Foreign Investment in Myanmar at lowest level since coup

The level of investment in Myanmar by foreign businesses has fallen to a new low since the coup of 2021 amid ongoing instability, violence, and human rights violations perpetrated by the military, according to official data.Figures released by Directorate of Investment and Company Administration (DICA), Myanmar’s junta-controlled company registry, indicate that from April to October, the first seven months of financial year 2024-25, totalled only $226 million. This represents the lowest rate of foreign investment in the three years and nine months since the military seized power in Myanmar, ousting the civilian government of Aung San Suu Kyi’s National League for Democracy (NLD) party. In comparison, foreign direct investment (FDI) in Myanmar amounted to around US $661 million in the 2023-24 financial year, and around US $1,640 million in the 2022-23 financial year. FDI totalled US $642 million in the six-month period from October 2021 and March 2022, when the military regime changed the October-through-September date range of the financial year to a new date range of April through March. In total, foreign investment amounted to US $3,168 million in the three years between October 2021 and October 2024. By contrast, foreign direct investment in Myanmar under the NLD government totalled US $4,879 million in just one financial year, from October 2019 through September 2020, the last full financial year under its administration. Political instability, the fluctuations and rapid depreciation of Myanmar’s national currency, the military regime’s erratic economic management, and the insufficient supply of electric power have all contributed to deterring investment in Myanmar by foreign businesses, an economist told Myanmar Now. “Western sanctions also significantly impact foreign investment,” he said. “With more indirect costs, higher costs, and the higher risk of losses, the major international companies don’t want to invest in Myanmar.” While FDI is still flowing into the country, it is mostly due to existing operations and prior commitments rather than coming from new investors, according to DICA figures. According to DICA’s data, among the 33 foreign businesses investing in Myanmar during the seven months from April through October 2024, only four were new to the country. Most of the businesses still investing in Myanmar are based in China and Singapore, which have historically been the two largest sources of foreign investment. After the military coup of 2021, many foreign businesses have suspended operations in Myanmar, while dozens of international companies in a range of sectors—including fossil fuels, telecommunications, electricity, and mining—have exited the country. Due to foreign sanctions or the stigma of doing business with a regime known for violating human rights and its cronies, some foreign investors such as the Japanese beverage company Kirin Holdings have severed ties with military-owned businesses like Myanma Economic Holdings Limited and the Myanmar Economic Corporation. Some foreign entities have also suspended business with the military-controlled Myanma Oil and Gas Enterprise, which is subject to financial sanctions by the United States Treasury and blanket sanctions by the European Union. The junta faces an intensifying foreign currency crisis due to deteriorating market conditions and disruptions of border trade caused by expanding conflicts with armed resistance and ethnic armed groups, adding to the difficulties created by the lack of foreign investment. As a result, the economist said the junta is trying to supplement its foreign currency reserves through more stringently enforced taxes on the incomes of Myanmar workers making a living abroad. “While they earn foreign currency from oil and natural gas sales and some exports like garments,” he said, referring to the junta, “they can’t rely on these earnings for the long term. That's why they’re trying to collect taxes from workers abroad.” If taxed successfully, the earnings of Myanmar migrant workers, of which there are more than four million in the neighbouring country of Thailand alone, would constitute a multibillion-dollar source of revenue for the military regime. PeriodForeign Investment (US $ millions)2019-20 (Sept to Oct)4,878. 8172020-21 (Sept to Oct)3,792. 3982021-22 (Oct to March)642. 0842022-23 (April to March)1,640. 6672023-24 (April to March)661. 6212024-25 (until Oct 31)225. 08

Foreign Investment in Myanmar at lowest level since coup

Political instability, exchange rate volatility, international sanctions, and the irregular electric power supply have discouraged international entities from doing business in Myanmar

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