Myanmar’s economic potential makes it a hotbed for investors and traders.
It is surrounded by countries where more than 3 billion people reside, amounting to GDP worth $12 trillion. Besides that, it’s 65 percent working age population makes it rich in human resource.
So what will contribute to Myanmar’s steep growth? Let’s find out.
The road yet to be taken
3/4th of Myanmar is without paved roads and 40 percent of villages in the country have zero road access. But the government is planning on changing it by 2030, leaving investors plenty of space to boost their investment in it. Myanmar’s road network is increasing at a CAGR of 7.2 percent in the last ten years and will grow at double the rate in the coming ten. When it comes to aviation, Hanthawaddy International Airport is the largest infrastructure project undertaken in the country’s history.
Sealed virtual connections
Myanmar has the lowest Internet penetration – 19.3 percent as of 2016 – among all of ASEAN nations. But with an expected increase of 90 percent mobile phone penetration by 2018, Internet penetration is also likely to increase. What’s more, foreign companies will invest for long-term, as FDI law demands a commitment of 20 years in the minimum.
Myanmar’s oil and gas reserves are yet to reach its full supply potential. It has a proven natural gas reserves of 1.8 trillion cubic feet and could be government’s important revenue generator. In the early 2010s, the country attracted major companies like Total, Shell, Statoil, Petronas, etc, when it auctioned its oil and gas reserves for exploration. Myanmar’s untapped resources also welcome private companies for investment through the Multilateral Investment Guarantee Agency (MIGA) in production infrastructure. For example, Puma Energy International of Singapore is the first foreign company that allowed building of oil storage facilities in Myanmar.
An electrifying opportunity
The government has high ambitions to provide universal electricity by 2030. This comes at a time when power outages are commonplace. National Electrification Policy of 2014 is planning for 7.2 million grid connections by 2030 that will light up the entirely of the country. This opens doors for public-private projects (PPP). Their funding will establish more than 40 new power plants.
Chowing down the details
Myanmar is still largely dependent on agriculture, being the main source of living for 60 percent of the population. However the productivity and profits are not up to the par largely owing to lack of efficient irrigation facilities. Lack of government support for agricultural capital compels farmers to approach private moneylenders. This is not efficient in the long-term as it’s usually lent at exorbitant interest rates. This is an opportunity to invest because Myanmar is blessed with fertile soil and generations of farmers and low labor costs.
Traditional farming methods and practices are still deep rooted in the country and farmers lack the necessary knowhow, support and funding to change over to modern farming. This sector can do much better with interest from the investors, with the first half of 2010s already seeing major grants. For example, Japan Mitsui Co. Ltd partnered with Myanmar Agribusiness Public Corporation to invest $100 million to improve the quality of rice in 2013.
Learning to revitalize the numbers
Though average literacy rate is 96 percent as of 2012, it reduces by almost half when the students reach secondary education levels. The focus is to retain the number through this vital stage. Though government trebled the spending on education in 2015, it still has to make up for the long political instability, which unfolded numerous problems. However, government is trying to revitalize the primary education by granting thousands of scholarships to secondary school, upgrading the resources, and conducting conferences. It’s a start.
Healthcare financially unimaginable
Myanmar has a primitive level of healthcare with around 250 hospitals and only four with around 2000 beds. Though the government spending increased from 1.05 percent of the total budget in 2011 to 3.38 percent in 2014, more than 90 percent of private healthcare expenditure is financially unimaginable. As investments pour in from countries like Singapore, Malaysia, Thailand, and Indonesia, the country expects to launch Universal Health coverage by 2030.
Sachi Mulmi is a researcher with Frost & Sullivan. She can be reached at firstname.lastname@example.org
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at email@example.com | +603 6204 5830