Htet Tayza reports on the unveiling of Myanmar’s 20 year national development plan, where the country’s government has announced its long-term foreign direct investment (FDI) target.
FDI and Myanmar
By attracting FDI, a host nation can capitalise on fresh capital. However there are multiple benefits of FDI, as it can also facilitate technology flow and employee training. In a 2015 report, the International Monetary Fund’s Mission Chief for Myanmar, Yongzheng Yang, argued that “with continued economic reforms and FDI, the country’s economic prospects look favourable.”
Myanmar’s government has made attracting FDI a priority. The United Nations Conference on Trade and Development (UNCTAD), a global trade and development organisation, recently cited Myanmar as a world leader on liberalising investment. Figures from Myanmar’s Directorate of Investments and Company Administration shows that the country’s government has issued US$63.7bn in foreign investment permits, with FDI reaching new heights in the last fiscal year, hitting US$9.4bn.
New FDI target
In the 20 year development plan, Myanmar’s government estimates that FDI will hit US$140bn by 2030. The country has drafted strategies detailing how it plans to raise FDI levels every year. Yangon forecasts that the average annual rate of Myanmar’s FDI will climb to US$6bn between 2017 and 2020, then up to US$8bn between 2021 and 2030. Myanmar’s government added that responsible foreign investors will play a vital role in the nation’s economic reform process going forward.
Elaborating, the government said that in 2016 it will focus on raising FDI and enhancing its import sector and export market. Between 2017 and 2020, Myanmar will strive to benefit from its membership of the Association of South East Asian Nations Economic Community, bolster its industrial market and attract FDI. Between 2012 and 2030, Myanmar will aim to facilitate infrastructural and sustainable development, boost industries and foster business expansion.
Tapping economic potential
Recently, the World Bank released a series of policies notes detailing how Myanmar can capitalise on its economic potential. The organisation estimated that if Yangon makes prudent policy decisions, it could cultivate economic growth of 8% in real terms in the next five years. Commenting on this forecast Ulrich Zachau, the World Bank Country Director for South-East Asia, said:
“Three policy directions will be key to help achieve such inclusive growth: the further opening and diversification of the economy, with a level playing field for the private sector and structural shifts to more productive and labour intensive activities; nationwide programs to achieve, over time, universal access to basic education, health, and energy services of reliable quality; and transparency and accountability in the public sector.”
With its 20 year national development plan, Myanmar’s government has shown that it is committed to implementing the necessary reforms to tap into the nation’s full economic potential. By putting FDI at the heart of its plans to further develop the national economy, this South East-Asian Nation has positioned itself to receive the monetary, technological and pastoral support required to develop key industries such as agriculture and infrastructure development going forward.