Despite unrest, Rakhine State still attracting foreign investor interest

Foreign investors are still showing interest in Rakhine State despite sanctions and international pressure applied due to the political unrest. And now that the state has better access to electricity, conditions are looking better for businesses to enter the state or expand.

Projects related to China’s Belt and Road initiative remain a focus, with the Kyaukphyu special economic zone (SEZ), which comprises a deep-sea port, industrial park and housing, being a major pull of foreign direct investment (FDI) into the state. The industrial park will support businesses involved in aquaculture, livestock and garment industries while the deep-sea port and its facilities will connect Myanmar with a regional network of economies including China, India and Asean.

Plans to develop the SEZ was first announced in September 2013 and a consortium led by Beijing-based CITIC Group Corporation Ltd that included Thailand’s Charoen Pokphand Group Co Ltd was awarded the project at the end of 2015. However, it was not until November last year that a framework agreement was signed between the Myanmar government and CITIC, which also saw the original price-tag of US$7.5 billion reduced to US$1.3 billion.

Rakhine State chief minister U Nyi Pu said among the projects within the SEZ, Forging The Future Co Ltd and Myanmar Bright Prospect International Logistics Co Ltd have proposals to set up prawn farming, support a jetty project on Made island and build a five-star hotel on Ramree island.

“There have been a number of proposals submitted. There have also been requests to conduct surveys and permission to acquire land,” he said, adding that the state government welcomes all investors as the state’s development will create more job opportunities.

Due to the large FDI involved, the proposals have all been forwarded to the Myanmar Investment Commission (MIC), which has the authority to approve the projects.

Rakhine’s state minister of development U Win Myint told The Myanmar Times that the hotel and jetty projects were supporting projects for the deep-sea port project. The five-star hotel project has an estimated cost of US$38 million while the jetty has an estimated cost of over US$100 million.

The state capital of Sittwe has also become a focus for investors, with Coast KTMG Development Co Ltd proposal to build a US$38 billion 7,000-acre project called New Sittwe Myanmar City 2030 having been submitted to the MIC. A Chinese-backed local company has also submitted a proposal to build a coastal road through the Ponnagyun industrial zone. U Win Myint said for certain projects like the New Sittwe Myanmar City 2030 project, a number of issues regarding land ownership will have to be solved first before the project can go ahead.

“They have to solve the land disputes firstly. Then, they need to pass the MIC as the investment amount is large. We’ll do all we can at the state government level to help expedite the projects,” he said.

U Thant Sin Lwin, director general at the Directorate of Investment and Company Administration, added that businesses involved in the offshore oil and gas industry are welcome to invest in Rakhine.

“Rakhine is rich in oil and gas reserves and many other natural resources as well. A bit of unrest won’t affect the whole of Rakhine State, which consists of seven townships. The violence is contained in Maungdaw. There are many opportunities available in Rakhine if the state government can manage effectively,” he said.

Source: Myanmar Times

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