DICA warmly invites responsible investors to pursue business opportunities that help grow and shape the “New Myanmar” and accelerate the realization of national development goals through sustainable economic development on a countrywide scale.
Myanmar’s economy has continuously grown at approximately 8% since 2012. Over FY 2014-15, a GDP increase of 8.7% has been mainly driven by developments and investments in the telecommunication sector (57.5%*), extractive industries (50.5%*), oil and gas (36.1%*), construction (15.9%*), manufacturing (9.7%*) as well as growth in key service industries (e.g. tourism). (*=percentage increase of the absolute GDP contribution of the sector)
Myanmar’s overall growth strategy is built on a complementary mix of policies to simultaneously enable modernization in industry, agriculture and infrastructure, a diversification of the export basis and the expansion of value-added production for domestic and international markets.
Three costal Special Economic Zones in Thilawa, Kyaukphyu and Dawei with particular investment incentives, simplified processes for investors and industrial facilities at international standards will become “growth engines” of the New Myanmar.
In addition, growth along economic corridors with old (Yangon and Mandalay) and new development nodes (e.g. Bago, Hpa An, Sittwe, Myitkyina and border towns) is fostered.
Economic growth has led to the emergence of an increasing middle class and a significant increase in per-capita consumption of 10.9% (during FY 2013-14). Increasing opportunities open up for the FMCG industry and service industries (e.g. private education institutions, entertainment).
Location & Connectivity: Shaping Asia’s new crossroads
Myanmar is in an excellent position to access to regional and global factor markets as well as product markets. Improvements in Myanmar’s infrastructure (in terms of particularly power infrastructure, road, rail, air and ports) have highest priority by the Government in order to establish efficient national and international supply chains for future economic growth.
Myanmar is the largest country of mainland Southeast Asia and has – beyond its domestic market of more than 50 million citizens – direct access to China, India, ASEAN markets and other international markets through ports along the Bay of Bengal and Andaman Sea.
After decades of international isolation prevented the modernization and expansion of infrastructural networks, the Government of Myanmar is now in the preparation for building the physical “roads” to becoming Asia’s “crossroads” through investments into
major domestic highways and transnational road links to Thailand (i.e. from Hpa An and Dawei SEZ), China (i.e. from Mandalay) and India (i.e. from Mandalay and the Kaladan Multi-Modal Transit Transport Project),
a more modern rail network and dry port facilities in Ywarthargyi (near Yangon) and Myitnge (near Mandalay) and
power infrastructure to expand installed capacity (4,422 MW in 2014) and annual production (12,247 GWh) as well as the transmission system according to the National Electrification Plan foreseeing an full electrification even of remote areas by 2030.
Myanmar will be increasingly integrated into regional production networks through its membership in the ASEAN Economic Community as well as the ASEAN-China Free Trade Area (ACFTA), while internationally enjoying preferential tariff schemes as a least developed country (LDC).
Supporting the reforms course of the “New Myanmar”
Myanmar is undergoing a fundamental political and economic transformation to a democratic, federal and peaceful national state. Responsible investments are key requirements for and direct drivers of sustainable and inclusive economic development.
A National Comprehensive Development Plan (NCDP) has been formulated to identify policy directions for countrywide sustainable economic development in based on international best practices to alleviate poverty in the country.
A sector-specific National Export Strategy (NES) is under implementation to strengthen trade and investment in high-potential industries with strong global demand (e.g. rice, textiles and garments, tourism). Myanmar as a least developed country (LDC) is enjoying preferential tariff arrangements to facilitate the access of the country to major international markets.
The Government of Myanmar is highly committed to encouraging investments with a positive impact on society and environment. Investment activities in certain sectors are therefore prohibited or restricted or may require specific approvals, processes, joint venturing or Environmental and Social Impact Assessments (EIA/SIA) to avoid adverse impacts on communities and their livelihoods, the environment as well as the progress in peace and national reconciliation.
DICA is warmly inviting foreign companies to invest in less developed parts of Myanmar and to consider business opportunities facilitating the economic inclusion of Myanmar citizens in remote parts of the country (e.g. Chin State).
Investing in(to) the Myanmar society
Myanmar has the right “ingredients” and potentials for sustainable growth: The country offers natural resources and arable land in abundance – most importantly, however, Myanmar possesses a skilled, motivated and young population to realize the potentials and positive change.
In the previous years of political and economic reform, the Myanmar society has shown to be willing and capable to drive the fundamental change. Myanmar’s citizens have demonstrated to be flexible in adapting to the availability of new opportunities and in dealing with new technology (the so called “digital leapfrogging of Myanmar”) and requirements, while acquiring new skills and competencies in a learning society – as employees and entrepreneurs.
Particularly in Yangon and increasingly in urban centres in all of Myanmar, traditional life and modernity mix harmoniously – the society is open, warm and welcoming to foreign cultures and influence.
According to the Myanmar Population and Housing Census (2014), Myanmar is home to 51.4 million people – a young population with a share of 65.6% within working age (15-64 years).
The population is generally well educated with a high literacy rate of 93% and widely spread basic competences in English. Vocational training programs through the private sector may therefore easily close skill gaps.
Valuable efforts are being made to strengthen the education sector in Myanmar: Compared to 2012, public spending in education in 2014 has increased by 49%. In addition, the Government is leading a Comprehensive Education Sector Review (CESR) to better understand the current status of education and is developing a National Education Sector Plan (NESP), which will guide the implementation of policies and programmes.
Profiting from a liberal, transparent and business-enabling environment
The creation of a business-enabling environment, investment promotion and protection are key priorities of the Government of Myanmar to attract responsible investment.
Several Bilateral Investment Treaties (BITs) and other International Investment Agreements (IIAs) have been concluded to date. Please find an updated list here.
Agreements on the avoidance of double taxation are in place with eight countries such as India, Laos, Malaysia, Korea, Singapore, Thailand, United Kingdom and Vietnam.
Various laws have been revised to facilitate investment and to ease the operation of businesses in Myanmar, such as the e.g. Foreign Investment Law (granting taxation benefits, land use rights etc.), the Myanmar Citizen Investment Law and the Arbitration Law. Further legal changes to a better business-enabling environment are currently in the making (e.g. Banks and Financial Institutions Law of Myanmar and a combined Myanmar Investment Law).
A “National Framework for Public-Private Partnerships” (PPP) is being prepared to accelerate growth and faster improvements through the effective engagement of the private sector e.g. in infrastructure development. Transparent procedures in public tenders will be put in place to allow cost-efficient public service provision and modernization.
The transformation of the telecommunications industry in Myanmar from a monopoly into an open market and first competitive tender processes (such as for a gas-fired power plant in Myingyan, Mandalay Region) show the efforts of the Government to create an open and transparent business environment.