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Could Myanmar's economic reform bring business to war-torn ethnic regions?

Myanmar has passed a new foreign direct investment law. Now a cease-fire in the country's war-torn Karen state has some entrepreneurs hoping to attract foreign investment.

By Correspondent / September 10, 2012

Myanmar factory workers stage a rally outside Myanmar Labor's Office in Yangon, Myanmar, Friday, Sept. 7. Elected President Thein Sein launched economic and political reforms when he took office last year after almost five decades of military rule, foreign sanctions and restrictive laws that kept the economy stagnant.

Khin Maung Win/AP

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Hpa'an, Myanmar

On the heels of recent reforms in Myanmar, aspiring entrepreneur Shar Phaung established Shar Mu Lar Mining Co. just two months ago, sensing economic opportunity in a war-torn state close to the Thailand-Myanmar border.

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The Karen National Union (KNU) has fought the Myanmar government in the Karen state, where Mr. Shar Phaung lives, since the late 1940s. The on-again, off-again jungle conflict has driven hundreds of thousands of people from their homes, left thousands killed or maimed, and made it a struggle for families to make ends meet. 

Now a cease-fire has been coupled with Myanmar President Thein Sein's pledge to prioritize economic reform one of Asia's poorest countries. The government and the KNU met last week in the latest round of peace talks, discussing troop positions.

“Overall we can say things are improving as this is the third time the government and KNU meet, and publicly the government praises the KNU,” says Susanna Hla Hla Soe of the Karen Women's Action Group, an observer at last weeks' negotiations here in Hpa'an.

The lull in fighting means that even in this ramshackle riverside town of around 50,000, a six-hour drive from Yangon, entrepreneurs such as Mr. Shar Phaung now see business opportunities.

“The KNU and the government have the cease-fire so we can go to the places like Kyaiseikgyi near the Thailand-Myanmar border, where there is the antimony,” he says, referring to a potentially lucrative element mostly used in batteries and flame retardants.

Antimony is just one of an array of natural resources prompting a surge in investor interest in Myanmar, which is better known for its gas, gemstones, timber, and oil. Given that antimony is also used sometimes in bullets, it is a grim irony that Shar Phaung could soon be mining in a region home to what is commonly described as the world's longest-running civil war.

Still, both Ms. Susanna Hla Hla Soe and Shar Phaung acknowledge that a political settlement is a long way off. “It is just cease-fire for now: They have many things to discuss still,” says Shar Phaung.

The Karen and several of Myanmar's other large ethnic minorities have long sought substantial devolution of central control to their regions, something the Myanmar authorities have resisted, fearing that minority regions could try to break away from Myanmar.

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