NAYPYIDAW – South Korea is set to invest $US 56.86 million into developing Myanmar’s infrastructure, according to the Southeast Asian nation’s state-run media.
The announcement was made by the New Light of Myanmar – a newspaper owned and published by the Burmese government. Talks between the two nations began late last month, when a delegation from Myanmar arrived in Seoul to discuss the potential advantages of investing further in the Southeast Asian country.
The amount reported would make South Korea one of Myanmar’s most prolific investors. Although the full details of the deal have yet to be announced, the money is thought to be set for the construction of new model villages, schools, power stations, and research and technology centers. These are areas all in dire need of improvement in the Southeast Asian nation. Earlier this month, the Asian Development Bank (ADB) released a “country diagnostic study” of Myanmar, in which it highlighted its weak infrastructure and inferior institutions as impediments to significant economic growth.
Relations between South Korea and Burma have greatly improved in recent years. In 2012, South Korea’s former president Lee Myung-bak made a state visit to Naypyidaw, during which he promised his Burmese counterpart Thein Sein that South Korea would assist in developing Myanmar’s economy and education sector. Since then, trade between the two countries has quickly grown, reaching US $1.569 billion by the end of the 2013 – 2014 fiscal year. A Memorandum of Understanding (MoU) has also recently been signed for South Korea to fund a $US 20 million national institute for economic and social development in Naypyidaw. The investment deal struck this week perhaps represents the culmination of their bilateral ties.
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Question marks have previously been raised over Thein Sein’s ability to liberalize the Burmese economy and alter its world image. Myanmar is the poorest of the ASEAN nations, and only opened its borders to foreign direct investment (FDI) four years ago following political reform.
However, the country’s leader seems to be steering it in the right direction. Myanmar was appointed chair for ASEAN 2014, has improved relations with the U.S., and last year broke its record for FDI, receiving approximately US $3.5 billion. Moreover, FDI for the 2014 – 2015 fiscal year is predicted to exceed that amount, with estimates in the region of US $5 billion, and further reforms are purportedly in the pipeline.
With the introduction of FDI into key parts of its infrastructure, Myanmar will be in a far better position to build upon its recent successes. The deal may be one of several building blocks needed to transform Myanmar into a nation that can properly compete with its ASEAN neighbors.
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