Brussels, 20/03/2014 (Agence Europe) - The EU wants to protect its companies against a still uncertain political climate in Burma/Myanmar. Many companies are currently eyeing up a Burmese market that is rich in resources and with high tourist potential.
As expected, on 20 March European Commissioner for Trade Karel De Gucht gave the kick-off in Nay Pyi Taw - with the Burmese authorities - to negotiations for a bilateral agreement on the protection of investments. Long closed because of the sanctions regime against the military junta - which in 2011 entrusted the power to the civil government led by the former general, Thein Sein - the Burmese market is arousing great interest from European companies that want to have access to the protected sectors while being protected from an uncertain political climate. It is with good reason that European companies are interested in Burma as it has strong agricultural and tourist potential, and is rich in natural resources (hydrocarbons, timber, copper and precious stones). However, the Burmese economy is handicapped by heavy red tape, a lack of infrastructure and an institutional system where the political and economic elites are closely linked to the army.
The future agreement aims to protect investors from both parties and to reserve fair treatment for them. It aims to offer protection against discrimination and expropriation without compensation, and to guarantee the transfer of capital. “This agreement could become an important accelerator for the reform process in Myanmar/Burma. Experience has shown that improving legal certainty and predictability for investments is key in providing business opportunities and much-needed development for this growing economy”, said De Gucht. According to official Burmese figures, the cumulated total of EU investments in Myanmar stood at $3.1 billion in 2103, in other words 9% of the foreign investments in the country. (EH)