Wednesday, November 29, 2023
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Business lobby broadens its Asian horizons

Burma’s leading industry federation is embarking on a reshuffle of its top staff whilst preparing to open an office in Beijing, a signal of the country’s growing economic ambitions.

The recent announcement that the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) is to develop a tangible presence in China serves to strengthen Burma’s lucrative economic relationship with its northern neighbour, which recently became the country’s top foreign investor.

The UMFCCI, Burma’s largest business federation, represents nearly 11,000 Burmese and 770 foreign companies operating in the military-ruled country. A significant number of overseas businesses there are from China, which has been hungrily eyeing Burma’s natural energy reserves, the sector that has attracted the majority of its investments.

The mooted appointment of a new UMFCCI chairman comes as former head, Win Myint, takes a position in the new Burmese cabinet. Although his title is yet to be confirmed, rumours are circulating that he will become the Minister of Co-operatives.

Although it bills itself as an independent body tasked with “representing and safeguarding the interest of private business sector”, the UMFCCI receives significant involvement from the Burmese government.

The clout wielded by the federation has strengthened since it was upgraded in 1999 in line with Burma’s shift towards a market-oriented economy, and it now acts as a mascot for the country’s unstable yet burgeoning business environment.

Indeed despite warnings from international watchdogs such as EarthRights International that doing business in Burma carries significant reputational and material risks, investment from East Asian companies is rising. Work recently began on the $US8 billion Tavoy deep-sea port in the country’s south, led by Thai construction giant Ital-Thai, while agreements to explore and exploit Burma’s vast natural gas reserves continue to be pushed through.

But it is China that has emerged as the regional trailblazer, with Beijing backing numerous hydropower plants and the controversial Shwe dual pipeline that will transport Burmese gas and Middle Eastern oil across Burma to its energy-hungry southern provinces.

In January last year, Win Myint, who has held the UMFCCI chairmanship since 1999, stressed the importance of increased trade between the two countries, particularly in the agricultural sector which accounts for some 60 percent of the Burmese labour force’s income. Back then, border trade dominated Burma’s economic ties with China, but that is rapidly changing with the increased focus on the energy sector.


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