Investors concerned about Myanmar law

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Myanmar road
Myanmar’s infrastructure needs improvement investors claim

Foreign investors are still wary of what they feel are obscure investment regulations, inadequate infrastructure and the volatility of the local currency in Myanmar, causing them to re-evaluate their possible investment projects in the newly opened country.

The Japan External Trade Organisation (Jetro) as a representative of one of Myanmar’s biggest prospective investors has said that it is worried about how interests of investors will be protected by the investment law adopted in November 2012. New regulations have been put in place but investors still do not know what they can or cannot do.

Another concern is poor infrastructure and subsequent high logistics costs, said Toshihiro Kudo, a senior research fellow at the Japan External Trade Organisation’s Institute of Developing Economies at a seminar hosted by the Thailand Development Research Institute in Bangkok on February 27.

Myanmar is also facing continuous power shortages, but electricity supply should improve next year when a new power plant commences operations.

With regards to the new investment law, Kudo said that “investors are concerned that the law gives too much discretionary power to authorities, so it may not be transparent.”

Myanmar should establish its own version of Thailand’s Board of Investment, he added. Many foreign companies are still waiting for infrastructure to improve and only have set up representative offices and trade and investment missions so far.

As for the Dawei investment park project in southern Myanmar, Kudo said there is “strong interest among Japanese investors”. However, since the funding for the $10 billion project is still unclear, the project is now on hold.

Another issue is the volatility of Myanmar’s currency, the kyat. Although is has originally been locked in a trade band versus the US dollar at around 818 kyat per US dollar, it is now trading in the range of 860 kyat per US dollar. The country is also heavily dependent on cash settlement compared with neighbours, making it difficult to stabilise the kyat.

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[caption id="attachment_7385" align="alignleft" width="300"] Myanmar's infrastructure needs improvement investors claim[/caption] Foreign investors are still wary of what they feel are obscure investment regulations, inadequate infrastructure and the volatility of the local currency in Myanmar, causing them to re-evaluate their possible investment projects in the newly opened country. The Japan External Trade Organisation (Jetro) as a representative of one of Myanmar's biggest prospective investors has said that it is worried about how interests of investors will be protected by the investment law adopted in November 2012. New regulations have been put in place but investors still do not know what they...

Reading Time: 2 minutes

Myanmar road
Myanmar’s infrastructure needs improvement investors claim

Foreign investors are still wary of what they feel are obscure investment regulations, inadequate infrastructure and the volatility of the local currency in Myanmar, causing them to re-evaluate their possible investment projects in the newly opened country.

The Japan External Trade Organisation (Jetro) as a representative of one of Myanmar’s biggest prospective investors has said that it is worried about how interests of investors will be protected by the investment law adopted in November 2012. New regulations have been put in place but investors still do not know what they can or cannot do.

Another concern is poor infrastructure and subsequent high logistics costs, said Toshihiro Kudo, a senior research fellow at the Japan External Trade Organisation’s Institute of Developing Economies at a seminar hosted by the Thailand Development Research Institute in Bangkok on February 27.

Myanmar is also facing continuous power shortages, but electricity supply should improve next year when a new power plant commences operations.

With regards to the new investment law, Kudo said that “investors are concerned that the law gives too much discretionary power to authorities, so it may not be transparent.”

Myanmar should establish its own version of Thailand’s Board of Investment, he added. Many foreign companies are still waiting for infrastructure to improve and only have set up representative offices and trade and investment missions so far.

As for the Dawei investment park project in southern Myanmar, Kudo said there is “strong interest among Japanese investors”. However, since the funding for the $10 billion project is still unclear, the project is now on hold.

Another issue is the volatility of Myanmar’s currency, the kyat. Although is has originally been locked in a trade band versus the US dollar at around 818 kyat per US dollar, it is now trading in the range of 860 kyat per US dollar. The country is also heavily dependent on cash settlement compared with neighbours, making it difficult to stabilise the kyat.

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