RANGOON, BURMA — T-shirts bearing images of President Obama and Aung San Suu Kyi, the Burmese pro-democracy leader, hang side by side in the shops just off the busy Kabar Aye Pagoda Road in Rangoon. It’s a reminder of the history made last November when Obama became the first sitting U.S. president to set foot in Burma.
A return trip to this former pariah state doesn’t appear to be on Obama’s immediate itinerary. But corporate America is on its way.
Google chairman Eric Schmidt visited in March, and Ford announced its entry into the chaotic local auto scene at an April event with the U.S. ambassador. Hilton is building a hotel across from the golden Sule Pagoda, and Colonel Sanders isn’t far behind, as Yum Brands’ KFC posts job ads in local newspapers.
It’s just one element of the surprisingly rapid expansion of economic, political and even military ties between the United States and Burma in recent months after more than two decades of estrangement.
The thaw will be on display again when Burma’s president, Thein Sein, visits the White House on Monday — the kind of event that would have been unimaginable even a year ago. The former general, who took power in a transition to civilian government in 2011 and has ushered in a wave of political and economic reforms, is also scheduled to be the featured guest at a U.S. Chamber of Commerce event.
Taking their cues from the administration, many U.S.-based companies are looking to make up for lost time in Southeast Asia’s last untapped market, where regional and European rivals have already moved in.
Local businesses see the change. Aye Hnin Swe, co-founder of Mango Marketing, a Rangoon-based advertising agency, noted that “American companies take a little bit longer time than the other companies.” But “after President Obama’s visit, things changed more quickly. We got more inquiries.”
Mango signed an affiliation with JWT just weeks ago, giving the American ad company valuable knowledge about a still opaque economy.
Yet the U.S.-Burma relationship remains fraught with awkward complications — including the fate of remaining political prisoners and U.S. concerns about the Burmese government’s handling of recent anti-Muslim violence, which has reemerged after being suppressed during decades of rule by the former military regime. The Burmese government remains under fire from human rights groups for its attitude toward the displaced Muslim Rohingya.
In a May 6 speech, Thein Sein acknowledged that “we are still at a sensitive stage in the reform process where there is little room for error.”
Derek Mitchell, who last year became the first U.S. ambassador to Burma in 22 years, said the ability to expand ties, “even as we frankly raise issues of concern,” reflects a maturing of the relationship. The United States is clear-eyed about the challenges but needs to keep backing reformers, he said. “I don’t think anyone expected the speed of change we have seen in this country over the past two years, and our engagement has sought to keep pace,” Mitchell said by e-mail.
Obama recently extended targeted sanctions against certain Burmese officials and government-connected business leaders for another year, calling it an effort to “ensure that the democratic transition becomes irreversible.”
Thein Sein’s visit to Washington, however, also follows a three-month period in which the Treasury Department ended a ban on financial transactions with some major Burmese banks and the State Department eliminated visa restrictions on some top officials.
The United States — which still officially refers to the country as Burma instead of Myanmar, the name the former ruling junta gave it — is helping the government prepare to chair the Association of Southeast Asian Nations next year, a sign of the strategic importance the United States places on this country of 60 million, wedged between India and China.
The U.S. armed forces helped train many Burmese military officials before relations between the two countries soured in the late 1980s, and despite concerns from some human rights groups, members of the Burmese military, or Tatmadaw, participated as observers in a U.S.-led military exercise in Thailand in February. A team from the U.S. Joint POW/MIA Accounting Command is currently outside Mandalay searching for information about U.S. service members who went missing in Burma during World War II — with assistance from Burma’s military.
The United States is also ramping up foreign aid and considering reinstating tariff benefits that have been suspended since 1989.
Indeed, Singaporean, Chinese, Japanese and Thai firms have long operated in Burma, and European companies face a far easier road following the European Union’s recent decision to end sanctions, other than an arms embargo.
“For the first time . . . you’re starting to see American brands,” said Joshua Brown, the chief representative in Burma for Tractus Asia, a management consulting company that helped arrange a visit by a U.S. Chamber of Commerce delegation in February.
Still, for every Ford or Coca-Cola, people in the local business community say there are several more American companies still evaluating whether they have the stomach to jump in, particularly ahead of an important presidential election looming in 2015 — when Suu Kyi might be allowed to run as a candidate.
Burma poses unique risks, Brown said, and companies want to know if things could go backward, as they have before. “American companies are very wary of the risks that are posed by the sanctions regime. It’s very difficult to understand who’s who,” he said. They want to “understand if the undoing of the sanctions regime has permanence.”
Ford navigated this complicated landscape, eager to seize a share of a currently small market dominated by second-hand Japanese vehicles.
“Everything we do, in a lot of respects, is the first time it’s been done in the country,” said David Westerman, Ford’s regional manager for export and growth operations in the Asia Pacific. “It’s a country of 60 million. We’re looking at the same numbers everyone is looking at.”
U.S. companies will be important advertisers in Burma’s growing media scene, noted Thiha Saw, editor of the Open News Weekly Journal. An end to a five-decade ban on publishing dailies has left downtown newsstands stacked high with newspapers — the kind of reform that is winning applause in Washington.
Still, the U.S. relationship with the newly opened Burma is in its infancy. “It hasn’t reached a point of no return yet,” Thiha Saw said. “It still needs a few more years.”