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CHAPTER: IV
FINDINGS
1. Part One
4.1. Overview of County FDI
Myanmar’s FDI incrase employmend opportunities and economic growth in recent
years and its help the country to transaform itself into an industrial economy. Myanmar cannot
properly negotiate with the large foreign investors due to the weak power of the governmet. One
the other hand, new elected government cannot manage huge amount of investment for the
betterment of the country. Through introduces many advance technology, the MNCs in myanmar
are not ready yet intrested to build their reasearch and evelopment centers in the country.
Myanmar is not much developed technology to attract huge foreign investment in the country
else closely opeated states like China and Japan. In fact, FDI helps attains the GDP growth. A
huge amount of foreign exhange flows out of the country every year. FDI also enhances social
welfare activities and helps build strong international relationship. The gaint investors demand a
lot of facilities, which are difficult to provide by a developing country like Myanmar. Most of the
MNCs in myanmar are not join with the stock exchange and they are not public limited
companies. So the people of Myanmar are deprived yet of the ownership and a share of their
profit in this time.
Thefore, while wages are low in myanmar, the country needs to improve labor
productively to incrase competitivense and move up the value added. The vaule added of worker
in myanmar is about US$1,500 per year, around 70 percent less than the average of seven other
Asian countries . Overall , myanmar left behind its regional peers in labour productivity across
all major sectors. For example, the labor productiviely in myanamr manufacturing sectors is
about 50% to 75% percent lower than the weighted average of manufacturing labour
productively in indonesia, thailand, and Vietnam. The Labour productivity in Myanmar
agriculture sectors is also low, at only about $1,300 per worker per year compared with about
2,500 in Thailand and Indonesia. This indicates that policy measures to tran for labour
productives in investment in human capital, technology and productively-enhancing capital
facilities as indeed (IMF, 2015).
Figure: 13# Comparison Manufacturing and Labour Productiy in Myanmar and its region
Moreover, It is widely accpted that FDI inflows are conducive to trade due to its
financing role in investment and the associated transfer of technology. Although FDI has
singnificantly incraseed in Myanmar, much of its has flowed into the gas sectors. To attarct FDI
into other sectors, particularly the budding manufacturing sectors its is essential to improve the
requlatory and business environment in Myanmar. Currently Myanmar ranks the lowest globally
in the criteria of starting a business on the world Bannk’s doing business 2015. Unsurprisingly,
its cost of starting a business is among the highest in the region (IMF, 2015).
Table:8# Approved FDI Inflows by Countries during, 1989- 2015 (USD in Million)
N
No Foreign
Capital
Total USD
1989-
1996
1997-
2004
2005-
2010
2011 2012 2013 2014 2015
1 Singapore 189
11817.614
N/A
1101.6
39
332.57
4
158.23 226.17
0
418.23
3
2300.1
21
4297.1
85
2998.062
2 Thailand
90
10352.331
-
1026.8
08
314.41
5
8226.87 13.000 529.07
2
165.67
9
88.187
3 Malaysia 52
1662.688
-
46.369 198.37
8
314.35 51.864 4.324 616.10
8
6.724 8.571
4 Indonesia
13
254.687
-
210.95
0
30.547 13.190
5 Philippine
s
3
147.173
-
6.667 140.00
0
0.506
6 Brunei
17
74.667
-
2.040 1.040 1.000 2.273 43.873 25.483
7 Vietnam 10
691.572
-
- 3.649 20.000 18.147 329.39
0
142.00
0
175.40
0
2.986
8 Cambodia - - - - - - - -
9 Laos
1
0.883
-
- 0.883
A ASEAN 25006.615 2808.4
33
1021.6
03
8719.45 296.18
1
765.94
7
3589.5
74
4690.2
5
3136.579
1 China 115 15418.363 28759 164,76
2
1264.46
8
8269.2
29
4345.7
28
231.77
3
56.920 412.182
2 Hong
Kong
117
7271.523
402.94
3
101,27
5
6.000 5798.2
77
84.839 107.10
2
145.529
3 Japan 83 608.862 167.02
1
44,613 19.841 4.328 54.063 55.711 85.740 197.128
4 S. Korea 122 3396.436 72.629 121,67
9
2729.38
9
25.572 37.942 81.205 299.58
6
35.219
5 Banglades
h
3 5.313 2.957 2.356
6 Macau
2
4.400
2.400 2,000
7 Srilanka 1 2.250 1,000 1.250
8 India 22 730.649 4,500 78.075 73.000 11.500 26.040 208.88
6
222.223
9 Thaiwan 6 12.249 0.760 5.489 6.000
B Other
Asia
27448.045
-
677.70
9
438.82
9
4121.77
3
8968.1
29
10247.
51
480.32
8
764.97
3
1020.637
1 Austria 2 72.500 72.500
2 Denmark 1 13.370 13.370
4 France 4 541.610 470.37
0
1.370 5.360 67.250
5 Germany 3 21.100 15.000 2.500 3.600
6 Netherlan
ds
13 981.991 238.83
5
10.301 303.40
5
430.450
7 UK 82 4058.613 1560.9
74
27.000 1071.98 99.831 232.70
0
156.86
4
850.75
9
58.505
8 Luxembo
urg
3 45.750 5.200 40.150 0.400
9 Sweden 1 14.300 14.300
C EU 5752.234 2249.3
29
112.87 1075.85 99.831 243.00
1
167.42
4
1279.4
64
489.355
1 USA 17 248.216 243.56 2.041
5
2 Australia 16 102.769 40.061 42.029 17.696 102.769
3 Canada 18 195.807 32.531 7.250 2.102 153.92
4
4 Panama 2 55.101 29.101 26.000
5 Cyprus 1 5.250 5.250
6 Switzerlan
d
3 30.382 3.382 27.000
7 Israel 12.400 2.400
8 Russia 2 94.000 94.000 94.000
9 Mauritius 3 39.584 30.575 9.009
1
0
U.A.E 3 47.192 41.000 4.500 1.692
1
1
Liberia 4 79.201 14.600 64.601
1
2
Marshall
Island
1 4.499 4.499
1
3
Norway 1 11.800 11.800
1
4
Qatar 1 4.500 4.500
1
5
S. Africa 1 1.309 1.309
1
6
Samoa 3 30.214
D Other
Regions
1026.01 330.60
0
119.98
7
135 26.000 6.602 292.26
2
202.578
Total 1033 59153.118
7501.9
25
249.45
3
10304.4
06
1998.9
60
1419.4
67
4107.0
55
8010.5
33
4915.819
Source: Koema: world Investment Report 2015 & Myanmar Investment Commision
4.2. Inflow of FDI in Myanmar
FDI inflow percentage by the world (1989-2015). This Fagure Pie-chart shows that
Myanmar total inflow FID by ASEAN countries are more than 42 percent which closely to catch
rest of the world of investment in all of years.
Figure: 14# Foreign Capital Inflow Percentage 1989-2015
FDI inflow by the world (1989-2015), the graph illustrated abit more detail by the
regions since 1989- 2010 as group of years then after country economic refroms views on singal
year until 2015. In this indication, ASEAN groups always line up importantly that reached to
8719.45 (million in USD) in 2005-2010 , the mount percentage overcame all the regions.
however, during the period of 2011, ASEAN investment Siganificantly drop then graduly
increase ASEAN FDI inflow 4690.25 (USD in million) in 2014 as hightest rate which can
comparable to other Regions at the same year. Therefoe, ASEAN investnment still very
importnatly remaind after refroms to Myanmar economic growth.
Figure: 15# Myanmar FDI Inflow by the World
ASEAN 42%
Other Asia 46%
EU 10%
Other Region 2%
Foregin Capital Inflow Percentage 1989-2015
FDI Flow by ASEAN countries (2011-2015), this fagure shows FDI inflow which
always have been important by Singapore and Thailand within ASEAN states in the past in1989
to until 2010 (see above table) . After 2011 economic reforms Singapore investment reach to
4,297.19 (Million USD) by 2014, which is duble number of Thai invesement in the same year.
Following by Thailand , Malayisa investment siganifically growth which account 2,300.19
(USD in million) which slightly catch up to Thailand in 2014. Rest of the ASEAN counties still
small numbers of capital inflow else Vietnam and Brunie . Vietnam highest number of
investment 329.39 (Million) in 2012 and Brunie FDI commited 43.873 (Million) in 2014 which
could be singanificat amounts compare rest of ASEAN counties.
Therefore, In all data of FDI graphs show clearly in the development Myanmar
foreign direct investment inflow after ASEAN engage with Myanmar Government since 1989,
which can link and role very importantly to Myanmar economic growth until present-day.
4.3. FDI, Net Inflow (GDP %)
Foreign direct investment are the net inflows of investment to acquire a last
management interest in an enterprise operating in an economy other of the investor. It is the FDI
net inflow value inward direct investment made by non-resident investors in the reporting
economy. It is the total of equity capital, reinvestment of earnings, and other long-term and
short-term capitals as record in the balance of payments. This series shows net inflows or new
0 2000 4000 6000 8000 10000 12000 14000 16000
ASEAN
Other Asia
EU
Other Regions
Total
percentage
mill
ion
Myanmar FDI inflow by the world
2014
2015
2012
2011
2005-2010
1997-2004
1989-1996
investment inflows less disinvestment in the reporting economy from foreign investors, and is
divided by GDP. The value of GDP, between 2012 and 2014, are noticeable rose from 1.79 to
2.17 and highest rate in 2013 reached to 3.84.
Figure: 16# FDI, Net inflow (GDP %)
Source: IMF
4.4. FDI, Net Outflow (GDP %)
Foreign direct investment net outflows are the value of outward made by the
residents of the reporting economy to external economies. This investment assets and liabilities
transferred between resident direct investors and their direct investment enterprises. It also
convers transition between resident and nonresident investors to fellow enterprise.
Myanmar FDI, balance of payments, capital & financial account in net outflows
(GDP%) mostly no data. It is due to Myanmar investment condition weakness and specific
investigation as Myanmar left trade in undocumented for many years. Therefore, it can conclude
that country resident investment also most unreported in national level for economic enterprise.
Here below available data was just before political-economic reforms, which
appeared in World investment report which account USD in millions.
Table:9# FDI outflow in Million
1
1987
1
1988
1
1992
2
2000
2
2005
2
2008
2
2010
2
2012
2
2014
2
016
7
5,018
4
18,023
1
6,492
1
3,998,32
0
1
9,005,55
0
3
1,690,0
00
N
/A
N
/A
N
/A
N
A
Source: World Investment Report 2016
4.5. FDI BOP Current US$
Figure: 17# Myanmar-Balance of Payments, capital & financial account-
Foreign direct investment, net (Bop, current US$)
Source: Knoema.
Above line graph illustrate in mount of capital value -4083, 839,112 that accounts in
87.76% in 2015. However, in the past, inflow capital percentages were kept-211,364,295 which
only just fewer than 10 percent of GDP growth in the country. The Access and compare forecasts
related to a country’s economic, demographic, and energy futures from leading international
institution, which accuracy tracking tool and select the most accurate forecast to supporting
analysis.
4.6. FDI, Net Inflow (BOP Current US$)
FDI net inflows (Bop, current US$) show the investment equity flows in the
reporting economy. It is the sum of reinvestment earning, capital equity. This investment
associated with a resident in one economy control in degree of influence on the management
process. At least, 10% of ownership shares of voting stock and investment relation. The below
line graph show the investment percent share from resident investors in 2010 to 2015.
Figure: 18# Foreign Direct Investment, Net inflows (Bop, current US$)
Source: worldbank
4.7. Net Inflow in Reporting Economy (US$)
According to the World Bank, foreign direct investment, net inflows in reporting
economy (DRS,US dollar ) in Myanmar was last measured at 756323000 in 2010. The FDI
shows the net change in foreign investment in the reporting country. Foreign direct investment is
defined as an investment which made to get lasting management interest in an enterprise
operating in a country other than that of the investor. This below graph has the latest recorded
value, related to indicators in FDI-net inflows in reporting economy (US dollar) in Myanmar.
Figure: 19# Myanmar net Inflow in Reporting Economy data (US$)
4.8. Factor Affecting FDI Climate in Myanmar
Since 2011, Myanmar has made significant reforms to improve its legal framework
in order to get an attractive business climate capable of generating more inward foreign
investment. The government has ship on an ambitious to strength the economy, and promotes
sustainable growth for international investors.
Over the past years, Myanmar’s attitude towards foreign direct investment (FDI) has
been positive and recent measures undertaken by the government and illustrate the government’s
commitment to future openness, including ongoing revision of the foreign investment law and
the special economic zone law and the award of certain tenders and licenses to foreign business
(U.S. Department of State, 2015). The government has also recently been developing advantage
to strengthen the role of the private sector in the economy. It is working closely with the World
Bank to improve the investment climate, including by strengthening public private dialogue.
In the doing business 1014 report of the World Bank ranks Myanmar 182 out of 189
economics. This the first time Myanmar was ranked according to this methodology and it’s
illustrating the early stages of business climate reforms in the country. This initiative allows
Myanmar to benchmark itself against regional peers and global reformers.
Overall, a number of steps in the investment registration process should eventually
be merged or removed. The cost of a procedure is directly correlated with the number of steps it
involves. Also, delegating licensing to the provincial level many contribute to smother
management of investment application. In the meantime, a certain degree of clarity has emerged
thorough the reforms, as is illustrated (OECD, 2014).
4.9. Impediments of FDI in Myanmar
It is widely accepted that FDI inflows are conducive to trade due to its financing role
in investment and the associated transfer of technology. Through FDI has significantly increased
in Myanmar, much of it has flowed into the oil and gas sectors. To attract FDI into other sectors,
particular the budding manufacturing sectors, it is essential to improve the regulatory and
business environment in Myanmar. Currently Myanmar ranks the lowest globally in the criteria
of case of starting a business based on the World Bank doing business in 2015. Not suppressing
the cost of starting a business among the highs in the regions while its regulatory equality is
among the lowest.
Especially, current specialized economic zone (SEZs) can partially address
development achievement. Due to the project is to develop infrastructure but this can be done
much quickly in SEZ enclaves. Many countries including Chain, Bangladesh, Cambodia, and
Vietnam have used this approach to attract FDIs (Lin 2012). Therefore, to improve country wide
regulatory environment and attract FDI, an immediate step, Myanmar can take it is approve the
investment law and company law. In addition, the CBM should speed up approval of foreign
borrowing related to FDI project while ensuring appropriate capital management for financial
stability.
On the other hand, while wages are allow in Myanmar, the country needs to improve
a labor productivity to increase competitiveness and move up the value added curve. Currently,
the value added of worker is about U$ 1,500 per year in Myanmar. Overall, Myanmar large
behinds its regional peers in labor productively across all major sectors. Example, the labor
productivity in Myanmar manufacturing sector is about 50 to 75 percent lower than the weighted
average of manufacturing labour productivity in Indonesia, Thailand and Vietnam. Labor
productive in Myanmar’s dominant agriculture sector is also low, at only about $1,300 per
worker peer year compared with about $2,500 in Thailand. Therefore, the description is to policy
and law measure such as training and investment in human capital, technology and productively
which to improve capital facilities for labour productivity based. (IMF, report, 2015).
4.10. FDI & Recent Economic Growth
The impact of FDI on economic growth in Myanmar is to perform across the
country, which the lagged growth rate of gross domestic product (GDP) over the five years. The
positive impact of FDI confined to higher income and job creation in the country. Therefore, FDI
link with economic growth though it is not the only parameter. The relationship between FDI and
economic growth always has been covering each other for positive development of the country.
In fact, FDI and Export keep economic growth since FDI acceptance over the
decades in Myanmar. Overall, the observation FDI structure actual amount of FDI inflows since
1989-90/2010-2011 until begging of country reforms. The pie chart show below the estimate of
FDI share percent in Myanmar economic growth. The highest growth rate was in oil and gas
sectors.
Figure: 20# FDI inflows percentage during the 1989-90/2010-11
Source:http://www.dica.gov.mm/dicagraph%.htm
Overall indication of FDI acceptance growth in manufacturing sectors, production
networks, industrial upgrading on technological development, human resource and infrastructure
development are impact directly into the country. However, unlikely the economic growth rate
quite slow due to unstable political condition over the military regime but them, we can be able
to look overall, the achievement of FDI inflow affect to country trade sector growth.
Figure: 21# Type of Commodities of Trade in Myanmar 2013/2014
Source: http://www.mnped.gov.mm/html_file/foreign_trade/s07MA0201.htm.
The total achievement of FDI flow huge impact country economics which share
more balance since economic freedom of the country. However, Myanmar still faces a lot of
struggle in economic development due to limit economic liberalization. However, overall, the
country economic prospect has been better and gain annual growth GDP following the years
since 2011 until 2015. This country also to gain potential growth in coming years that illustrate
according to Asian development bank outlook, the below table compare With Myanmar and
other regional countries. In early period FDI contact with Myanmar is very small compare other
selected regional countries due to unstable political situation. However, after country
unacceptably changed, FDI inflow directly impacts the GDP growth over the past five years.
Here the effectiveness of FDI like partly improved to Myanmar economic growth rate before and
after economic freedom since2011 (Ei Ei Phyoe, 2015).
Figure:22# FDI inflows of Myanmar compare with ASEAN countries and its economic
growth In 1990-2010 (USD in Millions)
Source: United Nations Conference on Trade and Development
According to above line graph, Myanmar FDI development process was quick slow
after 1990 due to limit open economic condition arose in the country. The figure illustrated that
FDI could not efforts to achieve economic growth compare other ASEAN Countries. However,
since its country economic reforms, the GDP dramatically growth it’s due to economic
liberation.
Figure:23# Myanmar GDP Growth after Political & Economic Reforms
Source: United Nations Conference on Trade and Development
Therefore, Based on the findings of this research, FDI has a positive impact on the
economic growth in Myanmar. The FDI inflows of Myanmar are quite smaller in the past; the
reason may be poor infrastructure to attract foreign investors and unstable political condition.
Secondly, as major FDI inflows are into the natural gas, fishing and mining sectors, the policy-
marker should intend promote FDI policies for further FDI inflows into the potential sectors such
as manufacturing, construction, financial and retail trade to be more beneficial for its economy.
According to, Asian Development Outlook 2006, overall indication, According to data
indication, here Myanmar GDP growth rate and inflection rate are higher than other ASEAN
counties. The current account balance in 2017, will be more sensitive than past years.
4.11. Prospects of FDI in Myanmar
Since the implementation of reforms, Myanmar has experienced rising foreign direct
investment (FDI) across various sectors, with the manufacturing industry attracting a significant
of foreign investors. Expecting the manufacturing sector will continue to enjoy a healthy growth
rate and rising investment drawn by various economic benefits and especially the development
of the country’s banking system.
According to the international Monetary Fund (IMF), there is a healthy GDP growth
rate of 8.05 percent. The industrial sector’s share of GDP in Myanmar increased from 11 percent
in 2008 to 21 percent in 2014. The special economic zone offer less bureaucracy as the
investment approval is needed only from the respective SEZ management committee rather than
from various government organizations.
Therefore, critically investors are total manufacturing FDI in 2014-2015 amounting
to $ 1.5 billion, a third of which comes from investment in Thilawa SEZ. “Although Dawei and
Kyaukphyu SEZs target to establish seaports of call for much larger vessels of about 300,000
DWT, the completion of all stages can go beyond 2020( Thin Zar Win Maw, 2015)”. Overall,
Myanmar has been successful in attracting significant inflow of FDI in the manufacturing sector
owing with favorable political and economic changes. ( Thin Zar Win Maw, 2015).
4.12. Facilities and Incentives for FDI
Myanmar set up various laws have been revised to facilitate investment and to ease
the operation of business such as foreign investment law, the Myanmar citizen investment law
and the arbitration law. Further legal changes to a better business environment are currently in
the making on Bank and financial institutions law of Myanmar. The evaluation and
transformation of the telecommunications industry sector a complete control into an open
market. It is the first competitive process like a gas-fired power plant in Myingyan, Manaday
region which show the efforts of democratic government to create an open and transparent
business environment (DICA, 2016).
Overall, the new Myanmar foreign investment law was reformed on the 2 November
2012, replacing the previous law of 1998. The purpose of this law is of course to encourage
needed foreign investment in Myanmar. In deep, The attraction of foreign investment, Myanmar
is offering to foreign investors a range of taxes exemptions and reliefs.
4.13. Policy Framework of Government toward FDI
Myanmar has recently transformed to implement fundamental political and
economic. Following the past years under economic embargo, Shortages of development
resources, capital, technology and management know how many drive Myanmar to actively join
the competition for FDI to the Southeast Asia. Once country economic had open, foreign
investors have quickly shown interest, with almost USD 24.4 billion of investment in the country
from April 2010 -2011. Yet, the Myanmar transition from a lower development level many still
put Myanmar in dire need to learn from regional countries experiences since they started the FDI
including industrialization system.
FDI attraction in the past decades could have important implications for Myanmar in
developing its FDI policy. First, Myanmar needs to have a suitable ideology towards FDI
promotion. FDI may constitute a good source of much-needed capital for economic development
in Myanmar’s early stage. However, the importance is the technology transfer and other positive
impacts embodied in such lows of capital. Therefore, Myanmar should pay good attention to
promoting such accompanied benefits, rather than the volume of foreign capital inflows alone.
Second, FDI policy must find itself fit in Myanmar’s broad framework for economic
reforms. The benefits from FDI would be more if it is based on comparative advantage in
industrial and trade structures. Improvement also is necessary to help the business environment
more favorable operations for foreign enterprise. In addition, the desired FDI inflows may not be
materialized effectively in the absence of supporting fundamentals for business operations,
specifically labor skills, and infrastructures. Need efforts to provide technical support for labor
training. Particularly, the areas related potential industries for FDI should be consistent with the
FDI policy itself.
Finally, FDI attraction is only able to succeed if the policy and economic
environment for private business operations embodies the essential substances of stability,
transparency, and predictability. Foreign investors would prefer a stable environment to make
good production and business decisions once they established presence in Myanmar for their
business. Meanwhile, sudden and unexpected changes of polices, including those related to
foreign-invested industries, should thus be detrimental of firms with significant adjustment cost
(Vo & Nguyen, 2012).
In fact, Myanmar had experiences in political and economic history over the last six
decades. In the past, unfortunate legacy of weak social trust and even weaker institution present,
particularly the current complex reforms face challenges for its policy makers. Therefore,
Myanmar economic reforms challenges are going to be particularly complex. For example,
consider how Myanmar can with its strong vested interests and weak institution:
“Encourage rice exports and ensure food security;
Pursue military and fiscal reforms simultaneously;
Liberalize trade and investment while ensuring inclusive growth;
Pursue natural resource development, while ensuring environmental and social safeguard;
Encourage public-private partnerships in infrastructure development with improving
national government effectiveness
Encourage glomeration economies by concentrating infacturer development, while
accelerating the development of ethnic states as a crucial complement to the peace
process (Vo & Nguyen, 2012)”.
Encouraging the formation of trade unions, Myanmar can learn from the experiences
of its successful neighbors countries, its policy reforms should be particular condition on its own
impact on history, institutions, politics, and culture.
4.14. Major Obstacles of FDI in Myanmar
In a few years past and some current implication of country FDI was leaded by
business cronies. There is no level playing field for the obstacle of foreign investments in
Myanmar. However, the country’s cronies have expanded their business opportunities not just
domestically but also internationally in most. For example, the cronies have been allowed to
establish big banking and insurance companies to provide services for potential international
investors, while the law technically blocks foreign investments from accessing those markets.
Therefore, “many believe that the real estate market is hyper-inflated due to the cronies have
invested in those markets for their money laundering purpose”. This statement must be
reasonably true given that majority of the people do not have sufficient amounts to trade off in
those markets. The other obvious example is in media industry, Upon government the relaxation
of censorship, the business cronies have expanded their investments in media industry. Of
course, many of cronies have largely invested in that for many laundering purposes. Therefore,
some of their investments are possibly aimed at influencing public and important political
decisions. Foreign investors know well its happened in the country for many years. Perhaps they
know better than the new regime does given their global business experiences. So, how it does
not necessarily means that foreign investments are not coming in the definitely well. So, it is a
bad practice what is Myanmar government doesn’t not cares about for the sustainable
development of FDI (Aung Tun, 2013).
On the other hand, it is seem that foreign investors are also concerned about a
convenient business transparency, political and economic stability. Moreover, the following
challenges might hinder FDI inflow into Myanmar.
Administrative barriers: the foreign investment commission screens foreign
investment proposal for export generation potential, technology transfer, and the size of the
investment.
Infrastructure barriers: while labor costs are relatively low in Myanmar compared
with other Asian countries. Foreign investors are not completely trusted of the challenges posed
by unreliable electricity, water and gas/fuel supply, substandard infrastructure in
telecommunication, in industrial estates and other logistical hurdles.
Information symmetries and imperfections: is one of the problems frequent
encountered by foreign investors. Foreign investors are having difficulties in getting enough
information and business environment information about Myanmar.
Policy barriers: The governments maintained of an official exchange rate are
barriers: every currency is difficult to access for exchange. The center government is only
available service for it. Rest of Bank, usually access only USD.
Other barriers: local political condition might also be one of the main barriers for
foreign investors. Investors might also be very tired of being criticized in the west for investing
with a long record of human rights violations in Myanmar.
In addition, due to lack of domestic consumption and cheaper goods coming from
china, local businessman is not interested in the AFTA agreement at the moment. They are also
not ready for AFTA yet, saying that unnecessary production costs under the military regime and
a poor economic infrastructure have made it difficult for businessmen even to sustain their
enterprises (Hla Theingi, 2011).
4.15. Current Account Balance, % GDP
Figure: 24# Myanmar Current Account Balance, % GDP
Myanmar recorded a current account deficit of 8.90 percent of the country’s GDP in
2015. Current account to GDP in Myanmar averaged 2.60 percent from 1998 until 2015,
reaching an all-time high of 6.77 percent in 2006 and a recorded low of 14.77 percent in 1998.
The current account balance as percent of GDP provides an indication on the level of
international competitiveness of Myanmar. In the way that happen, recording a strong current
account which have dependent on export revenues, but weak domestic demand. On the other
hand, import amount was higher than export. Therefore, the current account has a low saving
rates and high personal consumption as a percentage of income. The both graphs above illustrate
Myanmar current account to GDP actual values, and calendar of releases was updated until 2016.
4.16. Relationship between FDI and Economic growth
Figure: 25# Myanmar Economic Growth
Source: knoema.com
Myanmar Economic Growth data proved gross domestic product for Myanmar.
GDP per capita only estimated 400 USD dollars per year in 2000 and it’s dramatically growth
1200 USD per year in 2010, which positively impact to country economic liberalization. The
Annual GDP growth rate was unstable before until 2010. However, after country politically
transformed country economic growth directly impact from FDI. Following by below line graph
indication, Myanmar GDP inflection rate grew more positive: starting from 2011, higher GDP
inflection drop in 2012 and after a year, the country economic much stable growth which braking
record in 2015, reached to 14 percent at the end of the year.
Figure: 26# Inflation Rate of Myanmar GDP growth
Source: knoema.com
Overall, Myanmar inflection data includes the consumer price index for Myanmar,
the GDP deflator, and various indexes measuring the cost of living. The commercial import and
export market were unequal although country positive economic growth during FDI inflow in
2011 to 2015. However, the year of 2014 was most balance between export and import growth
rate. In overall consequence, country FDI push Myanmar economic growth in positive way in the
past five year.
Figure: 27# Myanmar Import and Export Volume 2011-2015
International Trade
Figure: 28# Balance of Payment
Source: knoema.com
2. Part Two:
4.1 Introduction
The principal of researcher assistant conducted this survey. The questionnaire is first
pre-tested and necessary point which ensures clarity and ease of response. Researcher also
considers the interviewees are mostly being student. Therefore, choosing question should be
flexible to answer for them rather than what should be asked for business man or investors in
Myanmar. However researcher believes, this survey would help for any other students,
researchers, business men and investors who are interesting doing business in Myanmar.
Therefore, this study is good significant research about Myanmar FDI and its economic growth
based on primary and secondary sources.
A total survey of nighty five people, consisting of 90 percent are student and rest are
working people in Bangkok, Thailand. This survey is to know how recent economic growth link
country FDI and its to find from Myanmar student and workers observation and their
experiences. Therefore, the possible and effective would bring to readers. The data analysis and
explanation would go through graphs which describe short and clear result for readers
4.2. Survey Profiles from Respondents
Numb
er of Respondents
Percenta
ge of respondents
Total Respondents 95 100.0
Gender
Female 55 57.89
Female 40 42.10
Missing - -
Background
Student 50 52.63
Part time employees 35 36.84
Business man/women 10 10.52
Age
25 or less 15 15.78
26-35 35 36.84
36-obove 45 47.36
Year of Business Experience
No experiences 20 21.05
1 or less 25 26.31
2 -5 35 36.84
6-above 15 15.78
Education level
High school -
Under graduate 20 21.05
Post Graduate 75 78.94
Interest in investment
Yes 50 52.63
No 15 15.78
Don’t Know 30 31.75
Political Value
Average 25 26.31
Low 55 57.89
Very low 15 15.78
Policy Change
Do Not change 0 0.00
Very few 15 15.78
Few 35 36.84
Very Much 45 47.36
Determiniton of Foregin Invistor to
come
Raw Material availability 25 26.31
Investment incentives 13 13.68
Cheap labour 25 26.31
Market Potential 25 26.31
Growth macroeconomic 5 5.26
Others 2 2.10
Obstical to Expend FDI
Exchange rate 6 6.31
Demand for product 45 47.36
Problem of getting credit 4 4.21
High level of interest rate 5 5.26
Lack of demand 3 3.15
Infrastructure problem 32 33.68
Others 0 0.00
Serious types of business uncertainty
Exchange rate 5 5.26
Demand 5 5.26
Interest rate 15 15.78
Politic 55 57.89
Taxes 10 10.52
others 5-
persons= Ethnic
affair and
Muslims
minority
problem need to
solve ,
5.26
Investment climate
Favorable 54 56.84
Not so favorable 31 32.63
Unfavorable 10 10.52
Good place for private investment
Yes 65 68.42
No 25 26.31
Don’t Know 5 5.26
IF No, Measure current situation?
Promote private investment 25 26.31
Advertise in foreign journals 16 16.84
Sponsor Entrepreneurs 9 9.47
Others 45=
use different way
to promote such
as economic
forum, make
political situation
is better, open
liberalize
business sectors,
promote tourism
47.36
Familiar with investment code?
Yes 20 21.05
No 75 78.94
Demand place to work in
Myanmar
Private enterprise 18 18.94
Inter-organization 13 13.68
NGO 14 14.63
Public Enterprise 30 31.57
Academic Affairs 10 10.52
Media 8 8.42
Others 2=
technology and
software
development
2.10
AEC 2015 and impact on Myanmar
Business
Favorable 32 33.68
Very favorable 22 23.15
Unfavorable 6 6.31
Very Unfavorable 3 3.15
Don’t know 32 33.68
Recent Economic Growth due to FDI
Agree 73 76.84
Partly Agree 17 17.89
Disagree 5 5.26
Assessment of contents of this survey
Excellent 28 29.47
Good 60 63.15
Adequate 5 5.26
Poor 2 2.10
4.3. Survey Analysis
Figure: 29# Background of Interviewees
Figure: 30# Age, Education & work Experiences
F
igure:
31#
Determi
niton of
Foregin
Invistor
to come
0
20
40
60
80
100
120
Gender Male Famale Missing
Number of Respondent
Number of Percentage
0
10
20
30
40
50
60
70
80
90
No of Resonsent
No of Percentage
Figure: 32# Obstical to Expend FDI
Figure: 33# Demand Place to work in Myanmar
0 5 10 15 20 25 30
Raw Material avaliability
Investment Incentives
Cheap labour
Market Potential
Growth Macroeconomic
Other
No of Percentage
No of Responsident
0102030405060708090
100
No of Percentage
No of Respondent
Figure:34# Recent Economic Growth due to FDI
In Overall indication, FDI flows are more positive linking with economic growth in
Myanmar. However, more male interviewee, age between 36 and above responded of their
experience which more likely agree with the main statement that Myanmar FDI flow directly
impact economic growth. Although, interviewee response positively, there are a lot of struggle to
achieve high demand in economic. The main problem is to avoid political rick which currently
sensitive level according to survey. The determination of FDI is generally attractive in the
country where high interest in market potential, cheap labor and raw material availability in the
No of Respondent
No of Percentage0
10
20
30
40
No of Respondent
No of Percentage
0
20
40
60
80
100
120
140
160
Agree Partly Agree Disagree
73
17 5
76.84
17.89
5.26
No of Respondent No of Percentage
country. In addition, investment climate is a more favorable in a survey result which over 55
percent sees positive impact after political and economic reforms. However, most of interviewee
also shows their awareness the country unstable political situation. By the contract, lack of
infrastructure, demand for product still under the track.
Overall, most of student show their interest on NGO and Public sectors rather than
private job or other affairs. It is due to opportunity risk or dependent variable in the country
economic value proposition. In addition, in this survey hypothesis that foreign direct investment
push more positive way in Myanmar economic growth which link and show as Myanmar good
place for next investors as well as emergence market growth and AEC awareness in the region
are significantly growing that can bring more advantage to Myanmar and economic growth in
recent years and future.
