While Myanmar suffers anxiety due to a sharp decline in foreign investment, China is seeing a boom in outbound investment. It is high time for Myanmar to ramp up efforts to rekindle Chinese investors' appetite in the Southeast Asian country to boost its economy.
Myanmar attracted $3.5 billion in foreign direct investment in the first nine months of the fiscal year 2016-17 ending in March, marking a sharp contrast from the $9.5 billion registered in the previous fiscal year.
Some investors are taking a wait-and-see attitude because of the uncertainty brought on by Myanmar's new Investment Law which is expected to come into force for the financial year starting April 2017. The decline in foreign investment could partly be attributed to an unclear economic policy, but forecasts by some scholars that foreign investment is likely to bounce back in the next fiscal year might appear to be overly optimistic.
Energy projects in Myanmar remain the most attractive targets for foreign investors. However, media reports said in July that local authorities would no longer approve new investment ventures related to the exploitation of natural resources. Industries such as services and infrastructure, which could play a bigger role in boosting employment in the country, are likely to be the focus of future efforts to attract foreign investment. Meeting those targets will require arduous efforts to optimize the country's foreign investment structure, and this is likely to be a very slow process.
China and Myanmar share a large potential for cooperation in infrastructure as Myanmar is an important nation in China's One Belt and One Road initiative and China is currently the biggest investor in Myanmar. Myanmar's China policy has been under the watch of the West as the Southeast Asian country lures interest from international investors following its democratic reforms.
The two countries should avoid distractions and strengthen strategic trust to promote intergovernmental economic cooperation.
More importantly, Myanmar has to ramp up efforts to attract China's private companies to invest in the country's agriculture and services sectors. Agricultural industries play an important role in Myanmar's economy but the sector has barely received any foreign investment in the past few months.
Corruption, regional violence and unclear policies are a few of the primary concerns for Chinese private investors. Myanmar needs to continue to improve its investment climate so as to lure more investors and further open up its market to Chinese private companies.
The author is a reporter with the Global Times
Courtesy Global Times