YCLOAK

The chairman of the U.S. House Transportation and Infrastructure Committee said Tuesday that there was not enough support in Congress to move forward with a plan backed by President Donald Trump to privatize the air traffic control system.

Republican Representative Bill Shuster of Pennsylvania said in a statement that the “air traffic control reform provisions did not reach the obvious level of support needed to pass Congress.”

But Shuster vowed to work with the Senate to move forward with legislation to reauthorize the Federal Aviation Administration, which expires at the end of March. Without authorization, the FAA would not be able to collect aviation taxes, and many of its employees would have to be laid off.

In June, Trump unveiled a plan to privatize air traffic control, saying it would modernize the system and lower flying costs.

Democrats contended it would hand control of a key asset to special interests and big airlines, and some Republicans opposed it.

On Tuesday, the Aircraft Owners and Pilots Association, nearly 250 general aviation organizations, state and local aviation officials, labor unions, consumer groups and airports said they had sent a letter to congressional leaders vowing to oppose any effort to privatize air traffic control.

United Airlines, Hawaiian Airlines, American Airlines and Southwest Airlines, all represented by the Airlines for America lobbying group, backed the plan.

Under the proposal, air traffic control would be spun off from the FAA and put under the oversight of a nonprofit corporation.

The FAA spends nearly $10 billion a year on air traffic control funded largely through passenger user fees, and has spent more than $7.5 billion on next-generation air traffic control reforms in recent years.

Trump has said current air traffic reform efforts have failed and were a “total waste of money.”

Opponents said the U.S. system is so large that privatization would not save money, would drive up ticket costs and could create a national security risk. Opponents also said technology upgrades would be sidetracked while the private entity was set up, potentially adding years to awarding contracts.
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Three of President Donald Trump’s senior economic aides are expected to meet this week with a top Chinese economic official to discuss trade disputes between the United States and China.

White House spokeswoman Sarah Huckabee Sanders told Reuters that Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Trump’s economic adviser, Gary Cohn, are expected to meet Chinese economic adviser Liu He in Washington.

The talks are likely to cover a range of differences including intellectual property and steel.

Trump has long called for a more balanced trade relationship with China and threatened to impose a big “fine” against China to protect American intellectual property. U.S. officials said Trump has been discussing imposing a global tariff on imports of steel from China, the world’s largest steel producer, and other countries.

The talks with Liu may help determine the trajectory of the U.S.-Chinese trade relationship, which Trump believes is heavily tilted in favor of China.

A senior U.S. official said there was skepticism on the U.S. side that a trade breakthrough could be achieved any time soon.

“We’re trying to treat this with an open mind. But the Chinese don’t really want to make a deal. They like the status quo,” the official said.

There was no plan for Trump himself to meet Liu, but officials did not rule it out if progress was being made.

Liu, a Harvard-trained economist and trusted confidant of Chinese President Xi Jinping, has emerged as the front-runner to be the next governor of China’s central bank, according to sources with knowledge of the situation. Liu is the top adviser to Xi on economic policy and is also expected to become vice premier overseeing the Chinese economy.

Steel

A source close to the White House said Trump had expressed interest in imposing a tariff on steel imports of at least 24 percent. The White House said no final decision had been made.

The Commerce Department on Feb. 16 recommended that Trump impose stiff curbs on steel imports from China and other countries and offered the president several options ranging from global and country-specific tariffs to broad import quotas.

A blanket tariff on steel would cover every steel and aluminum product entering the American market from China.

China has expressed concerns over excessive protectionism in the U.S. steel sector and urged restraint. It has also said it will oppose any “unfair and unreasonable” trade measures by countries such as the United States.
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The head of the World Trade Organization diplomatically took issue with U.S. President Donald Trump’s description of the WTO as a catastrophe on Tuesday, pointing out that the United States actually had a better deal than other countries in the club.

“World Trade Organization — a catastrophe,” Trump said on Monday at a meeting with U.S. governors, according to a White House transcript.

“The World Trade Organization makes it almost impossible for us to do good business. We lose the cases, we don’t have the judges. We have a minority of judges. It’s almost as bad as the 9th Circuit,” Trump said.

Asked about Trump’s remarks, WTO Director General Roberto Azevedo, a former Brazilian trade negotiator, told reporters in Sofia that it was not news that the United States had concerns about the work of the WTO. 

“Just one clarification,” he said.

“No member has more than one judge at the WTO. The members of the Appellate Body, they are seven, and they come from different regions, so no country has a majority there. The United States, in fact, has always had one of the Appellate Body members with U.S. nationality, which is very unusual, but it is the situation.”

Since last year, the United States has been vetoing the appointment of new judges to the WTO’s Appellate Body, in effect the supreme court of world trade.

The lack of judges has slowed down the handling of trade disputes and could halt the appeals process altogether after the next judge retires in September.

Trump has said he thinks the United States does not get a fair deal, but trade negotiators from other countries say he has not yet set any conditions for resuming judicial appointments, making it impossible to meet U.S. demands.

“This is a very serious situation that we are trying to discuss with members, to see how we can overcome this,” Azevedo said.

Former WTO chief Pascal Lamy said last week that Trump’s view of trade was “medieval,” and the U.S. win/lose rate in WTO disputes was similar to that of other countries.

“The question is whether the U.S. problem is trying to fix a number of issues or whether the U.S. strategy is trying to wreck the system,” Lamy said.
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The U.S. negotiator for regional content requirements in autos flew back to Washington from a NAFTA round in Mexico on Monday to talk with car companies, officials said, in a development some hoped would lead to progress on the contentious issue.

Three Mexican, Canadian and U.S. trade officials said the negotiator, Jason Bernstein, had been called back, with two of the officials saying he was there to meet U.S. automakers. Another said he would also meet U.S. Trade Representative Robert Lighthizer, and was due back later in the week.

The change in plans disrupted a schedule for talks early in the week about a proposal by the administration of U.S.

President Donald Trump to make automakers source more from the region and the United States, a major sticking point the industry warns would disrupt supply chains and raise costs.

Mexican negotiators have said the auto content issue must be resolved in large part between the White House and the Big Three Detroit automakers that dominate the industry.

“What I’ve heard is that he’s back in Washington because apparently they are meeting with the Detroit three. If that’s the case, that’s really positive,” said Flavio Volpe, president of the Toronto-based Automotive Parts Manufacturers Association.

“The timing is awkward. But if USTR is finally talking to those companies it’s something that we’ve been asking for for months,” Volpe said, referring to the United States Trade Representative (USTR).

U.S. trade officials and a Mexican auto industry official in Mexico City said they also believed the fact Bernstein had been called to Washington was a positive development for the talks to renegotiate the 1994 North American Free Trade Agreement.

A seventh round of talks began on Sunday with the three sides aiming to finish reworking less contentious chapters while also meeting to discuss the trickiest subjects blocking progress to rework the pact that underpins $1.2 trillion in annual trade.

“We’re hopeful to make quite a bit if progress this round. So we’ll see how it goes,” said Steve Verheul, Canada’s chief

negotiator as he arrived at the negotiations on Monday.

Two auto lobbyists in the United States, who spoke on background, said they did not believe there was a joint meeting scheduled with the Detroit auto companies but individual consultations might happen.

Mexico’s government is concerned that a lack of progress on the automotive content issue could hurt the wider renegotiation, a former official still familiar with the process said.

Seeking to break the deadlock, the Mexican government has said it would put forward a proposal on rules of origin during the current round of talks, but a Mexican official said on Monday no new ideas had been presented so far.

The renegotiation began last year at the behest of Trump who said the agreement must be overhauled to better favor American interests or Washington would quit the accord. The latest round has been clouded by renewed tension between Mexico and Trump over his planned border wall.

Mexico has consistently rejected paying for the wall, and its government had hoped to arrange a meeting between President Enrique Pena Nieto and Trump in the next few weeks. However, a senior U.S. official said over the weekend that plan had been postponed after a phone call between the two soured over the wall earlier this month.

Mexico’s government has not commented officially on the derailment of the Trump-Pena Nieto meeting, but Juan Pablo 

Castanon, head of the powerful CCE business lobby, was less reticent as he took stock of the unfolding NAFTA negotiations in Mexico City.

“Obviously, the cancellation of the Mexican president’s trip to the United States is an important element in the negotiations: it’s politics that can help us resolve the technical issues we’re moving forward on,” Castanon said.

Castanon said several chapters are close to being finished, including measures on e-commerce, telecommunications and sanitary standards for agricultural products. Others close to the talks believe the energy chapter could also be concluded.

Officials do not anticipate major breakthroughs on other intractable issues such as agriculture and dispute resolution mechanisms in the Mexico City round, due to run until March 5.

There was little sign of compromise on any issues early on, with a senior Canadian agriculture official pushing back against U.S. demands to dismantle Canadian protections for the dairy and poultry sectors known as supply management.

“When it comes to supply management, we believe there can be no concession,” said Jeff Leal, the minister of agriculture, food and rural affairs for the province of Ontario. 
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Comcast Corp, the biggest cable operator in the United States, offered on Tuesday to pay $31 billion to buy Sky, challenging Rupert Murdoch’s Fox and Bob Iger’s Walt Disney for the European pay-TV jewel.

Comcast, a $184 billion media giant which owns NBC and Universal Pictures, said it was offering 12.50 pounds per share, significantly higher than the 10.75 pounds per share agreed by Fox. Shares in Sky soared 18 percent.

Present in 23 million homes across Europe and known for its technological innovation, Britain’s Sky has already agreed to be sold to Murdoch’s 21st Century Fox but the takeover has been delayed by concerns over the media tycoon’s influence in Britain.

That has complicated a separate $52 billion deal by Disney to buy Fox assets including Sky.

“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content,” Comcast Chief Executive Officer Brian L. Roberts, 58, said. “We think Sky is an outstanding company.”

The latest round of major deals indicates the pressures being felt by traditional cable television networks which have been losing customers to streaming services like Netflix Inc and Amazon.com Inc..

Media rivalries

Shares in Sky rose to 13.08 pounds as investors hoped the ensuing bid battle would push both sides to offer a higher price.

“The initial share price reaction suggests that this story has further to run, with Sky’s price leaping above the level of the already increased Comcast offer,” said Richard Hunter, Head of Markets at Interactive Investor.

The proposed offer pits Comcast’s Roberts against Murdoch, the 86-year-old tycoon who helped to launch Sky in Britain, and who has been edging towards finally getting his hands on Sky after he first bid for the company eight years ago.

It also pits Roberts against Disney’s Iger, a longtime rival after Comcast tried to buy Disney for $54 billion in 2004.

Comcast said it had not yet engaged with Sky over the proposal and nearly 90 minutes after the statement came out, Sky was yet to respond.

“We would like to own the whole of Sky and we will be looking to acquire over 50 percent of the Sky shares,” Comcast CEO Roberts said.

“Innovation is at the heart of what we do: by combining the two companies we create significant opportunities for growth,” he said.

All eyes on Sky

Sky’s chairman is Murdoch’s son James, who is the chief executive of 21st Century Fox, so Comcast will have to gain the support of the independent shareholders for its better offer if it does not make a hostile bid.

Fox agreed to buy the 61 percent of Sky it did not already own in December 2016 but the takeover has been repeatedly held up by regulatory concerns that Murdoch controls too much media in Britain.

Some Sky shareholders have also started to complain that the offer was too low. In December, hedge fund manager Crispin Odey argued that Sky was being sold too cheaply.

Britain’s competition regulator said in January that Murdoch’s planned takeover should be blocked unless a way was found to prevent him from influencing the network’s news operation, Sky News.

The Competition and Markets Authority (CMA) said that the deal would give Murdoch too much influence and so would not be in the public interest.

Murdoch’s news outlets are watched, read or heard by nearly a third of Britons and have a combined share of public news consumption that is significantly greater than all other news providers, except the BBC and commercial TV news provider ITN.

Last week, Fox made further concessions, with a promise to maintain and fund a fully independent Sky-branded news service for 10 years.

Comcast said it had only a minimal presence in the British media market and did not see any plurality concerns over its proposal.

Comcast said it recognized that Sky News was an “invaluable part of the UK news landscape” and it intended to maintain Sky News’ existing brand and culture, as well as its strong track record for high-quality impartial news and adherence to broadcasting standards.

“Our strong market positions are complementary with Sky’s leadership in Europe enhancing our preeminent position in the U.S.,” Comcast’s Roberts said.
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A surge in sales of Cuba’s legendary cigars in China helped manufacturer Habanos S.A.’s global revenue rise 12 percent to hit a record of around $500 million last year, the company said on Monday at the start of Cuba’s annual cigar festival.

Habanos S.A., a 50-50 joint venture between the Cuban state and Britain’s Imperial Brands Plc, said sales in China, its third export market after Spain and France, jumped 33 percent in value in 2017.

“Without doubt, there is potential for China to become the biggest market at a global level,” Habanos Vice President of Development Jose María Lopez told Reuters after the company’s annual news conference, while puffing on a smoke.

The Cuban monopoly cigar company’s hand-rolled cigars, which include brands such as Cohiba, Montecristo and Partagas, are considered by many as the best in the world, and the festival attracts wealthy tobacco aficionados and retailers from all over for a week of extravagant parties and tours of plantations and factories.

Lopez said that growth in global sales of Cuban cigars last year outpaced the luxury goods market, which expanded 5 percent, according to consultancy Bain & Co. He put sales growth down to several good tobacco harvests and new products.

The Habanos executive said the outlook was also positive, given solid demand and “excellent” climatic conditions.

Hurricane Irma, which wrought havoc throughout much of Cuba last year, left the western, prime tobacco-growing state of Pinar del Rio mostly unscathed.

Cigars are one of the top exports for the Cuban economy, which is otherwise struggling with decreasing aid from key ally Venezuela, a cash crunch and a push back against market reforms.

However, the Caribbean island cannot sell its signature export to the biggest market worldwide for cigars, the United States, due to the decades-old U.S. trade embargo.

Improved U.S.-Cuba relations under former U.S. President Barack Obama stoked a boom in international travel to Cuba and boosted cigar sales on the island, with American visitors able to take home as many cigars as they wanted.

Lopez said U.S. President Donald Trump’s more hostile policy toward Cuba, including tighter restrictions on U.S. travel, did not appear to have impacted sales so far. Domestic revenue rose around 15 percent last year.

“We trust that despite Trump’s measures the Cuban market will continue to grow in 2018,” he said.

Cigars have been Cuba’s signature product ever since Christopher Columbus saw natives smoking rolled up tobacco leaves when he first sailed to the Caribbean island in 1492.

Late revolutionary leader Fidel Castro was often seen puffing on his favored kind, the long and thin ‘lancero’ until he quit in 1985.
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It promised ample snow and sunny weather on a normally bare, rocky peak easily accessible by “super highway,” thousands more hotel rooms than existed, and a cross-country ski course that looked good on paper but would have cut through some people’s backyards.

The airbrushed pitch worked, but after Denver won a bid to host the 1976 Winter Olympics, its plan unraveled amid questions about the environmental impact, ballooning costs and logistics of hosting such a big event in a quickly growing state.

Now, over four decades after Denver became the only city to withdraw as an Olympic host after winning a bid, it is exploring whether to try again after many cities have decided it’s just not worth it.

The city is again growing, with low unemployment and a booming economy, and this time has a bigger airport, light rail, more hotels, seven professional sports teams and multiple stadiums. But the highway touted in ’76 — Interstate 70, which connects Denver to the Rockies — has essentially remained the same. As the population of outdoor-loving Colorado has grown, the largely four-lane route is often gridlocked on weekends.

Meanwhile, the city also is trying to lure Amazon to open its second headquarters in the metro area, which already has many worried about growth, tax breaks and the rising cost of living.

The Olympic exploratory committee convened by Mayor Michael Hancock — which includes leaders of companies like Vail Resorts and Liberty Global, along with former Denver Broncos quarterback Peyton Manning and ex-Denver Nugget Chauncey Billups — is mulling a privately funded games, estimated to cost $2 billion, without any mega projects. Organizers say the strategy could even leave the state with a surplus to fund I-70 improvements or other work.

Denver already faces stiff competition from Salt Lake City, which became the first U.S. city to announce its plans to bid for the 2030 Winter Olympics this month. Salt Lake said it could host without losing money thanks to existing venues and its expertise in putting on the 2002 Olympics. Reno, Nevada, is also considering a bid.

While some worry the Olympics will distract Denver from urgent problems like affordable housing and transportation, committee members stress that the games won’t take money from those priorities and could potentially net $100 million to $200 million thanks to proceeds from ticket sales, sponsorships and merchandise.

The panel had been in a rush to decide in March whether to pursue the 2026 or 2030 games but is now focused on 2030. The U.S. Olympic Committee announced in Pyeongchang that it will not pursue a 2026 bid unless the International Olympic Committee decides to award bids for both years at once. Denver’s group now plans to make a recommendation to the mayor and governor by late April or early May, although chairman Rob Cohen said the exploratory committee would readjust its timeline if a dual bid becomes a possibility.

The International Olympic Committee is encouraging fewer billion-dollar projects and more facilities already in place after the lavish 2014 Olympics in Sochi. The three venues that would need to be built for a Denver-based Olympics — for Nordic skiing, ski jumping, bobsledding, luge and skeleton — would be temporary structures, said Cohen, CEO of insurance and wealth management company IMA Financial Group. The events could be spread around the state or concentrated along the Front Range.

The exploratory committee has been criticized for its lack of grass-roots representation for meeting behind closed doors, but it recently invited community activists to serve on advisory groups and held online meetings with the public.

Traffic jams

Architect Michael Wenham pondered the prospect of a Denver Olympics recently while at a park near downtown, noting it could be interesting to come up with environmentally friendly ways to host the Olympics. But he reconsidered when he thought about I-70 traffic. He can’t remember the last time he headed to the mountains to snowboard on a weekend because of its traffic jams.

“High-speed buses with their own lane. That is the only way they’re going to be able to do it,” Wenham said.

Cohen said buses would be one possibility for moving people to the mountains quickly during the Olympics, as would giving truckers incentives to bypass I-70. He said some of the surplus could be used to improve the interstate or on another project that would benefit the state long-term, and noted the federal government helped pay to fix highways for Salt Lake City’s 2002 Games.

Glamour vs. mundane

In the years since Denver said no thanks, more cities have become wary of pursuing the Olympics in the face of public opposition and financial concerns.

Innsbruck, Austria, which hosted the 1976 Games after Denver backed out, decided against pursuing a 2026 bid when its promise to organize low-cost and sustainable games failed to convince residents. Other cities that have considered but dropped Olympic aspirations in recent years include St. Moritz and Davos, Switzerland, Krakow, Poland and Oslo, Norway.

Former Colorado Gov. Dick Lamm, whose political career took off after he helped fight the 1976 Olympics, is trying to keep an open mind about Denver’s latest go-around. The committee studying the issue includes savvy people with a track record of successful economic development projects, he said.

But even if Denver could pull it off, he’s not sure what’s in it for the city.

Lamm thinks officials tend to get seduced by the Olympics’ glamour when they could spend their attention on the mundane things that support the economy, such as finding money for education and roads. That takes more campaigning and alliance-making in Colorado because of its strict tax and spending limits, which require voters to approve any tax hikes.

“There’s many opportunities to make this a better state, and I don’t see how the Olympics fit into that,” he said.
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The governor of Sao Paulo and likely centrist presidential candidate Geraldo Alckmin said on Monday that he would privatize Brazil’s state-run oil company Petroleo Brasileiro SA if he wins the elections in October.

Alckmin, who has single digit support in opinion polls, said during a television interview with Band TV that he favored private ownership of Petrobras, as Brazil’s biggest company is known, as long as the sale was conducted within a strict regulatory framework.

Once a taboo issue in Brazilian politics because of national sovereignty concerns, the privatization of Petrobras is set to become a campaign issue this year as Brazil struggles to bring an unsustainable budget deficit under control.

Brazil’s left fiercely rejects the sale of Petrobras, but the leftist leader leading early opinion polls, former President Luiz Inacio Lula da Silva, will likely be barred from running because of a corruption conviction and there are no obvious politicians who can fill his shoes.

It is not clear where the far right candidate Jair Bolsonaro, who is currently second in opinion polls, stands on relinquishing state control of Petrobras.

But his economic policy advisor Paulo Guedes told Valor newspaper in an interview published on Monday that he favored selling all state companies to raise 700 billion reais that would help pay off one fifth of Brazil’s public debt.
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U.S. President Donald Trump on Monday said he wants to bring the steel industry back to America even if it means applying tariffs to imports from other countries.

“I want to bring the steel industry back into our country.

If that takes tariffs, let it take tariffs, OK? Maybe it will cost a little bit more, but we’ll have jobs,” Trump told a meeting at the White House with state governors.

The U.S. Commerce Department has recommended Trump impose curbs on steel and aluminum imports from China and other countries. On Friday, the White House had said Trump has not yet made a final decision on the matter.
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One of the hallmarks of India’s financial capital, Mumbai, is a food delivery system that involves 5,000 lunchbox carriers, who distribute over 100,000 home cooked meals to office workers with an efficiency that has been the subject of top business school studies. These men are now using their food distribution skills to deliver leftover food to the hungry. Anjana Pasricha has this report.
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Days after saying that it would retroactively cut the profits reported over the past two years, General Electric Co. is reshaping its board of directors.

One person joining the board chaired the organization that sets accounting standards in the United States.

GE said Friday that it must cut its 2016 per-share earnings by 13 cents, and by 16 cents for 2017. It’s adopting new accounting standards for 2018.

The Securities and Exchange Commission investigating the Boston company over long-term service contracts and federal regulators are reviewing a $15 billion miscalculation that GE made within an insurance unit. GE disclosed last month that it would take a $6.2 billion charge in its fourth quarter after a subsidiary, North American Life & Health, underestimated how much it would cost to pay for the care of people who lived longer than projected.

After cutting the size of its board from 18 to 12 members, GE said Monday that a quarter of that board would consist of new members, including Leslie Seidman, former chairman of the Financial Accounting Standards Board. Also named were former Danaher Corp. CEO Lawrence Culp and one-time American Airlines CEO Thomas Horton.

CEO John Flannery, a longtime insider at GE, was tasked last year with reshaping the company, but the proposed changes at GE have grown more radical over the past several months as negative developments emerge. The company has shrunk dramatically since it became entangled in the financial crisis a decade ago and Flannery has vowed to shed $20 billion in assets quickly.

Former CEO Jeff Immelt left last June, three months early, and the company’s chief financial officer left several days later.

GE in November slashed its dividend in half and said that the sprawling conglomerate would focus on three key sectors – aviation, health care and energy. By January, after the $15 billion blunder, Flannery hinted that even more drastic changes in the makeup of the company could be on the way.

“All options on the table, no sacred cows,” Flannery said during a call with investors and industry analysts.

Shares slipped almost 2 percent to their lowest level in almost 8 years.
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Reports of massacres and the displacement of close to 700,000 Rohingya have chilled relations between Myanmar and its Western partners but the crisis has not reversed the country’s long-term economic outlook. 

Myanmar’s brand as a “frontier” destination for Western investment took a knock earlier this month with the exit of a disgruntled U.S. law firm, while doubts grow over the government’s ability to implement business-friendly reforms.

Some analysts say the crisis in Rakhine State is taking an economic toll and hurting the government’s efforts to attract more balanced foreign investment after years of over-reliance on China.

The government’s belligerent approach to Western criticism over the Rohingya crisis has allowed China to win back ground lost since Myanmar began to liberalize, economically and politically, after 2011. It remains the country’s largest trading partner, with Singapore now the largest investor. The U.S. and European countries trail far behind.

However, large Western firms that have entered in recent years—in energy, consumer goods, telecommunications, and beer, among other sectors—are digging in rather than packing up.

Tiago Coelho, editorial manager at the Oxford Business Group, a consultancy firm, told VOA that few Western companies that have committed funds and energy would seriously consider pulling out or downsizing on account of the Rohingya crisis.

Low-hanging fruit

The likes of Telenor and Heineken entered their respective markets—telecoms and beer—on the cusp of giant expansions, in a country where the cost of entry is high. Moreover, they can still count on the support of their embassies.

New sanctions, narrowly targeted at Myanmar military officers, are being enacted and discussed, but most embassies retain a pro-investment platform, in support of the civilian government of Aung San Suu Kyi and their own countries’ trade interests.

Eric Rose, lead director of New York-based Herzfeld Rubin Meyer & Rose, announced this month that the firm was leaving after five years in Myanmar, and cited stalled economic reforms. He had lobbied for the lifting of sanctions and for an American investment rush that never came.

Since 2016, only U.S. sanctions against arms deals, money laundering, and transactions with drug kingpins remained—until a regional army commander was sanctioned late last year.

In 2017, Myanmar’s investment directorate approved $5.6 billion of Foreign Direct Investment (FDI), down from $7.8 billion in 2016, prompting talk of a downturn.

But Tony Picon, Myanmar founder and director of real estate services firm Colliers International, warned against putting too much emphasis on FDI, since this index dips and surges as major infrastructure and energy projects are put to tender.

“Manufacturing FDI,” which has been robust, “is a better indicator of economic growth as this represents sustainable revenue,” he said.

The National League for Democracy government, which assumed power in early 2016, has launched few big-ticket projects compared to the previous, military-backed government, which scooped low-hanging fruit by liberalizing the oil and gas and telecoms sectors, among others.

Rebound

Although appalling in scale and intensity, the death and displacement in Rakhine is contained within an isolated border enclave of little economic consequence to the rest of the country.

Three months into the crisis, in November, visiting officials of the International Monetary Fund (IMF) hailed a “rebound” in Myanmar’s economy. Projected growth of 6.7 percent for the 2017/18 financial year, up from a post election-year dip of 5.9 percent in 2016/17, is being fueled by advances in agriculture and rising exports, they said.

Western investors seem largely convinced. In November, another international law firm, London-based Stephenson Harwood, opened an office in Yangon, Myanmar’s commercial capital. Lead partner Tom Platts declared it an “exciting time to be working in Myanmar.”

In January, the in-country managing director of Nestlé, the Swiss food and drinks giant, told Yangon-based media outlet Mizzima of plans for four-fold growth in Myanmar by 2020. A Nestlé factory near Yangon will soon go online, servicing the local market.

The similarly vast consumer goods company Unilever, headquartered in the UK and Holland, is also expanding in Myanmar. It announced a joint venture with a local company last year to build on combined annual sales of more than $120 million.

Reputational risk

As the Rohingya crisis has deepened, activists had trained their sights on Unilever as well as Telenor, the Norwegian telecoms company that has invested $2 billion in Myanmar since 2013 in a cutthroat race for mobile phone subscribers. In September, Telenor issued a statement of “grave concern,” but avoided using the word Rohingya which is politically toxic in Myanmar.

Telenor, now second in the market and not far behind a state-owned enterprise, is bracing itself for the entry this year of a new telecoms company, branded Mytel—with stakes held by the militaries of Vietnam and Myanmar—which is tipped to start a price war.

However, the worst effects of the crisis on investment may be the hardest to trace: that of foreign companies eyeing the Myanmar market and choosing, on assessment, to opt for countries with more favorable headlines and less risk to reputations. 

“Before any economic impact, you see a political impact,” said Coelho of the Oxford Business Group, noting the widening political gulf between Myanmar and the West.
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