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Burma attracted US$8.01 billion in foreign direct investment (FDI) in the fiscal year ending 31 March, a figure more than double that of 2013-14, according to the country’s Directorate of Investment and Company Administration (DICA).
“The oil and gas sector topped the list at $3.22 billion, followed by transport and communication with approved capital of $1.68 billion, and manufacturing with $1.5 billion,” state-run Global New Light of Myanmar reported on Wednesday.
The real estate sector attracted $0.78 billion while $0.36 billion was approved for the hotel and tourism sector, according to the report.
Two hundred and eleven firms invested in Burma, officially known as Myanmar, over the past 12 months, DICA said. China remains the top foreign investor with 74 Chinese firms having invested $14.7 billion since 1988-89. Singapore is the second-largest source of FDI followed by South Korea and Hong Kong.
Economist Sean Turnell from Australia’s Macquarie University acknowledged that this week’s FDI figures from the government were “impressive”, but noted that the potential of some industries is as yet undeveloped, saying: “the relative size of energy and other extractive sector industries tells us the economy has yet to undergo transformative change.”
The World Bank Group noted that FDI inflows in Myanmar have grown rapidly from around 2.5 percent of Gross Domestic Product (GDP) in 2008-09 to an estimated 5 percent of GDP in 2014/15.
“FDI can play a very important role in transferring knowledge and technology to Myanmar. This can help improve competitiveness and productivity,” said the World Bank Group’s Rangoon office. “This is already evident through falling communication costs thanks to recent investments in the telecommunications sector.”
It further noted: “Myanmar has the potential to emulate other countries’ experience where FDI has helped to diversify production, move up the value chain, and create strong export sectors.”
Burma recorded FDI of $4.1billion in fiscal year 2013-14.
DICA secretary Aung Naing Oo was quoted in the media this week saying that Burma’s FDI target for the 2015-16 fiscal year is $6 billion.
Established in 1988 under the Ministry of National Planning and Economic Development, DICA’s mandate was to assist Burma’s transition to a more market-oriented economy. A new Foreign Investment Law was revised in 2012 following the appointment of the Thein Sein administration. According to DICA: “The new Foreign Investment Law is aimed at creating a more investment friendly climate and encouraging greater cooperation between local and foreign businesses operating in Myanmar.”