Thai investment in Myanmar, officially known as Myanmar, is likely to lag behind other countries, from second highest for accumulated value in Myanmar’s direct investment to eighth this year if it keeps investing at the current pace.
Despite the steadily increasing clip of Thailand’s foreign direct investment (FDI), the growth is considered relatively low compared with that of neighbouring countries, particularly in the past two years, says Thai Ambassador to Myanmar Pisanu Suvanajata.
He said Thailand remained quite slow with its outbound investment, especially by small and medium-sized ventures, as most FDI came from large firms.
Thailand has an edge over rival countries in Myanmar in terms of geography, as well as its energy investment in the past decade, and is the second-largest investor largely due to natural gas investment by PTT Group.
But now Myanmar has opened up and offering opportunities for investors.
“To be successful in Myanmar, investors need to penetrate the market as soon as possible, find local partners, overcome obstacles and formulate a long-term plan,” Mr Pisanu said.
Myanmar’s growth domestic product index last year was 7.5 percent, expected to rise to 7.75 percent, while GDP per capita was US$1,700.
Thailand’s Board of Investment (BoI) plans to encourage medium-sized investors to move quickly investing in Myanmar.
Siriporn Nurugsa, the BoI’s executive director for FDI, said the agency’s plan is to implement measures to facilitate Thai medium-sized businesses entering Myanmar.
High-potential sectors are real estate, consumer goods and food products.
Ms Siriporn said Thailand’s accumulated FDI in Myanmar last year was 73 companies worth $10.1 billion or 2 percent of total investment in that market, ranked the second-largest accumulated FDI behind China, which had 60 firms with a total value of $14.2 billion or 30.8 percent.
Hong Kong is the third-largest approved investor with US$6.5 billion or 14.1 percent.
Most of Thailand’s investments overseas are in mining, financial and insurance activities.
Ms Siriporn said under the Myanmar’s current Foreign Investment Act, foreign companies are allowed to hold 100 percent in three special economic zones including Dawei.
Charles Schneider, senior operations officer of International Finance Corporation (IFC), said it is optimistic about Myanmar market potential.
Currently it has invested in tourism and finance with more businesses in the pipeline.
”IFC strongly believes the business environment is improving there as the government is committed to continue its development,” said Mr Schneider.
Myanmar was ranked 182 out of 187 countries as the ease of doing business index surveyed by World Bank.
However, the country has shown great potential for growth with its rich natural resources, abundant labour forces and strategic location.
Source: DVB Myanmar