While Western investors have shied away due to human rights issues related to the Rakhine refugee conflict, Chinese and Japanese investors showed visible interest in the state at the Rakhine Investment Fair on February 22.

State Counsellor Daw Aung San Suu Kyi, who attended the fair, said economic development could be the answer to much of Rakhine State’s woes, where communal conflict in recent years has turned away investors and impacted growth.

With a political solution difficult to achieve under the circumstances, the government believes that developing the state’s economy may be one way of lessening the conflict between communities and eventually ending it.

Rakhine Chief Minister U Nyi Pu said at the fair that economic development supported by local and foreign investors was “the best solution for sustainable peace and development in the state”.

To be sure, Myanmar faces pressure from the European Union (EU), which has withheld the signing of an investment protection agreement with the country over the Rakhine issue. The EU has also considered withdrawing trade preferences granted to the country under the General Scheme of Privileges and Everything but Arms agreements.

Yet, Chinese and Japanese investors, who showed visible interest in Rakhine during the fair, continue to support Myanmar. According to reports, China and Japan were the most interested in investing in Rakhine, followed by Singapore and Korea.

Japan’s ambassador to Myanmar Ichiro Maruyama said at the fair that the country will grant official development assistance (ODA) for much needed infrastructure such as roads and electricity. Japan has provided assistance in the form of ODA for areas such as education, health and transportation.

Japan External Trade Organisation deputy managing director Khun Tura told Myanmar Times that Japanese investors were mostly interested in the re-export sector, especially of marine raw materials, to Japan and other countries, as well as the tourism sector.

“Currently, there is not much investment from Japan in Rakhine State but I think Japanese investors will be more interested than before as Rakhine opens its door,” Khun Thura said.

Meanwhile, the Kyaukphyu special economic zone comprising an industrial park and seaport has the backing of Chinese firms with plans to link the zone to the Belt and Road Initiative championed by China’s President Xi Jinping.

U Aung Naing Oo, vice-secretary of the Myanmar Investment Commission, noted that there were twice as many attendees in the fair compared to other fairs, with many from Japan, Korea and Thailand.

He said the fair will give the international community a better view of the situation in Rakhine State. “I believe good results will come out in the future,” he added.

In Rakhine, investments in the past year have largely been in the oil and gas (O&G) as well as hotels and tourism sectors. Research on investments in the state showed that hotels and tourism; agriculture; livestock and fishery and; energy sectors drew the most interest from investors.

The Ministry of Electricity and Energy will also be calling tenders for onshore and offshore O&G projects in the coming months. Energy is also a main income source for Rakhine State.

JTB Polestar chair U Kyaw Min Htin said investors will continue to invest if there are opportunities. “The Rakhine tourism numbers are increasing and the sector has good potential. But the international community needs to know about this and we need systematic arrangements for that,” he said.

Oceanfront Investments CEO Pascal Gerken said besides developing a sustainable seaside resort in Ngapali, his company was also interested in agriculture projects. “We are interested to continue investing,” he said.

The fair saw 28 contracts inked worth a total US$4.9 billion with most investments in the hotel and tourism sector. “These businesses will invest within a year,” Rakhine’s Finance, Tax, Planning and Economic Minister U Kyaw Aye Thein said.