By Kim Tae-jong
South Korea, China and Japan are fiercely competing to get the upper hand in Myanmar, the only undeveloped market in Southeast Asia.
The three economic powers have been increasing investment in the country with a population of some 60 million on the back of the open-door policy of the country’s new president Thein Sein, who took office in 2011 and instituted economic and political reforms.
Korea has invested about $3 billion into Myanmar, and $2 billion was invested by Daewoo International, which operates Myanmar's large A-1 and A-3 natural gas fields, South Korea's largest overseas energy project, according to the state-run Korea Trade-Investment Promotion Agency.
Many Korean firms are planning to increase their presence in Myanmar in the coming years to take advantage of low labor costs and the high growth potential of the local market.
The business circumstances have also improved because Western nations have started to lift their crippling sanctions on the country’s previous military junta since the inauguration of the new president.
Samsung Electronics is said to be considering constructing a mobile phone manufacturing factory in Yangon and seven major Korean banks including the Korea Development Bank are going to set up branches in Myanmar.
The Korean government is also actively supporting the advancement of local firms into Myanmar.
Last month, an economic delegation led by Deputy Prime Minister Hyun Oh-seok flew to Myanmar to discuss widening economic and diplomatic ties.
China is the most active investor in Myanmar.
In fact, China has made the largest investment, which stood at $14.1 billion as of the end of March. It accounts for about 33.6 percent of foreign investment in Myanmar. Hong Kong also invested $6.4 billion, accounting for 15.1 percent.
China has been focusing on energy and natural resource development in Myanmar because it can transport oil and gas from the Middle East by land without passing through the Strait of Malacca, a region under the influence of the U.S.
Japan has made the smallest investment in Myanmar among the three countries, which stands at $270 million, but the Japanese government has aggressively expanded investment since last year.
The government has written off debts worth $5.2 billion borrowed by Myanmar and provided official development assistance worth $700 million. On the back of this, Japanese firms specializing in electricity, natural resources, finance, automobile and clothing have advanced into Myanmar.
Japanese investment in the country is expected to grow because major general trading firms such as Mitsubishi, Marubeni and Sumitomo are planning to construct a large-scale industrial complex in the northeast region of the country.