Singapore wants to see a swift end to western sanctions on Burma, which it considers damaging to regional markets as the Southeast Asian 10-nation bloc moves toward full economic integration in 2015.
The city state has also spoken of its desire to capitalise on Burma’s reforming economy, particularly the electricity sector where an abundance of hydropower potential has made it the apple in the eye of its energy hungry neighbours.
On Monday a delegation of more than 150 Singaporean businessmen arrived in Rangoon to scope out areas where investment would be particularly lucrative, and the following day Foreign Minister Kasiviswanathan Shanmugam told Singaporean MPs that a “good and longstanding” bilateral relationship with Burma would be strengthened in the coming years to facilitate the country’s involvement in the regional marketplace.
“When we do talk about the ASEAN Community in 2015, creating a centre of 600 million people, creating physical and social connectivities, obviously sanctions against any particular member is not the most helpful,” he is also reported to have said.
Access to its wealth of resources and cheap labour, as well as capitalising on a geographical location that has made it an increasingly prized strategic asset for East Asian countries, has for decades been stymied by poor governance and a reluctance by neighbouring states to lean too heavily on Burma when the guarantee of stable investment could not be made.
But the environment is changing, and Singapore has been quick to offer its help. The two countries signed memorandums of understanding in January that included offers of investment and trade promotion for Burma, as well as a long-overdue effort at modernising its moribund banking system. It will also train Burmese workers with the skills needed for employment abroad, including English-language lessons.
Analysts have also pointed to the need for Burma to streamline its distorted foreign exchange rate system, with a huge disparity between official and black market rates. Unifying the exchange rate was considered a key area of the reforms that galvanised the economies of China, India, Laos and Vietnam in the early 1990s.
Other nearby countries are also awaiting genuine reforms in Burma with bated breath, with Malaysia looking with interest at rubber plantations and an array of agricultural products. Japan and Korea have also lined up plentiful investment capital, but there is concern that, having been in the wilderness for so long, Burma will be unable to cope with the influx of business.
As a result it has been inviting various experts to advise on where to head from here. Renowned economist Joseph Stiglitz, who on Tuesday departed after a five-day visit, told DVB in an exclusive interview that prescriptions he had given during his first trip there in 2009 had been taken on board.
“They had actually done a number of things, like increasing the number of licenses so they’ve made a number of markets competitive that were not competitive before, which has had an effect, I gather, on prices,” he said.
Singapore’s input across a range of sectors of industry would help spur employment in Burma, he continued. “The problem in the past is that much of the investment has been in natural resources and electricity and very little has been in manufacturing, and other kinds of activities that create a lot of jobs.”
Singapore’s investments in Burma totalled $US1.70 billion, making it the fourth highest investor, although China is though to have pumped some $US20 billion into the economy in the past year alone, and remains the government’s key economic crutch.