Economy Financial Aid required for Myanmar agribusiness According to agribusiness experts, Official Development Assistance (ODA) would be a better source of funding for the agribusiness sector than Foreign Direct Investment (FDI) due to the risks embedded in the sector. In spite of Myanmar’s economic reforms since 2011, agribusiness has failed to attract significant overseas interest and FDI figures have remained low. Mr. Hideaki Matsuo, Economic Adviser for the Japanese Embassy to Myanmar, explains that agricultural investments are regarded as too risky in the short term. Furthermore, profit margins are seen as too low to attract FDI. By upgrading infrastructure and logistics in the country with the help of ODA, investments would become less costly and thus more profitable, said U Soe Tun, Joint Secretary General of the Myanmar Rice Federation. In the past years, the government did not prioritize the development of the sector enough as the national budget for the agriculture sector in 2011-2012 amounted only to US$ 310 million, which represents 5 percent of the national budget. Fiscal year 2012-2013 saw only a slight increase to 6 percent of the budget. Sean Turnell, an expert of Myanmar economy at Macquarie University in Australia, explains that the agricultural sector in Myanmar has a great potential to grow due to the country’s natural endowment and strategic location. To foster foreign investments, however, not only the infrastructure and logistics need to be enhanced, but some clarifications are required in the Foreign Investment Law.
Posted on: Fri, 21 Feb 2014 04:45:07 +0000
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