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US Clears Investments In Myanmar

The Obama administration’s decision to allow American investments in Myanmar   is a welcome move. This is a quick follow up on Secretary of State Hillary Clinton’s May announcement that sanctions against Myanmar would be lifted since Yangon has slipped into reform mode, after ending decades of military rule.  

There is no denying that the American action is motivated by self-interest and geo-political and strategic concerns as seen from Washington. Nevertheless, the determination to keep engaged with President Thein Sein will be helpful to bring the country out of decades of isolation. In the process, it will not only facilitate more openness in Myanmar but also loosen the Dragon’s grip of the semi-junta regime.

But the decision to bring the state owned oil giant Myanmar Oil & Gas Enterprise (MOGE) into American investment orbit is bound to face flak from human rights campaigners, and even investment managers. Democracy icon Aung San Suu Kyi has been explicitly opposed to foreign investments in MOGE.

Her stand is that foreign collaboration with Myanmar’s oil major should be on hold till the country adopted internationally accepted transparency and accountability norms. “Other countries could help by not allowing their own companies to partner with MOGE unless it was signed up to such codes,” she said as recently as June.

Obviously, the American administration was guided less by Suu Kyi ideals and more by domestic considerations in the election year. The US badly needs to shore up jobs and push up incomes. More over, it cannot afford to ignore the first mover advantage China has in Myanmar’s oil exploration sector.

The US also has to contend with the likelihood of European nations most of which are in a crisis mode, quickly moving in and thus reducing turf space for the American companies which have been voicing for some time their fear of losing access to Myanmar’s oil fields.

White House officials have neatly packaged the ‘decision’. According to them, the new rules will continue to bar investment in military-owned entities, and sanctions targeted at those who undermine the reform process will stay.

In a statement, President Barack Obama said: “Easing sanctions is a strong signal of our support for reform, and will provide immediate incentives for reformers and significant benefits to the people of Burma”.

Well, it is striking ‘right’ balance.

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