SU PHYO WIN 14 SEP 2017 - Concerns that the ongoing violence in Rakhine State could result in capital outflows and economic sanctions are rising in the investor and business community. At the 2017 Myanmar Global Investment Forum in Nay Pyi Taw on September 12, U Aung Naing Oo, secretary of the Myanmar Investment Commission, said he is not expecting any negative impact on the country’s economy as a result of the unrest.
“The issues are happening in the northern part of Rakhine. However, all the investments are in the southern part and offshore. So for the time being, there is no impact on foreign direct investments (FDI),” he said.
No impact on FDI
Since 2013, the MIC has approved US$2.8 billion in total FDI in Rakhine. “If there was any negative impact on the area, there would not have been any investment interest. Yet, investments are still flowing into offshore oil and gas projects and hotel projects in Rakhine. So, I don’t think there will be any negative impact on FDI for now,” U Aung Naing Oo said.
If the violence persists over a longer period, though, the political impact may dent the flow of FDI going into Rakhine. “However, I am quite confident that the Myanmar government can restore stability there in the short term,” he said. U Maung Maung Lay, Vice President of Union of Myanmar Chamber of Commerce and Industry (UMFCCI), said foreign investors are savvy enough to know when to remain invested and whent to withdraw from existing projects.
“The international focus on human rights and environmental impact is more frequent these days. But from an investment point of view, no one will deviate from an area or country where they believe they can reap business profits,” he said.
Still, while there is no visible impact on the Myanmar economy so far, U Maung Maung Lay conceded the country’s image and reputation as an investment destination would take a hit if the violence in northern Rakhine continues.