Foreign direct investment (FDI) in Myanmar is predicted to increase by 70% in fiscal 2014, jumping by US$7 billion over the previous year.
The figure would be the largest amount of inward FDI Myanmar has ever received since the country’s liberalization began in 2011, and the second highest number in recorded history.
As of November, the Myanmar approved roughly US$4.4 billion worth of investment projects, slightly more than the US$4.1 billion approved in 2013, according to Myanmar’s Ministry of National Planning and Economic Development.
A large amount of approvals tend to happen near the end of the year, meaning that the figure should exceed US$7 billion when the final numbers are released.
The transportation and telecommunications sectors were the most popular and drew over 30% of Myanmar’s total FDI by themselves from April through November last year. Foreign capital poured into the nation’s mobile phone sector after it was opened for investment in the middle of 2014.
While foreign investors used to focus almost exclusively on the raw material and mining industries, a spree of tax breaks and deregulation by the government of Prime Minister Thein Sein have lured companies to many other industries in Myanmar.
The biggest investors in Myanmar were Singaporean businesses, which were responsible for 57% of all FDI in the country between April and November. Companies in Hong Kong ranked second, followed by the United Kingdom and China in third and fourth places respectively.
U Aung Naing Oo, director general of the Directorate of Investment and Companies Administration, said the amount of Singaporean capital in Myanmar seems large because U.S. and European business have brought in money through their subsidiaries based in the city-state.
“Most of the US investments have indirectly entered into Myanmar through Singapore. The investments of some other countries entered into Myanmar indirectly through Singapore, too. That’s why the amount of Singapore’s investments in Myanmar is huge,” she said.
Myanmar saw its largest amount of FDI back in 2010 when China made several different investments in hydroelectric power, bringing the total to US$6.1 billion during that year, and the country will likely continue to attract a large amount of investment.