RANGOON — A total of US$23 billion in foreign direct investment has been pledged over the five-year term of the Union Solidarity and Development Party (USDP) government ending in less than a month’s time, according to Aung Naing Oo of the Myanmar Investment Commission (MIC), a figure that may exaggerate the actual rise in money entering the country from abroad.
According to MIC figures, total foreign investment from 1988 to 2016 was $59 billion, while during the five-year fiscal period ending March 31, $23 billion was committed. Singapore topped the list of foreign investors in Burma over the past five years, at $9 billion, but that pole position too may be misleading.
“Though Singapore is the top investor, not all those investments are made by Singaporean investors,” Aung Naing Oo, secretary of the MIC, said this week. “Some countries, especially European countries, register their businesses in Singapore and make investments in Myanmar.”
The oil and gas sector received the largest amount of foreign investment—more than $5 billion over the past five years, followed by the manufacturing sector with over $4 billion, and the telecommunications sector topping $3 billion.
Burma expects about $6 billion in foreign investment for the current fiscal year ending March 31 and has received more than $5 billion to date.
In the current fiscal year, the oil and gas sector received over $2 billion; the telecommunications sector nearly $1.6 billion; the manufacturing sector around $829 million; the property sector $435 million; and the hotels and tourism sector a distant fifth at $11 million.
Aye Lwin, joint secretary of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), said these FDI figures represented only estimated commitments.
“It’s not actual money coming into the country,” he said.
Myat Thin Aung, chairman of the Hlaing Thayar Industry Zone, Rangoon’s biggest industrial park, echoed Aye Lwin, saying the $23 billion was likely a pledged amount and that the manufacturing sector figures appeared to be overstated
“Investors usually inflate the numbers in their contracts, so that the MIC approves [them]. The actual invested money is less than the figures,” he said.
“In the industrial [manufacturing] sector, most investors come for garment factories. I don’t see significant development in this sector, but it is not known if the MIC included figures from Japanese investment in the Thilawa SEZ [special economic zone], for example.”
Myat Thin Aung added that most investors in the garment sector did not need to bring a large amount of money to get their factories up and running.
“When making contracts for garment factories here, the investment amount is always big,” he said. “That’s why these MIC figures may not be accurate.”