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Myanmar open for US business, but is it a safe bet?

Analysts are warning US businesses to 'do their homework' on the crony-linked businesses and rights abuses that allegedly comprise Myanmar's resource industry.

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In this photo taken in March, Derek Mitchell, then US special envoy to Myanmar, speaks during a press conference after meeting with opposition leader Aung San Suu Kyi at her residence in Yangon, Myanmar. Mitchell, the new US ambassador to Myanmar, arrived in the country yesterday, and a US business delegation is also expected to visit Myanmar this weekend.

Khin Maung Win/AP

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The Obama administration's decision to allow American businesses to invest in Myanmar after years of sanctions has prompted some regional analysts to warn potential investors of the country's high number of "unacceptable business partners," particularly in the oil and gas sector.

According to the new policy announced yesterday, US businesses will now have free rein to work within Myanmar's oil and gas industry, perhaps most significantly with the giant state-run Myanma Oil and Gas Enterprise (MOGE), the primary revenue source for the previous military government.

US President Obama called yesterday's announcement a first step in "allow[ing] US companies to responsibly do business in Burma [Myanmar]" and credited both Myanmar President Thein Sein and recently elected MP Aung San Suu Kyi for their combined work toward reform in the former military regime. 

But analysts have warned of the myriad crony-linked businesses and rights abuses that allegedly comprise Myanmar's resource industry and warned US companies to "do their homework."

"We need to be very cautious in engaging with this business sector because there are many unacceptable business partners in Burma," says Wong Aung of the Thailand-based Shwe Gas Movement, an activist group that researches the social, economic, and environmental effects of Myanmar's oil and gas industry.

"Many businesses are still controlled by the Burmese military and [its] cronies, and have been for a decade, so it is difficult not to engage with them," says Wong Aung. “We need to pass legislative framework to ensure that they are transparent and accountable and that local people can be protected. [Until then] I do not think the US government can ensure that there are accountable and transparent businesses in [Thein Sein's] administration."

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