BMI View: We still believe that near-term construction growth in Myanmar could remain close to the modest levels seen in 2012. This lack of acceleration in growth is due to the limited upside to foreign investment - the main driver of construction activity - and the numerous threats to its political environment before and during the 2015 general elections such as sectarian violence. That said, our base scenario is for broad political stability to persist in Myanmar and reforms in the country's business environment to continue. Should that be the case, we believe that the growth prospects for Myanmar's construction sector beyond 2015 are bright, due primarily to the country starting from a low economic base.
Key developments in Myanmar's infrastructure sector:
In September 2013, the government of Japan signed an agreement with Myanmar's government to render technical support for the construction of a gas-fired power plant in Hlaingtharyar Industrial Zone, to be located in the city of Yangon, reports Eleven Times. The 500MW project is expected to be completed by 2015. Additionally, the Japanese government would also provide support to a 50MW gas-fired power plant construction in the country's Thilawa Industrial Zone.
In September 2013, state media in Myanmar reported that construction of a 500MW thermal power plant in the Thilawa Special Economic Zone (SEZ) was due to begin before the end of 2013 and be completed by December 2014. The power plant will be built by Hanza International with support from 18 other companies including Korea-based Western Power Company. The Thilawa SEZ is located in Yangon's Thilawa Port, and will include textile and manufacturing factories and high-tech industries when completed.
In October 2013, media sources in Myanmar reported that feasibility studies were being conducted for six hydropower projects in the country. The six projects - namely the Upper Thanlwin (Kwanlon), Upper Thanlwin (Minetone), Hatgyi, Naungpha, Mantaung...
"Myanmar's latest political and economic awakening appears to be the 'real deal' and - as with any 'new' investment story - foreign interest is likely to reach fever pitch in the coming years. As seen in other resource-rich frontier markets, we expect a number of key sectors to dominate investor attention in the short to long term."
Business Monitor International (BMI) has just published 'Myanmar Awakens: Unearthing Asia's Hidden Gem', a brand new special report that examines the economic growth prospects for Myanmar as a resource-rich frontier market in the medium to long term.
Use BMI's core views on Myanmar's country and industry development to enhance your investment decision-making and strategic planning activities, assessing key questions such as:
- Will a fair and transparent electoral process in Myanmar pave the way for relaxation of the US and EU economic sanctions?
- With soaring economic prospects forecast for Myanmar as a result of its ongoing reform drive, how will China's interests be affected?
- Will foreign investment prevail in the short or long-term given the history of poor market accessibility?
- Will heavy investment in Myanmar's real estate market offer sufficient liquidity to entice an international audience and what will be the key barriers to overcome?
- Which key sectors will be the main outperformers for Myanmar in the short term?
- Which key sectors will be most promising in the long term?
The special report draws on BMI's 27 years of experience to critically assess the greatest economic and political risks for Myanmar in the years to come, helping you assess the opportunities and challenges for your business in 2012 and beyond.