Myanmar Foreign Direct Investment: China, Thailand, Hong Kong Biggest Cumulative Investors
July 16, 2013 12:28 AM EST
Mainland China, Thailand, and Hong Kong are the biggest investors in Myanmar, with $14.19 billion, $9.98 billion, and $6.39 billion of cumulative investments, respectively, according to a PricewaterhouseCoopers (PwC) report. The Myanmar government is preparing to establish a stock exchange, as well as prepare a new foreign investment law that will offer tax breaks and other incentives for foreign investor.
The stock exchange is expecting its first IPO by October 2015, said Jasmine Aung, Myanmar Director at PwC, according to the South China Morning Post.
In addition to tax breaks, the foreign investment law is expected to allow foreign investors to lease private land, and repatriate investment proceeds using market exchange rates, the PwC report said.
Myanmar has become an investment hub recently, as its democratic government makes steps to open up the economy. The country attracted nearly half a billion dollars in FDI in the month of June alone. Total foreign investment has reached over $42 billion, from 32 countries.
The power sector has received the most cumulative foreign investment - $19.24 billion, followed by oil and gas at $14.37 billion, according to Aung.
Investors have been concerned, however, with Myanmar’s lack of infrastructure and policies regulating investment, and worry the country cannot keep up with the amount of funds pouring in.
"Myanmar's GDP is expected to grow 6.3 per cent this year, driven by improved business confidence following recent political and economic reforms. However, short-term risks to growth include the rapid appreciation of the kyat," the report said.
In 2011, China surpassed Thailand to become the biggest foreign investors in Myanmar.
While most of the investment in Myanmar comes from its Asian neighbors currently, western companies will not be far behind in rushing to Myanmar.
The Coca-Cola Company (NYSE:KO) announced plans to invest $200 million in Myanmar over the next five years, creating 2,500 direct jobs and 22,000 more indirect jobs, according to the Financial Times. Ford Motor Company (NYSE:F) opened a new showroom in the Myanmar capital of Yangon. Unilever (NYSE:UN) has also opened a factory, and will begin to produce food seasoning next month.
Last week, executives from more prospective investors arrived in Yangon, to attend the World Economic Forum’s Asia gathering. Leaders from Microsoft Corporation (NASDAQ:MSFT), Chevron Corporation (NYSE:CVX), Mitsubishi Corp (TYO:8058), Citibank, Philips (NYSE:PHG), General Electric (NYSE:GE), Visa (NYSE:V) and Mastercard International (NYSE:MA) met with local figures including President Thein Sein, and democratic opposition leader Aung San Suu Kyi.
Leaders of these major companies think it’s the right time to expand into Myanmar, as the country is poised to grow at an unprecedented rate. By McKinsey & Co.’s estimation, Myanmar could potentiall bring its $45 billion economy to more than $300 billion in 2030.
“It was time,” said Harjit Gill, regional CEO of Philips, in reference to the launch of Philips’ first electronics shop in Yangon. “This country is in a fantastic position to leapfrog, we want to be here.”
That is certainly what the new democratic government wants, too.
“Our country used to be isolated,” said President Thein Sein at the World Economic Forum, according to the Marketing Magazine. “Now we are getting back to our right place in the world.”
To contact the editor, e-mail:
Most Popular Slideshows
- Still The World Champions: Team USA Overpowers Serbia, 129-92 To Win 2014 FIBA World Cup [PHOTOS]
- Pope Francis: World War III Has Started On Piecemeal
- After Win Over Maidana, Mayweather Says He Is Prepared To Negotiate A Fight With Pacquiao
- From Fat To Fit: Celebrities Who Were Overweight Before They Became The Beauties That They Are
Join the Conversation
- Global Air Travel Alert: Air France Pilots Stage Labour Strike
- West Africa Ebola Epidemic To Last 12-18 Months More
- Pope Francis Blasted For Defying Catholic Doctrine, Marries 20 Couples Who Have Cohabited And Had Children In No Else But St Peter's Basilica
- Venezuelans Using Made-in-China Silicones Because Of Breast Implant Shortage
- Security for Pope Francis' Albania Trip At Status Quo, Won’t Be Reinforced Despite ISIS Threat – Vatican
- Google Release Roundup: Nexus 5 2014, Nexus 6, Nexus 8 and Android L Killer Features
- Samsung Attacks iPhone 6 Plus Through New Galaxy Note 4 Commercial: Apple Claims Imitating Galaxy Note Phablets
- Pregnant Kate Middleton May Call Off Malta Trip Due To Sickness: Royal Couple Will Move To Anmer Hall Residence
- iPhone 6 And IPhone 6 Plus Sold Out, New Stocks To Arrive In October
- Moto G (Gen 2) vs. Xiaomi Redmi 1S—Specifications, Features And Price Showdown
- Nexus 6, 8 Release Dates Imminent as Moto X Pre-Order Begins & Nexus 7 Deals Ramp Up
- iPhone 6 And iPhone 6 Plus Shipping Has Begun, Expected To Reach Customers’ Doorstep On Sept 19 Launch Date