YANGON—The EU’s probable revoking of the Generalized Scheme of Preferences (GSP) will not have an impact on pending foreign investments in Myanmar, said a representative of Directorate of Investment and Company Administration (DICA), a government body under the Ministry of Planning and Finance.
“The EU granted the GSP in 2013. It has been just five years. But before that, CMP [meaning ‘cutting, making and processing,’ which refers to the garment industry] had already been exporting. I mean EU countries have never been the leading investors in Myanmar, Asian countries are,” U Than Aung Kyaw, DICA’s deputy director-general, told reporters at the Myanmar Investment Commission on Thursday.
EU Trade Commissioner Cecilia Malmström announced on Oct. 5 that the bloc was considering withdrawing Myanmar’s preferential trade status due to human rights violations committed against the Rohingya in Rakhine State last year.
“It may take months to do this; perhaps six months. Anyway, western countries are not major investors in Myanmar. We do have some investment from Britain and France but those are limited to oil and gas exploration. They don’t invest in manufacturing, so their investments are not that significant,” said U Than Aung Kyaw.
Myanmar’s manufacturing industry is mainly dominated by Asian investors, he added.
According to DICA, the transitional budget from April 1 to Sept. 30 this year showed Myanmar received $2 billion in foreign investment. Singapore was the largest investor with $700 million, followed by China with $300 million, Britain with $174 million and Japan with $134 million.
Garment exports, however, account for some 70 percent of Myanmar’s shipments to the EU, according to figures collected by the Myanmar Garment Manufacturers Association.
“Though the EU has not made direct investments in the garment industry, most garment exports are shipped to the EU. No matter who makes the investment—Japan or Korea or China or Myanmar citizens—in the garment industry, the majority of garment products are shipped to the EU. Therefore, it can be assumed that their orders might decline,” U Khin Maung Aye, chairman of Hlaingtharyar Industrial Zone Garment Manufacturers Association told The Irrawaddy.
Foreign investment in Myanmar mainly goes into the manufacturing, property development, communications and energy industries, according to DICA.
Translated from Burmese by Thet Ko Ko.
