Foreign investment set to double, say analysts

Foreign investment in Myanmar is set to more than double this year, the country’s investment commission predicts. MIC anticipates an inflow of about US$3.5 billion for fiscal 2013-2014, compared to last year’s total of $1.4 billion, said U Aung Naing Oo, director general of the Directorate of Investment and Company Administration (DICA).

“Much of the investment is going to manufacturing, especially the garment industry,” he said.

Foreign investments had already reached $2 billion as of November, of which 80 percent went into the manufacturing sector.

The MIC is still negotiating with foreign companies for about $300 million, with another $1 billion expected to come in from two telecom companies next year.

The sources of the investment include countries estranged from Myanmar for many years, including Australia, the US and France, as well as some newcomers like Luxembourg and the United Arab Emirates, he said.

“Foreign direct investment will grow further when infrastructural needs are met. The amount of investment in the extractive industries fell this year. We have to analyse which investments benefit us and protect our economy,” he said, adding that China and Vietnam were good examples to follow.

Investment in small projects can take about six or seven months to negotiate, while larger enterprises can take up to two years, he said, citing Nissan Group, which has just decided to invest after many visits and long discussions.

U Aung Min, associate director of MMRD Research Services, said FDI flows into Myanmar had been slow for 20 years before 2011 due to economic sanctions and a poor investment climate. During these years most of the country’s FDI came from Japan, he said, adding that Myanmar had yet to maximise its geographical advantage by developing economic corridors to the Mekong region.

“If Japanese companies want to move their factories from China to Vietnam or Myanmar, the linkages have to be in place,” he said.

Source:Myanmar Times