NAY PYI TAW: Myanmar’s foreign direct investment (FDI) this financial year is set to more than double that of last year’s to US$3.5 billion.
The momentum is unlikely to slow, with the country projecting US$4 billion in FDI in the next financial year.
Telecommunications and manufacturing are the main drivers of this growth.
The telecommunications sector looks set to overtake manufacturing in bringing in the top dollar for Myanmar’s economy.
Aung Naing Oo, director-general at Directorate of Investment and Company Administration, said: “Nearly 30 percent, which means about US$1.5 billion, or nearly US$2 billion, will be in telecoms sector because we have already discussed with the potential investors in Myanmar and some are in the pipeline for MIC’s approval.”
Some of those projects are likely to include improving communication connectivity by developing infrastructure.
Apart from telecoms, Myanmar is also planning to increase its investment returns by shifting its focus from producing primary goods to value-added products and services.
It is hoping to export more value-added products, such as finished wood-based products, instead of raw wood in 2-3 years.
However, the lack of infrastructure, unskilled workforce and ongoing ethnic tensions across the country still presents risks to investors.
But some are saying that the positive investment figures are indicative of how businesses are unaffected by the challenges, while others remain cautiously optimistic.
Researchers behind “The Report: Myanmar 2014” observed that investments into Myanmar continue to unlock substantial growth opportunities.
But they cautioned that the country needs to keep its communal strains in check for projects to take off.
Paulius Kuncinas, regional editor of Oxford Business Group, said: “Investors are willing to look beyond this for now because the opportunities are just too good to be ignored.
“But of course, there comes a point, investors in this day and age, have a lot of choice globally and there is a high risk if these issues are not resolved and that we get to a point where some investors will walk away.”
The 200-page report aims to mitigate risks by helping investors better understand Myanmar with its review of the spectrum of industries in the country.
Source: Channel News Asia