Myanmar expects to attract more investment as manufacturers seeking to relocate production from China to skirt US tariffs encounter capacity constraints in Vietnam. Myanmar aims to woo a total of US$5.8 billion in foreign direct investment this year and cut back the red tape that deters some companies, according to a senior government official, Aung Naing Oo. One advantage for Myanmar – where about one-third of the population lives in poverty – is that Europe and the US offer preferential export terms to boost growth.

At the same time, the US$71 billion economy continues to face traditional obstacles such as insufficient supplies of electricity and industrial land. Recent evidence suggests Vietnam has pulled ahead in the race to lure producers but neighbours including Thailand and Indonesia are stepping up efforts to attract them. Clogged infrastructure is one of the risks for Vietnam, where shipping container capacity will need to grow at almost twice its 10-12 per cent pace of the past decade to keep up with new demand, Bloomberg Intelligence research shows.

Net foreign-direct investment into Myanmar collapsed to 1.8 per cent of gross domestic product last year from 6 per cent in 2017, World Bank data shows. The World Bank has said that production relocation sparked by the US-China trade war is an opportunity for Myanmar. The lender expects the country’s economic expansion to climb toward 7 per cent by 2022, even as domestic conflicts – including in Rakhine – remain downside risks because of their potential impact on investor sentiment.

Source: South China Morning Post

1897total visits,1visits today