By Borderless
Land grabbing will slowly but surely become a concern for U.S. investors in Myanmar as firms gear up to enter the newly opened country, experts told Borderless News.
International media and rights groups have reported the seizure of more than 3 million hectares in Myanmar by politically well-connected individuals for projects including roads and factories, displacing many farmers in a country where most of the population depends on land to make a living.
While development and infrastructure are badly needed in one of Asia’s poorest nations, land confiscation is a potential source of instability amid the country’s transition to democracy.
While not currently topping the list of U.S. firms’ concerns, the issue is expected to come to the fore when the U.S. State Department begins considering which Myanmar companies to remove from the Specially Designated Nationals (SDN) list – the list that includes Myanmar firms with whom U.S. businesses are prohibited from partnering – according to people close to U.S. businesses in Myanmar.
“In order (for U.S. businesses) to do a lot of work in Myanmar, we’re going to have to wait for some people to come off the SDN list,” an individual close to U.S. firms in Myanmar told Borderless on condition of anonymity.
“It’s definitely something that at the very least is a soft focus of companies that are looking at working in Myanmar,” the individual said. “In a lot of cases, the companies aren’t at the place right now where that’s something they are seriously worried about,” he said, as U.S. companies are just gearing up to enter the Myanmar market and have not yet set up shop in droves. “But eventually the issue will become more important,” he said.
Among Washington’s main priorities in evaluating requests to be removed from the SDN list will be whether potential Myanmar partners can show they have clear title to their land, and that former residents have been fairly compensated, the individual said.
While a number of Myanmar officials have expressed concern, the problem is handled differently at different levels. For major U.S. company projects, there is less reason to worry about the land issue, as those projects would receive the personal attention of high government officials who would ensure that large investments run smoothly, the individual said.
But smaller deals, such as those struck by smaller or mid-size U.S. businesses, would not garner the same level of attention.
The country’s new land law is expected to help clarify the rights of large property owners, which will make a difference in many projects. But what it will not do is create the bureaucracy necessary to give small property holders, such as farmers, clear titles to land that many have farmed for generations.
Some experts said Myanmar may see some problems similar to Cambodia and Vietnam, where rural farmers have lost land and received compensation at far less than market value and in some cases received no compensation at all.
The roots of the problem are complex. Since Myanmar’s independence many decades ago, all land in Myanmar has been owned by the state, David Steinberg, a Southeast Asia expert at Georgetown University’s School of Foreign Service, noted in an interview with Borderless.
Previous governments also encouraged the military to provide for its own food needs, and military units often either confiscated land or took unused land and had farmers cultivate it, Steinberg said.
While the U.S. recently tweaked the reporting requirements for U.S. companies that plan to do business in Myanmar, issues surrounding land titles were not among them, experts noted.
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