Rakhine vi­o­lence has no im­pact on econ­omy

The on­go­ing con­flict in north­ern Rakhine is not ex­pected to have an im­pact on Myan­mar’s econ­omy and for­eign di­rect in­vest­ment, ac­cord­ing to the busi­ness com­mu­nity.

The Myanmar Times - - Front Page - SU PHYO WIN su­phy­owin@mm­times.com

CON­CERNS that the on­go­ing vi­o­lence in Rakhine State could re­sult in cap­i­tal out­flows and eco­nomic sanctions are ris­ing in the in­vestor and busi­ness com­mu­nity.

At the 2017 Myan­mar Global In­vest­ment Fo­rum in Nay Pyi Taw on Septem­ber 12, U Aung Naing Oo, sec­re­tary of the Myan­mar In­vest­ment Com­mis­sion, said he is not ex­pect­ing any neg­a­tive im­pact on the coun­try’s econ­omy as a re­sult of the un­rest.

“The is­sues are hap­pen­ing in the north­ern part of Rakhine. How­ever, all the in­vest­ments are in the south­ern part and off­shore. So for the time be­ing, there is no im­pact on for­eign di­rect in­vest­ments (FDI),” he said.

No im­pact on FDI Since 2013, the MIC has ap­proved US$2.8 bil­lion in to­tal FDI in Rakhine. “If there was any neg­a­tive im­pact on the area, there would not have been any in­vest­ment in­ter­est. Yet, in­vest­ments are still flow­ing into off­shore oil and gas projects and ho­tel projects in Rakhine. So, I don’t think there will be any neg­a­tive im­pact on FDI for now,” U Aung Naing Oo said.

If the vi­o­lence per­sists over a longer pe­riod, though, the po­lit­i­cal im­pact may dent the flow of FDI going into Rakhine. “How­ever, I am quite con­fi­dent that the Myan­mar gov­ern­ment can re­store sta­bil­ity there in the short term,” he said.

U Maung Maung Lay, Vice Pres­i­dent of Union of Myan­mar Cham­ber of Com­merce and In­dus­try (UMFCCI), said for­eign in­vestors are savvy enough to know when to re­main in­vested and whent to with­draw from ex­ist­ing projects.

“The in­ter­na­tional fo­cus on hu­man rights and en­vi­ron­men­tal im­pact is more fre­quent these days. But from an in­vest­ment point of view, no one will de­vi­ate from an area or coun­try where they be­lieve they can reap busi­ness prof­its,” he said.

Still, while there is no vis­i­ble im­pact on the Myan­mar econ­omy so far, U Maung Maung Lay con­ceded the coun­try’s im­age and rep­u­ta­tion as an in­vest­ment des­ti­na­tion would take a hit if the vi­o­lence in north­ern Rakhine con­tin­ues.

Maung­daw in­dus­trial zone Even with­out the cur­rent fight­ing though, north­ern Rakhine is not ready for de­vel­op­ment and FDI, U Aung Naing Oo said.

“That area is not well-de­vel­oped. If we want to at­tract more in­vest­ments we need to first de­velop the in­fra­struc­ture. The cur­rent in­fra­struc­ture in north­ern Rakhine is not ready,” he told The Myan­mar Times dur­ing a side in­ter­view at the event.

He added that so far, there have not been any lo­cal in­vest­ments in the con­flict zone.

Weeks ago, the State Min­is­ter for Fi­nance, Rev­enue, Eco­nom­ics and Plan­ning, U Kyaw Aye Thein, told The Myan­mar Times that its ex­pects to start con­struc­tion of an eco­nomic zone ded­i­cated to pro­mot­ing trade, man­u­fac­tur­ing and ser­vices in the out­skirts of Maung­daw Town­ship in north­ern Rakhine this year.

The project’s aim is to fos­ter eco­nomic growth, cre­ate jobs and pro­mote re­gional sta­bil­ity based on long-term eco­nomic de­vel­op­ment, ac­cord­ing to the min­is­ter.

But U Aung Naing Oo said there has not been any of­fi­cial di­rec­tion or pro­pos­als for that Maung­daw project, which was ap­proved un­der the pre­vi­ous gov­ern­ment. So far, some K2.8 bil­lion has been in­vested in the project, The Myan­mar Times un­der­stands.

Photo: Aung Htay Hlaing

A sales­per­son han­dles a trans­ac­tion with a cus­tomer at Aung Tha Mar Di Jew­elry and Gold Shop on 29th Street in Yan­gon, on Septem­ber 13. Peo­ple con­tinue to spend in Yan­gon de­spite the vi­o­lence in Rakhine State.

Photo: Aung Myin Ye Zaw

Shop­pers at the Mar­ket­Place su­per­mar­ket in Yan­gon. The vi­o­lence in north­ern Rakhine is not ex­pected to af­fect the econ­omy and FDI.

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