While speaking at the opening of the Invest Myanmar Summit organized by the ruling National League for Democracy (NLD) in January 2019, with the aim of drawing foreign direct investment (FDI), State Counselor Aung San Suu Kyi understandably left no stone unturned in projecting Myanmar as an ideal investment destination.
Previously, Aung San Suu Kyi faced severe criticism for her handling of the Rohingya issue in the Rakhine province of Myanmar. According to a , there were severe against Rohingya Muslims (including mass killings and rape), and as a consequence over of them were compelled to flee the province. Her critics accused her of not just turning a blind eye to the violations, but also supporting the military’s excesses. Her supporters however argued that she was compelled to do so due to political compulsions.
At the opening of the summit, Aung San Suu Kyi drew attention to some of the key reforms undertaken by the NLD government. Some of the highlighted, according to the , were: introduction of new investment and companies laws (which are more investor friendly), liberalization in retail and wholesaling and education sectors (these are likely to play important roles in Myanmar’s future growth), revamping of the Myanmar Investment Commission, setting up of a new Investment and Foreign Economic Relations Ministry, and the Myanmar Sustainable Development Plan (MSDP).
Aung San Suu Kyi also highlighted other of Myanmar: its geographical location, demographic advantages, rising middle class, etc. She said, “With our advantageous geographical location, relatively low labor costs, and the enormous potential of our people, it’s the best time for grasping the opportunity that will arise as the global pendulum swings from West to East.”
Aung San Suu Kyi mentioned Asia in general and ASEAN in particular emerging as an economic powerhouse in the last four decades. She said that Myanmar would try to attract investments to the tune of over the next two decades. In November 2018, Myanmar parliament approved the setting up of the It is headed by U Thaung Thun, the , and will ensure better coordination between various government players and help in providing information and assistance to investors faster.
Diplomats and investors from a number of countries were present at the summit. Myanmar was specially targeting countries/regions in the Asia-Pacific — China, Hong Kong, Japan, Korea, Thailand, Singapore, India, Australia, as well as western countries like United States and the United Kingdom. Chief Ministers of (including the Chief Minister of Rakhine) were present at the summit, and made presentations regarding potential opportunities. Some of the projects showcased were , and officials from the province, stated that may help in bringing about overall stability.
The summit came at a crucial time. Rating agencies as well as multilateral organizations were downgrading Myanmar’s growth estimates. downgraded Myanmar’s growth for the fiscal year 2019 from 6.6 percent to 6.3 percent. The year 2017-2018 witnessed a for Myanmar. In 2016-2017, its FDI was over USD , while in 2017-2018, it was estimated at USD.
Apart from this, a survey of 150 European companies which invested in Myanmar by the European Chamber of Commerce (Eurocham) also underscored the fact that overall , not just due to r but also due to the overall political situation as well as human rights violations in Rakhine. While these companies were planning to re-invest in certain regions like the Shan state, planned re-investments around , the capital, and Mandalay, which was being aggressively promoted as an economic destination, had decreased.
Even Myanmar’s own officials acknowledged that it was not just red tape and outdated laws which were dissuading investors, it was also the damage to the country’s image caused by the handling of the .
In spite of the projected economic slowdown and issues of red tape, Myanmar is likely to receive investments from China, Japan, ASEAN countries as well as some western countries due to its potential and geographical location.
As of March 2018, Myanmar received a of USD a period of 30 years (China was the largest investor followed by Singapore and Thailand). The country has been trying to reduce its dependence on China and has been showcasing projects like Thilawa Special Economic Zone (jointly developed by Japan and Myanmar) to encourage other investors.
While delivering her at the in Singapore in November 2018, Aung San Suu Kyi stated, “I am happy to be able to claim that the Thilawa SEZ has become a crowning success in a very short period of time, receiving a total investment of $1.491 billion — a figure that reflects the dollar value of those investments actually entering the economy.”
However, a number of countries (especially European countries) are still wary of investing in Myanmar due to the Rohingya crisis, as has been pointed out in the survey. It is not just western democracies; for a very long time ASEAN countries also kept themselves out. Countries like Malaysia and Indonesia have been quite vocal in their disapproval. On the sidelines of the ASEAN Summit in November 2018, Malaysian Prime Minister Mahathir Mohammad lashed out at Aung San Suu Kyi, saying that she was trying to .
While Aung San Suu Kyi sought to reach out to a large number of countries during the Invest Myanmar Summit and showcased projects where countries other than China had invested, China remains the most crucial external player till date and is involved in some important infrastructural projects, for example the Kyaukphyu Port in Rakhine province. The terms and conditions, including and of this project had to be re-negotiated due to growing resentment against China and fear of falling into a debt trap.
India too has been seeking to increase its economic linkages with Myanmar. Myanmar is India’s gateway to Southeast Asia – the and the Kaladan multimodal project, which seeks to connect Sittwe port (Rakhine province) with Mizoram (India), are strong illustrations of this point. Infrastructure has also been upgraded at to give a boost to bilateral trade, although currently it is operating way below potential. There are also attempts to enhance linkages between Northeast India and Myanmar. While India has expressed its towards the Rohingya issue on a number of , the government is facing criticism for not taking up the issue more forcefully with Myanmar.
Interestingly, even Myanmar’s own officials acknowledged that it was not just red tape and outdated laws which were dissuading investors, it was also the damage to the caused by the handling of the . The official also admitted that the detention of two Reuters journalists, who had been covering the Rohingya crisis, in did not help the country’s brand value.
There is absolutely no doubt that Myanmar possesses a number of advantages, but it should seek to address the concerns of external players with regards to the Rohingya issue. Myanmar has been attempting to reduce its dependence on China, but the lack of transparency on the Rohingya crisis and an indifference to human rights issues will lead to a situation where it will not be left with too many options. If Myanmar wants to emerge as a success story, investment summits, a few big-ticket projects or Aung San Suu Kyi’s speeches are not sufficient. Its success as a democracy will depend upon its commitment to human rights and freedom.