Obama departs for Asia, to make historic stop in Myanmar

1 of 5. U.S. President Barack Obama steps aboard Air Force One at Andrews Air Force Base near Washington November 17, 2012. Obama is traveling to Thailand, Myanmar and Cambodia.

Credit: Reuters/Jason Reed

ABOARD AIR FORCE ONE | Sat Nov 17, 2012 4:27pm EST

ABOARD AIR FORCE ONE (Reuters) - U.S. President Barack Obama departed on Saturday for a three-country swing through Asia, using his first foreign trip since winning re-election to emphasize his administration's focus on the region.

Obama will make stops in Thailand, Myanmar and Cambodia. The highlight of the trip is likely to be the historic stop in Myanmar, a former pariah state. The White House hopes his visit will push the country to lock in democratic reforms.

"In addition to the democratic reforms, we've been concerned about the continued ethnic conflicts in Burma," Ben Rhodes, deputy national security adviser, told reporters accompanying Obama aboard Air Force One.

The Obama administration still refers to Myanmar by its older name, Burma.

Rhodes added the Obama administration is pressing Myanmar to break its military ties to North Korea, as well, and "we've seen them take some positive steps in that direction."

The president's tour may be overshadowed, however, by violence in the Middle East and concerns about tax and spending talks with lawmakers back home.

Obama is scheduled to return to Washington early Wednesday morning.

(Reporting by Jeff Mason; Editing by Bill Trott and Eric Walsh)

View the original article here

Obama, in Asia, says Myanmar trip to encourage democracy

1 of 10. U.S. President Barack Obama watches on as Thailand's Prime Minister Yingluck Shinawatra arrives at a dinner at Government House in Bangkok, November 18, 2012.

Credit: Reuters/Jason Reed

By Matt Spetalnick and Jeff Mason

BANGKOK | Sun Nov 18, 2012 9:41am EST

BANGKOK (Reuters) - U.S. President Barack Obama denied on Sunday his upcoming trip to Myanmar was an endorsement of the government there, calling it an acknowledgement of the progress made in shaking off decades of military rule and encouragement for it go further.

On Monday, Obama will become the first serving U.S. president to visit Myanmar, also called Burma, part of a three-country Asian tour that, as his first post-election trek abroad, will show he is serious about shifting the U.S. strategic focus eastwards.

Some human rights groups object to the Myanmar visit, saying Obama is rewarding the country's quasi-civilian government before democratic reforms are complete. But he told a news conference in Thailand he knew there was much still to do.

"I don't think anybody is under the illusion that Burma's arrived, that they're where they need to be," he said.

"On the other hand, if we waited to engage until they had achieved a perfect democracy, my suspicion is we'd be waiting an awful long time," he added. "One of the goals of this trip is to highlight the progress that has been made and give voice to the much greater progress that needs to be made in the future."

Late on Sunday, state television in Myanmar said 66 more prisoners would be released on Monday, bringing to 518 the number released over the past week.

The previous batch did not appear to include any political prisoners, but a senior prison department official, who declined to be identified, told Reuters that Myint Aye, a prominent human rights activist, would be among those freed on Monday.

It was not clear if other political detainees would be included. Obama has made the freeing of all political prisoners one of the conditions for the full lifting of sanctions imposed on Myanmar for rights abuses under the junta.

Obama will meet President Thein Sein, a former junta member who has spearheaded political and economic reforms since taking office in March 2011, and opposition leader Aung San Suu Kyi, who led the struggle against military rule and, like Obama, is a Nobel Peace Prize laureate. She is now a lawmaker.

"I'm not somebody who thinks that the United States should stand on the sidelines and not want to get its hands dirty when there's an opportunity for us to encourage the better impulses inside a country," Obama said.

"And, in part, I'm taking my guidance from what Aung San Suu Kyi, who I think knows quite a bit about repression in Burma, sees as the best means to continue the development and progress that's being made there."

White House officials have said Obama would press Myanmar's leaders to restore calm to the western part of their country and bring instigators of ethnic violence there to justice.

After a recent meeting with senior Obama aides, rights activists left satisfied that Obama wanted to push hard on human rights and political and economic reform in closed-door talks with Thein Sein and in his public remarks, including a speech.

After Myanmar, Obama will attend an East Asia summit in Cambodia as he seeks to recalibrate U.S. economic and security commitments to counter China's influence at a time when America is disentangling itself from wars in Iraq and Afghanistan.

But his attention will be divided during his travels as he faces a simmering crisis in the Gaza Strip pitting Israel against Hamas militants, plus economic problems at home.

ALLY THAILAND

Obama, who was born in Hawaii and spent part of his youth in Indonesia, has called himself America's first "Pacific president".

The U.S. administration regards Thailand as a key ally for advancing the "Asia pivot" that Obama announced last year with an eye to an increasingly assertive China.

At a joint news conference with Obama, Thai Prime Minister Yingluck Shinawatra announced Thailand would join talks on deeper trade ties with the United States and other countries under the Trans-Pacific Partnership (TPP).

The TPP is a trade pact being negotiated between the United States and Australia, New Zealand, Chile, Peru, Vietnam, Singapore, Malaysia and Brunei plus, more recently, Canada and Mexico.

It aims to tear down barriers to trade, going further than existing bilateral and other pacts, although some in Thailand worry that its provisions could conflict with rules governing a Southeast Asian economic community to be established in 2015.

As part of the itinerary in Bangkok, a monk in bright orange robes gave Obama and Secretary of State Hillary Clinton a tour of the centuries-old Wat Pho temple, taking them past its massive reclining Buddha.

Somehow, the fiscal problems back in Washington came up.

"We're working on this budget. We're going to need a lot of prayer for that," Obama was overheard telling the monk, a light-hearted reference to a fiscal showdown in Washington over tax increases and spending cuts that kick in at the end of the year unless Obama and congressional Republicans can reach a deal.

Security had been tight at Bangkok's old Don Muang airport for Obama's arrival but was far less visible in the historic center of the city at the temple, although roads around the building were closed and tourists were not allowed in.

From there, Obama left for an audience with King Bhumibol Adulyadej, 84, the world's longest-reigning monarch, who has been in hospital recovering from an illness since September 2009.

The king's softly spoken words made Obama smile at one point. "Elections in the United States are very long but it's very gratifying to know people still have confidence in me," the president responded.

(Writing by Alan Raybould; Editing by Robert Birsel)

View the original article here

Analysis: Foreign insurers enter Myanmar market with hope, caution

By Clare Baldwin

HONG KONG | Wed Nov 7, 2012 3:52am EST

HONG KONG (Reuters) - The world's top insurance firms are setting their sights on Myanmar, steeling themselves for a fight with corruption and ghosts from the nation's political past.

Prudential Plc (PRU.L), AIA Group Ltd (1299.HK) and Manulife Financial Corp (MFC.TO) are among the global insurance giants preparing to enter Myanmar as the government rolls out a framework for the sector's development with the lifting of European and U.S. sanctions.

The opportunities are many. A large population, economic reforms and a natural resources industry could combine to create rising wealth among Myanmar's people. There is also money to be made by general insurers providing cover for the impending boom in construction projects.

"A few years ago everybody needed to have a China story and India as well," said Michael Daly, a director and consulting actuary for the China and Southeast Asia life insurance practice at Milliman Inc. "Now the attention has shifted to Southeast Asia."

Myanmar could produce $1.6 billion in annual premium revenues, according to Reuters calculations based on economic data and comparisons with neighboring markets. That would less than 10 percent of what Singapore premiums bring in now, but in line with Vietnam's current insurance market.

With the opportunities come obstacles, including new rules governing foreign insurers that are yet to be tested.

In addition, the country's one sole established insurer - state-backed Myanma Insurance - is guaranteed certain contracts, effectively closing off portions of the market.

Other challenges include competition from a handful of regional players and corruption.

The country's political history may also pose problems for insurers looking to sell products to high net worth individuals who may have ties to the former junta or be on blacklists.

And yet the early enthusiasm among global insurers shows how tough things have become in their home markets and how crucial they see their position in Southeast Asia's growth story.

SOUTHEAST ASIA

Global insurers have had their eyes on Southeast Asia, buying up assets and opening offices in Indonesia, Cambodia, Sri Lanka, Malaysia and Thailand as growth rates in the developing world far-outpaced developed markets.

Premiums in Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam are expected to rise an average of 7.9 percent next year, according to a report by Swiss Re, more than double the global life insurance average.

Myanmar is attractive to insurance executives as its population of nearly 60 million makes it one of the largest in the region. Per capita gross domestic product is also over $850, near the $1,000 mark that insurers say is the threshold where individuals begin buying insurance.

Tokio Marine Holdings Inc (8766.T), Sompo Japan Insurance Inc (8630.T), Mitsui Sumitomo Insurance Co Ltd (8725.T) and United Overseas Bank Ltd (UOBH.SI) have already established representative offices in Myanmar.

Before nationalization in 1963, there were more than 70 local and foreign private insurance companies in Myanmar.

"Myanmar is an economic rising star," said David Wong, who runs Manulife's Southeast Asian operations and who travelled to Myanmar this fall as part of a Canadian delegation. "It's not far behind Vietnam."

MYANMAR VS. VIETNAM

Analysts and executives interviewed by Reuters struggled to put an exact dollar figure on Myanmar's insurance market.

Using Vietnam as a model, Myanmar may eventually generate between $1 billion and $2 billion in premiums a year, according to a Reuters analysis, based on sources and economic data.

Vietnam last year had a GDP of $120 billion and generated just over $1.8 billion worth of premiums. That meant an insurance penetration of 1.5 percent of GDP.

If Myanmar's economy grows 7 percent annually in the next decade - the lower end of the rate estimated by the Asian Development Bank - it will double in size in 10 years' time to over $100 billion. If its insurance penetration matches or comes close to that of Vietnam, Myanmar could generate around $1.6 billion in premiums.

Singapore brings in around $19.5 billion in premiums, the highest in Southeast Asia.

DARK PASTS, LOCAL LAWS

The clearest obstacle for a foreign insurer in Myanmar is corruption.

Transparency International ranks Myanmar as one of the four most-corrupt nations, on par with Afghanistan and only half a point better than North Korea and Somalia.

Rampant corruption would make it nearly impossible for global insurers to run proper background and business checks on policies for individuals and corporations.

Even worse, corruption could get an insurer in trouble if the company backs a person or entity that later becomes a criminal liability, a not-too-distant possibility in a country such as Myanmar.

"Many businessmen with close links to the military are now keen to reposition themselves as business friendly and compliant," said Richard Dailly, managing director at consulting firm Kroll Inc. "However, many of them still appear on blacklists either because of their close link to the regime or their proximity to narcotics production."

Detailed market information is also hard to come by, with debt and equity analysts and ratings agencies yet to begin covering Myanmar's insurance sector. Performing due diligence is difficult, Dailly adds.

The laws governing Myanmar's insurance sector are loosely-worded and don't apply to the state's monopoly, though some parts of the law could be attractive to foreign insurers.

Insurers can get licenses from the Central Bank of Myanmar that allow them to write policies in foreign currencies. Other parts of existing laws could prove worrisome.

So far, government officials are saying foreign insurers will be kept at arms-length until around 2015. That's when they will be granted licenses and allowed to do business, the deputy minister of finance and revenue told Reuters in September.

"For those who invest the time and energy and know-how to actually help it develop, those people are going to get a once-in-a-lifetime opportunity," said Ince & Co partner Iain Anderson, an industry lawyer who recently travelled to Myanmar.

(Additional reporting by Taiga Uranaka in TOKYO and Lawrence White in HONG KONG; Editing by Michael Flaherty and Ryan Woo)

View the original article here