MANDALAY, Myanmar — Foreign direct investment in Myanmar is expected to reach roughly $7 billion for the year ending March 31, rising 70% from the previous fiscal year.
The figure will be the country’s highest since democratization began in 2011 and its second-highest ever in statistics going back to fiscal 1989. Investment in telecommunications and manufacturing is seen leading the increase. President Thein Sein’s economic policy, which aims for growth through foreign capital, is bearing fruit.
The government had already approved roughly $4.4 billion in foreign investment as of November, more than the $4.1 billion seen in all of last fiscal year, according to an official at the economic development ministry. Foreign investment tends to pile up at the end of the fiscal year, making the full-year figure likely to exceed $7 billion.
Telecommunications and transportation together accounted for 31% of foreign investment from April to November, the largest share of the total. Myanmar opened up its mobile phone market to foreign capital in 2014, spurring an influx of foreign players whose installation of base stations pushed up the investment total. Manufacturing was the next-largest sector, accounting for 23%.
Foreign investment in Myanmar used to focus on resource development. But the Thein Sein government has offered tax incentives and deregulation since 2012, drawing companies in the manufacturing and infrastructure industries.
Singapore invested the most in Myanmar between April and November, accounting for 57% of the total. Multinationals used Singaporean financial subsidiaries to invest in Myanmar. Hong Kong ranked second as an investor, followed by the U.K. China came in fourth, while Japan was 11th.
Myanmar saw the largest foreign direct investment in fiscal 2010, when China made multiple investments in the hydroelectric power sectors, bringing the total to $20 billion. The second-largest sum, or $6.1 billion, came in fiscal 2005, when Thailand sank a huge amount into natural gas development.
Source: NIKKEI ASIAN REVIEW