Coca-Cola Back In Burma
Situation Analysis and Problem Identification
The release of economic sanctions on Burma by the United States has opened doors for the world’s most recognizable beverage brand, Coca-Cola, to enter a rapidly growing consumer market. However, Coca-Cola is challenged with developing a strategy to ensure direct investments are protected despite the Burmese legal system. Entering into the Burmese market poses many political, economic and legal issues. The important question that must be answered when analyzing this situation is how Coca-Cola will be able to mitigate the risks involved with the instability of the political and economic system in Burma.
Despite the release of Aung San Suu Kyi, the political situation remains unstable with vast internal disagreement over governance. The international political landscape of the country has made a sharp turn with the severance of ties to North Korea and the rebuilding of relationships with the West. These political relationships have paved the way to cooperative economic developments. The economic development of Burma has been on the rise for the last two decades, with economic growth taking an optimistic jump of 6 percent in March 2013. The end to the economic sanctions placed by countries such as the United States is contributing to the inflow of foreign capital investment. Additionally the release of the sanctions opened the floor for the development of trade agreements, namely free trade agreements and bilateral investment agreements, between Burma and other countries to facilitate further economic growth. In 2012 a Foreign Direct Investment Law was introduced, providing a significant legal issue for foreign investors. FDI is customary trialed under the principles of customary law. However, Burma has not signed onto the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This creates an unfriendly legal environment for foreign investors, as
The release of economic sanctions on Burma by the United States has opened doors for the world’s most recognizable beverage brand, Coca-Cola, to enter a rapidly growing consumer market. However, Coca-Cola is challenged with developing a strategy to ensure direct investments are protected despite the Burmese legal system. Entering into the Burmese market poses many political, economic and legal issues. The important question that must be answered when analyzing this situation is how Coca-Cola will be able to mitigate the risks involved with the instability of the political and economic system in Burma.
Despite the release of Aung San Suu Kyi, the political situation remains unstable with vast internal disagreement over governance. The international political landscape of the country has made a sharp turn with the severance of ties to North Korea and the rebuilding of relationships with the West. These political relationships have paved the way to cooperative economic developments. The economic development of Burma has been on the rise for the last two decades, with economic growth taking an optimistic jump of 6 percent in March 2013. The end to the economic sanctions placed by countries such as the United States is contributing to the inflow of foreign capital investment. Additionally the release of the sanctions opened the floor for the development of trade agreements, namely free trade agreements and bilateral investment agreements, between Burma and other countries to facilitate further economic growth. In 2012 a Foreign Direct Investment Law was introduced, providing a significant legal issue for foreign investors. FDI is customary trialed under the principles of customary law. However, Burma has not signed onto the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This creates an unfriendly legal environment for foreign investors, as