SINGAPORE’S investments in Myanmar are soaring, with the amount pumped in by organisations rising 41.5 per cent from 2012 to hit $311.4 million in 2013.
Spending has been particularly strong in the areas of urban development, connectivity and finance, said Ms Lai Shu Ying, the South-east Asia director of trade agency International Enterprise (IE) Singapore.
She attributes this to Myanmar’s abundant natural and human resources and its strategic location at the crossroads of India, China and South-east Asia.
The level of investment is striking, given that it has been only three years since Myanmar’s economic liberalisation.
And there is more to come, with one in four Asian enterprises planning to expand into Myanmar this year, according to a survey by the United Overseas Bank last year. Singapore was Myanmar’s third-largest trading partner in 2013, while bilateral trade was valued at $3.23 billion last year.
The high level of interest led IE Singapore to set up a Yangon office in 2013 to help businesses establish themselves.
One local firm that made the leap is restaurant group Les Amis, which opened two restaurants, House of Singapura and Peperoni Pizzeria, in Yangon last year after it formed a joint venture with a family-owned business in Myanmar.
Les Amis spokesman Raymond Lim likened Myanmar to an “untouched forest”, where consumer sectors face minimal competition.
However, an early entrance also meant that the firm had to import extensively to get around the lack of reliable supply chains and decor options.
Its initial investment amounted to nearly $250,000, but Mr Lim said the expansion was a wise move. “Investment-wise, cost isn’t prohibitive. We must have a foothold early.” Myanmar’s consumer base will increase when a middle class and middle-income economy take shape, but how long that will take is uncertain.
Dr Maitrii Aung-Thwin, associate professor of South-east Asian history at the National University of Singapore, said: “Myanmar has changed visibly in the cities, but less so in the countryside. Housing and living costs have gone up, making it difficult for the everyday urban citizen to meet day-to-day expenses.”
He urged businesses to acquaint themselves with the country’s long-term economic priorities. He said: “My sense is that Singapore companies need to be prepared to expect returns only in the medium to long term.”
Ms Lai said: “In this process of transition… some issues for companies in the market concern land ownership, training of local manpower and working around the limitations of physical infrastructure. Singapore companies should take a long-term view when investing in Myanmar and focus on sustainable partnerships that are mutually beneficial.”
Source: News Asiaone
To learn about why Singapore companies are so prolific in Myanmar read the article at http://consult-myanmar.com/2015/05/12/why-are-singapore-companies-so-prolific-in-myanmar/