The last one year and a half have seen big changes in Myanmar. The challenges facing the new government have been monumental, starting first with national reconciliation with the opposition as well as then engendering a participatory peace process with the large number of ethnic minority armed groups.

With peace and increased democracy well on their way, the government has turned its attention to the third largest priority, economic reform. International economic investment has previously been hampered by a Western sanctions regime. Mainly Asian companies, such as China and ASEAN countries as well as Russia, South Korea and India, had developed a limited presence in Myanmar.

Many of these companies worked in the extractive industries or developing infrastructure, often in alliance with the Myanmar government. Smaller import and export companies also operated, but on a rather more limited scale due to tariffs and a difficult licensing system.

However with Western sanctions suspended, a large number of international and multinational companies have started to arrive in Myanmar this summer.

The press has dubbed Myanmar "the last frontier" where big money can be made. Myanmar is not only wealthy in natural resources, including gas, gems and minerals, making it a haven for the extractive industries, but also has a small but growing middle class with a hunger for international goods and brands.

There are challenges as well. They include a confusing legal system that is currently undergoing some reform, with unknown changes in the pipeline.

The financial system is in a bad state with a tax system in disarray, few banks, an only recently unified exchange rate system for the kyat and difficulties is getting large amounts of international currency both in and out of the country. The first ATMs for local account holders are just being built.

There is also a lack of internationally educated and English speaking local talent, driving salaries up for those who do have relevant skills and qualifications. Then there's high inflation and a lack of hotel rooms and or good quality accommodation for offices and international staff. All in all setting up a new business venture in Myanmar will be neither cheap nor easy.

Myanmar has been a largely closed economy. The arrival of multinationals will mean that any trained staff will be able to find better paid opportunities elsewhere. The rise in salaries might mean that some local companies will be adversely affected. They have to increase efficiency quickly if they want to survive.

However local companies do know the local market and their customers well. They know what will sell and what won't and to whom to pitch what. There is also a local brand consciousness, which will remain unintelligible to the international competition unless they learn the language and culture.

For multinationals, start-up expenses are likely to be high and likely to grow as competition over scarce resources increases. The most challenging aspect will be a local needs assessment, depending on what industries want to settle and if they are producing goods for the local market or for export. Nonetheless, international business practices could bring better salaries for unskilled or low skilled workers, as well as better working conditions.

Established firms, including Chinese ones, will face increased competition on all fronts for space and manpower  that will result in rising salaries and demands for better working conditions. This will be particularly the case for unskilled or low skilled jobs, such as in the garment industry.

While established Asian companies are less at risk than the local Myanmar companies, it is clear that the opening-up of the Myanmar market will change conditions for them as well.

The Myanmar government has to think about what is needed, so that international investment and the arrival of the multinationals will benefit the country's economy as well as the local population. But in this transition period, it is unclear how international investment will fare and what effects it will ultimately have on the country.

The author is a South Asia expert with the Yangon-based Myanmar Egress, a nonprofit organization founded by Myanmar scholars and social workers. opinion@globaltimes.com.cn