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Top 5 Reasons Investors Should Consider Investing in Myanmar Now

Myanmar (or Burma) holds enormous potential after being isolated for much of past six decades. Myanmar is reforming its economy, and is transitioning to a more open and market-oriented economy. It was under the rule of an oppressive military junta from 1962 to 2011. A gradual liberalisation began in 2010, leading to free elections in 2015. It led to the installation of a government led by Aung San Suu Kyi the following year.

Myanmar has one of the strongest economic growth in Asia. It achieved 6.8% GDP growth in 2017 (see graph below) and is estimated to achieve 6.6% growth in 2018.

Myanmar GDP, Myanmar GDP Growth, Vietnam GDP Growth, Indonesia GDP Growth, Cambodia GDP Growth, Laos GDP Growth, Vietnam GDP, Indonesia GDP, Cambodia GDP, Laos GDP, ASEAN GDP
Myanmar GDP Growth (Source: Letolle Analysis)

Economic growth slowed slightly in recent years amid tourism uncertainties because of ethnic tensions (Rohingya crisis), and banking sector uncertainties. The Central Bank in February opened up the banking sector to foreign investment, which is a good move as it will help reform the sector through technology and capacity partnerships.

Myanmar launched the Myanmar Sustainable Development Plan ("MSDP") 2018 - 2030 in August 2018. MSDP provides an overall framework for coordination and cooperation across all ministries, states and regions. In future, proposals from ministries, states and regions will be reviewed based on strategic alignment with the MSDP.

Based on MSDP, it is working towards creating legal and regulatory frameworks to provide clear and stable foundation for business activities. From a social aspect, it intends to create social-equality and mitigate poverty throughout the country.

Yangon - A Mix of Old and New (Source: CNBC)

There is increasing foreign direct investment ("FDI") inflow over the past five years, signalling increasing foreign investors' confidence. For example, large multinationals, such as Unilever, Nestle, Gap, Coca-Cola, Nissan, Pepsi, BASF, Carlsberg, Heineken, Komatsu, have opened manufacturing plants. International food brands, such as KFC, Bread Talk, Krispy Kreme, Coffee Bean have opened shops.

Yangon has so far enjoyed the lion-share of FDI, and the Government is taking efforts to raise interest in the states and regions beyond Yangon. FDI is expected to increase especially in the manufacturing, infrastructure and retail sector.


1. Young and fairly literate population, as well as an abundance of land and natural resources

Myanmar has the fourth largest population in ASEAN behind Indonesia, Vietnam and Thailand. It has a significantly large youth population: median age is 27 and about 55% are under the age of 30, according to EIU. Myanmar has land area of 676,575 square kilometres. Due to the size of land, it has low population density.

As a comparison, median age in Indonesia and Vietnam is 30 (slightly higher), and median age in Thailand is 38. Myanmar has one of the youngest population in ASEAN. Only Laos and Cambodia have a lower median age in ASEAN, but these countries have a small population. It is therefore reasonable to assume that with Myanmar's young and large population, it has a significant economic resource to drive economic growth.

Myanmar's population is also fairly literate. Based on its latest census in 2014, literacy rate stands at 89.5%. Education has been recognised as the cornerstone of development, and is expected to play a key role in the country's democracy and peace-building process. The Government is targeting significant new investment in vocational training to increase number of skilled workers to support development.

For example, Kaplan Myanmar University College, a subsidiary of US education program provider Kaplan Inc has opened a campus in Yangon providing foundation, higher education programmes and language courses.

Myanmar is also rich in natural resources such as oil and gas, precious stones and gems, timber and forest products. Products from natural resources industry currently constitute Myanmar's largest export, and contribute significantly to its budget.


2. Fast rising manufacturing sector

Myanmar's manufacturing sector has witnessed dramatic growth over the past 5 years. The ease of international sanctions has helped increase manufacturing share in the overall economy. The Government wants to boost manufacturing exports to reduce trade deficit and to diversify from agricultural activities.

The Government has enacted a range of policies to promote development of special economic zones (SEZs) and industrial clusters to promote manufacturing. There are three SEZs: Thilawa, Dawei and Kyauk Phyu. SEZs represent an important step forward to develop export-oriented industries and to draw more foreign investors. Garments is currently its largest export item.

There are however issues with the SEZs which are seen to be short-term. Delays and disputes over compensation and inadequate consultation with local residents have led to disenchantment and opposition by locals and civil society groups leading some to call for their closure.

We view that issues are likely to cool-down when residents see economic growth, transfer of technology and jobs creation. Myanmar has taken steps to ensure that the SEZs benefit the broader economy. For example, article 75 of the SEZ Law requires 75% of skilled workforce employed in zonal firms, after four years of commercial operations, to be local.

Garment Factory, Myanmar Manufacturing, Myanmar Garment
Garment Manufacturing in Myanmar (Source: Nikkei Asian Review)

Myanmar is also set to benefit from rising cost in China. Companies are shifting its low-tech manufacturing from China to a lower cost country to remain competitive. Vietnam and Cambodia are currently the favourite alternatives, and Myanmar adds as the third alternative.

Myanmar has the lowest minimum wage in ASEAN. Minimum wage rate in Vietnam and Cambodia is already much higher than Myanmar (see chart below). If wages continue to rise in Vietnam and Cambodia, more manufacturing activities will most likely shift to Myanmar. Labour productivity in Myanmar has been improving. Myanmar is expected to compete on price in beginning, and eventually, aim to move up on product quality, features, and branding. Similar to Vietnam, the transition from agriculture to manufacturing and services will power Myanmar's growth.

ASEAN Minimum Wage, Myanmar Minimum Wage, Malaysia Minimum Wage, Thailand Minimum Wage, Indonesia Minimum Wage, Cambodia Minimum Wage, Laos Minimum Wage, Vietnam Minimum Wage, ASEAN Minimum Wage Comparison, Myanmar Low Minimum Wage
Selected ASEAN Minimum Wages (Source: Letolle Analysis)

When manufacturing grows, there will be rapid migration from rural areas to towns/ cities to fill up positions. Some of the skills learned in towns/ cities will be transferred back to rural areas, hence increasing labour productivity in rural areas.

Additionally, Myanmar is the largest mainland country in ASEAN. It is strategically located between China and India. Myanmar has convenient access to two of the world's most populous countries (total of 2.3 billion consumers), in addition to its fast-growing domestic consumer base.


3. Laws/ policies are creating more favourable investment environment

Myanmar is currently ranked 171 out of 190 countries on World's Bank Ease of Doing Business. Ease of Doing Business in Myanmar averaged 172 from 2014 until 2018, reaching an all time high of 177 in 2014 and a record low of 170 in 2016. Myanmar is working towards creating a more favourable environment for investments.

The improved ranking on the World's Ease of Doing Business is largely contributed by the Myanmar Investment Law ("MIL") which came into effect since October 2016. The law reduces complex and lengthy process and increases transparency. Foreign investors can now benefit from significant tax exemptions and other benefits if they invest in selected sectors such as manufacturing and infrastructure development.

Additionally, in August 2018, Myanmar instituted a new companies law, Companies Law 2017, amending its outdated Companies Act 1914, to facilitate business undertaking. Company's registration process is now done electronically. Restrictions on foreign investments have been laxed. For example, foreigners are permitted to own up to 35% of stake in local companies; where only local companies are allowed in banking, finance and pharmaceuticals sectors.


4. Physical infrastructure is being developed

There are numerous investment opportunities in the infrastructure sector, since infrastructure remains Myanmar's biggest challenge. Electricity grid remains prone to shortages and black-outs. Water and transport (including road) infrastructure needs to be upgraded.

Mid- and long-term transportation policy is outlined in the National Transport Master Plan (NTMP). It seeks to develop multiple transport corridors across the country, including 36 north-south and 45 east-west highway projects, spanning seven regions and seven states over the mid and long term. Several major highway projects have been completed.

Infrastructure Myanmar, Infrastructure Development, Highways Myanmar, Road Development Myanmar
Yangon-Mandalay Expressway (Source: Global New Light Myanmar)

Rural Road Access Myanmar, Rural Development Myanmar
Rural Access Roads in Myanmar (Source: Myanmar Insider)

Myanmar has planned construction of many dams, but progress has been slow or stalled, as dams are seen to be damaging to rural communities resulting in protests. As such, the Government is looking at other sources of renewable energy, which includes wind, solar and biomass. The potential of renewable energy in Myanmar is backed by WWF's report "Myanmar's Electricity Vision”. We view that the Government will continue to work and overcome the challenges with private and foreign investments.

Telecommunications have already significantly improved for Myanmar. Prior to the reform period, Myanmar had one of the world’s lowest rates of connectivity, with very limited internet access and active SIM cards measured in thousands. This changed virtually overnight. Myanmar now has more than 50 million active SIM cards, as well as the region’s fastest mobile internet speeds.


5. Huge middle class will eventually emerge in Myanmar

Middle class is emerging and growing in Myanmar. Majority of middle class now live in city centres or urban areas such as Yangon. Middle class will demand more sophisticated goods and services and will have significant influence on the economy. Studies show that middle-class tends to be early adopters of technology and are growers of the economy, as they seek to improve their socio-economic status.

There are already large modern shopping malls in Yangon. International retail fashion brands such as Armani Exchange, Esprit, Aigner and Coach are present in these malls. Retail sector is increasing in sales with rising incomes and changing consumer patterns.


Being an early mover in the market, companies can gain significant market share and brand recognition. This is especially true for non-technological sectors, where products are not constantly changing. Myanmar is still developing, so there is time to learn and at the same time, adjust the strategy.

There are risks, to be sure, but there is no better time to invest in Myanmar than now. If Vietnam is the here and now, Myanmar is the long-term play. As the saying goes, if you wait for a perfect market, you will also face a perfect competition.

What do you think about investing in Myanmar now? Let us know your thoughts and leave a comment below. If you require more information on Myanmar market, contact us. We assist companies to enter the Myanmar market by providing data and insights, as well as developing strategy. In our next article, we will cover what are the potential risks of investing in Myanmar.



Myanmar Insider, Rural Transport Access: A Must to Improve the Economy,, published December 2016

Oxford Business Group,

Myanmar Business Today, Myanmar's Manufacturing Sector Offers Promising Growth Prospects,, published 18 October 2015

World Bank,, accessed 9 March 2019

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