UK firms in secret talks on joining Burmese gold rush

Rights groups uneasy over race to invest in nation with long record of broken promises of reform

British businesses are looking to invest once more in Burma, as Western multinationals prepare for a gold rush inside one of South-east Asia's least developed – and potentially lucrative – economies.

JCB, Shell, HSBC and Standard Chartered are among the British firms said to be interested in Burma's potential.

The Independent understands the Foreign Office has held meetings with some British companies that have expressed an interest in investing in Burma. Officially, UK Trade and Investment does not encourage British firms to do business in the country. But a number of key British businesses privately indicate they are considering investing in Burma if reforms are brought in and EU sanctions against the state are lifted.

Reformists within Burma, desperate to attract foreign investment after decades of international pariah status, have promised a host of economic and political measures that they hope will encourage the US and Europe to lift sanctions. Washington gave its first indication this week it would begin lifting some of the sanctions that have been placed on the regime. The EU will decide whether to do the same later this month.

Many of Burma's neighbours have already set up shop in the resource-rich nation, prompting fear among Western companies that Asian rivals are stealing a march. One business figure with intimate knowledge of the market said: "The Chinese, Singaporeans, Koreans and Japanese are flocking to Burma."

Human rights groups express fears that the international community risks being hoodwinked by false promises from a junta with a long track record of back-tracking and brutality. They point to the example of Libya's Colonel Gaddafi, who attracted enormous Western investment in his final years with promises of reform, only to respond with ferocious brutality against his own people when his rule was challenged.

Burma's leading pro-democracy politician Aung San Suu Kyi has, however, given cautious support to the lifting of sanctions. The International Monetary Fund recently called Burma the "next economic frontier in Asia".

Rajen Nair, the regional head for JCB, Britain's largest construction equipment manufacturer, told The Irrawaddy newspaper: "I think Burma has very good potential for growth in the coming years."

A Standard Chartered spokesman told The Independent: "We make 70 per cent of our income in Asia and Burma is one of the very few countries where we don't have a presence. We would look at any market where we are able to operate, but only open for business when it is safe and makes economic sense to do so."

A Shell spokesman said: "Shell is not currently involved in Burma, and is in full compliance with the requirements of various governments. We have an ongoing dialogue with a wide variety of stakeholders to better understand the current economic, political and business environment in the region." HSBC did not respond to requests for comment.

Overall The Independent polled more than 20 major British companies about whether they considered Burma had investment potential. Although few were willing to say so publicly, many indicated that – if and when sanctions were lifted – they would look to move in.

"There is a danger of a free-for-all as companies try to muscle into a market that has virtually no environmental or regulatory controls," said Mark Farmaner of the Burma Campaign. "Forced labour is widespread and despite recent reforms there are hundreds of political prisoners still languishing in prison."

Corruption remains a major issue with Transparency International rating Burma third-worst in the world after North Korea and Somalia. Outside major population centres such as Rangoon Generals rule their areas like personal fiefdoms.

Professor Sean Turnell of Sydney's Macquarie University, who specialises in Burma's economy, has just returned from the country. "The hotels are bristling with people from all over the world coming in with ideas for doing business," he said. "But most are still put off by the difficulty of doing business, the risky political climate and sheer lack of infrastructure."

Junta says Suu Kyi's party broke vote rules

Eighteen months ago there was international condemnation of intimidation and vote-rigging as Burma's military junta romped home in the first elections for a generation. Now, having been trounced at the polls, it is the junta which is claiming foul.

The Union Solidarity and Development Party, the army-backed party in Burma, has announced it is to lodge an official complaint about what it called "poll irregularities" by Aung San Suu Kyi's supporters.

In this year's by-elections, Ms Suu Kyi's opposition National League for Democracy won 43 of the 45 parliamentary seats that were contested, while the USDP won just one – the only one where the NLD hadn't put up a candidate.

The junta has complained that the NLD or its supporters breached election rules by activities such as campaigning too close to polling stations and casting fake votes.

In a further sign of possible political changes in Burma, leaders of the Karen National Union, which has been fighting for greater autonomy since 1948, have reopened ceasefire talks.

Lewis Smith

PROMOTED VIDEO
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
News
i100
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Sport
Louis van Gaal watches over Nani
transfers
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
transfersColombian World Cup star completes £63m move to Spain
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst - Banking - Scotland - £380-£480

£380 - £480 per day: Orgtel: Business Analyst - Banking - Edinburgh - £380 - ...

Risk Analyst - (Multi Asset class) £70k - £80k

£70000 - £80000 per annum: Harrington Starr: My client is a leading financial ...

Programme Director - Conduct Risk - London

£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...

Application Support Engineer (Windows Server, Networking, Perl)

Negotiable: Harrington Starr: Application Support Engineer (Windows Server, Ne...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn