A STUDY OF FOREIGN DIRECT INVESTMENT IN MYANMAR AND VIETNAM

Written by Mekong Institute

Many countries have recognized that FDI is an important source of economic growth of a country. Myanmar also highly appreciates FDI as a key solution for the reduction of the country’s development gap towards leading ASEAN countries. Thus, it is important to investigate the factors that help attracting FDI into the country. Vietnam, which is compared to Myanmar economically in a similar situation has altered its economy from a centralized system to a market-oriented one in the mid- 1980s.

Both countries have favorable investment environments, offering abundant cheap labor, natural resources and investment-friendly policies. This paper intends to analyze how both countries strive to attract FDI, and which variables determine the inflow of FDI into Myanmar and Vietnam during the period 1989 to 2012 by using linear regression analyses.

According to our analysis for Myanmar, the growth rate of GDP, the labor force, the inflation rate and the exchange rate affect the inflow of FDI. For Vietnam, only openness of the trade is statistically significant at the percent level implying that Vietnam’s FDI policies have a positive effect in attracting FDI.

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Mrs. Guohua Liu

Director, Sustainable Energy & Environment (SEE) Department

Mrs. Liu Guohua is the Director of the Sustainable Energy and Environment Department at the Mekong Institute. Prior to this role, she worked in the Department of International Economic Affairs at the Ministry of Foreign Affairs of China, where she played a key role in shaping and implementing China’s cooperation strategies with UN development agencies. During this time, Mrs. Liu was actively involved in advancing initiatives related to the Sustainable Development Goals (SDGs), with a focus on climate change and green development. Additionally, she contributed to the evaluation of projects funded by various Chinese initiatives, such as the Global Development and South-South Cooperation Fund, Lancang-Mekong Cooperation Special Fund, etc.

In addition to her work in the Department of International Economic Affairs, Mrs. Liu has an extensive diplomatic background. She spent 7 years in the Department of African Affairs, followed by a 4-year tenure at the Chinese Embassy in Lao PDR, where she gained deep expertise in both Southeast Asian and African affairs. These diverse experiences have played a crucial role in shaping her approach to sustainable development and international collaboration, particularly in building regional partnerships and tackling global challenges like climate change.

She holds a Master’s degree in Economics, with a specialization in Finance, from the Central University of Finance and Economics, and a Bachelor’s degree in Economics, specializing in International Economics and Trade, from the Shanghai University of International Business and Economics.