Jun 6, 2013

Indian firms, government eye Myanmar for investment, strategic inroads

Indian companies are joining global firms as they rush to draw up investment plans in Myanmar, while the government is eyeing several opportunities ranging from special economic zones (SEZs) to banking ventures in the emerging investment hot-spot in the region.

Telecom major Bharti Airtel has been shortlisted for submitting final bids for telecom licences in Myanmar that is planning to award two telecom licences soon.

Commerce, industry and textiles minister Anand Sharma, who is leading a business delegation to the World Economic Forum's East Asia summit, is expected to hold wide-ranging talks to push the case for Indian investments in the strategic country that is slowly attracting global investor attention after opening up its economy.

India is also keen revive the discussions on the gas pipeline connection between India and Myanmar through Bangladesh. The two blocks awarded to ESSAR Ltd could emerge as a source for the pipeline to India, officials said. New Delhi is also expected to explore border trade in Rupees similar to the arrangement that Myanmar has with China and Thailand.

Officials said that India maybe be willing to offer $150 million of credit for project exports for setting up an SEZ at Sittwe and would like the Myanmarese government to provide land for the project. India is developing the Sittwe port and it would be an ideal location for a SEZ and would encourage Indian firms to participate in the venture.

Indian firms are also shown keen to invest in developing new industrial zones and SEZs as exclusive partners, and also examining investment options in existing old zones. SEZs would be of strategic importance for Indian investors due to the planned ASEAN and trilateral highways.

"Myanmar is a highly unusual but promising prospect for businesses and investors — an underdeveloped economy with many advantages, in the heart of the world's fastest-growing region. Home to 60 million inhabitants (46 million of working age), this Asian nation has abundant natural resources and is close to a market of half a billion people," the Mckinsey Global Institute said in a recent report.

"And the country's early stage of economic development gives it a "greenfield" advantage: an opportunity to build a "fit for purpose" economy to suit the modern world."

It said that, managed well, Myanmar could quadruple the size of its economy, from $45 billion in 2010 to more than $200 billion in 2030 — creating upward of 10 million non-agricultural jobs in the process.

The report said that if current demographic and labour-productivity trends continue, Myanmar could grow by less than 4% a year. "But it has the potential to grow by 8% a year if it accelerates the rate of annual labour-productivity growth, to 7%, from 2.7% — a difficult but not an unprecedented feat.

It said Myanmar must consider the best way of reconnecting to the global economy through investment, trade, and flows of people. The nation potentially needs more than $170 billion of foreign capital to meet its overall investment requirement of $650 billion and should develop a targeted strategy to attract it," the report added.

Source: The Times of India

 
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