By Dr Kyaw Linn Htun (Public Administration)
Foreign direct investment (FDI) can play an important role in Myanmar’s economic development. It can bring capital, technology, new skills, employment opportunities, and access to international markets. It can also help local businesses improve their productivity and become more competitive. However, attracting foreign investment requires more than having natural resources, a strategic location, or a large number of potential business opportunities.
Investors also need confidence that they can establish and operate businesses under clear, reliable, and predictable conditions. This raises an important question for Myanmar: Is the country ready to attract and retain sustainable foreign investment? Myanmar has several advantages. Its location between China, India, and Southeast Asia creates opportunities for trade, manufacturing, logistics, and regional business cooperation.
The country also has agricultural resources, a domestic market, and potential to develop food processing, energy, manufacturing, and service industries. These strengths provide a foundation for future investment. However, having investment potential does not automatically mean that a country is ready to receive investment on a large scale. Investors must consider whether they can operate efficiently, obtain necessary inputs, access financial services, transport goods, and plan their businesses over the long term. Myanmar’s readiness for FDI must therefore be assessed by looking at both its opportunities and the practical challenges investors face.
Myanmar’s current economic conditions make this assessment particularly important. The World Bank’s June 2026 economic report estimated that the economy contracted by 2.0 per cent in the 2025/26 financial year and projected growth of 2.0 per cent in 2026/27. The Asian Development Bank’s September 2026 outlook projected growth of 2.2 per cent and inflation of 24.0 per cent for 2026. Although the forecasts differ, both point to an economy facing significant pressures. For businesses, economic uncertainty affects costs, demand, financing, and future planning.
High inflation makes it more difficult to estimate project expenses, while weak demand can reduce expected sales. Foreign investors must consider these factors before committing capital, particularly when a project requires substantial initial investment and several years to generate returns. Nevertheless, these challenges should not lead to the conclusion that Myanmar has no investment opportunities. Rather, they show why investment promotion must go hand in hand with efforts to improve the conditions under which businesses operate. One important factor is political and security stability. Foreign investors usually make decisions based on long-term business plans.
They need to assess whether employees can work safely, goods can move reliably, supply chains can function, and projects can be completed on schedule. Uncertainty in these areas can increase costs and delay investment decisions. Improving the availability of reliable information, maintaining clear administrative procedures, and providing consistent communication can help reduce avoidable uncertainty. However, administrative improvements alone cannot remove wider political and security risks. Another important factor is the regulatory environment. Investors need to understand the rules governing company registration, investment approval, licensing, taxation, employment, land use, and financial transactions. Clear laws and regulations are important, but their consistent implementation is equally important.
When procedures are unclear, requirements are difficult to understand, or administrative decisions take longer than expected, businesses may face additional costs. Myanmar can strengthen its investment environment by improving access to official information, making administrative procedures more transparent, and encouraging better coordination among the relevant government agencies. These improvements do not mean removing necessary regulations. Instead, they mean ensuring that rules are clear, procedures are efficient, and decisions are made consistently.
A predictable regulatory environment would benefit both foreign investors and domestic businesses. Infrastructure and financial services are equally important. Electricity is essential for manufacturing, food processing, cold storage, commercial services, and many other business activities. Unreliable electricity can interrupt production, increase operating costs, and make it difficult for companies to meet delivery schedules. Improving electricity reliability and exploring commercially viable renewable-energy solutions would therefore support both existing businesses and potential new investors. Foreign exchange and banking arrangements also influence investment decisions. Businesses need to make payments, finance imports, receive export earnings, and meet their financial obligations through lawful and reliable channels. Uncertainty in these areas can make it difficult to prepare budgets and manage projects. Improving the clarity and predictability of financial procedures, within the applicable regulatory framework, would help investors make better-informed decisions. Transport and logistics also affect Myanmar’s competitiveness.
The country’s geographical location offers potential advantages, but those advantages can be reduced by high transportation costs, delays, and disruptions to trade routes. Efficient transport links, reliable delivery schedules, and effective customs procedures are important for businesses that depend on imported materials or export markets. Improvements in logistics would support investment while also helping domestic producers reach customers more efficiently. Myanmar must also consider the changing international investment environment.
Countries compete to attract foreign capital, and investors compare potential destinations according to market opportunities, operating costs, infrastructure, regulations, and risks. According to UN Trade and Development’s World Investment Report 2026, global FDI increased by 6 per cent to approximately US$1.6 trillion in 2025. However, investment recovery was uneven, and many developing economies continued to face difficulties attracting capital. This international environment means Myanmar cannot depend on its geographical position and natural resources alone.
It must also demonstrate that investment projects can be implemented and operated under commercially workable conditions. At the same time, the country can explore opportunities to strengthen regional economic connections and develop industries that support domestic production, employment, exports, and technology transfer. Not every sector, however, has the same level of readiness.
Agriculture and food processing may offer opportunities to increase the value of domestic products and improve connections between farmers, processors, and markets. Manufacturing may support local production and create opportunities to participate in regional supply chains. Renewable energy and related services may contribute to improving the wider business environment. Other sectors may offer opportunities where market demand, infrastructure, skills, and financing are sufficient. Each opportunity must be assessed according to its own requirements.
A project that can operate under current conditions may not face the same constraints as a large manufacturing project that depends on reliable electricity, imported machinery, and international supply chains. Investment promotion should therefore focus on identifying commercially viable opportunities while being transparent about the conditions that still need improvement. It is also important to distinguish investment approvals from actual investment. An approved project does not necessarily mean that the full proposed capital has entered the country, that construction has been completed, or that the business has begun operating.
To understand the real performance of FDI, Myanmar needs to examine not only approved investment figures but also actual capital inflows, project implementation, business operations, employment, exports, and other economic benefits. This distinction matters because the objective of investment promotion is not simply to increase the number or value of approved projects.
The broader objective is to encourage productive investment that can operate successfully and contribute to the economy over time. Monitoring the progress of approved projects and understanding the reasons for delays or cancellations can help policymakers identify where further improvements are needed. Is Myanmar ready for FDI, then? The answer is not simply yes or no. Myanmar retains important investment opportunities, but the readiness of the overall economy remains affected by economic uncertainty, infrastructure limitations, financial constraints, regulatory implementation, and political and security risks. The extent of these challenges also differs across sectors and projects. The way forward is to connect investment promotion with practical improvements in the investment environment.
Greater economic predictability would help businesses plan for the future. Clearer procedures and better coordination among government agencies would reduce avoidable administrative difficulties. More reliable electricity, financial services, and logistics would improve the ability of businesses to operate competitively. Better monitoring of actual investment would also help ensure that policy decisions are guided by evidence rather than approval figures alone. Investment readiness is not a condition that a country achieves once and then maintains automatically. It requires continuous improvement in policies, institutions, infrastructure, and business services.
Myanmar’s task is to build on its existing strengths while addressing the constraints that prevent investment opportunities from becoming successful operating businesses. Ultimately, the question is not only how much foreign investment Myanmar can attract, but also whether that investment can be implemented, sustained, and translated into lasting economic benefits.
By combining realistic assessment with consistent improvements, Myanmar can work towards an investment environment that supports responsible investors, strengthens domestic businesses, creates employment, and contributes to long-term economic development.
References Asian Development Bank. (2026). Asian development outlook: September 2026. https:// www.adb.org/outlook/editions/ september-2026
Directorate of Investment and Company Administration. (n.d.). Data and statistics. Retrieved 14 October 2026, from https://www.dica.gov.mm/resources/data-and-statistics/
United Nations Conference on Trade and Development. (2026). World investment report 2026: International investment in a turbulent era. https://unctad.org/publication/world-investment-report-2026-international-investment-turbulent-era
World Bank. (16 June 2026). Myanmar’s economy shows tentative stabilization, but fuel shock intensifies pressures. https://www.worldbank.org/en/ news/press-release/2026/06/16/ myanmar-s-economy-shows-tentative-stabilization-but-fuel-shock-intensifies-pressures
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