(Reuters) – Foreign direct investment (FDI) into Myanmar has soared to more than $8 billion this fiscal year, $3 billion more than anticipated, owing to increased activity in the energy, manufacturing and telecoms sectors, a senior official said.
The investments reflect growing if cautious foreign interest in one of Asia’s last remaining untapped markets, which is offering tax breaks and export tariff perks to create urgently needed jobs for its 50 million people.
Myanmar received $4.1 billion in FDI in 2013/2014 and in September announced a target of $5 billion for fiscal 2014/2015 running to the end of March as foreign firms won oil and gas concessions and international hotel chains started moving in.
But Aung Naing Oo, head of the state-run Myanmar Investment Commission, told Reuters that FDI had easily beat that to reach $8.1 billion, thanks to the opening-up of its telecoms sector and the courting of manufacturers and energy firms.
“Thirty-five percent of total FDI went into the energy sector, while manufacturing and telecommunications attracted 25 percent each,” Aung Naing Oo said.
It was unclear if the total referred to pledges or how much had already been disbursed. Aung Naing Oo said the energy deals were “for mid-term in the initial stage”, without elaborating.
Myanmar’s investment surge follows reforms launched in 2012 by President Thein Sein, a former general who enlisted help from technocrats and global financial institutions to overhaul an economy that wilted under sanctions and inept policymaking during five decades of military rule.
The lifting of most Western embargoes has allowed foreign access to sectors from banking, property and tourism to factories, infrastructure, airports and agribusinesses.
The $8.1 billion in FDI is a staggering 25 times the $329.6 million received in 2009/2010, the year before the military ceded power.
It compares with an estimated $11.8 billion of disbursed FDI last year in Thailand, $12.3 billion in Vietnam and $4 billion in Cambodia, according to official figures.
Norway’s Telenor and Qatar’s Ooredoo launched Myanmar cellphone services last year while the manufacturing sector has attracted firms such as Gap Inc .
Oil and gas exploration has seen most investment activity, with Chevron’s Unocal announcing this week it had agreed a $277 million contract for offshore block A-5.
Britain’s BG Group and Australia’s Woodside Petroleum announced a $1 billion deal last week to explore in four blocks off Rakhine state in the west of the country.