Investing in Myanmar, a market with opportunity and risk

Investing in Myanmar has been a topic heated discussed by businesspeople, researchers as well as government officials at the Asia Financial Forum which opened on Jan.15 in Hong Kong.

Sandwiched by fast-growing ASEAN neighbors, Myanmar is a newly opened market waiting foreign investment to set foot in. According to data released by Myanmar government, there are 503 permitted foreign enterprises in the country by October, 2012, with a total investment of over US$41 billion. Investment from China contributes the lion's share, a portion over 34%, according to Myanmar Survey Research.

Consulate General of the Republic of the Union of Myanmar in Hong Kong & Macau, Wai Lwin Than speaks during the workshop of Asia Pacific Forum in Hong Kong, on Jan. 15, 2013. (APD/Wang Jiping)

Consulate General of Myanmar in Hong Kong and Macau, speaking at the forum, said that his country's natural resources attract most of the foreign investors' attention. Nearly 90% of all the foreign capital goes to power, oil, gas and mining. Myanmar has a distinct geographical advantage in the region, he added, "we welcome everything you can do business in the country."

Myanmar has undertaken series of reforms in both economic and financial sectors. Amendments made to economic policies have removed bottlenecks of foreign investment by streamlining and simplifying the procedures, according to the diplomat. He emphasized the importance of the New Foreign Investment Law and Special Economic Zone Law, saying that more protections and incentives would be assured through the promulgation.

With reforms taking place in exchange rate and interest rate policy, foreign bank branches are opening in Myanmar. The Central Bank of Myanmar is planning the launch of a stock market by 2015.

With an "aspired goal" to triplicate per capita GDP by 2016 stated by President Thein Sein last June, Myanmar is so alluring to foreign investors for its natural resources, cheap labor and an opening market.

Despite the hype, risks are apparent in the premature market of Myanmar, participants at the forum said.

Don Lam, CEO of VinaCapital, an asset management and real estate developer in Vietnam described how the first wave of foreign investment flew into Vietnam. "Like Obama's visiting to Myanmar last year, Bill Clinton visited Vietnam in 1994," he said. "Huge amount of reforms took place and a lot of businesses came into Vietnam, but only few of them made money." Corruption, stability of currency and legal problems are mainly concerned issues of prospective investors.

Jonathan Choi, former Chairman of the Hong Kong Chinese General Chamber of Commerce, advised investors to look closely to the change of market, make wise decisions on when and how to make an investment. He also said finding credible local partners to start a business is a recommended way to go.