Could Coca-Cola put fizz into manufacturing in Burma?

How industrialisation could transform Burma

Coca-Cola is opening not one but two plants in Burma in the coming year. This is after a more than 60-year absence after the country entered military rule in 1962.

Coca-Cola sees potential in selling to Burma even though it is the poorest country in Asia. Average income is below $1,000 a year, which is lower than even North Korea, according to the best estimates by the OECD and others. Measurement is an issue of course, but Burma isn't industrialised, a key factor in raising incomes.

But, it is a sizeable country with the 26th largest population in the world, according to the World Bank. It is nearly three times larger than that other closed Asian country, North Korea. This is why Burma's opening up has attracted such interest.

However, it was only two years ago that Aung San Suu Kyi was under house arrest and there were 9pm curfews. Now, businesses, like the giant Coca-Cola, are pouring into the last large Asian economy to open up.

Coca-Cola's chief executive, Muhtar Kent: "It feels like when the Berlin wall came down in the 1980s."

Time is right

Coca-Cola is counting on the political and economic reforms continuing.

I went along to the opening of its factory outside of Rangoon and spoke to the company's chief executive, Muhtar Kent.

He emphasised that Coca-Cola views Burma as a market worth investing in because of its size, and that the time was right to return since he expects the opening up process to continue. Interestingly, he was also not very concerned about poor infrastructure, which is not uncommon in developing countries.

The return of multinational corporations that have the cash to invest and create jobs as well as partner with local firms could aid Burma's industrialisation process. The country, though, would need to make the most of the capital and skills on offer to ensure that they benefitted.

In the case of Coca-Cola, setting up the factory with a local partner is a step in that direction. The economic evidence points to joint ventures as being the most likely way to generate positive spillovers for the host country.

For the sake of the bulk of the Burmese people who are seeking a better life through economic development, industrialisation is key and that can be helped by multinationals - if their investments are managed appropriately.

Linda Yueh Article written by Linda Yueh Linda Yueh Chief business correspondent

Will the debate over immigration affect London’s position?

London's Mayor is confident that Britain's tougher stance on immigrants will not impact the UK economy.

Read full article

More on This Story

Features & Analysis

  • Prostitute in red light district in Seoul, South KoreaSex for soldiers

    How Korea helped prostitutes work near US military bases

  • LuckyDumped

    The rubbish collector left on the scrap heap as his city cleans up

  • Walmart employees and supporters block off a major intersection near the Walton Family Foundation to stage a protest calling for $15 an hour and consistent full-time work in downtown Washington October 16, 2014. Black mark

    Wal-Mart workers revolt against the annual shopping bonanza

  • Jennifer Lawrence in The Hunger Games: Mockingjay - Part 1More than 'Games'

    Fact and fiction blur in Mockingjay film.

From BBC Capital


  • All-inclusive holidaysThe Travel Show Watch

    With all-inclusive holidays seeing a resurgence are local trades missing out to big resorts?

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.