Foreign companies leave Myanmar in droves as economy collapses
04 September, 2021
Myanmar’s economy is in free fall after the February 1 coup that threw the country into substantial turmoil and probably decades back in development, and for many foreign investors that’s enough.
Add to that a tenacious Covid-19 pandemic which is further crippling public life, more and more foreign companies are leaving the country which for a short time window between 2011 and 2021 was dubbed the “last frontier” for foreign investment in Southeast Asia.
As we know, it turned out differently, albeit we have trouble to ascertain what the deeper purpose of the coup actually was since it made everything worse for all parties, including the military.
On that occasion, some observers hinted at the history of mental illnesses among Myanmar military commanders, topped by former prime minister and president Ne Win. Current leader General Min Aung Hlaing’s ideas about the country’s future economic path also seem to be a little detached from reality, as a local newspaper rightfully noted.
That said, the military takeover of the country and the resulting civil disobedience and street protests had a devastating effect on foreign investment, naturally.
One of the largest foreign investors, Norway’s telecom group Telenor, already announced in May it was leaving the country, writing off more than $780 million in investments.
Metro calls it quits
The latest foreign investor to call it quits is German wholesale food distribution company Metro which said it was ending its operations in Myanmar by October due to the “volatile business environment“ which is expected to continue for some time, leaving 131 locals jobless, thanks to the generals.
“We made this decision with regret because we started in 2019 with positive expectations in this interesting market and were able to quickly build a stable customer base,” Kubilay Özerkan, operating partner for Metro businesses in Asia, said.
“Unfortunately, the significant changes in business conditions in Myanmar give us no other option than to cease the business,” he added.
So far, about 15 foreign companies have suspended or stopped their operations in Myanmar since the coup. Prior to the military takeover, a majority of foreign businesses were planning to maintain or increase their operations and investments in the country, but now they make a U-turn.
Unprecedented company exodus from Myanmar
In August, US pretzel company Auntie Anne’s, Chinese restaurant Little Sheep and Taiwan bubble tea franchise KOI Thé also left Myanmar. Others such as Hong Kong-based energy firm VPower just recently said it was ending its involvement in two power generation projects in Myanmar’s Rakhine and Shan states “in these challenging times.”
Japanese beer company Kirin has also stated that it will be pulling out of a joint venture with Myanmar Economic Holdings Limited, a military-run conglomerate.
Thailand’s industrial park developer Amata said it had suspended work on a large project in Myanmar’s biggest city, Yangon, while Japanese car maker Suzuki Motor’s two plants in the city will also remain closed for the time being after operations were halted following the coup.
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