- By Kyaw Htike Soe
Myanmar was one of the ASEAN’s fastest-growing economies with GDP increasing from US$ 8.9 billion in 2000 to more than US$ 71 billion in 2018. Investment inflows into Myanmar under the Myanmar Investment Law from Japan reached over US$ 1.208 billion at the end of June this year. Thilawa Special Economic Zone where around 110 foreign companies have invested US$ 1.86 billion as of 30th September this year and more than half of the companies came from Japan.
Foreign direct investment (FDI) worth more than US$ 11 million has been channeled into Thilawa Special Economic Zone this fiscal year, according to an official from the Directorate of Investment and Company Administration under the Ministry of Investment and Foreign Economic Relations. Investments from Malaysia and Japan came to the industrial sector. “The investment proposals were approved in accordance with the Special Economic Zone Law. Japan and Malaysia invested over US$ 11 million into Thilawa SEZ,” he added.A total of 114 enterprises have been permitted to operate their businesses in Thilawa SEZ, with 39 businesses came from Japan and 27 firms from Singapore. Most of the investment came to industrial, transport, real estate and hotels and tourism sectors. As part of efforts to expand Thilawa SEZ, approximately 200 hectors of land are being reclaimed, said an official from Myanmar-Japan Thilawa Development Ltd.
Sales of land plots in Zone A and Zone B of Thilawa SEZ are expected to be finalized by 2021. So far 99 % of land plots in Zone A and about 50 % in Zone B have already been sold out, according to the Japan International Cooperation Agency (JICA).Toyota Motor Corp is setting up an automotive assembly plant on 21 hectors of land in Thilawa SEZ in the suburbs of Yangon and the new factory will produce 2,500 Hilux pick-up trucks per year from 2021.Since its establishment in 2015, Thilawa SEZ has attracted 113 investment projects and 76 companies have begun commercial operations.Japanese investment in Myanmar is expected to go up in the fiscal year 2019-2020, according to the DICA. Successful establishment of Thilawa SEZ marks a new phase in promoting bilateral relations between Myanmar and Japan. At the same time, the JICA is cooperating with Myanmar government departments in many areas.
Arrangements are being made to establish a textile and garment industry park in Mandalay Region as part of a joint project with the JICA, said Chief Minister of Mandalay Region Dr Zaw Myint Maung. Discussions on the establishment of the textile industry zone are still at the early stages, but it will potentially create job opportunities for around 50,000 local people, according to an official from SMART Myanmar. Traditionally, Mandalay Region has been a hub of garment manufacturing in Myanmar and nearly 20,000 garment, textile and footwear jobs have been created in Mandalay Region over the past five years. Myanmar is one of the fastest-growing garment, footwear, and travel goods suppliers in the world. The Southeast Asian country earned US$ 2.7 billion in 2017 from garment exports and fetched US$ 3.86 billion in 2018.
A new four-lane tarred road from Thanlyan Bridge to Thilawa SEZ and the Bago River crossing bridge (Thanlyan Bridge No-3) are being built with the Official Development Assistance (ODA) loans from Japan. The new tarred road is slated for completion by the end of this year.The Bago River crossing bridge measuring 1,982 metres in length will be built through three phases by spending some US$ 300 million of Japanese ODA loans. Once completed, the four-lane tarred and the new bridge will facilitate better flows of goods to Thilawa SEZ. Plans are underway to restart development of the Dawei Special Economic Zone in Dawei, Taninthayi Region, according to media reports. The government is seeking ways to resume establishment of the US$ 8 billion Dawei SEZ, which has been halted since 2013 due to financial constraints. The project consists of a deepwater seaport, high-tech zones, information technology zones, export-processing zones, transportation zones, services business zones, and other infrastructures.
Myanmar set a target to attract US$ 221 billion of FDI within 20 years from 2016-2017 FY to 2035-2036 FY under the short-term, mid-term and long-term Myanmar Investment Promotion Plan and to encourage the inflow of responsible investments into the country. In addition Myanmar is estimated to become a middle-income country by 2030. The MIPP is aimed to realize the responsible and quality investments necessary for Myanmar to become a middle-income country by 2030 and for pursuing subsequent further growth until 2035, through fundamental improvement of the business environment. It will be assessed and reviewed once in five years due to changing political and economic situations globally.The DICA has been cooperating with NGOs and INGOs so as to attract foreign direct investments to the country by organizing seminars, investment and business forums.
Singapore and China were the largest foreign investors in Myanmar, with both countries channeling more than US$ 1.3 billion and around US$ 350 million into the projects in the Southeast Asia country.Singapore is the largest foreign investor in Myanmar, pouring more than US$ 22 billion into 312 projects of the Asia’s last frontier market between 1988 to date. Most of the investments from Singapore came to oil and gas sector. Around 1,780 foreign enterprises from 50 countries around the world were permitted to invest in 12 sectors, with the total amount of US$ 81,597.743 million during the period from 1988 to the end of August 2019.The largest sector of FDI came to oil and gas sector, accounting for 27.48 per cent of the total foreign investments, followed by the power sector with 25.95 per cent and the manufacturing sector with 14.01 per cent.
Myanmar mainly exports clothing, marine and agricultural products to Myanmar and imports car and machinery from the East Asian country. Japan has been one of the largest providers of development assistance to Myanmar for decades. In terms of foreign investments in Myanmar, Japan ranks 10th place with over US$ 1.2 billion invested in 117 enterprises in the country, according to the government’s figures.