Well over half of all money flowing into the country is being invested in the real estate sector, according to Aye Lwin, joint-secretary of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).
The joint-secretary revealed this during talks between police in the Financial Investigation Unit and UMFCCI members on the anti-money laundering law and anti-terrorism funds law, held at the UMFCCI on Friday.
Aye Lwin said: “The inflow of money into the local real estate market far exceeds 50 per cent of the total inflow. That is to say, low-interest money from neighbouring countries is flowing into domestic banks. Those who manipulate the markets only for the use of bank interest are said to be money launderers. We must take legal action against them.
“My friend provides orphanages with education and builds the schools. He behaves like a good man. He is from the northeast of our country. He becomes rich by granting loans here. He was born in Myanmar but grew up there. He takes loans there with a 1 per cent interest rate and then put these loans into the domestic banks. He said he runs his business with the use of 95 per cent of the profits. Since then, I no longer envy him at all. This interest rate has caused a heavy burden to our people,” he said.
After the Thein Sein government introduced economic reforms in 2012, foreign investment in the country was less than US$4 billion annually, but double the amount during the time of the previous government, according to the Myanmar Investment Commission (MIC). Funds being invested in the real estate sector totalled less than US$500 million a year. But over the past two years, the inflow of investment into this sector has been skyrocketing.
People in the real estate trade have criticized that the inflow of money, claiming it comes from the trade in narcotic drugs, corruption, or illegal sale of gems and timber.
Myanmar remains on a list compiled by the Money Laundering-Financial Action Task Force (FATF) as the international agency says the country still needs to tackle money laundering and funds being used for terrorism.
Myanmar is likely to accept four of 40 points noted in February 2012 including passing an anti-money laundering law and a law against the funding of terrorism. But the country is not yet in a position to implement the remaining 36 points, according to the FATF.
Source: ELEVEN MYANMAR