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Impoverished Chin sees little progress in drawing investment


Long plagued by poor road connectivity and the absence of power infrastructure, Chin has not succeeded in securing investments to develop the region thus far, but opportunities in tourism, energy and agribusiness abound.

According to the “Opportunities and Challenges for Local Business Development in Chin State” report issued by the Gender and Development Institute of Myanmar (GDI), Chin has opportunities for investment which would be essential for the state’s 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, domestic or foreign, between fiscal year 1994-95 and October 2017. Until now, only one hotel business has entered the state.

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.

Key sectors

The key sectors which the government wants to draw investments from are hydroelectricity, hotels and tourism, SMEs, agriculture and livestock breeding, and urban development.

Electricity production in the state is a sector with good potential and has drawn foreign interest. There are currently seven foreign companies seeking to conduct research for large-scale hydroelectricity production, as well as, medium and small-scale electricity projects, the report said.

Another sector with good potential in Chin State is hospitality and tourism. The state government has invited potential hotel builders and submissions have currently been made for hotels to be built in Paletwa, Hakha, Falam, and Tedim townships.

In terms of natural resources, there is a potential for finding minerals such as chromite and copper in eastern areas of Chin State.

The government is also going to build a cement factory in Hakha Township as it has deposits of limestone sufficient to support cement manufacturing.

“In Chin State, hotels and tourism have the biggest potential. It has untouched mountains and forests. Therefore, the sector is in a position to succeed,” said U Min Zaw Oo, director of Chin State’s Office of the Directorate of Investment and Companies.

There are no special industrial zones at present as there are land and financial issues and a lack of skilled workers, said U Kap Khen Pau of the Chin State Chambers of Commerce and Industry. He said foreign investors are not coming in because the lack of power supply and road connectivity.

Trade prospects

The Kaladan Multi-Modal Transport Project by the India and Myanmar governments is expected to improve transportation between the two countries and promote bilateral trade.

As a part of the project, a road connecting Paletwa in Chin State and Mizoram in India is being built.

However, one of routes on China’s Belt and Road Initiative, the China-Myanmar-India road doesn’t directly connect to Chin even though it passes close to the state.

“Investors think about the market first. We need to consider how we can take advantage of China’s BRI route and India’s Kaladan project and what we can do for exports and imports. In identifying potential opportunities, we need to think about how we can attract investors,” said U Min Zaw Oo. The biggest hurdle is the lack of infrastructure.

Local companies

Although there has been little economic development in the state, it has many companies. Most of them are not operational business but were established for the government’s construction tenders, the report said. While Chin locals rarely take part in construction, many wealthy people in the state started to establish companies after the construction tender system was changed during U Thein Sein’s government.

Local companies used to number in the tens, but now there are 900 companies, according to the data from the Chin State Directorate of Investment and Companies. “Chin people need to have a business vision and change their mindsets to develop,” said Chin State Chambers of Commerce and Industry chair Ceu Hlei Lian.

The lack of employment opportunities has led to many leaving the state to seek employment elsewhere. According to 2014 census data, the unemployment rate in the state is higher than the country average and, according to the statistics of the Chin State General Administration Department, the unemployment rate has been rising. The unemployment stems from lack of investments, job opportunities and opportunities to learn to become qualified workers, the report said.

“We need foreign investments for Chin’s development. The local business people should change their vision with regards to the government’s construction tenders and seek to explore other areas. If so, there is potential development,” U Min Zaw Oo commented.

Chin State investment Forum will be held in March, 2019, with the aim to promote investment and trade in Chin State.

Source: Myanmar Times

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