The booming economy in Myanmar may be looking forward to even more growth in the future, with Japan now looking to get into the fold. So far, most investments in the country have come from China, India, or Western MNCs. During these past few days, long standing opposition leader Suu Kyi has been visiting with Japanese officials and trying to drum up interest in investments. This follows on the heels of increasing investments by a variety of Japanese companies.
Myanmar is seen as a sort of “last frontier” for investments in Asia. The country has been isolated for so long that many companies and public policy officials feel there is plenty of bottled up demand to fuel economic growth. With so many firms already established throughout the rest of Asia, investors may be hoping to face less intense competition in Myanmar.
Companies such as The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP) have been rapidly expanding their operations, while the Chinese government itself is pouring billions into the country. Currently, the Chinese are working to finish off a 700 mile long pipeline that will link the Bay of Bengal to China. Ford Motor Company (NYSE:F), General Electric Company (NYSE:GE), Caterpillar Inc. (NYSE:CAT), and numerous other companies are also increasing their investments in the country.
As of February, Japan has invested some 270 million dollars in Myanmar, coming in as the 11th highest investor. While this money is desperately needed in the impoverished nation, it pales in comparison to the 14.2 billion dollars that the Chinese have invested, and the 9.6 billion dollars coming from Thailand. Most of the money coming from Japan has been in the form of humanitarian aid, but now companies are looking to expand their operations in the country.
Now the Japanese are looking to get themselves into the mix by investing in Myanmar’s economic development. Fuji Xerox, a joint American-Japanese venture, is setting up an office in the country. Toyota Motors has also been stepping up its presence in the emerging markets, expanding its dealer networks and even studying the feasibility of starting up a manufacturing plant.
Meanwhile, Mitsubishi Corp (TYO:8058) is leading a group of investors in developing a special economic zone south of the capital of Yangon. Japan has promised some 200 million dollars in low interest loans to support the project and has been sending increasingly high ranking officials to meet with Mynamar’s government and business leaders. Even the Tokyo Stock Exchange has been hopping on the band wagon by agreeing to help Burmese financial regulators set up shop.
With the Japanese now competing with Western MNCs and Chinese investors, the potential for Mynamar’s economic development being able to take off only increases. For a nation that was shunned only a few years ago by most major governments and companies, this is a welcomed change. While the country is rich in resources, it lacks the capital to develop the operations necessary to fully tap into its potential.