DESPITE desires of the Burmese military government, last week's release of dissident political leader Aung San Suu Kyi isn't of itself expected to increase Western business investments here.
The State Law and Order Council (Slorc), the ruling military junta, has been seeking greater foreign investments for the past eight years. ''They hope that the release of Suu Kyi will help break their international isolation and encourage foreign aid and investment,'' one Japanese diplomat says. But Western businesspeople say many obstacles remain before United States and European companies will heavily invest in Burma (also known as Myanmar).
''We are thrilled about Suu Kyi's release,'' says Sean Fitzgerald, spokesman for Levi Strauss & Co. in San Francisco. ''But it's going to take a lot more than the release of one political prisoner to convince us that the climate has changed.''
Levi is one of several US companies that refuses to invest in Burma until the government improves human-rights conditions.
The Slorc bans independent unions, uses forced labor on infrastructure projects, and jails political dissenters, according to a 1994 US State Department report.
Burma, or Myanmar as it was renamed by Slorc, also faces other obstacles to foreign investment. The country has poor roads, phones, a lack of electrical power, and other infrastructure problems. The military nationalized all private firms, and the economy stagnated in the 1970s and '80s. Only in 1988 did Slorc begin to promote free-market capitalism. But the military continues to dominate the economy through state-owned companies.
Burma has a wealth of natural resources in wood, gems, oil, and gas, however, making it of long-term interest to foreign firms. ''Its 45 million population gives it a good consumer base,'' says Rajan Pillai, managing director of Peregrine Myanmar, a Hong Kong-based investment-banking firm. ''Myanmar has one of the lowest wage levels in the world today.... You have got a lot of industries that can do extremely well.''
But Burma has a way to go before realizing that potential. For example, while Peregrine has offices in the new International Business Center in Rangoon, the building is less than 50 percent occupied. As investment bankers, Peregrine has so far arranged no domestic or international loans.
''Their accounting systems are almost nonexistent,'' says Mr. Pillai, ''and they just don't meet international standards for loans.'' So far, Peregrine's business has consisted mainly of brokering business deals.
Singapore, Thailand, Indonesia, China, and Malaysia have invested in Burma, mainly in extractive industries such as forestry and mining. Unocal and the French oil company Total are building a $1 billion pipeline to transport primarily natural gas to Thailand. Slorc will earn some $400 million annually in royalties at the job's completion.
Burmese democracy advocates criticize such foreign investments and call for a boycott. ''The investment money has enabled the Slorc to buy more arms for their expanding armed forces,'' says one student leader. ''Consequently, there is an increasing number of people who are angry, bitter, and frustrated with these foreign investors.''
Slorc wants to improve its image and foreign reserves by promoting tourism. Hotels and other facilities are under construction. The government has simplified the visa process and allows tourists to spend up to 30 days in the country; it also requires that visitors spend at least $300.
But some Western observers doubt that the government can build enough international-class hotels to accommodate large numbers of tourists. And the political opposition has issued thinly veiled threats.
The student leader accuses Slorc of planning to develop sex tourism like Thailand's. ''Seen in the light of this form of exploitation,'' he says, ''it should not be surprising if and when people violently respond. An attack on foreign tourists is likely to be a form of expressing popular anti-foreigner resentment.''
The opposition movement will welcome Western investment after democracy is restored, he says. Berkeley, Calif., decided this year not to buy products from any company doing business in Burma. A similar measure is being considered in Massachusetts.
Peter Gajewski, an economist with Development Alternatives Inc. in Bangkok, says that such campaigns will have an impact on companies with US consumer sales. ''[US] companies with high-profile investments will think twice before investing in Burma,'' he says. ''If it's a low-profile investment, I think American investors are just as greedy as anyone else.''