Investing isn`t about waiting for the storm to pass. It`s about moving to a place with fewer storms.

Posted on 2 May 2017 by Douglas Chadwick

A Saltydog subscriber has recently asked whether there is potential for investment into Myanmar. I have done some investigation and my conclusion is that it is not there at the present. Myanmar (formerly Burma) along with Thailand, Vietnam, Cambodia and Laos form the Greater Mekong region and they are all members of the ASEAN Free Trade Area. It has a population of around 50 million. In 2011, the Military Junta relinquished power and President Htin Kyaw was democratically elected - although the Nobel prize winning Aung San Suu Kyi (recently released from house arrest), is said to be the person that rules the country from behind the scenes. Inward investment has taken place since democracy was re-established, and Singapore and China account for approximately 70% of this inflow. The country is also aided by the Asian Development Bank. Nevertheless, two corporations would seem to influence and dominate most investments and they are the Myanmar Economic Corporation (MEC) and Myanmar Economic Holdings Limited (MEHL). Both of these corporations are linked to the military and would appear to be steeped in corruption. This said, it would appear that health, education and the country`s superstructure are actually improving, as the new government drags the country into the 21^st century. In 2016 the USA lifted sanctions, despite there being little evidence of any reduction in the inheritant corruption linking business to the military. In my book, this is not yet a place to risk my money and anyway I could not find a fund representing Myanmar. However, that is not a problem as I feel that there are less stormy places in the Greater Mekong region - Vietnam is one such place. The population of Vietnam is around 93 million with an average age of thirty-two. Half now live in the cities and have aspirations to live a western life-style including the use of phones and the internet. The country is self-sufficient in oil and rice and supplies their surplice to the rest of the Asian community. China, America and Japan have off-shored manufacturing here for a number of years due to the low wages and the “can do” attitude of a young well-educated people. So when the Chinese and American economies are doing well, then so is the Vietnamese. You can see this from the five year graph of the VinaCapital Vietnam opportunities Investment Trust fund. It is evident that although it’s done well, it hasn’t gone up in a straight line. If you invested in 2012 then there are a couple of periods when the performance levelled off and even dropped back. If you had been watching the numbers and enjoying the rise, then this would have been the time to move out, whilst the storm passed over, and put your money to better use. Since the end of 2015 it’s been back on track, and in the last 12 months has gone up by over 40%. Hopefully in the future, the ASEAN Free trade area will become self-sufficient in its own right.  Should this happen, then Vietnam could be a really good place to be invested on a more permanent basis.