While not specifically investment oriented, an interesting New York Times Op-Ed on Myanmar and the likely path forward in this enigmatic country & market in the short-term:

The U.S. decision to engage with Myanmar’s generals is a recognition of reality, however brutal. Years of sanctions have failed. Emotional support for the jailed opposition leader Daw Aung San Suu Kyi and admiration for the bravery of the monks who challenged the regime in 2007 have come up against harsh facts.

The first is that neighboring countries have commercial reasons for making deals that bolster the coffers and self-confidence of the regime. Thailand profits by buying Myanmar’s gas, as does Singapore by acting as a key trading link and safe haven for the generals’ wealth. China has used commerce and informal migration to carve out an influence that will likely remain whoever is in power in Myanmar. Japanese and South Korean companies continue to do whatever business they can, and though several Western companies have pulled out, Total’s key role in Myanmar’s gas industry makes European Union sanctions seem hypocritical.

On the diplomatic front, modest attempts by the Association of Southeast Asian Nations and by the United Nations to persuade Myanmar to free Aung San Suu Kyi have been ignored. India’s pro-democracy instincts long ago yielded to the need to engage the generals to counter China’s overwhelming influence. New Delhi fears that Beijing’s support for Myanmar would be rewarded with Chinese military access to the Bay of Bengal. India wants to counter China’s commercial influence and has invested in a big Myanmar gas project, hoping to pipe gas across Bangladesh to its energy-short eastern states.

For sure, Myanmar’s state-driven economy is never going to prosper under the present regime. But there are enough easily exploited resources to attract foreign investment and which supply enough cash to keep the regime in place and to support the generals’ armament needs and their wives’ shopping habits.

So what can a shift in the U.S. posture achieve? In the short run, the answer is probably little. Sanctions are insufficiently onerous, so the possibility of their removal carries little weight. However, there are some glimmers of light. The regime has promised elections in 2010. There is only slight hope that Aung San Suu Kyi and her National League for Democracy will be permitted to participate, but it is possible she will be released, if only as a token gesture in response to U.N. and Asean pleas.

Elections will neither be free nor fair, but might be more than just a rubber stamp. The military, for which 25 percent of seats in the new Parliament are reserved, will continue to dominate, but enough new voices may emerge that can start a process of change, and provide Myanmar’s senior general, Than Shwe, with a path from dictator to figurehead.

Than Shwe is now 76 and may be ailing. His deputy, Maung Aye, is 71. The military will not readily surrender power. But it may be a good time to engage with younger regime figures who may be less paranoid than Than Shwe, know more of the outside world and may be willing to consider moves to a more dynamic economy, end Myanmar’s near-isolation and reduce its dependence on China. Some may feel that the nationalism that has always been at the heart of the military’s self-image has been compromised by that dependence.

Indeed, strains with Beijing may already be showing. China has been upset by a Burmese military campaign in a border area long effectively controlled by former insurgent groups. The campaign disrupted trade and sent 30,000 people fleeing into China. The incident is a reminder of how China has used Myanmar’s problems with its many ethnic minorities to its own advantage.

While there are some faint hopes of change, do not imagine that this is another Indonesia in the making. President Suharto’s authoritarianism was more personal than the Myanmar version, which is based on a self-perpetuating military elite that has been in power since 1962. Indonesia’s post-Suharto transition was possible only because of the social effects of an open economy and years of gradual relaxation of media and other controls. Myanmar is more like Vietnam 25 years ago — rigid, socialist and suspicious of the world.

Change may prove as elusive as it has been in North Korea. A popular revolution looks unlikely. Events in 2007 showed how ruthless the regime can be in the face of direct confrontation. Sanctions were worth trying but they have clearly failed. So willingness to talk to the generals just might open up chinks in their armor and reason to seek some accommodation with Aung San Suu Kyi, the monks and the outside world.