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Burma Places Hopes for Development in Foreign Investment
Burma is in a good position to make big gains in Asia's fast-growing markets. But development must include all of society and be sustainable for Burma to reach its goals. That is what the Asian Development Bank said in a recent report.
Cyn-Young Park is an economist with the bank. She says Burma's economic position is strengthened by its natural resources, such as oil, gas and minerals. It also has two large, growing neighbors: India and China. And the nation is young: one in four of its citizens are under the age of 30.
But Burma has a long way to go. After 50 years of military rule, it is one of Asia's poorest countries. Basic infrastructure, like roads, bridges and railways, are not developed. And only 30 percent of rural people have electricity.
Burma is trying to increase foreign investment. Its civilian government has struggled with a new foreign investment law. Some versions of the law restricted foreign ownership in some industries and ban it completely in others.
Sean Turnell is an economist with Australia's Macquarie University. He said the foreign investment law faced local disapproval, or push back. He said in some cases there appears to be a "walling off" of some industries to foreigners.
For years, Burma's military closely controlled the economy. Relatives and friends of military members received rich contracts. Now, the civilian government wants to expand services and manufacturing. It has considered giving foreign companies low tax rates so they will invest. But experts say this could be a mistake.
Sean Turnell says investors are concerned about infrastructure problems, not taxes. Economists also say tax breaks for local businesses may not be the answer either. They say the lack of access to credit for farmers and businesses in Burma is a bigger problem.
Reform in Burma is still in the early stages. The country recently announced new rules ending direct government censorship of news media. Reporters now must send censors their work after it is published, instead of before. Some reporters say they will wait to see if this means more freedom.
Cyn-Young Park says investors too are waiting to see if reform will succeed. "It is really going to take a while," she says, "before the investors do believe that this reform is sincere and the government is not going to retrench."
For VOA Special English, I'm Laurel Bowman. (Adapted from a radio program broadcast 24Aug2012)