..While investors, banking and economic services have seen the most interest in the petroleum and gas sector, it is anticipated that telecommunications and production sectors will be the focus in the years ahead as the economy develops.
Data from the Investment and Company Administration Directorate (DICA) indicates that the manufacturing and telecommunications sectors have had the greatest interest from foreign investors since 2016.DICA information showed that manufacturing sectors have seen annual investments ranging from US$ 1 billion to US$ 2 billion, while telecommunications have earned US$ 2 billion annually over the past three years. The permanent secretary of the Ministry of Investment and Foreign Economic Relations, U Aung Naing Oo, expects investor interest in the services, production and telecommunications sectors to continue to improve in the coming year.
YGA Capital Managing Director U Thura Ko Ko agreed that the regions attracting investor interest will be telecommunications and financial services. “It’s about whether the government’s strategy is sound; telecommunications has excellent policy support,” he said.
U Aung Naing Oo observed that, since the nation liberalized the insurance market by licensing five overseas players in early April, banking and economic services, and in specific insurance, will be one sector to watch.
“Insurance is one of the hot industries that will surely develop in the coming year, facilitating capital flows into the nation and creating a lot of fresh work possibilities,” said U Aung Naing Oo.
U Myint Zaw, AYA Bank’s managing director, estimates that the banking sector as a whole looks more competitive and promising now that overseas banks are permitted to open branches and provide financial services in the nation.
“Banking has been reformed and is now stronger than before, which is crucial for the country’s growth and development,” he said.
By contrast, while the oil and gas industry continued to rank at the top in terms of total foreign investments, no large-scale investments have been made in the last three years.
Investments in oil and gas peaked at US$ 9 billion in the fiscal year 2015-16, according to DICA. The complete value of investments in the sector has stagnated, however, with 154 enterprises reporting investments worth US$ 22.41 billion in May this year compared to the same amount of enterprises and investment value in May 2016.
U Kyaw Kyaw Hlaing, chairman of the Smart Group of Companies, pointed out that oil and gas remains an significant sector and that the income of the country may be impacted if investment falls. “It was quiet, but as tenders were invited, we expect to see interest,” he added.
The Ministry of Electricity and Energy recently announced that it plans to invite tenders for 33 oil and gas blocks this year.
Industry watchers think that after the latest tariff hikes that took impact on July 1, the energy industry also has growth potential. While in the past investors showed interest in electricity generation, they were unwilling to commit because electricity rates were smaller than the price of manufacturing. Now, businesses are betting that interest may return.
In order to speed up economic development, the government has also committed to a higher spending budget in the coming 2019-20 fiscal year, including on electricity and transport.
U Aung Naing Oo said that the instant need in Myanmar remains appropriate physical infrastructure. “We’re going to struggle to grow without the necessary infrastructure and that’s why investors from the private sector are needed as the government can’t afford to construct this infrastructure on its own,” he said.
Reference : Myanmar Times