Country Risk Report - Myanmar
Myanmar's reforms have led to the suspension of a number of sanctions from the US and EU, opening the door to foreign investment in a way that had not been possible before. However, ongoing political and sectarian violence continue to shed doubts on the government's willingness to implement social reform and grant the equal protection of human rights. Maplecroft latest country risk report analyses the key risks that foreign investors, especially those in the oil and gas sector will face when conducting business in Myanmar.
The latest off-shore bidding round will see an opportunity for foreign investors to maintain 100% ownership of operations in deep-sea blocks as the Myanmar partner entities such as MOGE lack capacity to operate under such conditions. The shallow blocks will however still require partnership arrangements that may pose reputational risks to investors and increase the risk of exposure to corruption.
The spreading of anti-Muslim unrest by nationalist Buddhists beyond Rakhine State demonstrates increasing political space for citizens to dissent and even openly engage in violence of this kind. However, the violence is destabilising. In Rakhine state in particular, it poses a risk to oil and gas operations dependent on the on-shore infrastructure.
The government's lacklustre response to calls from domestic and international stakeholders to stop the violence produces concerns that the situation will continue to get worse in the short to medium term. It carries with it physical risks to the logistics chain as well as reputational fall-out from heavy-handed government response or complicity in the ethnic violence.
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Jason McGeown, Head of Communications
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