Foreign investors re-routing capital from Myanmar to Vietnam, Cambodia

Those foreign investors which have been confident until recently of a bright economic future of a young democratic Myanmar have been taught better by the February 1, 2021 military coup, which most analysts say was a both politically and economically utterly pointless move by the Myanmar army.

The coup descended the country into chaos, with violent protests occurring on a daily basis and the country sent into a stalemate by general strikes of public workers, including teachers, bureaucrats and medics, new international sanctions and a retreat of foreign investors.

According to market observers, international investors which previously preferred Myanmar to set up business in Southeast Asia are now looking towards opportunities in Vietnam and Cambodia, with Vietnam being the top destination due to its booming economy, attractiveness for doing business and political stability.

Investment funds looking for greener pastures

Likewise, investment firms which have set up seed capital funds for Myanmar startups and entrepreneurs are now turning away and are looking for new deals in Vietnam as one of the top emerging countries in the region in terms of growth of its digital and innovative economy.

With the foreign investment flow halted by the coup, Myanmar has ceased to be Southeast Asia’s top nation with regards to growth in foreign fund inflows, a role which it has held for a while after the country’s democratisation process started after the 2010 elections.

Meanwhile, many businesses have terminated Myanmar partnerships that involve companies with ties to the military.

Japanese brewer Kirin Holdings severed ties with Myanmar Economic Holdings, a military-run company. Lim Kaling, co-founder of Singapore-based gaming company Razer, recently announced that he is divesting his stake in a venture which indirectly owns an interest in the Myanmar Economic Holdings-linked Virginia Tobacco Company.

All gains of the last decade are lost

In a nutshell, for most observing the situation the Myanmar coup was a pointless exercise of disgruntled generals and army cronies fearing to lose control that put the country’s development back a couple of decades.

With investors re-routing their funds, companies cutting their ties and startups and entrepreneurs looking elsewhere in the region to set up shop, the full devastating effects are yet to be seen, but it seems the coup suggests that the Myanmar military is ready to give up all of Myanmar’s gains of the last ten years in diplomacy, international trade and investment just to get back to holding an iron fist and continue to plunder the country in an unimpeded manner.



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Those foreign investors which have been confident until recently of a bright economic future of a young democratic Myanmar have been taught better by the February 1, 2021 military coup, which most analysts say was a both politically and economically utterly pointless move by the Myanmar army. The coup descended the country into chaos, with violent protests occurring on a daily basis and the country sent into a stalemate by general strikes of public workers, including teachers, bureaucrats and medics, new international sanctions and a retreat of foreign investors. According to market observers, international investors which previously preferred Myanmar to...

Those foreign investors which have been confident until recently of a bright economic future of a young democratic Myanmar have been taught better by the February 1, 2021 military coup, which most analysts say was a both politically and economically utterly pointless move by the Myanmar army.

The coup descended the country into chaos, with violent protests occurring on a daily basis and the country sent into a stalemate by general strikes of public workers, including teachers, bureaucrats and medics, new international sanctions and a retreat of foreign investors.

According to market observers, international investors which previously preferred Myanmar to set up business in Southeast Asia are now looking towards opportunities in Vietnam and Cambodia, with Vietnam being the top destination due to its booming economy, attractiveness for doing business and political stability.

Investment funds looking for greener pastures

Likewise, investment firms which have set up seed capital funds for Myanmar startups and entrepreneurs are now turning away and are looking for new deals in Vietnam as one of the top emerging countries in the region in terms of growth of its digital and innovative economy.

With the foreign investment flow halted by the coup, Myanmar has ceased to be Southeast Asia’s top nation with regards to growth in foreign fund inflows, a role which it has held for a while after the country’s democratisation process started after the 2010 elections.

Meanwhile, many businesses have terminated Myanmar partnerships that involve companies with ties to the military.

Japanese brewer Kirin Holdings severed ties with Myanmar Economic Holdings, a military-run company. Lim Kaling, co-founder of Singapore-based gaming company Razer, recently announced that he is divesting his stake in a venture which indirectly owns an interest in the Myanmar Economic Holdings-linked Virginia Tobacco Company.

All gains of the last decade are lost

In a nutshell, for most observing the situation the Myanmar coup was a pointless exercise of disgruntled generals and army cronies fearing to lose control that put the country’s development back a couple of decades.

With investors re-routing their funds, companies cutting their ties and startups and entrepreneurs looking elsewhere in the region to set up shop, the full devastating effects are yet to be seen, but it seems the coup suggests that the Myanmar military is ready to give up all of Myanmar’s gains of the last ten years in diplomacy, international trade and investment just to get back to holding an iron fist and continue to plunder the country in an unimpeded manner.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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