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FDI for 2016-17 hits $6 billion target: investment official

Construction workers rest at a street food stall after labouring at a construction site in central Rangoon on 22 August 2016. (Photo: Reuters)

An official with the Directorate of Investment and Company Administration (DICA) reportedly said this week that Burma had reached its foreign direct investment (FDI) target of $6 billion for the 2016-17 fiscal year.

With more than two months remaining until the close of the period on 31 March, FDI has exceeded expectations and will ease concerns that foreign investment might slow significantly during the first year of the National League for Democracy government. The party came to power vowing “change” — and with that, bringing considerable uncertainty over the new administration’s economic policy.

Aung Naing Oo, DICA’s director-general, told Myitmakha News Agency that if the Myanmar Investment Commission continued to grant approvals to applicants through March, FDI for the current fiscal year could top $7 billion.

The exact figure cited by Myitmakha News Agency this week, however, fell short of $6 billion, at just under $5.8 billion since 1 April 2016.

Still, it represents a surge in FDI in the first weeks of 2017; according to DICA figures, FDI through 31 December totaled just over $3.5 billion.

The vast majority of the FDI increase in 2017 would appear to have come from a major joint venture deal to roll out a fourth telecommunications network in Burma, which the Vietnamese firm Viettel won this month in partnership with local consortium Myanmar National Tele & Communications Co., Ltd. Viettel pledged to invest $2 billion to stand up the network.

As a whole, the telecommunications sector has accounted for the plurality of 2016-17 FDI to date, attracting a 47 percent slice of the total.

Singapore topped the list of foreign investors, followed by China and Hong Kong.

Burma took in $9.4 billion in FDI in the 2015-16 fiscal year.