Foreign firms invested $380 million from April to July, plummeting from $2.6 billion in the corresponding period last year
Myanmar's democratic transition instilled caution in investors, with foreign direct investment during the first four months of the government led by Aung San Suu Kyi dropping sharply from a year back, government data show.
Foreign companies invested $380 million from April to July, the first four months of Myanmar's fiscal year, plummeting from $2.6 billion in the corresponding period last year, the Department of Investment and Company Administration (DICA) said.
Businessmen and officials blamed reluctance to commit funds at the time of the biggest political shake-up in more than half a century, a delay in setting up a panel to approve new investments, and a new economic plan missing some details.
"I think the changes in the government and the respective laws made some potential big foreign investors reluctant," said Win Aung, chairman of a powerful business lobby, the Union of Myanmar Federation of Chambers of Commerce and Industry.
"They may have been concerned about possible risks that can arise out of the changes," he added. "They will come in when things are settled. I don’t think the first quarter inflow is enough to assess the situation for the whole fiscal year."
The investment of $380 million went into 13 projects, in sectors ranging from manufacturing to transport to telecommunications, said Kyaw Win Tun, a director of the DICA.
He attributed the steep fall to a delay in formation of a new Myanmar Investment Commission (MIC) to approve investments.
"Normally, the MIC is supposed to hold meetings twice a month, but it’s been able to meet only three times during this fiscal year," he said.
About 102 projects submitted since April were awaiting approval, Aung Naing Oo, the panel secretary, told Reuters in June. About half were foreign investment projects, with a total value of around $2.3 billion.
A long-awaited economic policy released by the government last month proved to be light on specifics. It outlined 12 broad policies, from prioritising labour-intensive enterprises to the privatisation of some state-owned ones, but lacked concrete plans to accomplish the goals.