RANGOON — Government figures show an astounding US$2.2 billion worth of foreign direct investment for April, the first month of the 2015-16 financial year, but officials have remained tight-lipped over how much of the money has made its way into Burma.
The Directorate of Investment and Company Administration (DICA) said that $2 billion was allocated to the oil and gas industry, while $116 million went to manufacturing and a further $50 million was allocated for the hotel and tourism sector.
Aung Naing Oo, secretary of the Myanmar Investment Commission (MIC) and DICA director-general, told The Irrawaddy last week that foreign direct investment appeared set to exceed government projections once again, after $8 billion was pledged during the 2014-15 financial year.
“I expected only $6 billion for 2015-16, but last year’s record spend was also over expectations,” he said.
The MIC secretary would not be drawn on whether the investment figures reflected the amount pledged by investors or the total influx of foreign investment capital for the month.
Phyo Min Thein, a Lower House lawmaker for the National League for Democracy and a member of the Financial Development Committee, said that much of the total foreign investment reflected memoranda of understanding signed between the government and international companies ahead of this year’s general election.
“Many foreign companies want to invest here but they are concerned by the country’s political situation,” he said. “They don’t want to take risks, which is why they have negotiated agreements well before actually coming inside the country.”
With the overwhelming majority of foreign direct investment slated for resource projects, Burmese business leaders have expressed concerns about the national economy’s ability to diversify beyond primary industries.
“Investment will disappear when there are no more resources left,” said Pyi Wa Tun, chairman of the Parami Energy group of companies. “We have to promote the emergence of competitive local industries, so that when our resources are depleted, we can stand on our own because we know how to compete.”
A relatively minor capital allocation to manufacturing has precipitated a boom in the rag trade, according to local industry sources. In the last year, garment factories have opened their doors in Rangoon at an average rate of more than one a week, and there are now more than 100 garment manufacturing operations in the Hlaing Tharyar industrial zone on the city’s outskirts.
According to the DICA figures, Singapore remained the top source of foreign direct investment at $1.4 billion in April, followed by The Netherlands at $430 million and India at $207 million.