Myanmar bullish on inflow of foreign direct investment
THOUGH some foreign investors cast doubts on Myanmar's potential, the country is bullish about greater inflows of foreign direct investment in the years to come thanks mainly to infrastructure requirement.
At the Myanmar Global Investment Forum, Aung Naing Oo, director general of the Directorate of Investment and Company Registration and secretary of Myanmar Investment Commission (MIC), said Myanmar expects to welcome a significant inflow of FDI by 2017 thanks to the better legal framework, the very modernised investment law and better infrastructure.
The DICA has said, foreign investment worth US$2.9 billion has been approved in the 2015-16 fiscal year, starting April. MIC targets $6 billion in the year. In the last fiscal year, the amount hit $8.01 billion.
To achieve this, Aung Naing Oo said the government has been making efforts to create a better business climate by easing the restrictions and modernising rules and regulations over the past three years. Meanwhile, the country’s infrastructure needs are huge.
Part of the modernisation concerned the consolidation of two investment laws – the Foreign Investment Law and Myanmar Citizens Investment Law – to create a level playing field. Sectors restricted to foreign ownership will be clearly defined.
Aung Naing Oo said that MIC has not yet decided on the sectors but this will depend chiefly on local business community concerns.
“But I am sure we will liberalise more in the new law and make it as little as possible for restrictions,” he said.
The MIC, which deals directly with foreign investment, recently moved its office from Nay Pyi Taw to Yangon, the country’s largest commercial city. A one-stop service centre was established while licensing regulations are shortened.
MIC happy to receive investors
“Before 2011, it was very difficult to engage with MIC. Some investors even gave us a nickname - Myanmar Impossible Commission. Now it is very easy to discuss with MIC. We are happy to receive investors at our office and answer all their questions,” he said.
Agreeing on the issue of attraction, foreign companies’ chiefs at the conference highlighted some challenges. Mark Bedingham, president and CEO of Singapore Myanmar Investco, admitted that Myanmar is attractive for investment in power, engineering, textile, and telecom sectors. To him, transparency, clarity (of laws and regulations), and government ministries’ engagement with international community will help Myanmar move forward.
Michael Armstrong, director of Siward Newton, added that the national ceasefire agreement with ethnic armed groups and complete lifting of the US sanctions would be a boon to the economy.
Andrew Lee, chief country representative for Myanmar of General Electric, urged private companies to engage more with the government sector.
He suggested observing to know what is happening on the ground and then find the best ways to solve the problems. Meanwhile, government agencies need to enhance their capacity. “Engaging is the only way to help Myanmar move forward. Despite challenges, I believe the government is going towards the right direction,” he said.
Stefano Poli, president of Toshiba Mitsubishi-Electric Industrial Corporation Asia, noted that energy is the most promising sector but Myanmar needs further liberalisation to attract more European investors who are aware of its natural resources but still cautious about its political climate.
Beside the power sector, Sunil Seth, country head of Tata, foresees growth in steel manufacturing, given the rising demand from construction and infrastructure projects. He urged the government to address land issues and electricity shortage urgently to attract more investors.
