Opinion
Burma And The Untapped Energy Frontiers
Investors, looking for sure bets, can stop reading right now. For those seeking overlooked energy “final frontiers,” well, there’s now – Burma.
According to the secretary of Burma’s largest business federation, the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), Myo Thet, he has been meeting with companies “every day for a year” even though “there is still rather low interest from the West. There have been some bank owners from the west and also Australia but it is still low compared to Asian countries. We wish to see more (investment) not only from the East but also the West… because the West, in terms of technology and finance, is stronger.”
Burmese Industry Minister U Soe Thein, who attended last month’s World Economic Forum in Davos stated that companies are “rushing” to Burma, and claimed his appearance at the Forum, a first for a Burmese government official, was proof of Burma’s growing status as a strategically key market for the west.
Why the turnaround?
The government is opening up the country’s previously tightly state-controlled economy and is accelerating reforms. The biggest external event however is some Western-imposed sanctions are getting lifted, causing Western business executives and government officials to pack flights to the capital Naypyidaw.
The European Union has already dropped a longstanding visa ban on some Burmese ministers and on 6 February the United States relaxed restrictions on the World Bank and International Monetary Fund entering Burma. Washington has also restored full diplomatic relations and lifted some visa bans against some senior Burmese officials. After an early January mission to Burma IMF executive Meral Karasulu told journalists, “Myanmar (Burma) has a high growth potential and could become the next economic frontier in Asia, if it can turn its rich natural resources, young labor force, and proximity to some of the most dynamic economies in the world into its advantage.”
In December 2011 a group of executives from Germany’s biggest bank and its government investment arm visited Burma. So did Japanese executives from Hitachi, Toshiba, Mitsui, Itochu, JX Nippon Oil and Energy and Marubeni, while Norwegian, Russian and Brazilian investors have expressed an interest in developing Burma ‘s energy sector. Closer to home China, India, Thailand and Vietnam have held trade shows in Rangoon and visited to explore possible infrastructure projects.
Putting the seal on the country’s potential, in January billionaire George Soros visited Burma and said that he intended to establish an office to facilitate philanthropic work and later this month an American delegation is due to visit.
In this context it is worth remembering that in the 1940s and 1950s Burma was Southeast Asia’s wealthiest and well on its way to becoming the second developed nation in Asia after Japan. By 1950 Burma was the first Asian economic “tiger” with an economy on fast-track development, which, by the end of 1960 had built up Southeast Asia largest qualified, educated workforce.
What happened?
A bloody military coup d’etat in 1962, which effectively halted economic development. What Burma’s dolorous history over the past five decades has proved is that junta generals are far more effective in repressing their own people than stimulating economic growth.
Significant change began last year with the election of Thein Sein, previously Prime Minister from 2007, as President in March 2011. In an interview last week with The Straits Times Sein pledged his commitment to the reforms, saying they will go on until Burma achieves a “flourishing democracy.” Western governments and investors are taking him at his word.
Burma has vast, largely untapped natural resources, including large oil and natural gas deposits, teak and timber, tin, antimony, zinc, copper, tungsten, lead, coal, marble, limestone and gems along with huge hydroelectric power and agricultural capacities. Regarding the latter, Burma was once the world’s largest exporter of rice.
Another attraction of undoubted interest to foreign investors is the country’s low wage scale, as the average factory worker currently makes a mere $30-50 per month.
But some nations and investors are already aboard the gravy train, notably China, Burma’s biggest trading partner, followed by Thailand and Singapore. China has already poured billions of dollars of investment into Burma to operate mines, extract timber and build oil and natural gas pipelines.
Last year Britain’s Economist Intelligence Unit estimated Burma’s growth rate was 3.2 per cent, largely driven by its natural gas exports, which account for over half of Burma’s export receipts and foreign direct investment. Burma’s natural gas exports will increase significantly once production begins from its offshore Shwe and Shwephyu fields, estimated to hold 5.7-10 trillion cubic feet of natural gas and scheduled to come online in the next several years.
Sad to say for investors come lately, much of this natural gas is already earmarked for export to China’s Yunnan province via a pipeline currently under construction by a consortium of Burmese and foreign partners, with an estimated completion date of 2014. Beginning next year Burma will earn an estimated $29 billion from the sale of the natural gas to China over the next three decades.
Because of increased natural gas exports, Burma’s Ministry of Commerce is projecting that Burma’s foreign trade will grow more than 30 per cent in the fiscal year 2011-12 to $16.1 billion.
But while China has the lead in developing the country’s energy resources, they are hardly alone, as South Korea’s Daewoo International, along with Indian companies ONGC Videsh Company Ltd and Gas Authority of India Ltd (GAIL), are also developing energy projects.
And Sein’s government is bidding to attract more business interest, having last month announced that it would offer eight-year tax exemptions to companies newly investing there along with revising restrictive investment laws enforced by the former junta.
Lest the above picture seem overly sunny, a cautionary note has been sounded in a report released earlier this month by British risk analysis group Maplecroft, which noted that Burma has the world’s worst legal system for doing business, retaining a position it has held for the last five years despite recent reforms, remaining “the country offering the least legal protection for foreign companies. With recent political reforms and the likelihood of sanctions being lifted, Myanmar offers huge potential for oil and gas firms.” The report added that on-going turmoil in the Middle East and Magreb “has made Myanmar’s hydrocarbon resources even more attractive globally,” but “Tangible improvements in the rule of law, including increased judicial independence and greater transparency in the regulatory system, will be required before the long-term potential of the economy can be realized.”
Still, nothing ventured, nothing gained, right?
Dr. Daly of Oilprice.com wrote in from Washington, D.C., United States.
John Daly
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Empowering Youth Through Agriculture
Quote:”While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries”.
The Governor of Rivers State, Sir Siminalayi Fubara, recently urged youths in the Rivers State to take advantage of the vast opportunities available to become employers of labour and contribute meaningfully to the growth and development of the State. Governor Fubara noted that global trends increasingly favour entrepreneurship and innovation, and said that youths in Rivers State must not be left behind in harnessing these opportunities. The Governor, represented by the Secretary to the State Government, Dr Benibo Anabraba, made this known while declaring open the 2026 Job Fair organised by the Rivers State Government in partnership with the Nigeria Employers’ Consultative Association (NECA) in Port Harcourt. The Governor acknowledged the responsibility of government to create jobs for its teeming youth population but noted that it is unrealistic to absorb all job seekers into the civil service.
“As a government, we recognise our duty to provide employment opportunities for our teeming youths. However, we also understand that not all youths can be accommodated within the civil service. This underscores the need to encourage entrepreneurship across diverse sectors and to partner with other stakeholders, including the youths themselves, so they can transition from being job seekers to employers of labour,” he said. It is necessary to State that Governor Fubara has not only stated the obvious but was committed to drive youth entrepreneurship towards their self-reliance and the economic development of the State It is not news that developed economies of the world are skilled driven economies. The private sector also remains the highest employer of labour in private sector driven or capitalist economy though it is also the responsibility of government to create job opportunities for the teeming unemployed youth population in Nigeria which has the highest youth unemployed population in the subSahara Africa.
The lack of job opportunities, caused partly by the Federal Government’s apathy to job creation, the lack of adequate supervision of job opportunities economic programmes, lack of employable skills by many youths in the country have conspired to heighten the attendant challenges of unemployment. The challenges which include, “Japa” syndrome (travelling abroad for greener pastures), that characterises the labour market and poses threat to the nation’s critical sector, especially the health and medical sector; astronomical increase in the crime rate and a loss of interest in education. While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries.
While commending the Rivers State Government led by the People First Governor, Sir Siminilayi Fubara for initiating “various training and capacity-building programmes in areas such as ICT and artificial intelligence, oil and gas, maritime, and the blue economy, among others”, it is note-worthy that the labour market is dynamic and shaped by industry-specific demands, technological advancements, management practices and other emerging factors. So another sector the Federal, State and Local Governments should encourage youths to explore and harness the abounding potentials, in my considered view, is Agriculture. Agriculture remains a veritable solution to hunger, inflation, and food Insecurity that ravages the country. No doubt, the Nigeria’s arable landmass is grossly under-utilised and under-exploited.
In recent times, Nigerians have voiced their concerns about the persistent challenges of hunger, inflation, and the general increase in prices of goods and commodities. These issues not only affect the livelihoods of individuals and families but also pose significant threats to food security and economic stability in the country. The United Nations estimated that more than 25 million people in Nigeria could face food insecurity this year—a 47% increase from the 17 million people already at risk of going hungry, mainly due to ongoing insecurity, protracted conflicts, and rising food prices. An estimated two million children under five are likely to be pushed into acute malnutrition. (Reliefweb ,2023). In response, Nigeria declared a state of emergency on food insecurity, recognizing the urgent need to tackle food shortages, stabilize rising prices, and protect farmers facing violence from armed groups. However, without addressing the insecurity challenges, farmers will continue to struggle to feed their families and boost food production.
In addition, parts of northwest and northeast Nigeria have experienced changes in rainfall patterns making less water available for crop production. These climate change events have resulted in droughts and land degradations; presenting challenges for local communities and leading to significant impact on food security. In light of these daunting challenges, it is imperative to address the intricate interplay between insecurity and agricultural productivity. Nigeria can work toward ensuring food security, reducing poverty, and fostering sustainable economic growth in its vital agricultural sector. In this article, I suggest solutions that could enhance agricultural production and ensure that every state scales its agricultural production to a level where it can cater to 60% of the population.
This is feasible and achievable if government at all levels are intentional driving the development of the agricultural sector which was the major economic mainstay of the Country before the crude oil was struck in commercial quantity and consequently became the nation’s monolithic revenue source. Government should revive the moribund Graduate Farmers Scheme and the Rivers State School-to-Land agricultural programmes to operate concurrently with other skills acquisition and development programmes. There should be a consideration for investment in mechanized farming and arable land allocation. State and local governments should play a pivotal role in promoting mechanized farming and providing arable land for farming in communities. Additionally, allocating arable land enables small holder farmers to expand their operations and contribute to food security at the grassroots level.
Nigeria can unlock the potential of its agricultural sector to address the pressing needs of its population and achieve sustainable development. Policymakers and stakeholders must heed Akande’s recommendations and take decisive action to ensure a food-secure future for all Nigerians.
By: Igbiki Benibo
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