Myanmar must be more proactive and enthusiastic across its attempts to attract foreign investors, such as visiting with the countries it plans to attract investments from. It should also better communicate developments that would be of interest to investors, such as recent directives on liberalising the education and retail sectors, Lee Hyuk, Secretary General of the ASEAN-Korea Centre, told The Myanmar Times during an interview yesterday. 

“Local officials and businesses need to visit the countries from which they are targeting foreign direct investments (FDI), such as South Korea, and engage with potential investors there so that people are aware of what Myanmar has to offer,” Mr Lee said during the sidelines of the Myanmar-Korea Investment Promotion Seminar.

Myanmar can also do a better job communicating developments relevant to foreign investors. These include recent measures to open up the domestic education and retail sectors to foreign investments in April and May, respectively.
More could have been done to promote the retail sector to overseas investors, for example.“South Korea is globally competitive in the retail industry. E-mart, for example, is planning to open in Vietnam and has plans to expand into neighbouring countries including Myanmar,” Mr Lee said. 

South Korea’s education system is also globally renowned. “With the liberalisation of the education sector and IT development, I believe more lively exchanges in the sector between our two countries will flourish,” he said.

As such, Myanmar should take advantage of that opportunity to promote the benefits of investing in the domestic education sector.

Regional competition

Myanmar must also do more to promote itself as an investment destination as competition for South Korean investments is intensifying across Southeast Asia. 

“For example, in Vietnam, which receives the highest amount of investments from South Korea, companies like Samsung Electronics enjoy favourable treatment incentives to do business in the country. Myanmar must do the same.”

Mr Lee, who is the former South Korean ambassador to Vietnam as well as the Philippines, added that “Vietnam is constantly investing in developing its roads and railways. But the Phillippines have invested less in infrastructure. As a result, Vietnam now attracts the highest amount of global FDI in the region,” Mr Lee said. 

In Myanmar, not only is electricity in short supply, infrastructure such as roads, railways and bridges are urgently needed. “There is now only one bridge connecting Yangon to the Thilawa Special Economic Zone. How will companies in Thilawa transport their goods to the port on time?” 

The other setback is the price of property. The way Mr Lee tells it, “the rental for a decent apartment in Yangon is more than twice what expatriates pay in Ho Chi Minh City and Hanoi. It is even much more than what people pay in Seoul.” 

In that light, Yangon should raise the supply of apartment units, making the city more liveable to foreigners who work or have plans to work in the region. 

Myanmar advantage

Interest to invest in Myanmar among South Korean companies is nevertheless rising, particularly in the manufacturing sector. The main reason is low labour costs compared to the rest of the region, Mr Lee said. 

Even though the daily minimum wage was recently raised by more than a third to K4,800 from K3,600 previously, wages in Myanmar remain low compared to Thailand, Vietnam and China. 

For its part, Myanmar has taken the effort to draw FDI from South Korea. The latter, for example, is welcome to establish new industrial zones in Myanmar. 

During a visit by the Minister of Trade, Industry and Energy of Korea Mr Kim Hyun-chong, Minister of Trade, Industry and Energy of Korea to Nay Pyi Taw, plans to establish an industrial zone for Korean companies to manufacture and assemble Korean vehicles for export purposes were discussed. 

Meanwhile, the Korea Land & Housing Corporation (LH), in partnership with the Ministry of Construction, is already building a $120 million, 2.4 sq m industrial complex in Hmawbi township.

There are also six Korean companies that have already opened factories at Thilawa, including food company CJ Cheiljedang and Yojin Construction & Engineering.

According to official statistics, South Korea’s total investments in Myanmar between 1988 and 2018 amount to around $4 billion, making it the sixth largest foreign investor in the country.

Still, there have also been Korean companies that have pulled out of Myanmar. In February, Samsung Electronics was reported by Korean media to have abandoned plans to build a manufacturing plant in Myanmar due to the lack of infrastructure and poor economic reforms.  

As such, Myanmar should not let the opportunity to capture much needed funds from the Koreans pass it by.

Source From: The Myanmar Times