Htet Tayza discusses reports which suggest that Myanmar’s foreign direct investment (FDI) levels hit new heights throughout the 2015/2016 fiscal year.
Rising foreign investment
Over the past decade or so, Myanmar has positioned itself as an attractive investment destination for global investors. Official statistics suggest that the South-East Asian nation’s FDI levels are climbing year-on-year. Myanmar’s FDI volumes grew from US$4.1 billion (bn) in the 2013/2014 fiscal year to US$8bn in the 2014/2015 fiscal year.
News agency Reuters reports that Myanmar’s FDI volumes continued to climb in the 2015/2016 fiscal year. New official data indicates that during this period, the South-East Asian country amassed a total of US$9.4bn for 217 projects, allowing the nation’s FDI levels to hit a new annual high.
Explaining FDI data
The Directorate of Investment and Company Administration, the governmental agency which compiled this data, shed more light on Myanmar’s record FDI volumes. The Directorate explained that increasing foreign investment reflects expanding, if cautious, interest in one of Asia’s last remaining untapped markets. The data also broke down Myanmar’s FDI volumes by industry and nation.
In terms of sectors, Myanmar’s oil and gas industry attracted the largest investment levels during the 2015/2016 fiscal year. Other sectors which attracted significant FDI included transport, communication and manufacturing. In terms of countries, Singapore topped the list of foreign investors. The city-state, which was just named Asia’s largest financial sector, put US$4.3bn into 55 Myanmar-based projects in the previous fiscal year. Investing $3.3bn, Myanmar’s largest trading partner China came second on the list of foreign investors.
In early 2016 Aung Naing Oo, the Secretary of the Myanmar Investment Commission, said that he expects more investment from western countries in the next fiscal year. He was quoted by Nation Multimedia saying: “More investment from western countries is expected during the incoming administration because of the [Myanmar-European Union investment protection] agreement. After that, investment from EU countries will enter with more trust than before.”
Increasingly, Myanmar is proving an attractive investment destination internationally. The country was recently named a world leader on liberalising investment by The United Nations Conference on Trade and Development (UNCTAD), an international trade and development organisation. By this, UNCTAD means that Myanmar has taken key steps to open up its economy to foreign investors. A forecast from the Asian Development Bank (ADB), a regional development agency, suggests that Myanmar’s economy will grow by 8.4% in the next fiscal year.
Myanmar’s growing economy is providing foreign investors with new opportunities to reap significant return on investment. The country is implementing new regulations and signing new trade agreements which make it easier for foreign investors to operate within its borders. With Myanmar’s economy expected to keep expanding, the country’s FDI volumes may continue to climb in the next fiscal year.