Economic development

Myanmar's economy - catching up in a competitive environment

After decades of economic stagnation and isolation from western supply chains since 2000, Myanmar has entered a bold process of catching up. The basis is low in terms of most macroeconomic indicators. The economy is resource driven with oil and gas, mining and agriculture as the most important export sectors. The industrial basis needs to be strengthened and the country lacks value added processing and supply chains. These need to be developed to bring to bear the wealth in natural resources from oil and gas, to mineral resources, huge arable land with good soils and a variety of climates and a high level of water resources.

At the same time, a relatively strong private sector exists since private businesses have been allowed again during the early 90's. State owned military owned corporations still are major actors in a number of sectors.The most important business organization is the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry, UMFCCI. Furthermore, the government tries to attract foreign investment in view of know how transfer and job creation. Since 2012, quite liberal regulatory frameworks for foreign investors are in place. A new investment law for both domestic and foreign investors has come into effect on 1 January 2017. Restrictions for foreign companies to be active in trade and distribution are one of the biggest hurdles still existing.

Myanmar's population of 51 m is a strong asset when it comes to integration into regional and global supply chains. Comparably low wages levels and zero tariffs for imports to the EU and other western countries are among the competitive advantages of the country. Whereas most of the foreign investors currently focus on supplying the domestic market with fast moving consumer goods, cars and perspectively more elaborate consumer goods, there is huge potential for export production and relocations from other Asian countries because of rising cost levels there. Currently the garment sector is a driver in this field, with other light industries to follow.

Special Economic Zones are meant to promote mainly export production. The first SEZ, the Thilawa Special Economic Zone near Yangon, has started operation at the end of 2015. Other zones in Kyaukphyu and Dawei are in an early phase of development or under discussion. While currently Yangon is the hub of industrial production, regional diversification is a must. Bago and Mandalay have good potential to attract investors with industrial parks on international standards under development.  

Find a collection of all investment related laws here.

Contact

Martin Klose

Delegate of German Industry and Commerce in Myanmar

+95 9 4506 293 64
+95 9 448 458 181
Write an e-mail
Download vCard

Sophie Waldschmidt

Senior Manager Economic Development and Business Co-operation

+95 9 4506 293 64
Write an e-mail
Download vCard