1. Managing Foreign Investment
in the Natural Resource Sectors
Lai Lai Thein
Director General,
Planning Department, Myanmar
8 August 2012
1

2. • Introduction
• Current National Plan
• Foreign Direct Investment in Myanmar
• Environmental Mainstreaming
• Conclusion
2

3. Introduction
Where Myanmar is!
China – 1347
India - 1220
Bangladesh-158
Thailand – 70
Laos – 6
Total – 2801
40% of World
Population
3

4. Introduction (continued)
• Rich in natural
resources
• More than 100 national
races
4

5. Introduction (continued)
Topography can roughly be divided into 3 parts: the
Western Hills Region, the Central Valley Region and the
Eastern Hills Region
5

6. Introduction (continued)
• New Administration launched end of March 2011
• Political and macro-economic reform
• Peace making activities
• Review law and regulation and promulgate the
new laws
• Second stage of reform – People Centered
Approach
• Four policies have been adopted 6

7. Introduction (continued)
• Sustaining agriculture development towards
industrialization and all round development;
• Balanced and proportionate development
among states and regions,
• Inclusive growth for entire population, and
• Quality and correctness of statistics
7

8. Current National Plan
National Plan
Regional Plan
Sectoral Plan
14 States/Regions
14 Sectors
Union Territory
8

9. Sectors under Sectoral Plan
 Agriculture
 Livestock and Fishery
 Forestry and Environmental
Conservation
 Energy
Sectoral Plan  Mining
 Processing and Manufacturing
 Electric Power
 Construction
 Transport
 Communications
 Trade
 Investment and Finance
 Social and Administrative Sector
 Services
9

10. 14 Sectors’ contribution in GDP
2011-12 (Target)
20
26
2
0.1 2
0.9
8.3
13.2
0.3
0.1
0.8
4.7
1.1 20.4
Agriculture Livestock and Fisheries Forestry
Energy Mining Processing and Manufacturing
Electric Power Construction Transport
Communication Finance Social and Administration
10
Other Services Trade

11. Foreign Direct Investment in Myanmar
Myanmar has opened its doors for FDI in 1988 subsequently the enactment
of Foreign Investment Law on 30 November, 1988
11

12. Investment Laws of Myanmar
The Union of Myanmar Foreign
Investment Law (FIL) was
enacted on 30 November 1988.
The Union of Myanmar Special
Economic Zone Law was enacted
in January 2011.
The Dawei Special Economic
Zone Law was also enacted in
January 2011 subsequently.
12

13. FDI Policy in Myanmar
• Adoption of market oriented system for the
allocation of resources
• Encouragement of private investment and
entrepreneurial activity
• Opening of the economy for foreign trade and
investment
13

14. Investment Laws of Myanmar
100% Foreign
Owned
Any Myanmar Partner
An Individual
35% A Private Company
A Cooperative Society
State Owned Enterprise
14

15. Constraints for Foreign Investors
• Land can lease only state-owned land and
buildings for investment activities
• No one shall lease immoveable property to a
foreigner or a company owned by a foreigner for
more than one year
• There is no right for investors to make an account
transfer for payment transition
15

16. Notifications
• Two notifications were issued for better
opportunities in doing business
16

17. Notifications
• With the aim of facilitating investment procedures and getting better opportunities
in doing business, Government issues two notifications relating to Land used and
Foreign Currency.
The Transfer of Immoveable Republic of the Union of the
Property Restriction Law Myanmar Notification of
(Pyithu Hluttaw Law No. Concession Rights for Land
1, 1987) Used relating to FIL
(Notification No. 39/2011)
- No person shall lease to a - Investor has a right of the
foreigner or a company grantee of land lease or land
owned by a foreigner used from government owned
immoveable property for more land, governmental
than a year at a time department, organization
owned lands and citizen
owned private lands
17

18. Notifications (Conted.)
Republic of the Union of the
Myanmar Notification of
Existing FIL Relating to foreign currency
relevant with Foreign
Investment Law (Notification
No. 40/2011)
Foreign Capital brought in Foreign Capital brought in can be
has to be evaluated at exchange with prevailing market
official exchange rate price
No rights to make account Investor has the rights to make
transfer for payment account transfer for payment
transition transition
18

19. • According to notification, private can release
his or her own land and grant longer time for
utilization, and favorable condition for
foreign currency.
• FDI law and Special Economic Zone Law are
currently revising.
19

20. Investments in Myanmar
Livestock & Industrial Estate Agriculture
Real Estate
Fisheries Transport &
3%
1% Communication Construction
Hotel and Tourism 1%
3% Other Services
Manufacturing
4%
Mining
7%
Power
46%
Oil and Gas
35%
20

21. Investments in Myanmar
Foreign Investment of Permitted Enterprises as of (30/6/2012)
(By Sector)
(US$ in Million)
Sr. Permitted Enterprises
Particulars No. Approved %
No. Amount
1 Power 5 19067.498 46.47
2 Oil and Gas 113 14181.972 34.57
3 Mining 66 2814.36 6.86
4 Manufacturing 170 1778.375 4.33
5 Hotel and Tourism 45 1064.811 2.60
6 Real Estate 19 1056.453 2.57
7 Livestock & Fisheries 25 324.358 0.79
8 Transport & Communication 16 313.906 0.77
9 Industrial Estate 3 193.113 0.47
10 Agriculture 7 173.101 0.42
11 Construction 2 37.767 0.09
12 Other Services 6 23.686 0.06
Total 477 41029.400 100.00 21

22. Investments in Myanmar (Cont.)
Foreign Investment of Permitted Enterprises as of (30/6/2012)
(By Country) (US$ in Million)
Sr. Permi tted Enterpri ses
Parti cul ars No. Approved %
No. Amount
1 China 34 14142.674 34.47
2 Thailand 61 9568.093 23.32
3 Hong Kong 40 6371.495 15.53
4 Republic of Korea 51 2954.105 7.20
5 U.K * 54 2799.185 6.82
6 Singapore 75 1824.651 4.45
7 Malaysia 41 1026.961 2.50
8 France 2 469.000 1.14
9 U.S.A 15 243.565 0.59
10 Indonesia 12 241.497 0.59
11 The Netherlands 5 238.835 0.58
12 Japan 25 216.940 0.53
13 India 6 262.000 0.64
14 Philippine 2 146.667 0.36
15 Russia Federation 2 94.000 0.23
16 Australia 14 82.080 0.20
17 Austria 2 72.500 0.18
18 Panama 2 55.101 0.13
19 Viet Nam 3 41.796 0.10
20 United Arab Emirates 1 41.000 0.10
21 Canada 14 39.781 0.10
22 Mauritius 2 30.575 0.07
23 Germany 2 17.500 0.04
24 Republic of Liberia** 2 14.600 0.04
25 Denmark 1 13.370 0.03
26 Cyprus 1 5.250 0.01
27 Macau 2 4.400 0.01
28 Switzerland 1 3.382 0.01
29 Bangladesh 2 2.957 0.01
30 Israel 1 2.400 0.01
31 Brunei Darussalam 1 2.040 0.00
32 Sri Lanka 1 1.000
477 41029.400 100.00
* Inclusive of enterprises incorporated in British Virgin Islands, Bermuda Islands and
Cayman Islands.
** The name and promoter and principal organization be changed from Singapore to
22
Republic of Liberia.

23. • Resource seeking investment is higher in
Myanmar
• Induced investment in agriculture, livestock and
fisheries, hotel and tourism, industrial
estate, electricity and other services
• Potential land resources for the expansion of crop
areas
• Less exploited in fishing and large mineral
potential
23

24. • Downstream project in oil and gas sector
• High potential in hydropower
• Shortage of power supply and development of
power projects are needed
• EIF and SIF take into account
• Mining law is revising to preserve environment
24

25. Environmental Mainstreaming
• Constitution prescribes to protect environment
• Article 45 states as “The Union shall protect and conserve
natural environment”.
• Article 390 (b) Every citizen has the duty to assist the Union
in carrying out environmental conservation
• Energy, Electricity, Mining and Forestry Sector is included in
SCHEDULE ONE, Union Legislative List “Environmental
protection and conservation including wildlife, natural plants
and natural areas” is prescribed under it.
25

26. Environmental Mainstreaming
• Environmental Conversation has been taken
place in poverty reduction and rural
development objectives.
• Extraction of forestry products is limited to
preserve the environment.
• FDI is not allowed for the extraction of teak and
hard wood.
• Environmental law was promulgated in April
2012 to implement environmental policy. 26

27. Conclusion
• Managing for the effective utilization of natural
resources
• Economic and environmental impacts are also
considered
• Managing natural resources in Myanmar needs to
consider both the requirements for long-term
investment in a context of less abundant capital, as
well as the acute immediate needs for poverty
reduction and expansion of education, health and
other human development outcomes.
27

28. 28