Myanmar's parliament on Friday passed an eagerly awaited new law aimed at boosting foreign investment in the former pariah state, which is emerging from decades of military rule. The move comes as global corporate giants from Coca-Cola to General Electric jockey for a share of an expected economic boom in the impoverished but resource-rich nation, which is opening up after a long period of isolation.
The investment law, which allows foreign firms to own up to a 50-percent stake in joint ventures with local partners, is aimed at regulating the growing interest from overseas as the international community begins dismantling sanctions. It still needs to be approved by President Thein Sein, who could send the legislation back to parliament for further changes.
Observers said the law was not yet a done deal and the former general could push lawmakers to come up with a more liberal text. One of the major complaints of businesses eager to enter the country formerly known as Burma is the lack of a clear legal framework.
"The law is likely to give confidence to foreign investors, but it is part of a long process to reform the legal framework of investment," said Romain Caillaud, who heads the Yangon office of business advisory firm Vriens and Partners. "Some structural problems remain... such as lack of infrastructure, electricity (supply problems) as well as a lack of competence in the bureaucracy," he said.
The law's approval follows months of wrangling over how much room to give to foreign firms. Observers say "cronies" of the former junta who grew rich thanks to their links to the generals who ran the country for decades opposed throwing the doors wide open to foreign rivals.