Blog Frontier markets woo foreign investors
Serge Pun, Executive Chairman, Serge Pun & Associates, Yoma Strategic Holdings said that most “frontier” markets in Asia are competing to attract overseas investors, especially to provide infrastructure financing. The result is that their Foreign Direct Investment (FDI) rules are similar.
Most of them have ambitious growth targets too, and this could cause destabilizing income and social inequalities later.
However, Myanmar’s recently-elected parliament has been far-sighted by promulgating a labor law - the right to freedom of speech and a land bill to help farmers, said Pun.
“The effect of these reforms won’t be immediate but they will promote greater inclusiveness as the economy grows,” he said.
Bangladesh aims to reduce poverty from 35 percent to 15 percent of its population and achieve middle-income status by 2021. Ready-made garment exports and remittances from migrant workers make up a large proportion of the country’s foreign exchange earnings, but Bangladesh is keen to diversify and expand its industrial and manufacturing base.
“The private sector is the engine for growth and the country is keen to attract foreign investment into 32 key areas including ready-made garments, textiles, pharmaceuticals, IT and agriculture,” said Dr. Syed Abdus Samad, Executive Chairman, Board of Investment, Prime Minister’s Office, Bangladesh
The country created a level playing field for domestic and overseas investors more than three decades ago, he added.
Cambodia also has ambitious plans to raise the standard of living, and attain high-income status by 2050. The country’s economy is growing at more than 7 percent a year, driven by agriculture, RMG and textiles.
“Cambodia is a very business-friendly country with almost every sector open to overseas investment,” said H.E. Sun Chanthol, Senior Minister, Minister of Commerce, Cambodia and Vice Chairman of the Council for the Development of Cambodia. For instance, 28 out of 36 banks are foreign-owned.
Chanthol highlighted Cambodia’s political stability, solid macroeconomic ratios and its government’s determination to develop the country’s physical infrastructure.
“We need to rebrand Cambodia from the image created by the movie ‘The Killing Fields’,” he said.
Mongolia is strategically placed between Russia and China, and is blessed with vast mining resources, said Tuvshinbileg Ganzorigt, Director, Head of Funding Division, Development Bank of Mongolia.
“Last year we enacted a new investment law that removes the distinction between foreign and domestic investors. We have also extended exploration licenses and land permits,” he said.
As frontier countries increasingly target FDI and offer similar financial incentives, they might need to advertise other attractions.
“Myanmar’s special appeal is that it is a beautiful country,” said Pun.