FDI


There was a time when oil and gas attracted the most FDI in Myanmar. This is FDI that results in greater exports by enabling the unlocking of the resources under the ground and the waters of Myanmar. One can debate how much of the risk is borne by whom and whether the returns are proportional to risk. But generally, greater FDI in the energy sector is a good thing for a country like Myanmar, seeking to move out of least-developed-country status. The fact that telecom is the biggest attractor of FDI in a country so rich in resources is not something to be celebrated.
The Egyptian investment in North Korea surprised many. But Naguib Sawiris expressed confidence when I heard him talk about it in Barcelona a few years back. Apparently making good profits was possible, but what value are profits that cannot be repatriated? The Egyptian operator rolled out North Korea’s sole mobile network in 2008 as a joint venture with the state-owned Korea Post and Telecommunications Corporation (KPTC). Orascom owns 75% of Koryolink, which has 3 million subscribers.
The incredible growth of ICT in Myanmar has been enabled by massive investments, business models and managerial skills. Yet, it appears that FDI in the sector is still not the largest. This is a good sign for the balanced development of the Myanmar economy. In the first five months of the 2014-15 fiscal year, telecoms accounted for 31 percent of total FDI of $3.32 billion, becoming the biggest single component in direct capital inflows, according to data issued by the Myanmar Investment Commission.
Now that the licenses to Ooredoo and Telenor have been granted, the discussion is shifting to investment and rollout. “Telenor and Ooredoo have received licenses as service providers, but they can’t implement everything themselves,” said Aung Naing Oo, director-general for the Directorate of Investment and a member of the Myanmar Investment Commission (MIC), told the Irrawaddy last week. “We need other companies that can help their projects—for example, building fiber optic lines and towers around the nation—so we expect that some related foreign companies that can help them will be coming in the next year.” Aung Naing Oo added that he expects 20 percent of FDI to come from telecom sector. Investment could come from other companies like Ericsson, and Japanese and Singaporean companies as well to help the two winners with building infrastructure.
Internews is a US based organization that engages in hard work of helping the producers of news and information do their jobs better. Not in the space that LIRNEasia occupies, so our interactions have not been many, but my impression has been of people who are trying to make a difference by working at ground level, quietly. Therefore, I took seriously the op-ed written by its CEO on Myanmar. Here is an excerpt. For now, the reforms and the apparent end of censorship have unleashed a veritable media gold rush in Myanmar.
Technocrats (and people like us who emphasize the rational) would prefer a rational, integrated solution. But we rarely get greenfield opportunities. In almost all cases vested interests dominate. So the reform that gets done is imperfect and messy. This is the message P Chidambaram, Minister of Finance seems to be giving to NYT.
A story on fines imposed on Etisalat’s Nigerian affiliate describes its international reach (without mention of the Sri Lankan affiate): It is easy to see why the company continues to look outside its home market despite the risk of complications. Pressed by Dubai’s agile operator, du, Etisalat has seen eroding domestic profits and market share. Meanwhile, revenues from the company’s international operations, driven by strong performance in Saudi Arabia, Nigeria and Afghanistan, grew 21 percent in the first quarter of 2012, compared with the same period last year. Etisalat’s international gains helped first-quarter total revenue rise 2 percent to 8.2 billion dirhams, or $2.
Pervez Ifthikar is a passionate commentator on telecom issues in Pakistan. A knowledgeable commentator and as the founding CEO of the universal service fund (one of the best in the world in his time), one who has to be taken seriously. Irrespective of the on-going, completely unnecessary, “controversy” surrounding auction of 3G in Pakistan, allotting 3G frequencies to telecom operators is extremely urgent and essential for Pakistan. We have already been left behind by others who used to be our followers in 2G. Mobile broadband – or 3G – should have been introduced here already four years ago.
India’s opening up of retail services to foreign investors will bring in capital and expertise to make supply chains more efficient. Analysts have estimated that up to 35 percent of Indian fruits and vegetables spoil before they get to market, largely as a result of an antiquated supply system that includes many wholesale markets and middlemen. Partly as a result, Indian food prices often rise quickly when there are minor disruptions in the supply or harvest of staple crops like onions and potatoes. Food inflation in recent months has been hovering near 10 percent. While some companies have begun building supply networks in parts of India, Mr.
Part of what Boards of Investment do is spin. According to the Chairman of the Sri Lanka BOI, telecom and power sector contributions will go down because tourism investments will increase, not because they are going down in absolute terms. “In the past telecoms and power sector contributed around 60 percent of FDI, while 40 percent came from other sectors,” Perera told reporters in Colombo. “In the future the telecoms and power sectors will come down to around 40 percent.” But we wonder whether this is the full story.