Myanmar’s FDI on target despite Rakhine situation

NAYPYITAW — In a bright, well-carpeted conference hall in Naypyitaw — Myanmar’s sprawling capital built by the former military government — more than 1,000 investors and business executives gathered earlier this week for the annual Euromoney Myanmar Global Investment Forum.

The opening remarks on Sept. 12 by speakers including government officials and foreign and local executives were typically optimistic and laudatory, acknowledging the “mouthwatering” opportunities available to investors in the country. Many at the conference, both speakers and delegates, were positive on the outlook for the economy and investment.

Speaking on economic reform, Peter Beynon, Jardine Matheson’s country chairman for Myanmar and Cambodia, said he was “very happy with what’s happened to date,” adding that it was time to quicken the pace of investment and economic development.

Perhaps anticipating mild criticism on the speed of economic liberalization, Deputy Finance Minister U Maung Maung Win told attendees the government was taking fresh steps to “improve the credibility” of its economic reform platform, forecasting falling inflation and robust economic growth. The deputy minister pointed to a new investment law that offers protection and dispute settlement, and a Companies Act that, although still in draft form, is expected to help encourage investment in local companies.

A few hundred kilometers west of Naypyitaw’s coffee and canape sessions, in northern Rakhine state, burnt, empty villages showed the devastating impact of a brutal military campaign against Rohingya militants.

Nearly 400,000 Rohingya refugees have fled the military “clearance operation” launched in response to Aug. 25 attacks on at least 30 police posts and military facilities by a group calling itself the Arakan Rohingya Salvation Army. About 12 military and police personnel and more than 77 militants were killed in the attacks, although since then the military claims to have killed hundreds of ARSA fighters and suspects.

The United Nations High Commissioner for Human Rights, Zeid Ra’ad Al Hussein criticized human-rights abuses against the Rohingya in the wake of ARSA’s first attacks in October last year. On Sept. 11, the high commissioner said that because the government refuses to allow access to human-rights investigators, the situation on the ground cannot be fully assessed, but that “it seems a textbook case of ethnic cleansing.”

The Myanmar government and much of the majority Buddhist population has largely rejected international criticism from bodies like the U.N. and Amnesty International. But some business representatives are keenly aware that how Myanmar is perceived internationally is also important as the government opens up sector after sector to foreign investment in attempt to build a modern economy.

Yangon-based law firm VDB Loi held a matchmaking event on the Euromoney forum’s sidelines, providing a list of over 30 local projects across electricity, insurance, real estate, health, and oil and gas that are in search of foreign partners. The Myanmar Investment Commission has already approved over $3.6 billion in FDI applications since the start of the financial year and the government views foreign investment as “important” in achieving its goals, the deputy finance minister said.

With reports of sweeping violence and an escalating refugee exodus dominating international headlines, however, many investors are worried about what to tell their boards and shareholders. VDB Loi partner Edwin Van der Bruggen said he has been receiving calls from concerned investors, although the events in Rakhine state have yet to prompt investors to pull out of Myanmar.

Source: Nikkei Asian Review