THAILAND has emerged this year as the biggest foreign investor in Myanmar, contributing 53 percent of all foreign direct investment (FDI) in the country since the government began a shift towards a market economy in 1988, a government official said October 27.

The projected US$6.03-billion Thai investment in the Tasang hydropower project on the Thanlwin River propelled Thailand to the top of 27 countries that have invested in Myanmar over the past 18 years.

It also dramatically boosted total FDI in Myanmar, causing aggregate foreign investment from 1988 to 2005 to leap by almost 80pc in the 2006 calendar year – though the commitment inked in April is yet to be fulfilled.

“Foreign direct investment in Myanmar now reaches more than $13.85 billion from 400 foreign companies,” the Minister of National Planning and Economic Development, U Soe Thar, said in Nay Pyi Taw last month.

According to the state-run Myanmar Investment Commission, FDI from 1988 to 2005 stood at $7.7 billion.

“FDI from Thailand has contributed more than 53 percent of total FDI into Myanmar,” an official from the Ministry of National Planning and Economic Development said October 27, including this year's investment.

“Thailand’s investment in Myanmar has amounted to $7.3 billion, out of $13.856 billion,” said the official, who asked not to be identified.

In 2005, Thailand was the third-biggest foreign investor in Myanmar with some $1.3 billion having been injected into nine economic sectors. It ranked behind the United Kingdom and Singapore, which have both now dropped one place to second and third biggest investors in Myanmar respectively.

The ministry official admitted that FDI in Myanmar was still relatively low compared with investment flows into neighbouring countries.

Dr Alfred Oehlers, associate professor of economics at New Zealand’s Auckland University of Technology, told The Myanmar Times in Yangon on October 29 that a stable business climate was essential to investment growth.

“Consistency of rule and regulation is the first priority and a key factor for those who are considering foreign direct investment in Myanmar,” he said, adding that improving these aspects could significantly increase foreign investment in the country.

Until this year, Myanmar’s oil and gas sector had proven the most attractive to foreign investors, accounting for 34pc of FDI from 1988 to 2005, according to government figures.

It was followed by manufacturing, which had drawn 20pc of FDI.

“The energy sector, including oil, gas and hydropower, is the leading sector in helping increase FDI in Myanmar compared with other parts of the economy,” a well-known economist at the Yangon Institute of Economics said, requesting that his identity be kept confidential.