Foreign investments in Myanmar are facing higher levels of uncertainty as protests escalate and embassies urge their citizens, many of whom run businesses or are employed in management and corporate roles, to leave the country for their own safety.
The Singapore Embassy in Myanmar on February 9 informed Singaporeans in the country of contingency plans made in light of escalating protests taking place in Yangon and across Myanmar.
Singaporeans who want to return home have been strongly advised to do so via a February 12 relief flight, as the embassy “is unable to guarantee that the relief flights will be able to continue.” Meanwhile, it has made alternative accommodation arrangements for Singaporeans currently residing in areas affected by large-scale demonstrations.
The embassy is taking on a tone of greater urgency as protests erupt across the country. On February 9, police in Nay Pyi Taw shot several live bullets into a crowd of protesters. A woman was hit in the head and is now in critical condition.
In Mandalay, tear gas was used to disperse crowds of protesters and around 100 were arrested for defying a February 8 order against gathering in public in groups of more than five. An 8am-4pm curfew has also been imposed in 90 townships in 30 cities across the country.
The escalating violence and political uncertainty now facing Myanmar is not only putting new investments in the country on hold. While just two major foreign investors, Kirin Holdings and Amata Corporation, have pulled out of Myanmar so far, the situation could prompt expatriates who are key executives of businesses to leave the country, placing existing operations on hold.
It is also preventing other key personnel from returning. On February 9, Korean Air suspended its flights to and from Myanmar until February 15, with an extension possible. All these disruptions would be taking place at a time when the economy is already reeling with restrictions imposed due to COVID-19. With the key executives of many foreign businesses now thinking twice about staying or unable to return to run their businesses,, the economy could take a greater beating.
Other investors of Myanmar are also taking flight. At the close of the stock market on February 3 after trading on the Singapore Exchange resumed, the share price of Singapore-listed Yoma Strategic plunged 25.45 percent. It called for a trading halt on February 1 and gave a business update via the Singapore Stock Exchange the following day, stating that its office employees have been asked to work from home for the week due to the uncertain and evolving political situation in Myanmar.
The business update provided by its CEO Melvyn Pun also stated that some of the group’s businesses were disrupted intermittently on February 1 due to outages in telecommunications networks but which have since been restored.
While several of its businesses have resumed operations and the situation remains calm, Mr Pun said in the filing that there could potentially be a change in business sentiment as the situation evolves. “It is still too early to ascertain the longer term impact to the group’s businesses. The company will continue to closely monitor the political developments in Myanmar and provide further updates as and when there are material developments,” he said in the stock exchange filing.
According to the World Bank, Singapore was the largest foreign investor in Myanmar last year, accounting for 34pc of overall approved investments. According to Enterprise Singapore, in 2017, the bulk of Singapore’s investment in Myanmar was in the information and communications sector (73pc) followed by manufacturing (14pc) and real estate (4.6pc).
Notable investments include Sembcorp industries’ US$310 million power plant in Myingyan, Mandalay, and US$230 million industrial park in Hlegu, Yangon. Some other Singapore companies active in Myanmar include urban development consultancy Surbana Jurong as well as property developers Soilbuild and Tiong Aik.
Many other global investors also channel capital into Myanmar via Singapore. As the situation unfolds over the next few months though, these funds may be put on hold.
source: Foreign businesses in Myanmar face rising uncertainty as protests escalate