After decades of isolation, Myanmar has undertaken important steps to liberalize both its economy and its government over the past few months. This initial progress has generated significant buzz about the prospects of the Burmese economy going forward.
Under the ruling military junta, Myanmar spent decades under an oppressive regime whose extractive economic system resulted in perpetual economic stagnation.
However, President Thein Sein has recently implemented a number of progressive reforms, including allowing free elections which saw the Aung San Suu Kyi-led opposition rout the incumbent, military-backed party.
As a result of this increased openness, western entities like the European Union and the United States are considering lifting sanctions. This development has attracted the attention of potential foreign investors as resource-rich Myanmar could be poised for an economic boom.
Unfortunately, because of existing sanctions and the lack of an existing stock exchange (Japanese firms are looking to set one up quickly) obtaining direct exposure to Myanmar in the near term may be difficult.
Given these structural impediments, the best way to play Myanmar may be through Thailand (THD, quote). Thailand is Myanmar’s largest export market and second largest import market, the latter of which is set to boom with an easing of import restrictions and a progressively freer Myanmar market.
As well, trade delegations have exchanged visits, a double-taxation treaty has been signed, and additional border checkpoints have been approved. These agreements bode well for Thai-Myanmar trade, which should give Thai companies an early-entrant advantage to this nascent boom.