The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.  To access the most recent ICS, visit the U.S. Department of State Investment Climate Statements website.

Executive Summary

On February 1, 2021, Burma’s military seized power in a coup d’état that reversed the economic progress of recent years. The military’s brutal crackdown on peaceful protests destabilized the country, prompted widespread opposition, and created a sharp deterioration in the investment climate. Burma’s economy shrank by 18 percent in 2021, according to the World Bank, which forecasts three percent growth in 2023. The regime’s ongoing violence, repression, and economic mismanagement have significantly reduced Burma’s commercial activity, compounded by the pro-democracy Civil Disobedience Movement that emerged in response to the coup. Immediately after the coup, the military detained the civilian leadership of economic ministries as well as the Central Bank of Myanmar (CBM) and replaced them with appointees who are beholden to the regime.

The CBM has imposed severe foreign exchange restrictions that limit commercial activity, and the regime severely limits access to U.S. dollars. Onerous import licensing and foreign currency conversion rules, as well as frequent power outages and reliance on generators have dramatically raised costs for business and limited both companies’ ability to move inputs into and produce products in Burma, as well as pay employee salaries and repatriate any profits from sales and asset liquidations. Suspensions of internet and other telecommunications have restricted access to information and seriously hindered business operations, particularly those of U.S. companies reliant on telecom and Internet Service Providers that are increasingly under the direct control or ownership of the regime’s Ministry of Transport and Communications (MoTC). The Bureau of Industry and Security’s addition of the MoTC to its Entity List on March 6, 2023, limits most network equipment exports to MoTC without an export license.

Many foreign companies have suspended operations, invoked force majeure to exit investments, and evacuated foreign national staff. These departures continued through March 2023. The rule of law is absent, regime security forces engage in random violence, disproportionally respond to pro-democracy People’s Defense Forces, and arbitrarily detain perceived regime opponents, including labor organizers and journalists. Companies invested in the market face a heightened reputational risk. There is also the potential for the regime to expropriate property or nationalize private companies. In response to the coup, the U.S. government has imposed targeted sanctions, including on members of the regime’s State Administration Council (SAC), ministers, and other authorities. The United States has also suspended its Trade and Investment Framework Agreement and instituted more stringent export controls. In the 2022 Business Advisory for Burma, the United States reaffirmed that it does not seek to curtail legitimate business and responsible investment in Burma. Nevertheless, investors should exercise extreme caution, including when assessing potential reputational and regulatory risks associated with regime-affiliated businesses, and conduct heightened due diligence when considering new investments in this market.