投资者Have High Hopes as Myanmar Prepares to Pick a President

As Myanmar prepares to elect a president in the coming days, completing its transition to democracy after 54 years of military rule, investors are eagerly looking for signs that the new government will improve the business environment and unlock the potential of Asia’s most alluring market.

“Myanmar is the last of the closed markets in Asia to open up,” says Thomas Hugger, founder and chief executive officer of Asia Frontier Capital, a Hong Kong outfit that manages funds focusing on东南亚, Vietnam and Iraq. Hugger has been scouring the country for investment opportunities in recent months. “It is rare that investors get a chance to go into a country where everything is starting from almost zero,” he says.

2月1日，该国的第一次选举设法举办办公室，为长期反对派领袖和诺贝尔和平奖得主的长期反对派领导人和诺贝尔和平奖赢家提供全国民主联盟（NLD）。她的党在2015年11月选举中赢得了一场压倒性的胜利，赢得了498个席位的390次竞争。70岁的亲民主的象征据希望，粉碎流行的授权将说服军事当局删除或忽视她成为主席的宪法禁令，因为她的两个儿子有英国国籍，但军队拒绝了比赛。（该宪法储备议会为武装部队的25％席位，足以阻止任何宪法变革。）

In recent weeks, however, the two sides appear to have struck a sort of modus vivendi under which the NLD will elect one of its members as president and Suu Kyi will act as the power behind the throne, with the military retaining considerable influence. During the parliamentary campaign, she played down the constitutional issue and claimed she would be “above the president.”

3月10日，NLD提名的HTIN KYAW，69，牛津大学经济学毕业生，作家和苏·克里伊的关闭顾问，作为其总统和亨利·瓦里奥，成员或下巴少数民族的候选人，为副总裁。该军方提出了仰光地区首席部长的主要总统候选人，总统席席席席组织。在3月17日议会选票时，HTIN KYAW几乎可以放心，击败普通人。另外两名候选人将占据副总统职位。

“The NLD is just reverting to Plan A, which is to let a loyalist start the transition process and hopefully hand over to Suu Kyi at some point midterm,” says Moe Thuzar, a fellow at the Institute of Southeast Asian Studies in Singapore.

向国家公司政府的权力移交将成为东南亚最贫穷和最封闭的国家转型的重要里程碑。“缅甸的前进方向现在有很多政治清晰度，”百年期亚顾问首席执行官Manu Bhaskaran说，新加坡基于华盛顿战略咨询公司百年集团的子公司。他认为，军队和苏·什地都选择是务实的，并表现出对妥协的偏好。

The new government will face no shortage of challenges. The economy has been expanding at an annual rate of more than 8 percent for the past three years, the fastest rate in Asia, but the country remains one of the poorest in the region. With a population of 53.4 million and a gross domestic product of some $64.3 billion, its per capita GDP of $1,270 exceeds only that of Cambodia among developing East Asian and Pacific countries, according to the世界银行. Fast growth has pushed inflation into double digits and caused the current-account deficit to grow to around 8.5 percent of GDP. Myanmar’s currency, the kyat, has fallen by 20 percent over the past six months, to a rate of about 1,201 to the U.S. dollar.

“With a loose fiscal policy and explosion in credit growth, the economy has been overheating,” says Gareth Leather, senior Asia economist at Capital Economics in London. Trying to rein in the excess without slowing growth dramatically will be a tough balancing act for the incoming administration, observers say. “The first thing the new government needs to do is to stabilize the economy,” says Melvyn Pun, CEO of Singapore-listed Yoma Strategic Holdings, one of the largest private sector investors in Myanmar with interests in banking, real estate, infrastructure and consumer goods.

The government also faces other tricky political difficulties. Investors will want to see steady progress in resolving the country’s ethnic insurgencies, ending the persecution of the Rohingya Muslim minority and stopping human trafficking, Bhaskaran contends. Last October, the outgoing military government signed a cease-fire agreement with eight armed ethnic groups in a bid to end conflict between Myanmar’s ethnic factions. The deal does not cover seven other armed groups, though, including the Kachin Independence Army, one of the largest armed ethnic groups along the country’s northern frontier, and analysts say the new government needs to expand the cease-fire to bring lasting peace.

然而尽管他们承认obstacl的潜力es, many investors remain optimistic. “People have waited a long time for a new civilian government, so it is understandable that expectations are high,” says Khin Maung Win, chairman of Yangon-based Myan Shwe Pyi, which operates power plants and sells construction equipment. “I think the new government understands what needs to be prioritized, and I believe they will put the right policies in place.”

The payoff could be huge if the NLD succeeds. Capital Economics’ Leather says Myanmar has the potential to sustain a growth rate of 10 percent “if it can get the right reforms in place quickly.” Given the country’s structural problems, he believes a growth rate of about 7 percent over the next decade might be more realistic.

The country should be able to take advantage of China’s audacious “One Belt, One Road” regional infrastructure push and capitalize on the mainland economy’s move up the value chain. The world’s second-largest economy is losing low-end manufacturing to cheaper locations in Asia. So far, the biggest beneficiary of that trend has been Vietnam, but Myanmar shares a land border with China and should be able to carve a niche for itself. The country can also benefit from closer ties to its partners in the ten-member Association of Southeast Asian Nations.

“随着工资成本迅速上升和袁欣赏侵蚀了中国在低成本制造中的竞争力，对东盟的前沿经济体的产量相当大转变，”新加坡IHS首席亚太经济学家Rajiv Biswas说。他说，泰国是东南亚的主要制造枢纽，直到崛起的工资开始伤害其竞争力。“缅甸现在有机会成为泰国公司的集线器，希望跨国公司希望将其生产从泰国搬迁到东南亚的另一个位置，”Biswas说。

缅甸需要做些什么来利用它的潜力并成为下一个亚洲虎？除了巨大的基础设施推动建设和升级道路，港口，机场和发电厂，Bhaskaran表示，政府需要优先考虑柔和的治理基础设施。他说，这意味着采用投资者保护法律鼓励进入外资的流入。缅甸传统上，传统上在亚洲透明国际腐败感知指数中排名最差，世界银行最近将该国作为亚洲第二次做生意做生意的地方，以及全球189个国家的第167名。

“They need to set up an investment promotion agency with similar powers and mandate as, say, the Malaysian Investment Development Authority or the Board of Investment of Thailand to bring foreign direct investments into the country,” says Bhaskaran. “We need to see comprehensive economic cooperation agreements with India, China and with other ASEAN partners to help generate new investments.”

The new government also needs to focus on a strong central bank and restore public faith in the financial system. “Myanmar’s monetary policy, banking supervision and exchange rate framework need to be reformed, which means a major revamp of the central bank,” says Bhaskaran. “Their banking system remains archaic and out of date, so they need to focus on modernization of the payments system and things like deposit insurance,” he adds, which will help rebuild public trust in the financial system.

In December the Yangon Stock Exchange opened for business but still has no listed companies, although shares in six public companies trade over the counter. Later this month the exchange is expected to give a green light to the listing of those six companies, which include First Myanmar Investment Co., an affiliate of Yoma Strategic Holdings. “FMI is a conglomerate that owns a local bank in Myanmar, a health care joint venture with Indonesia’s Lippo Group that is building private hospitals, and a real estate joint venture,” says Yoma’s Pun. Over the next two years, Pun says, there could be dozens of companies on the exchange. “There are lots of private companies in Myanmar that need capital or have thousands of shareholders, so they would rather be listed,” he says.

Mark Mobius, chairman of Templeton Emerging Markets Group, an arm of Franklin Templeton Investments, is excited about getting in on the ground floor of an undeveloped market like Myanmar. “Private equity and unlisted companies will be our first targets, as well as companies on the new exchange” and listed companies elsewhere in the region with Myanmar exposure, he says. Still he cautions that the lack of listed companies and significant turnover will deter many institutional investors, and points out that other barriers like foreign exchange controls will come down only over time. “The first order of business for the new government should be privatizing state-owned companies,” says Mobius. State firms are large enough to provide good liquidity and growth, he says. “The new government also needs to ensure a smooth and open foreign exchange regime to allow foreign investors to take money into and out of the country.”

Asia Frontier Capital’s Hugger believes the best investment opportunities are in infrastructure and tourism-related facilities like hotels. Real estate typically captures a lot of investment in newly opened economies, he notes, but “the problem in Myanmar is that property prices have gone through the roof in recent years, and a lot of people have already made a lot of money,” he says.

Pun likes the consumer sector and finance. “Ninety percent of the population in Myanmar is unbanked, so there is a lot a new bank like ours can do,” he says. “There is a growing middle class in Myanmar and a lot of people with cash, so when the stock market opens, they might buy shares,” he adds.

With such extensive reform and development needs, Myanmar is not for the faint of heart. Pun says. Myanmar’s bourse is likely to have teething pains like any other new frontier market. “Investors need to take a five- to ten-year view of Myanmar,” he says. “A frontier market at an early stage is not for investors who have a time horizon of six to 12 months.”

This article has been updated to reflect the nomination of presidential candidates on March 10.