Myanmar Foreign Direct Investment Policy:

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Myanmar Foreign Direct Investment Policy: Should Myanmar place restrictions on MNCs by placing environmental and labour law

Executive Summary
MNCs are one of the factors to contribute the country’s development. Myanmar’s economy is based on agriculture, and its natural resources. Thus, it has the bargain power regarding with these sectors and lack of bargain power regarding with country’s infrastructure, technical and management skills. As the economy is based on oil & petrochemical (gas), mining and agriculture, it needs to maintain the sound natural environment to get the sustainable economic development. In addition, most of the Myanmar workers have to work with low wages and they lose their labour rights. Hence, in this essay will present the policy of restriction on MNCs regarding with natural environment and labour law.

Introduction
This paper will analyze “should Myanmar place restrictions on MNCs entering into country’s economy?” In this study, I will focus on “Myanmar needs to attract MNCs to enter the country for economic development but we should place some restrictions in order to protect the environment damages and domestic workers.” First, it will explore the Myanmar’s political and economic situations. According to these situations, it will analyze the bargain power of MNCs and bargain power of Myanmar to get the feasible options for foreign direct investment (MNCs) policies. And then, it will narrow down these feasible options of Foreign Investment Policies. Finally, the paper will conclude and give the recommendation its chosen policy.

Current political and economic situations of Myanmar
In this part, it will explore the current political and economic situation of Myanmar which can affect the MNCs entering into the country. The current situation of Myanmar is facing with declining in economics because of its mismanagement in economy and 2007 Nargis Cyclone. In addition, Myanmar is facing with western sanctions because of its human rights violations. From IMF’s data, the GDP on purchasing power parity (PPP) per capital was only US$ 1,084 (estimated) at free market exchange rate in 2008. Myanmar is the agricultural based country and it is well known with the abundant of natural resources such as natural gas, gem, petroleum, fertile agricultural land, timber, copper, zinc and lead.Moreover, Myanmar situated economically in strategic location between Southeast Asia countries and South Asian countries. It shares common borders with India, Bangladesh, China, Laos, and Thailand. During 2006-07, 26 China’s MNCs are involved in oil and gas sector, hydropower, and mining sectors of Myanmar. Myanmar is connected with India Ocean and the coastline is about 2000 kilometers. In addition, Myanmar has many ancient pagodas, beautiful beaches, and other interesting places for travel and tourism such as Bagan, Mandalay, Myauk Oo, Bago, Napali, and Chaung Thar Beach.

The main investors of Myanmar
The main investors and trading partners of Myanmar are the Asian countries such as China, Singapore, Thailand, Malaysia, Indonesia, Republic of Korea and UK (European country). The sectors of foreign direct investment are agriculture, oil and gas, construction, industrial estates, real estate, transport and communications, manufacturing, livestock and fisheries and tourism and hotels. The main contribution of revenue comes from Myanmar natural gas. Moreover, Myanmar’s minerals, ore and gemstones are also contribute the country‘s economy. In 2007/ 2008, Myanmar government approved $US 173 million in new FDI (oil and gas sector.) Although Myanmar can attract FDI in natural gas, hydropower and mining sectors, the other sectors such as construction, tourism, agriculture, and manufacturing sectors are less attractive because of its poor infrastructure and economic growth. China and ASEAN countries (Singapore, Thailand, and Malaysia) can be seen as the main investors of Myanmar. On the other hand, we can also...
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