Is Burma ready for foreign investment?

Burma's reform process has prompted Western governments to lift some limited sanctions, and the EU has made clear that further progress, like clean by-elections in April, could lead to more movement. The change in mood has encouraged a wave of investor interest, reports the BBC's Rachel Harvey from Rangoon.

Image caption Phyu Phyu (in pink) and Su Su Tin have seen their restaurant business booming

It is tough to get a lunchtime table in Monsoon these days. The upmarket Rangoon restaurant, opened in 2005, has long been a favoured haunt of local expats, tourists and the Burmese elite.

At Monsoon, Burmese cuisine is seasoned with old colonial splendour. The fans circulating on the impossibly high ceiling, the wooden window shutters and ochre walls recall a bygone era.

The restaurant is owned by two sisters - Phyu Phyu and Su Su Tin.

"Now we see more Japanese and European businessmen coming in," Phyu Phyu said.

"And big groups of Americans which didn't exist before," Su Su chipped in.

The family is thinking about trying to open more restaurants in other popular tourist destinations like Mandalay and Bagan. But they have other plans too.

"We don't have enough serviced apartments (in Rangoon) or houses for rent," said Phyu Phyu. "So we are thinking about construction too."

Her sister pointed to Rangoon's soaring rents as evidence that more accommodation was needed.

"The rent for the office we have now has almost doubled this year, so we are looking for a new place to move to," said Su Su.

Building boom

Established local construction firms are already rushing to meet growing demand. Scaffolding and cranes now pepper a skyline still largely devoid of the gleaming tower blocks which characterise other Asian cities.

Hotel lobbies are filled with foreign business executives scoping opportunities for future investment. Rooms in Rangoon need to be booked weeks in advance.

Ram Nurani, the general manager of the Park Royal hotel, says occupancy rates have jumped from around 65% in November 2010 (when Burma held historic but widely criticised national elections) to more than 90% today.

"We came up with plan to send people to Singapore to prepare them for the international clientele that's coming into this country, preparing them for the English language and for the business clientele expectations," he said.

The Park Royal is part of the Pan Pacific hotels group headquartered in Singapore. Mr Nurani is acutely aware that a well-trained staff is a precious commodity.

"Competition is coming not just from hotels but from private companies,'' he added. ''What they would target is associates (staff) from hotels who are well versed, confident and speak English well."

The Park Royal has now linked staff salaries to performance in the hopes of retaining its best employees.

Outdated infrastructure

There is a palpable buzz about Rangoon these days - a feeling that things are about to take off. But is Burma really ready for a business boom?

Image caption Infrastructure in Rangoon and elsewhere in Burma is in need of investment

It is common on Rangoon's street corners to see a small table laden with telephone handsets, their wires draped precariously over the branch of the nearest tree or post. This is the way many Burmese still keep in touch with friends and relatives - by paying to use a phone at an outside stall.

There are plenty of shops selling the latest mobile phone handsets, but not everyone can afford them and networks are patchy, particularly outside main towns.

Internet speeds are slow; roads are poorly maintained; and power cuts are not at all unusual. In major cities things are improving. But the kind of connectivity that modern business needs is still largely lacking.

For some, that is part of Burma's charm. Tourists are increasingly keen to see a country still largely untouched by the rapid development that has changed so much of the rest of Asia.

Delia Bethal, originally from the UK, is now living across the border in neighbouring Thailand. But this is her first trip to Burma.

When the old authoritarian military government held power, many foreigners were deterred from visiting.

"It was always considered not politically correct to come. But now things seem to be changing and the feeling is it's good to go," Ms Bethal said.

She was travelling with a friend and their two teenage daughters.

"There's change in the air and we wanted to come before it becomes touristy,'' she said. ''We want to see what the unspoiled Burma is like."

The trick then is for Burma's new semi-civilian government to encourage the wave of investor interest without swamping Burma's unique character.

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