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Burma: Investing at the Future Crossroads of Prosperity

First off, congratulations to Myanmar (or Burma, as many of us still call it). The country held elections last week for 45 of the 664 seats in its Parliament. Aung San Suu Kyi’s National League for Democracy won 43 of the 45 contested seats. The decision to gradually democratise Burma’s political process was made by Burma’s ruling generals.

Burma’s generals, supported by their patrons in China, are probably not opening the country up out of the kindness of their hearts (although we concede this is possible). They’re doing it because there is probably more money in running the country at a profit than in exploiting poor people through force and coercion. This more or less supports the point we were making yesterday that : profit IS socially responsible, as it lifts standards of living and allows people to pursue their own interests.

We’ve never been to Burma. But we had dinner with our friend Doug Casey in Sydney last year when he was in town for a conference. We asked him where he would go if he was a young man just starting out in life looking for fame, fortune, and adventure. He said Burma. The map below begins to tell you why.

The city of Mandalay isn’t on the map above. But Mandalay is more or less in the middle of Burma. If you took a 700-mile-long piece of string, held an end in Mandalay, and then rotated it around 360 degrees, you’d have 700 million people living inside the circle you’ve just drawn. That’s over 10% of the world’s population. Mandalay is a place you’d want to avoid if you don’t like crowds, in other words.

But if you see Burma as the crossroads between India and China, and if you see the Bay of Bengal as a vast new source of oil and gas for the Emerging Markets, and if you see that Burma is the same size as Thailand but has a GDP one-tenth the size, you start to see how much could happen there in the next 50 years. And that’s not even mentioning the beaches, temples, and islands that are sure to attract tourists from all over the world, including the new middle class of China.

If you’re interested in opening up a Daily Reckoning office in Rangoon, let us know. We could use a correspondent on the ground. In the meantime, we’ll note that international oil companies have only been awarded 16 exploration blocks off-shore of Burma since 1960. That will probably change in the coming years.

Regards,

Dan Denning
for The Daily Reckoning Australia

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Dan Denning
Dan Denning is the Editor-in-Chief of The Daily Reckoning Australia and the author of 2005’s best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 as a small-cap analyst. From 2000 to 2005 he was the managing editor of Strategic Investment, where he recommended gold and warned of the US housing bubble. Dan has covered financial markets from Baltimore, Paris, London and, beginning in 2005, Melbourne Australia, where he is the Publisher of Port Phillip Publishing. To follow Dan's financial world view more closely you can subscribe to The Daily Reckoning for free here. If you’re already a Daily Reckoning subscriber, then we recommend you also join him on Google+. It's where he shares investment research, commentary and ideas that he can't always fit into his regular Daily Reckoning emails.
Dan Denning

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1 Comment

  1. Dion Henderson says:

    Hey,

    I’m a student currently, am going to Burma as soon as my degree is over at the end of next year. I will be there most of the time, but have connections in Hong Kong interested in investments inside the country… We have big plans for Burma, can’t say much on here, but if you’re interested please contact me at dion.henderson@student.bond.edu.au for further information and contact details.

    Dion.

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