Companies in Thailand are starting to invest in Myanmar as political fears subside. Thailand’s total outward FDI into Myanmar’s emerging economy amounted to US$10 billion in 2013.
This amount is the second largest of any country besides China, which invested over US$14 billion in the country.
Myanmar’s capital of Yangon is filled with billboards advertising some of Thailand’s largest companies. CP Group, Bangchak Petroleum, Bangkok Dusit Medical, PTT, and several other firms already have begun operations.
These signs are among those of other multinational companies such as Coca-Cola, Telenor, and Samsung.
Yet Thai ambassador to Myanmar Pisanu Suvanajata says that his country won’t be Myanmar’s second largest investor for very long.
The Myanmar Investment Commission (MIC) recently approved massive projects by investors from Singapore, Japan, and South Korea.
“Myanmar is not our choice. Indeed, they’re choosing who should be allowed to invest here,” said the ambassador.
The large presence of Thai businesses in Myanmar is because of several factors. These include rising wages in Thailand and many of its other neighbors, along with economic reform in Myanmar reducing barriers of entry into the country.
Invest in Myanmar: Asia’s Last Frontier Market
Most analysts are optimistic about the Burmese economy while inward foreign direct investment from across Asia is now booming.
Total FDI rose from US$901 million in 2010 to US$6.2 billion in 2013 – a factor of nearly three times. This led to stellar GDP growth, which was 8.25% in 2013.
Some experts are even more bullish. Bangkok Bank’s executive vice president told those attending a seminar in Yangon that he expects growth in excess of 10% over the next decade.
“The IMF expects FDI to Myanmar to grow by $5 billion annually over the next 5 years. Personally, I expect it to be $8 billion per year, judging from conversation with potential investors who have shown their interest in the country,” he said.
Myanmar’s government doesn’t even approve large investments very often though. Plenty of reputable businesses had their projects rejected.
These “lost projects” could have otherwise made the performance of the Burmese economy even more impressive than it already is.
It’s debatable whether this is due to the commission wanting to take a gradual approach to inward investment, or because of other reasons.
Either way, the country’s economic development is progressing well. But there are still risks for companies wanting to invest in Myanmar.
Poor infrastructure, low supply of quality office buildings, lack of trained employees, and government bureaucracy lead to big challenges that foreign businesses in Myanmar must overcome.
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