Japanese and Korean companies are leading the way in terms of recent interest in Burma but western investors continue to tread with caution, awaiting signs of concrete reforms in the business environment before launching ventures, according to a leading business figure in Burma.

Myo Thet has been meeting with companies “every day for a year”, he tells DVB. The secretary of Burma’s largest business federation, the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), is well placed to assess the current developments and says that “there is still rather low interest from the west”.

“There have been some bank owners from the west and also Australia but it’s still low compared to Asian countries. We wish to see more [investment] not only from the east but also the west … because the west, in terms of technology and finance, is stronger.”

Sanctions have been largely to blame for lack of interest from European countries, as well as Australia, Canada and the US, but that could be about to change: the EU has already dropped a longstanding visa ban on President Thein Sein and other ministers, while the US yesterday relaxed restrictions on the World Bank and IMF entering Burma.

But according to industry minister U Soe Thein, who was at the World Economic Forum in Davos last month, companies are “rushing” to Burma, and claimed his maiden appearance at the Forum was proof of the country’s growing status as a strategically key market for the west.

Economic reforms underway are aimed at making the business environment more attractive to western investors, many of whom fear the effects of widespread corruption and conflict in the resource-rich border regions.

Investment figures suggest Asian companies are less nervous about those two factors, with China leading the way in FDI, followed by Thailand and Singapore. Japan is also fronting around a quarter of the capital for the massive Tavoy industrial project in southern Burma, which will eventually cost some $US50 billion.

While much of this is concentrated in the energy sector, with Burma hosting significant gas and hydropower resources, Myo Thet thinks outside interest in the agriculture and service sectors will grow.

“Malaysia is keen to invest in rubber plantations and other forestry and agricultural projects, which can bring outstanding business development,” he said. Later this month around 120 delegates from Singapore will arrive, and Myo Thet they will bring with them a proposal for greater Singaporean investment in the tourism and electricity sectors.

He suggested that Burma was trying to lessen its dependence on China, which has become “the sole monopolist” over the country’s economy, by seeking a greater variety of countries keen to invest in Burma.

In a bid to attract more business interest, the government announced last month that it would offer eight-year tax exemptions to companies newly investing there. The government has also claimed it is revising restrictive investment laws enforced by the former junta.