70 percent of Japanese firms keep business in Myanmar in spite of political instability

A ribbon-cutting ceremony in February 2017 to mark the start of construction to expand the Japanese-backed Thilawa Special Economic Zone near Myanmar’s commercial capital Yangon. (Kyodo/VNA)

Tokyo (VNA) - About 70 percent of Japanese companies investing in Myanmar will either maintain or expand their operations in the Southeast Asian country in a year or two despite the impact of political instability and the coronavirus pandemic, according to a Japan External Trade Organisation report.

The report quoted a JETRO survey as saying 52.3 percent of Japanese investors will maintain current levels of operations in Myanmar and 13.5 percent will expand them, while 27.5 percent will scale back their business in the country and 6.7 percent will withdraw from the country or move their operations to a third country.

The report said if the business environment continues to deteriorate in Myanmar, more Japanese investors may have no choice but to reduce their operations or withdraw.

The United Nations said that the political and security situation in Myanmar is expected to remain volatile in 2022, and the country will experience the fourth wave of COVID-19 due to a relatively low vaccination rate and the emergence of new variants of the coronavirus.

In October, the International Monetary Fund forecast that Myanmar's economy would shrink 17.9 percent in 2021, down 9.0 percentage points from the Washington-based institution's estimate in April. The IMF also projected that Myanmar's gross domestic product would contract 0.1 percent in 2022.

According to the JETRO survey, 63.6 percent of respondents expected their 2021 operating profits to fall from a year earlier, while 27.8 percent forecast they would chalk up the same level of profit.

About 180 companies responded to the survey conducted in August and September. As of late June, a total of 433 Japanese companies had invested in Myanmar.

A UN agency has issued a dismal outlook for Myanmar, saying an estimated 14.4 million people, or about a quarter of the country's population, will require humanitarian aid such as food and medical supplies in 2022./.