Chris Nolan, Manager, Advisory Services, BSR

A trademark sign of globalization can now be seen at several prominent intersections in Yangon, Myanmar: Coca-Cola billboards.

Myanmar is no doubt a country undergoing fundamental changes, and I recently had the opportunity to get a firsthand look at what some of these changes might mean for responsible investment during an assessment trip to the country. I met with stakeholders from the Myanmar government, civil society, international organizations, and local companies and unsurprisingly found that the challenges Myanmar faces on virtually every major front are pressing. What’s needed can be more aptly described as a nation-building effort than a transition.

No one I spoke to was under the illusion that this will be easy, and people—from a former political prisoner to the manager of a textile factory—know all too well the damage that systemic repression and decades of isolation have caused. But there is also genuine optimism and palpable urgency to overcome these challenges and put Myanmar on a better path.

This presents an opportunity for responsible investors to play a proactive and credible role in supporting the positive changes and ongoing reform. Here are some observations:

Legal reform will take more time than most people think. The challenges to overcome are immense, but momentum is in the right direction. The passage and implementation of key legal reforms, including the Foreign Investment Bill, Farmland Bill, Labor Organizations Law, and Media Bill will take more time than foreign investors expect. For all of the talk about “getting it right” in Myanmar, the process should not be rushed. By applying lessons from other transitional economies, companies can credibly support the legal reform process by offering perspectives that are in the best long-term interest of the country rather than in the short-term interest of any one investment.

Social and environmental standards need to be elevated properly. Many local stakeholders expect that international investors will elevate standards of business conduct for the country, especially on social and environmental issues, and make important contributions to national development. Short of passing and implementing the full range of legal reforms necessary, this will only happen if companies introduce and implement international standards and best practices. The government also recognizes it lacks capacity in key areas pertinent for responsible investment and needs support. Business can work with multilateral and bilateral organizations providing technical assistance to the government to help improve its capacity to uphold obligations. Without increased government commitment and capacity, prospects for responsible investment will be limited.    

Myanmar needs and is open to international partners. International partners can help shape the transitional environment—including legal and political reform, social and economic development, environmental stewardship, and education and training. Companies must work collaboratively with one another to identify effective approaches to issues fundamental to responsible investment. This should happen at industry levels (financial services, telecommunications, oil and gas), across industries on issues including land rights, transparency and corruption, and human rights and security, and with multilateral and international development organizations on areas such as vocational training and capacity building for local companies on environmental and social standards. Companies need to be collaborative to avoid working at cross purposes and undercutting progress in the process. 

At the upcoming BSR 2012 Conference on Oct. 23-26, we will further explore how companies can make sense of a constantly shifting landscape like Myanmar, manage risks and opportunities responsibly, and align business and societal growth for the betterment of the country. Join our “Responsible Growth: On the Frontier” session with Joanne Bauer, Adjunct Professor at Columbia University and Annette Stube, Director of Group Sustainability at A.P. Moller–Maersk.