Is Myanmar the Next China?

At first glance, the idea that Myanmar is a "next China" should strike most readers as absurd. Myanmar's population of less than 60 million is not even 5 percent of China's. Most of the people are farmers and don't even have a light bulb to read by because they aren't connected to the aging electrical grid. Even factories in the commercial capital of Yangon only have electricity five hours a day. Most people are subsistence farmers who would consider themselves lucky to own an ox.

Myanmar's wealth and heritage have been squandered as a result of 50 years of disastrous policies that saw it drop from one of Asia's richest countries to one of its poorest. Its medical school was one of South Asia's best. Now Burmese doctors work in hospitals from London to Hong Kong while back home the health care system is in shreds. The "Burmese way of socialism," as the military government that ruled the country after a 1962 military coup styled its policies, was a disaster that might even rival Mao Zedong's Great Leap Forward.

In short, Myanmar is a lot like the China of 1978 when Deng Xiaoping launched reform and opening up. There is lots of potential, and a fast-growing, mostly young population, with only about 5 percent of the people over 65. People are hungry for change.

I visited Myanmar in May as part of a delegation from the Hong Kong General Chamber of Commerce and found it impossible not to be swept along by the belief that a transformation is underway. A reform-minded government, led by President Thein Sein, has started a sweeping process of economic and political reform. Long-time democracy activist and Nobel Peace Prize winner Aung San Suu Kyi has joined Parliament, with her party winning 43 of 45 seats in recent by-elections. Parliament passed a new foreign investment law in early May. The government has set a goal of creating one million new jobs before the end of its term in 2015. Six different exchange rates are being unified into one market-driven rate. Tax holidays and other inducements for foreign investors are being introduced. U.S. and E.U. sanctions, which badly hurt export industries, are being relaxed.