Myanmar wait and see approach
Australian businesses with exposure to Myanmar are adopting a defensive posture and waiting to see if the military coup will result in civil unrest.
Australian businesses with exposure to Myanmar are adopting a defensive posture and waiting to see if the military coup will result in civil unrest, ethnic violence, nationalisation or significant sanctions.
Australian-Myanmar business community insiders speaking to The Australian on the condition of anonymity say the path forward isn’t clear, with the implications of Aung San Suu Kyi’s disposal for business uncertain.
One insider, a lawyer, said he had briefed a large client on the risk of the nationalisation of their assets and believes such a situation is “highly unlikely.”
“The military has installed U Aung Naing Oo as the Minister of investment and Foreign Economic Relations,” he said.
“It sends an interesting message because although he used to be a member of the military, he’s become popular with the foreign business community as the head of Myanmar’s equivalent of ASIC.”
“He’s seen as a convert to market forces.”
More immediate concerns include widespread civil unrest and a ramping up of ethnic violence, which has become more prevalent despite widespread ceasefires between the military and ethnic groups being signed in recent years – and so staff safety is a priority.
Australian natural gas producer Woodside has one of the largest offshore petroleum holdings in the country, completing three successful drilling campaigns in the last five years, with plans for a fourth now in question.
The company said that although access to some infrastructure was limited, it would continue to put the safety of its staff first.
“Our highest priority remains the safety of our people, their families and contractors in country and we are working closely with the Australian Government in this regard,” a spokeswoman said.
“Communications are fully operational and our people are accounted for, safe and well.
“Our employee assistance program remains available to our employees that require this support.
“Access to some infrastructure is limited and as a result we have postponed some logistical activities while we await further clarity.”
Credit Suisse analyst Saul Kavonic told The Australian that the fourth project, project as part of a development aimed at sending gas to Myanmar and Thailand by pipeline, was a lesser priority before the political situation.
“After Thailand political instability – a target market for Myanmar gas – Covid and now Myanmar political developments, Woodside‘s Myanmar project can’t catch a break,” he said.
“It may be premature to determine impact here but clearly there is risk of further delay to developments,” Mr Kavonic said.
ANZ is one of 13 foreign banks with a branch presence in the country.
Based in Yangon, the company told The Australian that delays to payment processing had been resolved and it was working on keeping its dozen of staff safe.
“Our number one priority is ensuring the safety and wellbeing of our staff,” a spokesman said.
ASX listed miner Myanmar Metals entered a trading halt over the political situation on Monday, pending the release of a statement.
The $133m company has silver, lead, zinc and gold interests in the country’s expansive Shan State, which is home to armed separatist armies.
Another Australian miner, PanAust, has three exploration licences in the country and a 90 per cent interest in joint venture that holds a further seven licences, all in the relatively safer Sagaing Region in the country’s north west.
“At this stage, PanAust is focused on keeping its people safe and will continue to monitor the situation carefully,” a company spokeswoman said.
ASX listed infrastructure company Cardno told The Australian it was poised to deploy resources to keep its staff safe.
“The safety and wellbeing of our staff and their families is our number one priority,” a spokesman said.
“ We have accounted for all our staff in-country. We are communicating regularly and providing them with support in line with our safety and security protocols.
“Our external security provider and our in-country networks are also at the ready should we require additional resources to keep our people safe.”Macquarie University Department of Security Studies and Criminology Lecturer Roger Lee Huang said the military coup may see actions taken against separatist groups in the region increase.
“I speculate that now the military has control of the civilian aspect of the government and the military – this puts the military in a far stronger position.
“Whether this means intensification of fighting, or a decrease, I can’t say for sure, but it gives the military an upper-hand in how it chooses to engage with ethnic groups. I assume it will mean more fighting in some areas but less in others.”