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Dirt-poor Chin State hidden gem for investors

THE regional government in Chin State, together with the Directorate of Investment and Company Administration (DICA) and a UK-funded initiative, hailed Chin as a hidden gem overlooked by domestic and international investors. Renewable energy, tourism, agribusiness, weaving and urban development are pitched as key areas for development.

Chin State, the least developed among Myanmar’s 14 states and regions, has suffered from an absolute absence of foreign direct investment (FDI).

According to DICA, Chin State is the only state or region in the country with zero investment between fiscal year 1994-95 and October 2017-18.

FDI is absent even though all nine townships in Chin enjoy a tax exemption for up to seven years. The state qualifies for the highest tax incentives under the recently implemented Myanmar Investment Law as it is one of Myanmar’s least developed states.

A workshop to raise the awareness and capacity of the state to attract more foreign and domestic investment was held in the state capital, Hakha, on November 17 and 18. It is part of the national strategy to support investment promotion and facilitation across the country.

The event was organised by the DaNa Facility, a UK-funded private sector development programme, DICA (under the Ministry of Planning and Finance) and the Chin state government. Established in May 2016, DaNa is funded by the UK Department for International Development (DFID) and supports inclusive economic growth through responsible and sustainable private sector development (PSD).

Investments needed

The regional government said that Chin is suffering from abysmal road accessibility, lack of power supply especially in urban centres, a weak private sector and poor housing facilities. The region urgently needs investment flow in order to kickstart development.

“There is no other way to realise the development we want in Chin State except through attracting investment,” Salai Isaac Khen, State Minister for Development Affairs, Electricity and Industry, said.

The state minister named four key potential areas for investment in Chin State: hydropower and wind power, hotels and tourism, organic farming and traditional weaving as well as urban development.

Salai Lian Luai, Chin State Chief Minister, said that the main focus of his government is infrastructure and electricity access for the region.

“This is because electricity coverage is only 15 percent in the Chin State. Chin government is very committed to having these infrastructure in place.

“Without these infrastructure, we cannot attract FDI or domestic investment, though the government sees ecotourism as the sector with the most potential,” the chief minister told The Myanmar Times in an exclusive interview.

Constraints

U Aung Naing Oo, DICA director general, said during the workshop that Chin State is located along the East-West Corridor and connected with Manipur and Mizoram in India. This geographical connectivity presents enormous potential for investors to dive into border trade, eco-tourism and agribusinesses which involve highland cash crops and farming.

During a sideline interview with The Myanmar Times, the director general added that poor infrastructure limits the number of potential sectors for investment.

“We need to focus on the potential sectors in order to boost the investment from flat-ground investment. Agribusinesses have the highest potential, as suggesting by multiple stakeholders. Apart from small-scale agriculture, traditional weaving and eco-tourism investment, Chin state does not attract FDI in other sectors or in developing large-scale investment projects because of its poor infrastructure and geographical location,” he said.

U Aung Naing Oo, added that infrastructure gap constitutes a huge barrier for economic development in Chin State. Lacklustre local businesses also failed to attract investors from other parts of the country or from abroad.

“But I must say the infrastructure gap in Chin State could become the opportunities for the investors to invest in those areas such as hydropower projects and road construction,” he said.

New developments

Authorities have made efforts to lay the groundwork for investors. The Chin State Chamber of Commerce and Industry was established earlier this year and DICA operation started in Hakha in September.

“I think it’s a real challenge to promote investment in Chin State. But, clearly, for agribusinesses, ecotourism, traditional textile and hydropower, we can see what the opportunities there are and we will try to work with the government to target a few companies [not many] with good service and good follow-up. And then we can improve the infrastructure step by step,” Peter Brimble, Team Leader of DaNa Facility, remarked.

Chin is one of the poorest among the states and regions in Myanmar, hence there is every reason for DaNa and DFID to focus on Chin State, Mr Brimble added. This is because the region has not received sufficient attention and support and is hence left behind.

“It’s going to be a real challenge. It could even be more of the challenge because of the political situation in Rakhine State, which is going to complicate things a little bit. Meanwhile, we try to build the capacity and understanding here,” he went on.

Next move

Going forward, the next step will be to identify potential investors in Chin. DaNa has also planned another mission to Chin, which will focus on investment promotion strategies and developing priority sectors.

Under the Chin State government’s SMEs development policy, coffee industry as well as community-based tourism have already started in Tongzang and Tedim townships; traditional weaving in Hakha, Falam and Thantlang townships; organic farming in Falam township and Rih lake-based tourism are in the pipeline.

Additionally, the enterprise involving growing avocadoes, elephant foot yam (whitespot giant arum) and coffee in Matupi, Mindat and Kanpetlet townships have begun. The enterprise is a three-year project supported by DaNa Facility.Community-based tourism in Khonumsum National Park has also commenced.

Source: Myanmar Times

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