Myanmar aims to attract $140 billion in FDI until 2030
MYANMAR has set its sights on attracting US$140 billion (Bt4.9 trillion) in foreign direct investment (FDI) from now until 2030, according to a national economic development plan.
From 1988 until March 30, which marked the end of the 2015-16 fiscal year, Myanmar had granted permits for foreign investments worth $63.7 billion.
The national development plan, obtained by Daily Eleven, was completed on expectation that the United States would restore the generalised system of preferences (GSP) to Myanmar this year.
Some foreign companies have established plants in Myanmar to enjoy the GSP to the European Union, which was reinstated in 2013.
Accordingly, annual FDI from 2017-20 is expected to be $6 billion. The target is raised to $8 billion per year from 2021-30.
FDI inflows into Myanmar reached a record high in the 2015-16 fiscal year, at $9.48 billion, according to the Directorate of Investment and Company Administration (DICA). This is despite foreign investors' reservations ahead of the general election last November. The figure was also about 50 per cent higher than the $6-billion target.
Myanmar received $8 billion in FDI in 2014-15, compared with $4.1 billion in 2013-14.
Economist Zaw Oo said earlier that the GSP should be reinstated this year following a review by the US of Myanmar's labour rights and copyright laws.
Myanmar Business Today reported last month that Maung Maung Lay, vice chairman of UMFCCI, at a meeting of American-Myanmar businessmen, said the discussions between the Myanmar and US governments would resume sometime between June and July. "To get this benefit, it has to be discussed in the American congress and with the country's elections in the coming months it could cause a delay," Maung Maung Lay said.
It has been widely anticipated that FDI would spark a new wave of investment into the country if the US renews the GSP and lifts remaining sanctions that still bar financial institutions from completing transactions for some Myanmar individuals.
Myanmar first received GSP status from the US in 1976, though it was revoked in 1989.
The European Union also resumed its GSP for Myanmar in July 2013.
In the first nine months of the 2015-16 fiscal year, the country's trade with the EU exceeded $500 million, with Myanmar earning more than $256 million, according to the Commerce Ministry. Trade with the EU has been increasing annually.
US-Myanmar trade in the first 10 months of the previous fiscal year totalled $205 million, with imports reaching $137 million, according to the Commerce Ministry.
Myanmar mainly exports agricultural products, marine products and raw materials to the US, while it imports commodities, tools and equipment for investments from the US.
The national plan focuses on attracting FDI and developing the export sector and the domestic market. From 2017-20, the strategy is to develop industry, benefit from membership in the Asean Economic Community and attract FDI.
The strategies from 2021-30 include sustainable development, assisting businesses, boosting industries and infrastructure development.
Citizens' socio-economic development would be a priority, it said.
Rice has been highlighted as a key export item, but up to 90 per cent is still set aside for China.
To boost rice exports, the Myanmar Rice Federation recently urged the new government to hold bilateral negotiations with the European Union.
Until March 25 in the 2015-16 fiscal year, Myanmar earned more than $511 million from exports of 1 million tonnes of rice and 360,000 tonnes of broken rice, according to the Commerce Ministry.
In the last fiscal year, Singapore, which invested $4.3 billion into 55 projects, topped the list of foreign investors, followed by China, Myanmar's biggest trading partner, which invested $3.3 billion.
Investment from Thailand was only $236.74 million in 12 projects, against $165.7 million in fiscal 2014-15 and $529.1 million in fiscal 2013-14. The oil and gas industry has been the biggest beneficiary of FDI.