Following two consecutive days of inter-communal violence between members of the Buddhist majority and the Muslim minority, authorities imposed a night-time curfew in Myanmar’s second largest city Mandalay on 3 July.
The clashes in the economic hub underscore the operational, reputational and strategic risks from sectarian violence to businesses in Myanmar, according to Maplecroft.
The ethnic conflict has in recent months already affected Myanmar’s heartland around Mandalay and commercial capital Yangon.
Renewed violence threatens to erode the gains the country had made in improving its human and political rights record.
Maplecroft emphasizes that further instances of communal violence against the Muslim community could derail the country’s political transition and nascent economic opening.
In 2012, an Economist Intelligence Unit (EIU) report revealed that business opportunites abound in the country but warns this should not lead to a goldrush.
"The potential is clear but this should not be a goldrush. Myanmar has a long way to go and it remains a volatile and high-risk market,” says Manoj Vohra, Director of Custom Research, Asia Pacific, EIU.
With confidence from the enactment of the Foreign Investment Law, the Myanmar Government continues to apply its best efforts in reforming the legal system.
At the very beginning of this year, the government enacted the Special Economic Zone law which grants income tax exemptions for 7 years and 5 years to businesses in the free zone and the promotion zone respectively.
Other important bills have been proposed, including amendments to the land laws, the foreign investment law, the Small and Medium Enterprises Development bill, the Condominium bill, an amendment to the Mining Law.