Foreign investment into Myanmar far behind target

Despite efforts by the Myanmar government to meet its foreign direct investment (FDI) target of $5.8 billion during the country’s fiscal year 2018-19 (ending September 30), the total FDI influx was just $4.1 billion in the period, 70 per cent of the original target.

But U Thant Sin Lwin, director general of the Directorate of Investment and Company Administration and secretary of the Myanmar Investment Commission, told Myanmar Times that FDI has been picking up and should align with the government’s estimates for fiscal 2019-20 despite 2020 being the year of a risk-laden election to be held in November which will likely put many potential investors on the sidelines in a wait-and-see position.

A partly reason for the drop might be that in 2018-19, the government changed its investment policies with economic sustainability in mind. Now, investments that potentially cause losses or damage to the environment, society and natural resources are turned down.

“The goal is to only invite responsible investments. Because of the stricter screening process, FDI volumes decreased,” Lwin said. He added that time was also spent harmonising the various laws and restrictions in Myanmar.

Myanmar held numerous investment forums in the states and regions, leading to higher volumes of investment being channeled into areas like Rakhine and Chin, he added.

FDI could continue to be subdued in fiscal 2019-20, Lwin said, citing continued trade tensions between the US and China as well as the ongoing lawsuit brought against Myanmar at the International Court of Justice (ICJ) by Gambia.

“The ICJ issue has become a focus for foreign countries. Many Western countries are waiting to see whether economic sanctions will be imposed on Myanmar as a result of the case. So, the prospects of FDI from the West are slim this year,” Lwin noted.

“FDI will come mainly from East Asian countries in 2020,” said U Maung Maung Thein, former deputy minister of the Ministry of Planning and Finance.

Most of the funds will likely be channeled into Thilawa Special Economic Zone, Nyaung Nga Pin Korea industrial zone and a third Thai-led industrial zone near Hlegu, he noted. Meanwhile, Hong Kong and Taiwan are also keen to develop industrial zones while, Vietnam is preparing to invest “heavily” into Myanmar.

Despite efforts by the Myanmar government to meet its foreign direct investment (FDI) target of $5.8 billion during the country’s fiscal year 2018-19 (ending September 30), the total FDI influx was just $4.1 billion in the period, 70 per cent of the original target. But U Thant Sin Lwin, director general of the Directorate of Investment and Company Administration and secretary of the Myanmar Investment Commission, told Myanmar Times that FDI has been picking up and should align with the government’s estimates for fiscal 2019-20 despite 2020 being the year of a risk-laden election to be held in November which...

Despite efforts by the Myanmar government to meet its foreign direct investment (FDI) target of $5.8 billion during the country’s fiscal year 2018-19 (ending September 30), the total FDI influx was just $4.1 billion in the period, 70 per cent of the original target.

But U Thant Sin Lwin, director general of the Directorate of Investment and Company Administration and secretary of the Myanmar Investment Commission, told Myanmar Times that FDI has been picking up and should align with the government’s estimates for fiscal 2019-20 despite 2020 being the year of a risk-laden election to be held in November which will likely put many potential investors on the sidelines in a wait-and-see position.

A partly reason for the drop might be that in 2018-19, the government changed its investment policies with economic sustainability in mind. Now, investments that potentially cause losses or damage to the environment, society and natural resources are turned down.

“The goal is to only invite responsible investments. Because of the stricter screening process, FDI volumes decreased,” Lwin said. He added that time was also spent harmonising the various laws and restrictions in Myanmar.

Myanmar held numerous investment forums in the states and regions, leading to higher volumes of investment being channeled into areas like Rakhine and Chin, he added.

FDI could continue to be subdued in fiscal 2019-20, Lwin said, citing continued trade tensions between the US and China as well as the ongoing lawsuit brought against Myanmar at the International Court of Justice (ICJ) by Gambia.

“The ICJ issue has become a focus for foreign countries. Many Western countries are waiting to see whether economic sanctions will be imposed on Myanmar as a result of the case. So, the prospects of FDI from the West are slim this year,” Lwin noted.

“FDI will come mainly from East Asian countries in 2020,” said U Maung Maung Thein, former deputy minister of the Ministry of Planning and Finance.

Most of the funds will likely be channeled into Thilawa Special Economic Zone, Nyaung Nga Pin Korea industrial zone and a third Thai-led industrial zone near Hlegu, he noted. Meanwhile, Hong Kong and Taiwan are also keen to develop industrial zones while, Vietnam is preparing to invest “heavily” into Myanmar.

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