U.S. Companies Go Googly Eyed for Myanmar

Tech companies salivate over Myanmar's untapped markets.

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In this photo taken on Friday, Nov. 26, 2010, merchants examine jade lots displayed at Myanmar's special gems emporium in Nay Pyi Taw, Myanmar. The military government's mouthpiece Myanmar Alin daily said a total 7,784 jade lots were sold out during the 13-day sales, the first such sales in the new-administrative city, which ended Monday, Nov. 29 with over 6,700 merchants, mostly from China. Despite its richness in natural resources, Myanmar is ranked as one of the poorest countries in the world.

Robert Nolan is an editor at the Foreign Policy Association and producer of the Great Decisions in Foreign Policy television series on PBS. You can follow him on Twitter @robert_nolan.

As extraction companies worldwide continue to salivate over Myanmar's untapped natural resources -- following new rules that allow more foreign direct investment in the resource rich country also known as Burma -- technology firms are not far behind in the quest for big profits in Asia's final frontier.

The impoverished Southeast Asian country, ruled by a military junta that chose isolation from the world over engagement for most of the past 50 years, is set to offer two operating licenses for firms to create a new telecommunications and technology infrastructure. It's been said that less than 10 percent of Myanmar's 60 million people currently own cellphones, making it a lucrative opportunity for the winning bidder. Yangon, the country's largest city, reportedly has one fiber optic cable, and the government has traditionally censored use of the internet.  All that is changing faster than you can click, "I'm Feeling Lucky" on a search engine.

It's no wonder, then, that a group of 50 U.S. executives, including those from technology firms like Google, Cisco, Microsoft, and Intel, hopped on a trip organized by USAID to Myanmar last month. And tomorrow, Google Chairman Eric Schmidt is expected to land in Yangon, to lecture budding entrepreneurs and promote the benefits of technology before meeting with government officials, according to The New York Times.

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American companies aren't the only game in town, however, with telecoms from China, South Africa, Thailand and Australia also pining to do big business in Myanmar.

"I know for a fact that the business people [in Myanmar] would rather do business with American companies," said Frances Zweig, counselor of the U.S.-ASEAN Business Council, in an interview for Great Decisions in Foreign Policy, now airing on PBS. "We have the gold standard products, we have the gold standard of the way we do business, and we treat our workers best. "

American companies also have the advantage of strong support from Washington, which has lifted sanctions and doled out other rewards incrementally to Myanmar as it takes steps towards political and economic reforms. This tit-for-tat reached its peak when President Obama made a visit to Myanmar his first overseas trip after being reelected in 2012.

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The U.S. also hopes to bring Myanmar's economy into the orbit of its allies in the region, including Vietnam, Thailand and other ASEAN countries, and away from its rival, China—though officials don't state this last point publicly. The overall policy encompasses a more subtle (and perhaps skillful) form of democracy promotion than that practiced under the Bush administration, as the U.S. "pivots" to Asia.

"We see the private sector as a very important partner in the process of reform for the U.S. government. Their engagement can, I think, affirm to the economic and business ties the kind of values—transparency, accountability—that we think are critical for the future of the country and the future of democracy," U.S. Ambassador to Burma Derek Mitchell told Great Decisions, adding that investing in Burma, a uniquely complicated country, requires due diligence. "The way they engage is going to be very important as a way to send signals as to what America is all about. People will see companies as an extension of the U.S. So one thing they certainly need to be aware of is the complexity of the environment in which they will operate. It is a highly complex environment. It is not a simple place, it is transition. Its diversity requires a lot of understanding of conditions on the ground, so they don't do things that will not only affect their interests, but ours."

Those complexities include ongoing ethnic tensions and religious violence that some worry could result in a rollback of reforms. Just this week, violence between Buddhists, who make up 80 percent of the population, and Muslims resulted in the deaths of four people.

[See Photos: Obama Makes Historic Visit to Myanmar.]

There are also dangers of doing business with the wrong crowd. U.S. law currently prohibits American companies from venturing with blacklisted members of the military regime, but former junta leaders are surprisingly good at reinventing themselves as businesspeople—not unlike the oligarchs who emerged from the top ranks of the Communist Party after the fall of the Soviet Union. Late last month, the U.S. Treasury announced that American companies would be able to do business with four of Myanmar's largest banks, despite the fact that at least two of them have strong ties to former members of the military regime.

Still, democracy experts insist that access to U.S. markets and technologies can indeed help keep Myanmar on the path to reform. "If you want access to our markets, you need to begin to change your policies," said Lorne Craner, who heads up the International Republican Institute, a congressionally funded democracy promotion organization, in Washington D.C. "I think that was one of the two or three things that the Burmese government finally looked at and said, 'We really do need to begin to become part of a globalized world and not get left behind.'"

The opportunity to help make that happen has a lot of American companies googly eyed.

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