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FDI to be hit if EU withdraws GSP benefit to Myanmar: DICA

13
Nov '18
Foreign direct investments (FDI) in Myanmar will be hit if the European Union (EU) withdraws its generalised scheme of preferences (GSP), under which the country enjoys easy trade access to the world’s largest trading block, according to U Aung Naing Oo, director general of the country’s Directorate of Investment and Company Administration (DICA).

Three-fourths of workers employed by the garment manufacturing industry could lose their jobs if the EU blocks Myanmar’s access to its market, the director general said. Job loss will delay reforms, he added.

The EU is considering doing away with the GSP benefit due to the ongoing crisis in northern Rakhine. An EU monitoring mission recently visited the country to meet government officials, businesses and labour associations as part of it decision making, according to media reports from Myanmar.

Myanmar was expected to draw FDI of $5.8 billion this fiscal, according to DICA.

FDI from the EU accounts for 10 per cent of total FDI in Myanmar, with most funds directed to the garment sector. Myanmar exports almost half its apparel to the EU.

Other countries invest in the garment sector in Myanmar to have a share of the EU’s rising demand for textiles, clothing and footwear.
Foreigners dominate 65 per cent of the country’s garment industry, while the remaining are domestically-owned.

Of the foreign-owned factories, around three-fifths is run by the Chinese, which then export to the EU, according to the Myanmar Garment Manufacturers Association (MGMA). (DS)

Fibre2Fashion News Desk – India


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