As the plane descended toward Yangon International Airport, peeking through the window revealed a flat but bustling Yangon City, Myanmar’s capital, with abundant construction sites and sprawling manufacturing plants, one of which was the conspicuously huge Universal Robina Corporation (URC) factory.
My wife, Kay, and I went through immigration, and we cannot but take wonder of the endless bevy of tourists that converged. There was also a large contingent of seemingly Singaporean businessmen who were on our flight from Singapore.
We later learned that Singapore’s prime minister, Lee Hsien Loong, just finished his three-day official visit to Myanmar which commemorated 50 years of diplomatic ties between the two countries, paving the way for greater cooperation, especially in business and education. We also read in the local paper that in May this year, the president of Myanmar, U HtinKyaw, met with the Russian president, Vladimir Putin, to discuss bilateral relations—particularly future investments, scholarships, and funding.
Why is there a great deal of interest in this newly formed republic that these world leaders are paying much attention to? Myanmar, a member of the Association of Southeast Asian Nations (Asean) which is evolving as an economic community, presents huge opportunities for investment and regional cooperation.
One factor that bodes well for the country is its road to political stability. Its shift from entrenched military regime to a system of dynamic political reform starting from the 2015 elections has created a bounty of new opportunities. In March this year, Myanmar sworn in its first elected civilian president in 50 years, U HtinKyaw with charismatic Aung San Suu Kyi as the state counsellor, a position similar to prime minister. This marks smooth transition of power to the Democratic Party that was formerly in opposition.
A landmark event held recently, The 21st Century Panglong Conference, has produced good outcome, a consensus reached, potentially ending the long-running conflict between the government and numerous ethnic armed organisations. Many locals, based on our conversations with them, agreed that this is the key to lasting peace in the country.
Hinging on political stability is economic growth, which Myanmar has witnessed with an average GDP growth of 7.44 during the past five years, peaking at 8.7 percent in 2014. With the additional easing of US sanctions in May, the country can now expect greater inflow of foreign investment. In fact, the Asian Development Bank projects Myanmar’s growth to be at 8.4 percent and 8.3 percent in 2016 and 2017, respectively, the highest rate in Asia.
Furthermore, foreign direct investment (FDI) is expected to reach $8 billion in the fiscal year 2016 to 2017, according to the Directorate of Investment and Company Administration, while last fiscal year it amounted to $9.5 billion—compare this with the Philippines’ FDI in 2015 at $5.72 billion. Attractive sectors for investment are energy, manufacturing, transport, communication, real estate, mines, hotels and tourism. The fact is, our 9-hour bus trip from Yangon to Bagan by modern and well-maintained tourist bus was a pleasant experience, owing it to good roads and highways.
The future of Myanmar is bright. With its competitive labor pool, fast-improving telecommunications and road network infrastructure, and attractive investment incentives, the country may woo as much as $100 billion in FDI by 2030 if it spends enough to achieve its economic growth potential, the McKinsey Global Institute reported.
Myanmar’s rise presents opportunities as well as challenges for the Philippines. Already, many Philippine conglomerates are investing in the country—from URC to Ayala Land—preparing to take advantage of the impending Asean integration.
On the other hand, our country would be in competition with Myanmar for FDI. Our new government needs to step up its efforts to make our country an attractive destination for foreign investments.
The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be emailed at firstname.lastname@example.org.
The author is a senior executive in an information and communications technology firm. He is the chairman of the ICT Committee of FINEX. He also teaches strategic management in the MBA Program of De La Salle University.