UK's Cameron to visit Myanmar as EU mulls sanctions lift

YANGON Tue Apr 10, 2012 12:45pm EDT

Britain's Prime Minister David Cameron (C) is welcomed by Nissan Motors employees upon his arrival at the company's global headquarters in Yokohama, south of Tokyo April 10, 2012. REUTERS/Issei Kato

Britain's Prime Minister David Cameron (C) is welcomed by Nissan Motors employees upon his arrival at the company's global headquarters in Yokohama, south of Tokyo April 10, 2012.

Credit: Reuters/Issei Kato

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YANGON (Reuters) - British Prime Minister David Cameron will meet pro-democracy leader Aung San Suu Kyi in Myanmar on Friday, the first major Western leader to visit the long-isolated country since a 1962 coup began a half century of military rule.

His visit, confirmed by local sources, comes nearly two weeks after Suu Kyi's National League for Democracy won historic April 1 by-elections by a landslide, convincing the United States and European Union to consider relaxing economic sanctions imposed years ago in response to human rights abuses.

Suu Kyi's party said Cameron will meet the Nobel Peace Prize laureate on Friday at her lakeside villa where she had been kept under house arrest until November 2010, and the two would dine together that evening at the British ambassador's residence.

A scramble for economic opportunities in Myanmar is building steam, with Western firms vying to be among the first to do business in Myanmar once sanctions are lifted.

They are afraid they are missing out to competitors from China, India, Japan, Thailand and South Korea that are already well entrenched.

Big businesses across Europe want the EU to lift sanctions in the coming weeks, which would allow them into the country ahead of their U.S. rivals. A formal European decision is expected on April 23.

British companies are among those seeking access to what could be huge opportunities in energy, mining, financial services, telecoms and tourism in Myanmar.

Cameron arrived in Japan on Tuesday, leading executives from around 35 companies including energy major Shell, defense giant BAE Systems and the world's biggest miner BHP Billiton, at the start of a tour of Southeast Asia including Malaysia and Indonesia.

The British government declined to confirm whether Cameron would stop in Myanmar.

EMERGING MARKETS

Cameron's government is urging British companies to trade more with emerging countries, seeking new markets to jolt the sluggish British economy into life at a time when key trading partners in the euro zone are immersed in crisis.

Visiting Myanmar, particularly accompanied by a large business delegation, could be controversial as the EU has not yet lifted sanctions and maintains an arms embargo on Myanmar.

Tomas Valasek, director of foreign policy and defense at the Centre for European Reform thinktank in London, said there was some "one-upmanship" among EU countries when it came to Myanmar.

"Assuming Myanmar continues to develop, everybody in Europe wants to be seen as the one that broke the ice with the country," he said.

Countries that were among the first to reach out could stand to have better trade relations with Myanmar, he said.

A string of Western politicians, including U.S. Secretary of State Hillary Clinton, have travelled to Myanmar in recent months to encourage it to stay on the path of reform.

Valasek said it was a "tricky call" whether it was beneficial for Cameron to visit Myanmar now.

"Obviously you want to send some signals that the relationship is going to improve," he said.

But, on the other hand, "you don't want to put all your eggs in one basket and give (Myanmar) all of the benefits of full cooperation" when reform still has a long way to go, he said.

Gareth Price, a senior research fellow at London's Chatham House thinktank, said it made sense for Cameron to visit.

"Now is really the time to encourage them on this (reform) process," he said.

But he conceded there was a danger "that there suddenly becomes a rush to this country where this political reform process is far from complete."

"The risk ... is that if all these foreign investments take place under the current system all that will happen is it is going to enrich the people in charge at the moment," Price said.

UNTAPPED RESOURCES

While Myanmar has one of the lowest per-capita incomes in the world at $1,300 a year and is still largely agrarian, it also has large untapped resources of oil and natural gas, sizeable deposits of coal, nickel ore and gemstones, and the potential to return to being a major exporter of rice and wood.

British Foreign Secretary William Hague said last week the EU may lift some sanctions on Myanmar but would keep up pressure for the release of remaining political prisoners. He ruled out an "instant and complete opening up of trade".

Cameron's visit to Myanmar will be the first by a British prime minister since 1955, seven years after the end of British colonial rule of the former Burma.

He will also be the first major Western leader to step foot in Myanmar since a 1962 coup ushered in 49 year of unbroken military rule that ended last year, when a junta handed power to a quasi-civilian government stacked with former generals.

The government has since freed hundreds of political prisoners, begun peace talks with ethnic rebels, relaxed some media censorship, allowed trade unions, and shown signs of pulling back from the powerful economic and political orbit of its giant neighbor China.

(Additional reporting by Adrian Croft in London; Writing by Jason Szep; Editing by Myra MacDonald)

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