Here is the latest low-cost Asian country that our assistant Maria analyzed.

Could Myanmar be the newest rising star in Asia? Will the new reforms in economic policies introduced by the Myanmar government sometime after the political changes in 2011 do the country any good?

According to the Asian Development Bank,in the past few years, Myanmar (also known as Burma) has been receiving favorable project commitments from many international investors since the reforms were set in place. One of these reforms involves trade liberalization to help its export and import economy.

Top Exports

As an agricultural country, with a third of its population working in this sector, Myanmar was once in demand for its rice exports, and the country primarily engaged in trades with Thailand, China, Japan and India. While it is still one of the biggest rice producers of the world, its other industries have surpassed rice production as its primary export.

In recent years, Myanmar’s gas industry has emerged as its top-earning export product, netting earnings of over US $3 billion in the last financial year. Because the country was widely known for its decades-long military regime until the recent government takeover, it has not maintained good relations with Western countries. But with the changes taking place, Myanmar has since auctioned off gas and oil blocks to more than 60 energy companies around the globe, with countries like the US, the UK, and Australia taking interest.

While natural gas and petroleum products account for about 29% of its total exports, Myanmar’s naturally-rich terrain makes the region viable for mineral exports like precious stones, jades, pearl, copper, tungsten, zinc, coal and lead, among others. There are, however, some limitations to this, as government regulations for mineral commodities are still quite strict, with little policies for mineral assets in order. Poor infrastructure is also making it difficult for foreign companies to invest in the mining sector, but there is potential for development once reforms are enacted.

Myanmar also exports wood products, beans, fish and clothing to countries like India, China, Japan, Thailand, Malaysia and Pakistan.

Top Producers and Main Ports

Petroleum is mostly found in the east of Myanmar, in the Ayeyarwady region, while minerals like copper, coal, lead, tungsten and zinc are mined in sites like Mawchi, located in Kayah, and Bawdwin, located in Lashio’s northwest. Precious gems are found in Mogok, while jade is abundant in the Hunkwang Valley, which is nearest to China.

Myanmar is geographically abundant in water, being situated by the coastline of the Indian Ocean. For many centuries, the country has made use of this strategic location for trading with the Indian and Chinese markets. Its ports also serve as bridges to other international trades in and around Southeast Asia and the Middle East.

• Dawei Port – Situated in Tavoy, it lies southeast of Myanmar and near Bangkok, Thailand. This port is the country’s deep-sea port, providing access to trades with Europe and Africa. Mainly supported by an abundant fishing industry, Dawei Port is also being developed, with the help of Japan, into an industrial site where major power plants will rise.

• Thilawa Port – Most cruise ships coming from international waters dock on this port. The site, which is located south of Yangon and near the Andaman Sea, is being developed into a Special Economic Zone with Japan as its investing partner. The project will turn Thilawa Port into an industrial, high-functioning zone.

• Yangon Port – Established during the colonial period, this port serves as one of Myanmar’s current cultural bastions, with its distinctive colonial structures and pagoda set against modern buildings. Both small fishing boats and massive shipping lines share the port, as all sorts of traders ply their goods in this area. It’s in the process of rehabilitation, and will see completion by 2015, where it will have shopping sites, restaurants, hotels, and other facilities in its vicinity. 

Foreigners and Manufacturing

A few years back, Myanmar’s garment sector received a boost from Hong Kong investors when it carried out plans to open garment factories in the Yangon region. While garment manufacturing is still considerably a small enterprise in this country compared to other Asian countries like India and Bangladesh, the amended Foreign Investment Law should mark an improvement in Myanmar’s role in this industry.

Meanwhile, automakers from Japan and Thailand are poised to invest in Myanmar with plans of opening car factories. Suzuki is headed to Thiwala, while Nissan is looking into Bago as their base. Another significant foreign investment flowing to Myanmar in recent years includes the return of the Coca Cola bottling plant in Rangoon. The American company pulled out of the country sixty years ago.

While these manufacturing plants will open thousands of jobs for the locals, Myanmar is still at a slight disadvantage, as the country lacks skilled workers and leaders that would help strengthen entrepreneurship.  Forbes Magazine states, however, that these are still the “early days” for the country. The demographics may change in due time. What is clear though is that Myanmar is now considered a good base for foreign investments, when it wasn’t the case before.

Pay Rates

In a report by Myanmar’s Labour Rights Clinic, about 55% of Yangon’s factory workers earn 24,000 to 35,000 kyat or 25 to 36 USD as their monthly basic salary. This is equivalent to about a daily wage of 800 to 1,166 kyat or 0.83 to 1.21 USD. To compensate for these low wages, companies offer incentives such as snacks and transportation, and sometimes even free boarding.

While a minimum wage law has been enacted by Myanmar’s Ministry of Labor,many families are still barely able to make ends meet with daily expenses. Workers also have to deal with work-related problems like forced overtime, unfavorable working conditions, the absence of safety standards, and poor communication with management.