With encouragement from both Vietnamese and Myanmar governments, local firms are rushing to exploit business and investment opportunities in the last "closed" market in ASEAN
A woman shops for vegetables at an open-air market in Yangon, Myanmar
Robert Hai has leased three island s, with areas of 100 to 200 hectares each, from the Myanmar government to raise sturgeon for export.
The leasing agreement was signed during Vietnamese Prime Minister Nguyen Tan Dung's visit to the country in April.
Hai said the 30-year-deal was one of the first 100 percent Vietnamese investments made by a group of investors in Myanmar which has the right conditions to raise the fish using technology from Russia and Ukraine. The first 50,000 baby sturgeons were carried by a helicopter to man-made pools in the leased islands.
Hai, who manages the US$65 million sturgeon project, found Myanmar a promising and "fresh" destination he has studied for years. He said investors would initiate other aquaculture projects on the islands in coming years.
Chu Cong Phung, Vietnamese ambassador to Myanmar, said Vietnamese investors were taking their initial, but significant, steps into country at the right time.
Three months after the visit by the Vietnamese Prime Minister, 20 projects worth $700 million were at various stages of development in Myanmar, compared to $30 million in combined investments from Vietnam in previous years, said Phung.
He said timber and real estate firm Hoang Anh Gia Lai, telecom firm Viettel and Hoa Sen Steel were among the investors.
Hoang Huy Ha, deputy president of Bank for Investment and Development of Vietnam, said they were waiting for approval from the Ministry of Planning and Investment to set up a $200 million financial joint venture in Myanmar.
Ha said the venture would establish a bank to support trade between the two countries and finance investments initiated by Vietnamese businesses in the country. The first of the investments was a $50 million rock mining project developed by Simco Song Da in Mandalay, the second biggest city after Yangon in Myanmar.
"The Vietnamese government will join us through financial support to encourage trade and investment from Vietnam into Myanmar," Ha said.
Myanmar is the last market in Southeast Asia that is closed to the world because of the embargo imposed on the ASEAN member nation by Western powers, and needs outside support for its economic development.
Phung said the country with 58 million people was at the same stage as Vietnam before the Vietnamese government embarked on the doi moi (renovation) policy more than 20 years ago.
With underdeveloped technological and management skills, local production met just 15 percent of the country's demand, he said.
People needed consumer products, while the economy lacked capital and technology to develop, the ambassador said, adding the country with a per capita income of $700 presented great trade and investment opportunities for Vietnamese firms.
Vietnam and Myanmar have had a close relationship for years and both governments have facilitated businesses and investors from either country, the envoy said.
But, he cautioned, the opportunities would reduce after the embargo was lifted.
The country will hold a general election by the end of this year to form a new national assembly and government, shifting governance from the current military-appointed cabinet.
Two-way trade between Vietnam and Myanmar is about $100 million per year, according to the Vietnamese Embassy in Myanmar.
Thailand and China are big partners who have been exporting their consumer products to Myanmar, said Tu Minh Thien, director of the HCMC Investment Trade Promotion Center.
He said the center will organize a fact-finding trip for businesses in the city to Myanmar next month. Thien said businesses would not be disappointed with the market as it offered more opportunities for them to sell their products to end-users and businesses.
During his April visit, PM Dung and his Myanmar counterpart signed deals to strengthen cooperation in 12 fields including mining, aquaculture, agriculture, banking, aviation and offshore oil exploration.
National carrier Vietnam Airlines plans to open a direct flight between Ho Chi Minh City and Yangon in October. This is the second direct flight between the two countries after the Hanoi-Yangon route was launched in March. The first route operates with a 60 percent occupancy rate.