US secretary of Commerce Penny Pritzker oversaw the opening of a commercial services office in Yangon on June 6 as the US looks to strengthen economic ties with Myanmar after decades of severely limited engagement hampered by strict sanctions.
The commercial services office will operate out of the US Embassy in Yangon and will serve as a resource for US companies that are looking to investment in Myanmar as well as Myanmar-based companies who are looking to export products to the US.
Ms Prtizker, the first Commerce Secretary to visit Myanmar, was joined by representatives from American companies that had recently announced projects in Myanmar.
Colorado-based beverage container manufacturer Ball Corp in May announced plans for a US$40 million production line that will sell cans to Coca-Cola and other soft drink producers with Myanmar operations.
At a signing ceremony following the US Embassy event, Ball Corp officials confirmed that the plant would be located in the Japanese-backed Thilawa Special Economic Zone, making it the first of two companies to agree to set up production in the SEZ. The other is Japanese auto parts maker Koyo Radiator Company.
Officials from APR Energy, a Jacksonville-headquartered short-term energy firm, announced that their 100 megawatt power generation plant in Kyaukse, Mandalay Region was fully operational. The initial contract for the project was signed in February.
A day after Ms Pritzker’s visit, apparel maker Gap Inc said that it had begun sourcing clothing made at two factories in Yangon. The outerwear is set to arrive in US stores later this summer.
As of April 30, US companies have planned to invest US$243.6 million in Myanmar, according to figures released by the US Embassy, lagging well behind Myanmar’s top investor China, which accounts for $14 billion in approved FDI, but also never levelled sanctions against Myanmar’s previous military government.
US officials were optimistic that Myanmar could draw significant investment despite a business environment described by US Ambassador to Myanmar Derek Mitchell as “complex”.
“As your economy continues to grow and as your market continues to open, more US companies want to do business in this country and the United States government is encouraging American companies to evaluate the opportunities here [Myanmar],” Ms Pritzker said.
But observers said that many companies still look to be taking a wait-and-see approach to the Myanmar market, where a number of uncertainties still remain.
“Many US companies still seem to be holding back,” said Murray Hiebert, senior fellow and deputy director of the Sumitro Chair for Southeast Asia Studies at the Center for Strategic and International Studies. “They recognise that the economic environment continues to face many challenges, including a pretty weak infrastructure, limited legal protections, reforms that could face challenges from communal relations between Buddhists and Muslims, and political uncertainty heading into the 2015 elections.”
Ms Pritzker’s two-day visit to Myanmar was part of a larger trip that saw her make stops in Vietnam and the Philippines and aimed to offer assurance to ASEAN countries that American economic engagement in the region was a priority. In the past investment has “seemed less important to the US rebalance to Asia than security relations”, said Mr Hiebert.
Source: Myanmar Times