Due to a meaningless military coup, Myanmar’s foreign direct investment fell by 22% The country’s Investment and Companies Administration recently reported that foreign investment in Myanmar has fallen sharply in the months since the February 1 coup, reaching its lowest point in eight years. In the previous fiscal year ending September 2021, the total foreign investment approved by the bureau fell by 22% to US$3.8 billion, excluding investment in special economic zone projects. Within 12 months, the number of newly approved investment projects dropped sharply to 48, accounting for one-fifth of…
The country’s Investment and Companies Administration recently reported that foreign investment in Myanmar has fallen sharply in the months since the February 1 coup, reaching its lowest point in eight years.
In the previous fiscal year ending September 2021, the total foreign investment approved by the bureau fell by 22% to US$3.8 billion, excluding investment in special economic zone projects.
In 12 months, the number of newly approved investment projects dropped sharply to 48, one-fifth of the total number of the previous year. Of all projects, 38 were approved before military takeover.
Most investment in energy projects
Among the approved investments, the amount of power-related projects tripled from the previous year, reaching US$3.12 billion. This is driven by a US$2.5 billion joint LNG thermal power plant investment approved in May.
Approved investments in manufacturing have had a significant impact on job creation, which fell by 75% year-on-year to US$286 million.
The third largest approved investment amount is 133 million U.S. dollars for transportation and communications. This is followed by US$81 million in the hotel and tourism industry and US$28 million in real estate for industrial use.
No planning guarantee for foreign companies
Under the current circumstances, many foreign companies operating in Myanmar are reluctant to make additional investments.
In this case, companies cannot be sure whether the country’s political and public security affairs will return to normal, or whether stricter sanctions and other factors will make the business environment worse.
According to estimates by the World Bank, Myanmar’s economy shrank by 18% in the fiscal year ending in September. The Asian Development Bank believes that the contraction rate is 18.4%.
