.
Note: The FESR can be downloaded through our News & Research.
No. Myanmar offers outstanding diversification benefits because of its non-correlation with both U.S. and international developed markets. Furthermore, the U.S. government now offers qualified U.S. citizens and entities political risk insurance (PRI) for Myanmar investments.
The use of PRI, combined with a local presence1, methodical investment strategy, non-correlation, and potentially high returns, create an environment in which Myanmar assets can offer crucial benefits for investor portfolios. Hence, a case can easily be made that not investing in Myanmar assets may actually increase portfolio risk.
For more information about PRI, please get in touch.
Primary exports from Myanmar to China include gas, jade, and other natural resources; however, gas exports are predetermined in contracts, and 90% of the world’s jade comes from Myanmar, making it nearly impossible to source anywhere else. Furthermore, two new gas fields are expected to come fully on stream this year, underscoring increasing natural gas exports.
If China’s sharp growth slowdown spans across the medium term, both Myanmar’s exports to and investments from China will probably decline significantly; however, the Myanmar government is actively diversifying exports and trading partners, effectively minimizing the impact of any decline in Chinese growth. In addition, the IMF estimates the impact of any near-term slowdown of Chinese growth to have a low impact on Myanmar (“low” indicating a probability of less than 10%).
Myanmar has abundant natural resources, including:
For more information about Myanmar’s resources, please get in touch.
1. Melvin Teo’s research, “The Geography of Hedge Funds,” published in the September 2009 issue of Review of Financial Studies, suggests investment managers that have a local, physical presence in a country experience higher risk-adjusted returns than those without.
Asian Development Bank, International Finance Corporation, International Monetary Fund, McKinsey Global Institute, Review of Financial Studies, World Bank Group.