US, Japan investors wooed by Myanmar at forum

YANGON, Aug 21, 2019, Myanmar Times. Myanmar continues to woo Japan and the US as a source of investments even as the global growth outlook dims considerably with investors preferring to stash their money in safe-haven assets such as US Treasuries and gold, reported the Myanmar Times.

State Counsellor Daw Aung San Suu Kyi, who gave the keynote speech at the Myanmar-Japan-US Forum on Fostering Responsible Investment held on August 20, held up Myanmar’s strategic location between South Asia, China and the rest of Asean, a growing economy as well as reforms that were underway as reasons why US and Japanese investors should look to the country as an investment destination.

“Myanmar, positioned at the crossroads of Asia, constitutes a key bridge between East and West; a link between India and China, a doorway to Asean. Myanmar seeks to capitalize on this favourable position by connecting these rising geo-economic regions, offering a strategic trade conduit, providing a gateway to the Indian Ocean, and thus benefitting the country and the region broadly,” she said.

Her speech comes at a time when foreign direct investment (FDI) commitments, an indication of future FDI flows, has slowed down according to the December 2018 edition of the Myanmar Economic Monitor published by the World Bank.

The Directorate of Investment and Company Administration (DICA) expects US$5.8 billion in FDI for the current fiscal year between October 1, 2018 and September 30, 2019, little changed from the $5.7 billion that was received in fiscal 2017/2018, which began on April 1, 2017 and ended on March 30, 2018. DICA data showed that for fiscal 2016/2017, the country received $6.6 billion of investments.

Recent news reports have also noted the geopolitical rivalries that Myanmar has to navigate, with the yuan and yen designated as currencies for settling international trade in the country earlier this year, joining the greenback, Singaporean dollar and euro.

Daw Aung San Suu Kyi’s speech emphasised a favourable investment environment that enables job creation, new opportunities, sustainable growth, and more equitable spread of wealth.

She noted that the country continues to undergo rapid and prolonged growth that has also enabled structural shifts to the economy, and that the challenge for policymakers is to ensure that the people can take full advantage of this period of tremendous growth and dynamic change.

“Myanmar, very much a part of changing Asia, has entered a period of radical change accompanied by unprecedented growth. Our economy has expanded, with GDP rising from $8.9 billion in the year 2000 to over $71 billion in 2018. This places our country amongst Asean’s fastest-growing economies,” Daw Aung San Suu Kyi said.

She added that trade policy remains dynamic and guided by the Myanmar Sustainable Development Plan, “is continuously revised to be in line with regional and global commitments, in accordance with liberal economic principles”.

Although Daw Aung San Suu Kyi assured US and Japanese investors that their investments would be safe and that the government remains committed to reforms, the World Bank’s December report noted that the fall in FDI commitments could indicate investors’ concerns over political will to implement the reforms while the Rakhine crisis has also taken its toll.

According to DICA data, approved FDI from Japan this fiscal year totaled $37.72 million while there were none from the US as of June 30, 2019. Approved FDI from China totaled $437.41 million while approved FDI from Singapore totaled just over $2 billion.