Myanmar is becoming a top Asian tourist destination, attracting travellers from all over the world. Its tourism infrastructure, however, remains rudimentary, limiting expansion opportunities. To tackle this issue, Myanmar recently called for more responsible and sustainable investment in its tourism sector.
Figures from global industry body the World Travel and Tourism Council indicate that tourism revenue accounted for 5.9% of Myanmar’s gross domestic product (GDP) in 2016. Tourism is now a leading contributor to Myanmar’s economic growth. This trend is expected to continue, as the country’s tourism sector expands, attracting increasing visitor volumes. Tourism’s contribution to Myanmar’s GDP expansion is projected to grow at a pace of 7.8% per year through to 2026.
The expansion of Myanmar’s tourism industry can somewhat be attributed, government agency the Myanmar Ministry of Hotels and Tourism argues, to foreign investment. In 2016, Myanmar’s tourism foreign direct investment (FDI) levels hit nearly US$3bn, generating 56 projects. In contrast, FDI equalled US$2.6bn in 2015, generating 48 projects. The leading foreign investor nations in Myanmar’s tourism industry are Singapore (US$1.6bn), Thailand (US$445m) and Vietnam (US$440M).
The Minister who heads this department, U Ohn Maung, recently implied that the time is ripe for foreign investment in Myanmar’s tourism. Maung discussed this subject at the Association of South-East Asian Nations (ASEAN) Tourism Forum 2017, which was recently held in Singapore. Commenting, he argued that “The timing couldn’t be more perfect to invest in Myanmar as it opens up to the world.”
Continuing, the Myanmar Union Minister of Hotels and Tourism said: “We have fantastic tourism destinations that need to be served with world-class hotels and resorts, unique travel experiences, and better infrastructure… Discovering Myanmar is more than visiting the archaeological sites in Bagan or our golden pagodas. We have excellent beaches, too. We invite travellers to make a trip down south and see the beautiful landscape, pristine beach and natural park in Mergui Archipelago, and enjoy festivals and the unique culture in Kayin, Chin, Mon and Kayah states.”
U Ohn Maung is a supporter of Community-Based Tourism (CBT). The Minister promotes income-generated measures, to support both the local population and the expansion of tourism products. Current on-going CBT initiatives in Myanmar include the Thandaung-gyi B&B, Tea Plantation, Small Butterfly Village and Forest Walks project, based in Kayin State and the Eco Tourism project in Indawgyi Lake, Kachin State, both of which involved active support from the local populations.
The local population has access to limited resources, so they could use foreign investment to expand tourism infrastructure. Maung argued that the new Myanmar Investment Law will provide foreign investors with the support they need to enter Myanmar. Expanding, he said: “Our new investment law offers flexibility to meet the needs of local and overseas investors as well as ease of doing business in Myanmar. We’d like for the number of visitors to Myanmar to steadily rise in line with the current upward trend of investment. That’s why we highly encourage investors to come to Myanmar.”
Myanmar has made attracting foreign investors a priority in recent years. International investors not only bring capital, but also technology and industry knowledge and they can also help local businesses establish lucrative connections with the wider global sector. But Myanmar’s economy has traditionally been slanted in favour of local businesses, making it unappealing to global investors. The country, however, is now seeking to level the playing field, with the aim of raising FDI to US$140bn by 2025.
The Myanmar Investment Law should help the county achieve this aim. It includes measures such as tax incentives for global investors who plough capital into specific areas of Myanmar. These measures will lower operating costs for global businesses, making them more likely to enter Myanmar, as they can tap a fast-growing economy without incurring a significant financial burden. Maung’s call for foreign investment in Myanmar’s tourism sector seems appropriate, as the industry is ripe for global investors and they in turn, seem more likely to invest in the South-East Asian nation than ever before.