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Myanmar Times: FDI report outlines opportunities, risks

FDI report outlines opportunities, risks
By Stuart Deed
Volume 32, No. 626
May 14 - 20, 2012
POTENTIAL investors are crawling all over Myanmar, with the previous pariah nation now regularly described as the region’s “final frontier”.

However, would-be investors are finding that tracking down reliable information on the country’s different sectors can be a major challenge. In recent months a number of reports informing potential investors have been written, including international heavyweights such as the Economist Intelligence Unit.

In a further addition to the burgeoning field, Mr Keith Rabin, authored the recently released report: Business and Investment Opportunities in the ‘New’ Myanmar.

“This initial report is designed to provide perspective on recent developments in Myanmar and how companies and investors can begin positioning themselves to take advantage of the opportunities now emerging,” he said.

Mr Rabin said in an email interview with The Myanmar Times that the report is based on interviews with leading experts and reviews of several hundred sources, and was written over the course of February and March this year.

During his stay Mr Rabin met key government officials including the ministers of industry and commerce, the Central Bank’s governor and several presidential advisors, as well as other government representatives, the private sector, donors and NGOs.

“Following a trip to Myanmar this month [April] for discussions with business and government leaders, we plan to supplement this first briefing with sectorally-focused reports. This will help to provide the data needed to plan, and justify market entry and investments, in tourism, technology, telecom, resources, manufacturing, services and the other areas addressed within this study,” he added.

“Our report is oriented to companies and investors seeking not only an understanding of how recent trends are effecting Myanmar but how they can develop strategies and the planning that will allow them to participate in, and benefit from, the many opportunities now emerging,” Mr Rabin said.

He added that his company, KWR International, also provides buyers with a no-cost consultation so they can ask questions and better pursue opportunities in Myanmar to determine how this market might fit into their own corporate and investment strategies.

Mr Rabin has a long history of involvement with Myanmar, dating back to before the country emerged from the socialist era, having managed a company that focused on developing trade between Myanmar (then Burma) and the United States and Europe from 1980 to 1987. That position saw Mr Rabin spend several months a year in the country and he formed close links with the Myanma Export Import Corp (MEIC), Yangon Division Cooperative Syndicate, Ministry of Industry 1, donors, the US embassy and many private clients and vendors.

The 57-page report outlines Myanmar’s comparative advantages, including its geographical location, 55-million-strong untapped market, bountiful natural resources, and also takes a look at the factors that could derail the country’s growth. These include the “need to resolve conflicts with ethnic minorities, to release political prisoners and re-integrate them into civil society, to overcome sanctions, and to sustain continuing movement toward a more democratic form of government”.

Mr Rabin said he was confident that the government officials he met understood the scope of the task in fast-tracking Myanmar’s economic development.

“I was extremely impressed with the understanding the [government] officials and their staff demonstrated of Myanmar’s needs, their honest evaluation of the present situation and their determination to move forward. At the same time it is important to recognise the immensity of the challenge before them,” he said.

“Myanmar has remained a largely closed economy for many decades and substantial work must be done to develop the policies, regulatory standards, institutional capacity and human and other resources needed to manage the large FDI inflows we are likely to see in coming decades.

“At the same time it is important to understand that foreign investors do not need to see a perfect structure in place, but rather confidence they will see positive, sustainable movement in the right direction.”

The report concludes with a section titled “Regional Catalysts that Reinforce Reform Process” that draws on the importance and impact of the 2013 Southeast Asia Games, the chairing of the 2014 ASEAN Summit and the establishment of the ASEAN Economic Community in 2015.