Where Do Key Investment Opportunities Lie in Myanmar?

For those who are seeking business opportunities in Myanmar, the following sectors are highlighted to accelerate the country's sustainable economic growth.

 

Agriculture

 

Myanmar is an agro-based country with a vast potential of fertile land and abundant water resources. Given the landscape profile, topographic dimensions and different climatic areas, not only perennial plants but also crops such as rice, pulses, beans, fruits, and vegetables can be easily grown. Key opportunities are:
 

1) Agricultural input industries

    ▪ Distribution of low-cost irrigation systems to rural communities (e.g. solar-powered, with instruction)

    ▪ Leasing of agricultural tools and machinery

    ▪ Distribution of high-quality seeds for higher yields

    ▪ Establishment of the production of fertilizers, crop protection chemicals etc.

2) Product and market development

    ▪ Contract farming, i.e. direct sourcing from rural communities (based on partnership agreements)

    ▪ Introducing value-added production/processing based on local agricultural produce (e.g. groundnut, sesame)

    ▪ Establish packaging/canning industry for agricultural produce

3) Agriculture-related services

    ▪ Establishment of research and training institutions or demonstration farms on integrated agriculture, crop sequencing, fertilizer use, organic agriculture, and agriculture-related business skill development

    ▪ Construction of warehouses and cold storages

    ▪ Microfinance, micro-insurance, and trade finance services for farmers

 

Aquaculture & Fisheries

 

Given Myanmar’s 2,832 kilometers of coastline along the Bay of Bengal and in the Andaman Sea, fisheries represent – as a natural matter of fact – an important opportunity for communities and businesses in the coastal areas of Myanmar. Foreign investment in the fisheries sector is permitted to foreign investors in a joint venture with a local company. Key opportunities are:

    ▪ Capture and aquaculture of different types of fish, shrimp, and prawn

    ▪ Fish food production

    ▪ Fish and seafood processing facilities

    ▪ Cooling, canning, and packaging facilities

    ▪ Establishment of education and research institutions to broaden knowledge as well as the base of human resources available to the fisheries sector

Recently, fishery products from Myanmar received approval to be exported to the European Union by certified producers. Myanmar enjoys preferential tariff arrangements with the European Union as a least developed country (LDC).

 

Urbanization 

 

Likewise to other economies, Myanmar is experiencing a gradual migration process of the population from rural to urban areas of Myanmar driven by a more diverse set of educational, professional and income opportunities. Hand-in-hand with urbanization come challenges as well as opportunities for local and foreign businesses addressing these needs and finding durable solutions for better and smarter cities in a more livable and a sustainable environment. Key opportunities are:

 

1) Real Estate& Construction

    ▪ Realization of projects for affordable housing in Yangon, Mandalay and second-tier cities in all states and regions

    ▪ Restoration of colonial heritage buildings in Downtown Yangon

2) Urban solutions

    ▪ Investments into systems for the improvement of public transport in urban agglomerations

    ▪ Establishment of parks, facilities for recreation and entertainment

    ▪ Provision of private healthcare facilities

    ▪ Establishment of private education institutions (e.g. private universities, business schools, certified vocational training)

    ▪ Smart traffic management and road safety solutions

    ▪ Urban waste management

    ▪ Water treatment facilities

3) Production and distribution of consumer goods and lifestyle articles

 

Tourism and Hospitality

 

The tourism and hospitality sector in Myanmar is evolving rapidly since the political and economic opening of the country – the number of visitors to the country has been growing nearly exponentially since 2011. At the moment, foreign tourists (on their first short-term visit to Myanmar) mostly visit Yangon, Bagan, Inle Lake/Nyaung Shwe as well as Mandalay. However, Myanmar offers to date unexplored treasures of natural beauty in the whole of the country from Kawthaung in the tropical South-East to Putao in the Himalaya. Key opportunities are:

 

    ▪ Exploring new high-potential investment locations in hospitality and tourism
    ▪ Developing eco-tourism along with respective activities such as trekking routes or tours
    ▪ Building cultural and community-based tourism


Foreign investors may engage independently in hotel developments of 3-stars or higher standard, whereby local investors are encouraged also to consider opportunities in offering budget accommodation through guesthouses at international standards. For foreign companies, investments in tour companies, travel agencies, budget hotels, amusement parks, and tourism-related public infrastructure projects are permitted on a joint-venture basis.
 

Power Sector

 

Beyond 92 identified larger-scale hydropower development (for the future development of potentially additional 46.1 GW) along the Ayeyarwaddy, Sittaung, Salween and Chindwin River systems, also smaller-scale hydropower plants, as well as other sources of energy (i.e. solar, wind, gas), have high potential to play a significant role for national power supply.

 

The installation of considerable additional capacity to the current 4,422 MW as well as the rapid construction of transmission lines are national priorities. The power sector of Myanmar opens up abundant and immediate opportunities to foreign and local investors. Key opportunities are:
 

    ▪ Construction of medium to large-scale hydro and gas-fired power plants in Public-Private-Partnerships

    ▪ Investments into the transmission system

    ▪ Realization of small-scale hydropower projects e.g. to supply a village tract

    ▪ Establishment of solar energy farms and wind power farms

    ▪ Provision of efficient and practical solar-power kits to communities currently off-grid as well as of solar-power based solutions

    ▪ Upgrading of the current power infrastructure in urban centers and industrial zones

 

Manufacturing

 

The manufacturing sector opens up opportunities due to the significant domestic market of Myanmar, direct access to strategic markets of Southeast Asia (ASEAN Economic Community) as well as to China and India. Preferential tariff arrangements for exports of the least developed country Myanmar to various geographies (e.g. European Union, Japan) create distinct economic incentives for investments in Myanmar. Investments are encouraged in the following industries:


    ▪ Labor-intensive industries
    ▪ Agro-processing industries
    ▪ Production of building materials
    ▪ Gemstone processing industries
    ▪ Capital-intensive industries
    ▪ Wood-processing industry
    ▪ Paper and cardboard industry
    ▪ High-tech industries
    ▪ Chemical industries
    ▪ Industrial services


To facilitate investments in manufacturing, three Special Economic Zones (SEZ) in Thilawa (near Yangon), Dawei in Myanmar’s Southeastern Tanintharyi Region as well as Kyaukphyu in Rakhine State are currently under development along with a separate legal framework granting investment incentives to companies in these SEZ. Thilawa started its operation in 2015 as the first SEZ of Myanmar.
 

Infrastructure Development

 

Myanmar is in an excellent position to access to regional and global factor markets as well as product markets. Improvements in Myanmar’s infrastructure (in terms of particularly power infrastructure, road, rail, air, and ports) have the highest priority by the Government in order to establish efficient national and international supply chains for future economic growth. Key opportunities are: 

 

    ▪ Road, bridge and railway construction
    ▪ Construction and operation of airports
    ▪ Construction of ports
    ▪ Establishment and retrofitting of industrial parks and supportive infrastructure
    ▪ Logistics infrastructure

 

Extractive Industries (Minerals/Oil and Gas)

 

Myanmar is a candidate for the Extractive Industries Transparency Initiative. Responsible investments in extractive industries are necessary to consider the implications on livelihoods of the local population, the environment, societal factors as well as the political economy in specific areas. Key opportunities are:

 

    ▪ Exploration and feasibility studies for projects in mining as well as oil and gas

    ▪ Medium to a large-scale operation of mines and wells

    ▪ Offshore and onshore opportunities for the exploration and extraction of oil and gas

    ▪ Establishment of petroleum-based industrial, processing and supportive facilities

    ▪ Value-added production based on natural resources

    ▪ Supporting industries, such as machinery, maintenance, consulting services

    ▪ Establishment of education and research institutions to broaden knowledge and the base of human resources

 

Forestry-Based Industries

 

In order to prevent the continuation of unsustainable forestry practices and large scale log-harvesting particularly of teak, the Government of Myanmar strictly and effectively abandoned the export of unprocessed teak and hardwood in April 2014.

 

The structural change offers opportunities to foreign and local investors to support this emergence of value-added and sustainable forestry, e.g. by establishing new wood-processing industries in Myanmar. Furthermore, the stronger engagement of the private sector in the plantation business to restore forests in an environmentally and economically sustainable way is desired. Key opportunities are:


    ▪ Establishment of the wood-processing industry
    ▪ Expansion of bamboo forests and bamboo-based production
    ▪ Rubber-based industries
    ▪ Teak and hardwood plantations
    ▪ Sandalwood-processing industries
    ▪ Community-based forestry


Myanmar is undergoing a fundamental political and economic transformation to a democratic, federal and peaceful national state. Additionally, the Government of Myanmar is highly committed and warmly invites responsible investors to pursue business opportunities that help grow and shape the “New Myanmar” and accelerate the realization of national development goals through sustainable economic development on a countrywide scale.
 

Sources

https://www.dica.gov.mm/en/why-invest-myanmar
https://www.dica.gov.mm/en/investment-opportunities 

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