Foreign direct investment plunged more than US$2 billion in the four months since the National League for Democracy government took office over the same period last year, media reports said last week, quoting government figures.
FDI in the first four months of the fiscal year from April to July totalled $380 million, a huge fall from $2.6 billion in the same period last year, said the Department of Investment and Company Administration, it was reported on August 13.
Reuters newsagency quoted businesspeople and officials as blaming the slump on caution amid the change of power to the first civilian-led administration in more than 50 years, a delay in appointing new members of the Myanmar Investment Commission and a government economic policy criticised for lacking detail.
“I think the changes in the government and the respective laws made some potential big foreign investors reluctant,” U Win Aung, chairman of the Union of Myanmar Federation of Chambers of Commerce and Industry, was quoted as saying by Reuters.
“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,” he said.
U Kyaw Win, a director at DICA, said the fall was due to a delay in appointing a new 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 this fiscal year,” Reuters quoted him as saying.
The MIC secretary, U Aung Naing Oo, told Reuters in June that about 102 projects submitted since April were awaiting approval. About half were foreign investment projects valued at about $2.3 billion.