Government statistics released yesterday reveal that Myanmar received its highest-ever investment totals in the last fiscal year (FY). Reports suggest that investment inflows totaled US$6.07 billion, up from just US$158.28 million in the previous fiscal year.

The significant rise is largely the result of the Thai-funded US$6 billion Ta Sang hydropower project, which is situated on the Salween river in Shan state. The rest of the investment went into the oil, gas and mining sectors, with India investing US$30.6 million, Thailand a further US$4.4 million and China US$700,000.

With Thai-land standing as Myanmar’s largest investor in FY2005, investment from China dropped off, falling from US$126.55 million in FY2004 to US$700,000 in FY2005. In fact, the total number of foreign companies investing in the country dropped dramatically from 15 in FY2004 to just five in the last fiscal year. These included one Chinese firm, two Indian companies and two Thai firms.

Significance: The figures are interesting, although at this stage it is too early to tell if they mark any particular trends. In this respect, the sizeable drop in investment from China is significant and will need to be watched.

It has long been argued that the activities of investors from countries such as China and India have sorely undermined the sanctions regime imposed by a number of Western nations. That said, the scramble for natural resources in the region means it is difficult to see China and India ending their pursuit of energy and mining interests in Myanmar.