In the past five years, Singapore has overtaken China as the largest investor in Myanmar. While Myanmar stands to benefit from this, it will need to maintain legal, regulatory and political stability in order to maintain Singapore's enthusiasm for investing in the country.
In the past five years Singapore has overtaken China as the top investor in Myanmar for each fiscal year. At present, the total amount of investment by firms based in Singapore is USD20840.400m, just a little more than the total of USD20500.073m invested by China’s companies, according to the Directorate of Investment and Company Administration of Myanmar (DICA).
Together, Singapore and China account for slightly more than half of all foreign investment approved in Myanmar. The next biggest players are Thailand and Hong Kong, accounting for 14% and 10% respectively of all foreign investment.
Singapore’s position as top investor in the country has to be understood in light of two overall trends. First, the total amount of foreign investment in Myanmar hit a peak in the 2015-2016 fiscal year but has fallen steadily since. Second, investment from Singapore and China has roughly followed this pattern as well.
What is the nature of Singapore’s investment in Myanmar? In total, 305 firms are involved, consisting of Singaporean and Singapore-based enterprises. According to Singapore government statistics, in 2017, the bulk of Singapore investment in Myanmar was in the information and communications sector (73%), followed by manufacturing (14%) and real estate (4.6%).
Together, Singapore and China account for slightly more than half of all foreign investment approved in Myanmar.
Although the amount of Singaporean investment in Myanmar has fallen in the past few years, Singaporean companies continue to be enthusiastic about expanding into Myanmar. According to a survey conducted by the Singapore Business Foundation last year, the ASEAN countries that the 700 companies registered in Singapore surveyed were most enthusiastic about were Vietnam (31%), Myanmar (30%), Indonesia (27%) and Malaysia (27%).
Myanmar is in a good position to benefit from this. It is a fast growing economy undergoing legal and regulatory reform. However, it needs to finetune these processes and to ensure that its political transition is carried out in a measured and steady fashion.
Su-Ann Oh was Visiting Fellow of the Myanmar Studies Programme at ISEAS – Yusof Ishak Institute.