Investment Opportunities
in Myanmar
(WHEF 2013, Bangkok)
Khine Khine Nwe
Joint Secretary General
UMFCCI
August 10, 2013
 GDP - composition by sector:

agriculture: 43%
 industry: 20.5%
 services: 36.6% (2011 est.)
 Labor force:
 37.35 million (2011 est.)
 country comparison to the world: 19
 Employment - by occupation:
 agriculture: 65%
 industry: 12%
 services: 23% (2011 est.)
Total land boundaries5,867
km
- China
2,185 km
- Lao
235 km
- Thailand
1,800 km
- Bangladesh
193 km
- India
1,463 km
ECONOMIC CORRIDORS
Myanmar is well situated on the
Northern
Corridor,
North-South
Economic Corridor and East-West
Economic Corridor and, Southern
and Western Corridors.
Although
East-West
Economic
Corridor known as EWEC connects
eastern ASEAN countries, Western
Corridor and Southern Economic
Corridor are the key base to
establish Mekong-India Economic
Corridor (MIEC) by extending the
link to Dawei of Myanmar.
What’s new in Myanmar, what’s news about Myanmar
• New Government
The first democratically elected government
• New Political Landscape
Measures to achieve positive changes in political,
economic and social spheres are put in place, in line with
the market conditions and international circumstances.
June 2013 : World Economic Forum
2013 : SEA Games
2014 : Asean Chairmanship
• New Economic Landscape
Myanmar is in the process of instituting a series of
policy and strategic reforms with the aims of
achieving national development and catching up with
the economic success of neighboring countries.
• New Development Ideology
• to reduce poverty and to increase wealth
• to lift the country out of the least developed
country status
• to ensure job opportunities and health and social
security benefits for its people
New National Economic Policy
• Sustainable development of agriculture
sector
towards
industrialization
• Equitable and proportionate development
among Regions and States
• Inclusive development of entire people
• Develop
the
Quality
statistical system
of
statistics
and
Goals of the Fifth Five-Year Plan (2011-12 to 2015-16)
•To achieve an average annual GDP growth rate of 7.7%
•To increase industrial share of GDP from 26% to 32%
together with an increase in the service sector, reducing the
currently high share of agriculture.
•To increase Per capita GDP growth between 30-40% from
the base year of 2010, which will help attain the first goal of
MDG in reducing the poverty incidence by half over the
period 2000-2015.
Source: MNPED
New Reforms and Laws
•
•
•
•
Finance and Banking
Unification of exchange rates in April 2012
Adopted a managed floating rates
Foreign currency reserve US$7 billion in
September 2011 and expected to US$ 9
billion by end of the year 2013.
• Central Bank Law (approved July 13, 2013
by Parliament)
• Myanmar’s Foreign Investment Law
• “FIL” is revised with more exemptions and relief and approved
•
•
•
•
•
by the Parliament in November 2012.
Ministry of National Planning and Economic Development issued
the Foreign Investment Law Regulations, passed on 31 January
2013.
Myanmar Investment Commission announced List of Prohibited Economic Activities
List of Economic Activities allowed in the form of Joint Venture
with Myanmar citizens and
List of Economic Activities which shall be allowed under the
specific circumstances
Aims of the New FIL
• to produce products using abundant resources of the country, for the people
to enjoy sufficiently and to enable the surplus to export
•
to open up more employment opportunities for the people, as business
develop and expand
• to develop human resources
• to develop infrastructures, both hard and soft
• to develop respective area of studies in communication networks, transport
business such as rail, ship, aircraft, throughout the entire country, to meet
the international standard
• To promote nationwide development and to encourage citizens to work in
relevance with other countries
• To promote the building up of the economic enterprises and investment
business in accord with the international norms.
• Special Economic Zone Law : Existing law
enacted in February 2011, being revised to be
one of the most investor friendly laws in the
region.
• Taxation Law : Revised with effect from 1st April,
2012, reduction of tax rates to induce foreign and
local investment.
• Intellectual Property Law : 11th draft in process,
based on minimum standard and maximum
flexibility, expected end 2013 or early 2014.
• New York Convention : Submitted instrument of
accession to the Convention on the Recognition
and Enforcement of Foreign Arbitral Award
(1957) in Aoril 2013.
Changes in Trade and Investment
Environment
• Commercial tax and Income tax for export - 10% to 0 % (except
for 18 special commodities)
• Income tax- 10% to 0% (CMP including garment exports)
• Reduce Cargo inspection stations at Border Checkpoints
• Liberalization in documentation process for trade procedure
• Liberalized in car import- any citizen with foreign exchange
account is allowed to import car
• Online Licensing system will be introduced soon.
• Myanmar Investment Commission reorganized.
• One Stop Service for Investors in Yangon (DICA) started on
April 10
Top 10 Exports & Imports (2011-2012)
No
Items
Value ( US Dollar in Million)
No
Items
1
Natural Gas
3463.482
1
Petroleum Products
2079.765
2
Bean and Pulses
1120.938
2
Vehicles & Spare Parts
1178.761
3
jade
780.340
3
603.768
4
Marine Products
705.866
Iron & Steel Construction
materials
5
Garment
498.608
4
Iron and Steel Materials
512.460
Rice
5
Machinery and Spare Parts
511.518
6
324.622
6
Palm Oil
388.291
7
Rubber
311.090
7
Plastic Raw Materials
314.129
8
Teak log
283.923
8
Ships, Boats and Spare Parts
311.383
9
Hardwood Log
272.883
9
Pharmaceuticals
226.061
10
Corn
216.789
10
Fertilizers
174.590
Total
9097.000
Total
Value (US Dollar in Million)
9053.780
Top 3 Trade Partners of Myanmar (2012-2013)
Export
Import
Total (mil USD)
China
2166.40
2748.20
4914.60
Thailand
3752.16
789.50
4541.66
Singapore
282.89
2500.02
2782.91
Source: MOC
FOREIGN INVESTMENT OF PERMITTED ENTERPRISES AS OF (30/6/2013)
(BY SECTOR)
(US $ in million)
Sr.
Permitted Enterprises
No
Approved
Particulars
No.
Amount
%
1
Power
6
19237.92
44.82
2
3
Oil and Gas
Mining
115
67
14372.27
2829.694
33.48
6.59
4
Manufacturing
255
2730.883
6.36
5
Hotel and Tourism
47
1585.811
3.69
6
Real Estate
19
1056.453
2.46
7
Livestock & Fisheries
26
347.124
0.81
8
Transport &
Communication
16
313.906
0.73
9
Industrial Estate
3
193.113
0.45
10
185.351
0.43
2
37.767
0.09
11
577
38.752
42929
0.09
100
10
Agriculture
11
Construction
12
Other Services
Total
Source: DICA 2013
FOREIGN INVESTMENT OF PERMITTED ENTERPRISES AS OF (30/6/2013)
(BY COUNTRY)
( US $ in million )
Sr.
Permitted Enterprises
Particulars
No
Approved
No.
Amount
1
China
47
14185.529
2
Thailand
66
9979.443
3
Hong Kong
49
6393.334
4
Republic of Korea*
78
3013.705
5
U.K*
60
3045.434
6
Singapore
90
2358.946
7
Malaysia
44
1034.785
8
France
2
469
9
Viet Nam***
6
511.186
10
India
9
283.1
11
Japan
35
270.283
12
The Netherlands
7
249.136
13
U.S.A
15
243.565
14
Indonesia
12
241.497
15
Philippine
2
146.667
16
Russia Federation
2
94
17
Australia
14
99.246
18
Austria
2
72.5
19
Panama
2
55.101
20
United Arab Emirates
1
41
21
Canada
16
41.883
22
Mauritius
2
30.575
23
Germany
2
17.5
24
Republic of Liberia**
2
14.6
25
Denmark
1
13.37
26
Cyprus
1
5.25
27
Macau
2
4.4
28
Switzerland
1
3.382
29
Bangladesh
2
2.957
30
Israel
1
2.4
31
Brunei Darussalam
3
4.273
32
Sri lanka
1
1
Total
577
42929.047
Source: DICA 2013
%
33.04
23.25
14.89
7.02
7.09
5.49
2.41
1.09
1.19
0.66
0.63
0.58
0.57
0.56
0.34
0.22
0.23
0.17
0.13
0.1
0.1
0.07
0.04
0.03
0.03
0.01
0.01
0.01
0.01
0.01
0.01
0
100
Increase of FDI Since September 2012
Existing Enterprises
(30/9/2012)
Sr.
No.
Particulars
1 Oil and Gas
Approved
No.
Amount
62 13474.728
Existing Enterprises
(30/6/2013)
Approved
%
No. Amount
43.37
64 13665.028
%
42.33
5 13207.921
9 2304.496
40.92
31
1254.475
3.89
2.04
155
992.505
3.07
275
0.89
7
275.000
0.85
2
179.113
0.58
2
179.113
0.55
Agriculture
6
154.07
0.50
6
154.070
0.48
Transport & Communication
7
137.676
0.44
7
137.676
0.43
7
64.946
0.21
8
87.712
0.27
5
232
8.067
31068.182
0.03
8
21.827
0.07
302 32279.823
100.00
2
Power
4
13037.498
41.96
3
Mining
8
2289.162
7.37
4
Hotel and Tourism
30
814.475
2.62
5
Manufacturing
94
633.447
6
Real Estate
7
7
Industrial Estate
8
9
10 Livestock & Fisheries
11 Other Services
Total
100.00
7.14
SEZs
Kyaukphyu
SEZ
Dawei
SEZ
Thilawa
SEZ
Source: Ministry of Industry
Agriculture
 agro-based country
 Potential food basket for Asia
 Vast potential of land
resources as well as
different networks of
irrigation facilities for the
expansion of Agriculture
Sector both horizontally and
vertically
MINERAL SECTOR
Western
Ranges
Eastern
Highlands
Abundance of precious gem stone such as
ruby, sapphire, jade and diamond. Ruby
Nickel
Chromite
PGM
Central
Belt
Lead,Zinc
Copper
Silver
Tungsten
Antimony
Iron
accounts for 90% of world supply and the
largest jade resource country in the world.
Jade is second largest export item
with the amount of USD 2.2 Billion.
2.8 Billion USD investment by 64
Porphyry
Copper
Gold
Coal
Oil & Gas
Enterprises.
22
INDUSTRY SECTOR
•
•
•
•
•
Foodstuff,
Textile,
Personal Goods,
Household Goods,
Leather Products
• Transport Equipment,
• Building Materials,
• Pulp and Paper,
•
•
•
•
Chemicals,
Pharmaceuticals,
Iron and Steel,
Machinery and Plant
Developing together with other sector such as agriculture,
fishery, mining and oil and gas sectors ; plenty of opportunities
to invest in manufacturing sector such as labour intensive
industries, Small and Medium Enterprises (SMEs) and
production Network FDI projects.
23
Garment Industries
900
Myanmar Garment Export Trend
(2001-11)
800
High Growth Potential for
700
Export to Japan, Korea, EU
US $ in Million
600
and USA
500
Large Domestic Demand for
400
300
textile and clothing (about
200
USD 56 million, 75% of
100
which has been imported.)
0
2001
4/13/2015
2003
2005
2007
2008
2009
2010
2011
Power
At least 37,000 megawatts can be generated
from hydro all over the country in the
Ayeyarwaddy,
Sittaung,
Thanlwin
and
Chindwin river basins and only about 745
megawatts has been developed so far.
Energy Sector
potentials for cooperation in the downstream
projects in Energy Sector such as refinery
plant and fertilizer plants.
OIL & GAS SECTOR
Myanmar possesses significant natural
gas and oil reserves.
10th largest resource of natural gas in
the world, over 90 trillion cubic feet.
26
FORESTRY
 Expansive forest which
covers half of total area of
the country, exports 80% of
world teak supply
 Major exporter of teak in
the world
 many
hardwood
and
softwood species that have
been neglected in the past
 processing value-added
products commercially for
exports as well
Potentials for Value added
production of Minor Forest
Products:
Bamboo,
Cane,
Rattan
27
FISHERIES SECTOR
A long sea coastline of
2,832 kilometers associated
with
229,000
square
kilometers of continental
shelf and 486,000 square
kilometers of exclusive
economic zone
Fishery resources that are
currently being used is less
than 60% of sustainable
yield, potential of 1.05
million MT of fish and
28
fishery product
TOURISM SECTOR
Booming
sector
after
reform
16.95% increased in 200910, 4.88% increased in
2010-11
and
30%
increased in 2011-12
Very new white sand
beaches
at
Myeik
Archipelago
comprising
800 islands
Year round festivals with
simple and kind hearted
people
29
PROMISING FUTURE BUSINESS
1. Labor intensive manufacturing
– garment, footwear, toy, wigs etc…
2. Export oriented agro-based
value added industries
Huge potential for agricultural
production
• huge global demand
• abundant potential in food
supply
3. Supportive Industries
• SMEs & SMIs
Potential Jobs Opportunities
Agriculture
Resource
Fishery
Mining
Mineral Processing
Forestry
Wood Processing
Oil & Gas
Petrochemical
Garment
Labor
Electronic Parts
Assembly
Footwear Industry
Others
Hotel & Tourism
Services
Food Processing
Logistics
Real Estate
Other
Market Potential
TOTAL : 2.839 BILLION
Neighboring Markets
2 Giants Economies
ASEAN Pop 600 mil
International Markets
EU, USA, Japan,
Korea
INDIA
1.21 Billion
CHINA
1.35 Billion
BANGLADESH
145 Million
LAO
7 Million
60 Million
Domestic market
THAILAND
66 Million
60 million Population
BAY OF BENGAL
ANDAMAN SEA
40.6% OF WORLD POPULATION
32
STRENGTH
 Abundant trainable labor force with basic education, hardworking, quick learning, sincere and obedient mindset of the
people.
 Well connected to major Asian market, ASEAN, China and
India.
 Strategic location : Geopolitical importance for regional
connectivity as the tri-junction of East Asia, Southeast Asia
and South Asia.
 Benefit of late comer in development: can leapfrog.
 Strong political and economic will of the leaders and strong
will of the people to advance forward under the good
leadership.
33
Weakness
•
Poor infrastructure adds up in high production and transaction cost.
•
Underdeveloped banking and financial system. (Reforms in banking
system.)
•
Shortage of skill workers and middle level technicians. (Skill Development
Law, schemes)
•
Job-hopping from one workplace to another. (Insecurity, Minimum Wage
Law, Social Security Scheme)
•
Lack of financial access, incentives, modern efficient machineries,
technology and management. (Training Center)
•
Transshipment in Singapore. (Corridors and Deep Sea Ports)
34
•
•
•
•
THREAT
Regional inequality may cause social
inequality
Competitiveness
International pressures amid reforms and
economic sanctions. (?)
Genuine change! Reversible-irreviserble!
Capacity!
OPPORTUNITIES
 Regional hub for multimodal transportation and a potential
supply route bypassing the Malacca Strait.
 Huge Domestic Demand for textile and clothing (about USD
56 million, 75% of which has been imported.)
 GMS Cross Border Transport Agreement (CBTA) based
Transit Transport. Cutting off substantially transaction cost,
both time and money.
 Sole land-bridge between two giant economies, China and
India Bharat.
 High potential to be a “food basket” and “energy source” for
Asia (Connectivity Hub). Huge industrial potential for FDI
from ASEAN and global supply chains.
 Lifting of economic sanctions and re-instatement of
GSP/EBA by EU, by US?
36
Conclusion

On the right track politically, economically and socially.
 On the runway to take off which ensures the benefit for
investors.
 Amid abundant opportunities.
From blossoms to blooms.
38