Foreign investment into Myanmar has fallen by more than 50% to $1.4 billion in the six months to the end of September, according to the Myanmar Investment Commission, which nonetheless remains optimistic about the rest of this fiscal year.
In the first half of the 2015-2016 fiscal year overseas investors pledged $3 billion, but that figure fell by $1.6 billion this year as companies awaited clarity from the new NLD government, according to U Aung Naing Oo, Secretary of the Myanmar Investment Commission.
“In the period of transition from the previous government to the new one, foreign investors were hesitant,” he said. “They have been watching and observing the government’s policies and priorities.” The lacklustre investment was normal for a period of transition, he added.
In June the NLD disbanded the Myanmar Investment Commission set up by the USDP government and formed a new one. The new MIC started work on June 27th, and has since approved $662 million of investments from 52 firms.
The $1.4 billion total since April includes extensions to businesses that were already approved by the USDP-led government and $143.526 million for the Thilawa Special Economic Zone, according to the MIC.
The commission expects Myanmar’s new investment law, which was passed by the upper house earlier this month, to spur foreign investment for the rest of the fiscal year and help it catch up to last year’s figure.
“The new Myanmar Investment Law improves upon the two previous laws,” said U Aung Naing Oo. “According to the existing laws, investors have to submit all the information to the MIC, especially foreign investors. The MIC had full authority to approve the investment proposal. So, foreign investments took time and the process wasn’t smooth.”
He added: “We expect $6 billion of foreign investment [by the end of the fiscal year]. Current investment volumes are slow compared to last year but we have six months left in this year, I believe that investment will increase for the rest of the fiscal year,” U Aung Naing Oo, Secretary of MIC, said.
Correction: In last week’s issue our story ‘Foreign Investment Jumps as $280m in New Projects Approved’ incorrectly stated that the MIC had approved $662 million in investments since April 2016. The figure in fact only applies to the period from June 27th, when the newly reformed commission began work. We apologise for the error.
Source: Myanmar Business Today
