Im­pov­er­ished Chin sees lit­tle progress in draw­ing in­vest­ment

The Myanmar Times - - Business - THIHA KO KO thi­[email protected]­

LONG plagued by poor road con­nec­tiv­ity and the ab­sence of power in­fra­struc­ture, Chin has not suc­ceeded in se­cur­ing in­vest­ments to de­velop the re­gion thus far, but op­por­tu­ni­ties in tourism, en­ergy and agribusi­ness abound.

Ac­cord­ing to the “Op­por­tu­ni­ties and Chal­lenges for Lo­cal Busi­ness De­vel­op­ment in Chin State” re­port is­sued by the Gen­der and De­vel­op­ment In­sti­tute of Myan­mar (GDI), Chin has op­por­tu­ni­ties for in­vest­ment which would be es­sen­tial for the state’s de­vel­op­ment.

Chin State, the least de­vel­oped among Myan­mar’s 14 states and re­gions, has suf­fered from an ab­so­lute ab­sence of for­eign di­rect in­vest­ment (FDI). Ac­cord­ing to DICA, Chin State is the only state or re­gion in the coun­try with zero in­vest­ment, do­mes­tic or for­eign, be­tween fis­cal year 1994-95 and Oc­to­ber 2017. Un­til now, only one ho­tel busi­ness has en­tered the state.

FDI is ab­sent even though all nine town­ships in Chin en­joy a tax ex­emp­tion for up to seven years. The state qual­i­fies for the high­est tax in­cen­tives un­der the re­cently im­ple­mented Myan­mar In­vest­ment Law as it is one of Myan­mar’s least de­vel­oped states.

Key sec­tors The key sec­tors which the gov­ern­ment wants to draw in­vest­ments from are hy­dro­elec­tric­ity, ho­tels and tourism, SMEs, agri­cul­ture and live­stock breed­ing, and ur­ban de­vel­op­ment.

Elec­tric­ity pro­duc­tion in the state is a sec­tor with good po­ten­tial and has drawn for­eign in­ter­est. There are cur­rently seven for­eign com­pa­nies seek­ing to con­duct re­search for large-scale hy­dro­elec­tric­ity pro­duc­tion, as well as, medium and small-scale elec­tric­ity projects, the re­port said.

An­other sec­tor with good po­ten­tial in Chin State is hos­pi­tal­ity and tourism. The state gov­ern­ment has in­vited po­ten­tial ho­tel builders and sub­mis­sions have cur­rently been made for ho­tels to be built in Paletwa, Hakha, Falam, and Tedim town­ships.

In terms of nat­u­ral re­sources, there is a po­ten­tial for find­ing min­er­als such as chromite and cop­per in eastern ar­eas of Chin State.

The gov­ern­ment is also go­ing to build a ce­ment fac­tory in Hakha Town­ship as it has de­posits of lime­stone suf­fi­cient to sup­port ce­ment man­u­fac­tur­ing.

“In Chin State, ho­tels and tourism have the big­gest po­ten­tial. It has un­touched moun­tains and forests. There­fore, the sec­tor is in a po­si­tion to suc­ceed,” said U Min Zaw Oo, di­rec­tor of Chin State’s Of­fice of the Direc­torate of In­vest­ment and Com­pa­nies.

There are no spe­cial in­dus­trial zones at present as there are land and fi­nan­cial is­sues and a lack of skilled work­ers, said U Kap Khen Pau of the Chin State Cham­bers of Com­merce and In­dus­try. He said for­eign in­vestors are not com­ing in be­cause the lack of power sup­ply and road con­nec­tiv­ity.

Trade prospects The Kal­adan Multi-Modal Trans­port Pro­ject by the In­dia and Myan­mar gov­ern­ments is ex­pected to im­prove trans­porta­tion be­tween the two coun­tries and pro­mote bi­lat­eral trade.

As a part of the pro­ject, a road con­nect­ing Paletwa in Chin State and Mi­zo­ram in In­dia is be­ing built.

How­ever, one of routes on China’s Belt and Road Ini­tia­tive, the Chi­naMyan­mar-In­dia road doesn’t di­rectly con­nect to Chin even though it passes close to the state.

“In­vestors think about the mar­ket first. We need to con­sider how we can take ad­van­tage of China’s BRI route and In­dia’s Kal­adan pro­ject and what we can do for ex­ports and im­ports. In iden­ti­fy­ing po­ten­tial op­por­tu­ni­ties, we need to think about how we can at­tract in­vestors,” said U Min Zaw Oo. The big­gest hur­dle is the lack of in­fra­struc­ture.

Lo­cal com­pa­nies Although there has been lit­tle eco­nomic de­vel­op­ment in the state, it has many com­pa­nies. Most of them are not op­er­a­tional busi­ness but were es­tab­lished for the gov­ern­ment’s con­struc­tion ten­ders, the re­port said. While Chin lo­cals rarely take part in con­struc­tion, many wealthy peo­ple in the state started to es­tab­lish com­pa­nies af­ter the con­struc­tion ten­der sys­tem was changed dur­ing U Thein Sein’s gov­ern­ment.

Lo­cal com­pa­nies used to num­ber in the tens, but now there are 900 com­pa­nies, ac­cord­ing to the data from the Chin State Direc­torate of In­vest­ment and Com­pa­nies. “Chin peo­ple need to have a busi­ness vi­sion and change their mind­sets to de­velop,” said Chin State Cham­bers of Com­merce and In­dus­try chair Ceu Hlei Lian.

The lack of em­ploy­ment op­por­tu­ni­ties has led to many leav­ing the state to seek em­ploy­ment else­where. Ac­cord­ing to 2014 cen­sus data, the un­em­ploy­ment rate in the state is higher than the coun­try av­er­age and, ac­cord­ing to the statis­tics of the Chin State Gen­eral Ad­min­is­tra­tion Depart­ment, the un­em­ploy­ment rate has been ris­ing. The un­em­ploy­ment stems from lack of in­vest­ments, job op­por­tu­ni­ties and op­por­tu­ni­ties to learn to be­come qual­i­fied work­ers, the re­port said.

“We need for­eign in­vest­ments for Chin’s de­vel­op­ment. The lo­cal busi­ness peo­ple should change their vi­sion with re­gards to the gov­ern­ment’s con­struc­tion ten­ders and seek to ex­plore other ar­eas. If so, there is po­ten­tial de­vel­op­ment,” U Min Zaw Oo com­mented.

Chin State in­vest­ment Fo­rum will be held in March, 2019, with the aim to pro­mote in­vest­ment and trade in Chin State.

Photo: Aung Htay Hlaing/ The Myan­mar Times

The city of Tedim is one of the nine ma­jor cities of Chin State.

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