Political and economic reform is set to continue in the medium term, despite the resistance of powerful hardline elements of the former military junta. President Thein Sein’s government will remain stable and is unlikely to be toppled either by mass protests or a military coup. This coupled with easing trade restrictions is likely to bring increased external investment to this under-developed country over the medium term.
However, a recent resurgence in violence between Buddhists and minority Muslims illustrates the fragile nature of the peace in many parts of Myanmar. Fresh sectarian violence in the town of Meiktila has led to notable deterioration in security in and around the major trade and transport hub of Mandalay. This presents heightened risks of protracted business disruption. While the on-going violence is unlikely to lead to a reversal of the reform process, it does necessitate temporarily increasing the power of the military. In an attempt to contain the violence, the army imposed curfew in several towns in central Myanmar.