By Kyaw Htike Soe
THE Yangon Region Investment Committee gave the nod to 10 foreign investment projects at its monthly meeting held in Yangon City in March. With the total capital amount of US$ 21.98 million from six countries in the manufacturing sector, the approved projects are expected to create up to 7,334 job opportunities for Myanmar citizens. Nearly half of foreign investment projects into Yangon Region this fiscal year came from Asian countries, Chairman U Phyo Min Thein of the Yangon Region Investment Committee tasked with reviewing and evaluating foreign investment proposals into the region told the reporters.
“Some foreign companies want to pump investment into garment sector which can employ many people. At the same time, we are trying our best to create an attractive and investor-friendly business environment in the region,” Chief Minister of Yangon Region told the reporters.
The chief minister once told the reporters that he wants to make Yangon into an environmentally friendly and livable city. In addition he also pledged to draw up a plan to promote foreign investment in the region.
Most of the foreign investment flowed to manufacturing, transport and communications, livestock and fishery, industrial estate, hotels and tourism, oil and gas, agriculture, power generation and mining sectors. According to the new investment regulations, the Yangon Region Investment Committee is entitled to permit foreign investment proposals worth US$ 5 million.
The Myanmar Investment Commission (MIC) is required to grant foreign investment proposals worth above $5 million. The New Myanmar Companies Law which came into effect on 1 August 2018 allows foreign investors to take up 35 per cent stake in local businesses. The MIC said that Yangon Region is expected to lure more FDI in the years to come. In addition, Yangon Region has also long been touted by local authorities as a promising investment destination for foreign investors and domestic entrepreneurs. The local government assures that the foreign direct investment is a key drive for economic growth and is committed to an open, fair, competitive and clean investment policy for local and foreign investors. The local government has taken a number of significant steps to ensure that it will be much easier for foreign investors to do business in Yangon Region.
Special economic zone projects to be established in Yangon Region are expected to become a major resource that can boost economic growth, create job prospects and bring new hopes for local people.
The local government also invited local entrepreneurs and foreign developers to inject investment into road construction, airport upgrade, industrial zones, new towns, and beach resort projects as well hotels and tourism industry in Yangon Region. Due to potential market and economic growth coupled with abundant young workforce and better infrastructure, Yangon Region draws the interest of international and local investors for setting up economic zones, port terminals and industrial parks. Development of infrastructure projects in the region will also increase economic growth and provide job prospects for residents.
There are around 30 industrial zones including the Thilawa Special Economic Zone in Yangon Region that represents more than 50 per cent of the total industrial zones in the Southeast Asian country. Thilawa SEZ, Myanmar’s first special economic zone is located on outskirts of Yangon City and had become fully operational since September 2015. The governments of Myanmar and Japan have agreed to jointly set up the special economic zone covering an area of approximately 2,400 hectares of land. A total of 81 factories in which around 40 businesses from Japan and 27 firms from Singapore have started commercial operations in Thilawa SEZ with an investment amount of US$ 1.92 billion. Japan topped the list of foreign investors in Thilawa SEZ, accounting for around 37 per cent of the overall investment, followed by Singapore and Thailand.
Myanmar’s Ministry of Construction and the Korea Land and Housing Corporation from the Republic of Korea inked a deal to jointly establish an industrial complex in Hlegu Township, Yangon Region on 7 August last year. Under the agreement, an industrial zone named “The Korea-Myanmar Industrial Complex” will be set up on nearly 600 acres of land in Nyaung Hna Bin Village, Hlegu Township at an estimated cost of about US$ 110 million. The industrial complex is designed to include SMEs, heavy industry and a vocational training school and will support the development of industrial, export and human resource sectors in Yangon Region. Around 200 Korean firms are expected to pour investments into the industrial complex which will create 50,000 to 100,000 job opportunities for local people and generate US$ 10 million in taxes annually.
The local government also signed an agreement with a consortium from Hong Kong and Taiwan to build a US$ 500-million industrial zone on 2,200 acres of land in Htantabin Township, Yangon Region. Yangon Region accounts for 23 per cent of the gross domestic product of the country, with annual GDP growth at an average of 9.2 per cent. China topped the list of foreign investors in Yangon Region. Yangon Region attracted a total of US$ 20.2 billion between 2011-2012 FY and 2018-2019 FY in foreign investment from 845 enterprises since the fiscal year 1988-89. About 60 per cent of foreign direct investment came to Yangon Region and around 30 per cent of total FDI flowed to Mandalay Region while the remaining regions and states received a small share of total capital inflows.
Yangon Region received over US$ 2.21 billion of foreign direct investment in 2015-2016 FY, more than US$ 3.94 billion of FDI in 2016-2017, nearly US$ 3.3 billion of FDI in 2017-2018 FY, almost US$ 2.6 billion in 2018-2019, and US$ 465 million in the current fiscal year.
Ref; Yangon Region Investment Committee (YRIC)
