By Benedict Lynn
According to the Burmese government’s Directorate of Investment and Company Administration (Dica), Asian businesses have been pouring into Myanmar at a significantly higher rate than their western counterparts, and now account for nearly 50 percent of firms setting up in the newly-opened republic.
Following a 49 year-long military junta, Myanmar saw a semi-civilian, reformist government take office in 2011. Since then, the country has been attempting to have a number of Western sanctions removed in order to attract foreign investment.The emphasis has been on improving the republic’s badly underdeveloped infrastructure and ridding itself of its international reputation for corruption and human rights abuses.
The latest statistics from Dica, however, indicate that while this makeover has seen some success (there are now 783 foreign invested enterprises operating in Myanmar), investor confidence from the West is still much lower than it should be.
This is a mistake. Myanmar, and its consumer base of 50 million, is no longer under military rule. Taxes have been slashed and even its notoriously protected telecommunications sector has been opened up to the outside world, with two foreign telecoms giants, Telenor and Ooredoo, granted formal licenses to operate networks there.
This provides just one of many exciting, new and totally unsaturated markets. The country’s mobile penetration rate stands at a mere nine percent, with a target in place to reach 80 percent by 2016.
Other investment opportunities abound, from the various infrastructure projects to the agriculture sector. Myanmar, once the number one exporter of rice in the world, is still the main exporter of the commodity to China and has just signed a deal with India to supply the world’s most populous country with rice for the next five years.
The land is rich in natural resources, from oil and gas to timber and precious stones, and foreign investment will no longer be controlled by corrupt military officials.
As an ASEAN member state and signatory to the soon to be finalized ASEAN Economic Community (AEC), investor access can only become simpler and more transparent.
The new republic offers a wealth of opportunities to foreign investors. While Asian businesses have been taking advantage of this for some time, Western businesses have only just started to test the water. They should dive in before the pool is drained.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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