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Myanmar Opening Will Be Boon for US Companies

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Political instability masks enormous potential.

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On Wednesday night, Hiebert explained what the changes currently taking place in Myanmar mean for America.

"The political transformation process that has started [in Myanmar] and has folks very optimistic removes a major constraint for America's engagement with ASEAN as a region," Hiebert said. "And for those of us who work in Southeast Asia, where countries want to obviously be engaged bilaterally, but clearly there has been a growing competition among major trading nations in the world to begin to engage the ASEAN nations as a region, as a reflection of the fact that ASEAN is in the process of a regional economic integration agenda [RCEP] to form an ASEAN economic community, the process unfolding in Myanmar does open up some new opportunities for the United States, to not only to continue engaging the region individually, but perhaps now to really compete with Europe, which has started a free trade agreement with ASEAN right now, and with China, Japan, and Korea [as well], which already have preferential trade agreements with ASEAN."

Mealy compares the opening of Myanmar to the not-too-long ago opening of another once-isolated country in the region.

I was based as a reporter in the early '90s in Vietnam when the US was about to lift the sanctions against that country. We are seeing the same sort of stampede mentality: US companies -- particularly in consumer products, food and beverages, financial services, and the big equipment manufacturers -- are all plowing in there to look. Right now, it's mostly window shopping, preparing themselves for the future. Myanmar was the one closed market in the region, other than North Korea. Nobody wants to be left out when this place suddenly takes off. It has a lot of potential. It has lot of oil and gas, particularly gas, copper, and other minerals. It has a population of over 60 million people that will eventually become consumers, who are very poor right now, who have a very low standard of living. It's almost shocking to realize that at the end of World War II, Myanmar and the Philippines were the two richest countries in the region. Myanmar has certainly fallen off the wagon in the meantime thanks to some horrible political leadership. To get the country going is going to take a quite a bit. The infrastructure is really hammered. Roads are terrible. Ports are over extended.... Only about 25% of the country is electrified.

Mealy says Myanmar has a lot of advantages for US companies like GE (NYSE:GE), Caterpillar (NYSE:CAT), and Procter & Gamble (NYSE:PG).

Mealy goes on to tie China back into his final point: "Adding to one of the reasons this is so interesting... Myanmar, because of the sanctions put in place by the United States -- basically, the only people that could sell to them were the Chinese. The country [Myanmar] felt slightly overwhelmed by China's dominant presence, and that's at least one of the factors that motivated people to launch political reforms to open the country."

Twitter: @brokawbrokaw
No positions in stocks mentioned.
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