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.
But Thai ambassador to Myanmar Pisanu Suvanajata says his country will not be Myanmar’s second largest investor for 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
Analysts are optimistic about the Burmese economy, and foreign direct investment is 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.
The government often didn’t approve large investments though. Even reputable businesses had their projects rejected. These could have otherwise made the performance of the Burmese economy even more impressive.
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, an undersupply of office buildings, lack of skilled employees, and government bureaucracy all lead to major challenges which foreign businesses must overcome.
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