Coca-Cola returns to Burma after 60 years
Filed under: News
The American drinks giant is taking advantage of US easing of restrictions on investment in the country, following Burma's appointment of a civilian president last year who has initiated reforms. Thein Sein has freed political prisoners and opened talks with opposition leader Auung San Suu Kyi, who was elected to parliament after spending years under house arrest. The 66-year-old Nobel peace laureate is currently on a European tour, although there are worries about her health.
President Barack Obama has also lifted sanctions on financial services to Burma, allowing American credit card companies to return. However, like other countries, the US has not removed restrictions on imports from Burma such as oil, gas, gems and timber - which they worry is a lucrative business for parts of the army that are hostile to the reforms.
Atlanta-based Coca-Cola will initially ship its flagship drink from neighbouring countries to Burma but will also look for local partners, and expects to make "significant investments" in the country over the next few years.
The world's largest soft drink maker left Burma when the military seized control of the country in 1962. It quit Cuba in 1960 after the Cuban Revolution, when Fidel Castro's government started seizing private assets. It has never operated in north Korea. Any Coca-Cola products for sale in those countries are delivered through third parties. Cuba was actually one of the first countries Coca-Cola moved into, in 1906.
Coca-Cola likes to be one of the first to enter or re-enter markets. For example, in 1949 the company and other foreign firms were expelled from China by Mao's communist regime. After the US restored full diplomatic relations with the country in 1979, the soft drink maker was quick to move back in: it had 20,000 cases of Coke delivered by train from Hong Kong, then still a British territory.
A group of American businesses had urged the US government to lift sanctions on Burma. For example Caterpillar, the world's largest manufacturer of construction equipment, wants a slice of the expected construction boom as Burma rebuilds its patchy infrastructure, and argued that it has lost out to Chinese rivals due to the western sanctions. Asian companies were not covered by the tough sanctions imposed by the US and Europe since the late 1990s.
The Asian Development Bank forecasts that the Burmese economy will grow 6% this year after 5.5% last year due in part to the flow of foreign money. Burma has a population of around 50 million, similar to South Korea.