Major Push for Investment in Rakhine at Invest Myanmar Summit
By Nan Lwin 29 January 2019
NAYPYITAW—Despite a troubled reputation fueled by the Rohingya crisis and recent violent clashes between government and Arakan Army troops, the government of Rakhine State has been desperately inviting foreign investment to the state in order to move ahead on economic development plans for the state.
“If we have economic development in those areas, we can gain trust from investors. They would stop worrying about the instability that actually affected a small part of the Rakhine State,” Rakhine Chief Minister U Nyi Pu said at the Invest Myanmar Summit 2019 in Naypyitaw on Monday.
“This is the reason I want to focus on development projects more on those areas,” he said.
The summit is being held to attract foreign investment mainly from countries of East Asia, and also to counteract a significant decline in foreign direct investment (FDI) seen in Myanmar over the last two fiscal years. At this first summit of its kind, 10 states and regions have come up with their own projects to attract investors, focusing on the construction of economic zones, industrial parks and power plants, new city development, mining projects, upgrading airports and eco-tourism development.
Among 120 projects worth over $3 billion which are being showcased at the summit, six projects are being prioritized in Rakhine—the Kyaetaw-Mingan development project which involves a port, trade zone, apartments, supermarket and a small and medium enterprises (SMEs) zone in Sittwe Township; construction of a new airport in Mrauk-U; the upgrade of Ngapali Airport in Thandwe Township; an eco-tourism project on Man Aung Island; Ponnagyun industrial project in Sittwe; and a new city project in Mrauk-U.
Rakhine is one of the poorest states in Myanmar and is situated on its western coast. It is bordered by Chin State to the north, Magway Region, Bago Region and Ayeyarwady Region to the east, the Bay of Bengal to the west, and the Chittagong Division of Bangladesh to the northwest. Covering 36,762 square kilometers of Myanmar’s Western coast, Rakhine State is rich in natural resources, particularly oil and gas. However, 69 percent of people there are living in poverty, lack access to public services and are struggling with poor infrastructure, unemployment, meager living conditions and a lack of legal mechanisms which affect all communities in Rakhine, according to United Nations Development Programme (UNDP).
“Even though foreign investors are less interested in Rakhine State. We have been trying hard to invite foreign investment,” U Htoo Min Thein, director of the Directorate of Investment and Company Administration (DICA) in Rakhine State, told The Irrawaddy.
“We still have a lot of opportunities for investment. We are welcoming companies which have experience in the construction of industrials parks and ports,” he said.
The Rakhine government has welcomed feasibility studies for all six priority projects, however the estimated cost is still unknown.
The Myanmar government has recently adopted a look-east policy in a bid to revive declining foreign investment, however, he said, the Rakhine government would warmly welcome investment from any country in order to step up the pace of development, saying that the state’s investment slogan is “Rakhine is open for business to the world.”
Since the National League for Democracy government took office in 2016, they have made several economic reforms such as the new companies law, a new investment law and other relaxations in the financial, banking and trade sectors. However, following on news of the 2017 Rohingya crisis which badly tarnished the country’s image, foreign investment has significantly declined and western investors have grown increasingly cautious of Myanmar. Approved foreign investment into Myanmar fell last year to its lowest since 2013. Rakhine is a problematic state when it comes to securing invite foreign investment.
Nevertheless, the Rakhine government plans to host a Rakhine-specific investment fair in February which will focus on three major sectors—the agriculture, livestock and fisheries sector, tourism development and SME development.
“We also want to invite investors to come and see the opportunities in Rakhine. They all have a chance to invest in massive areas of the state,” U Htoo Min Thein said.
On the first day of the summit, State Counselor Daw Aung San Suu Kyi said that as Myanmar is “Southeast Asia’s final frontier market, we offer innumerable investment opportunities; investment opportunities are everywhere in Myanmar, some are plain to see, others are waiting to be found.” She also reassured investors of the government’s commitment to continue reform and to build an investment-friendly environment.
“The crisis happened in a small part of the state. We believe when there is economic development, it will lead to stability. We have selected projects where there is no crisis. We fully guarantee [the investors] safety,” U Kyaw Aye Thein, Rakhine State’s minister of finance, revenue, planning and economy, told The Irrawaddy.
Amid the outrage of the international community over the government’s handling of the crisis in Rakhine State, China inked a framework agreement for the Kyaukphyu Deep Sea Port last November. The port will offer China access to the Bay of Bengal while enhancing its regional connectivity as part of Beijing’s Belt and Road Initiative (BRI). The first phase of the project is set to be carried out after environmental and social impact assessments are conducted. Phase 1 will involve the construction of two jetties with a total investment of not more than $1.3 billion.
Rakhine is also a checkpoint of the Chinese pipeline that has been carrying natural oil and gas from the Bay of Bengal, across Myanmar to Kunming in China’s Yunnan Province since 2010.
“I really hope for more investment from other countries,” U Nyi Pu said.
On the second day of the summit, Union Minister for Investment and Foreign Economic Investment U Thaung Tun spoke to the audience about sentiment on Rakhine State, saying “instead of blaming and shaming, let’s work together.”
U Thaung Tun stressed that “we can work together to create sustainable development in Rakhine State. Let’s start with investing in the agro-based sector and fishery sector.”
“We admit that there is a problem in Rakhine,” he said going on to stress that Rakhine State’s problems only happened in three out of 17 townships.
“We need development in Rakhine. Rakhine is safe to [invest in]. We will have a Rakhine investment fair next month so come and see Rakhine.”