Foreign investments will propel national economic growth

Perspectives

[dropcap font=”0″]F[/dropcap]oreign direct investment is of great importance to national economic growth for the simple reason that investors coming from the developed world have potential to render financial support and expertise to local companies.
One primary advantage of foreign direct investment is that money freely goes to businesses with the best prospects of growth anywhere in the world. It is clear that people, regardless of race and religion, make investments in the
hope of the best return for their money with the least risk.
With a favourable economic outlook led by rising gas production and somewhat steady inflation alongside stable exchange rate, Myanmar is now at a low risk of debt distress.
It is however important for the government to ensure that borrowing is kept under control and external concessional borrowing prioritized.
Despite this, there are risks to this budding outlook, a few of which are low levels of international reserves, rising public debt and weak policy frameworks. For instance, loose taxation policies will lead to low revenue collections. To address them, the Central Bank of Myanmar should start to fine-tune its monetary policies and regulatory framework so as to attract more foreign investments and allow greater foreign participation in the financial sector. It is hoped that the CBM will increase its international reserves as foreign inflows are expected to intensify in a few years’ time.
It seems that the government should strive for the continued progress with its economic reform, which has contributed to the recent entry of foreign banks.
All in all, Myanmar still needs to make efforts to reinforce its institutional frameworks and pursue its structural reforms. Given its transformational needs and limited capacity, the country still finds itself in a situation to seek technical assistance from international institution.

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