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August 19, 2019

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ECONOMY

9 more investment enterprises permitted in Myanmar

Image result for InvestmentMyanmar Investment Commission (MIC) has recently permitted nine more investment enterprises from home and abroad, according to a release from the Directorate of Investment Company Administration (DICA).

The permitted enterprises included foreign enterprises with 101.172 million U.S. dollars’ investment capital and local enterprises with a capital of 110.7 billion kyats (73.8 million U.S. dollars). The investments entered the country’s manufacturing, livestock and fisheries, hotel and real estate sectors, creating 3,029 local employment opportunities.

From the fiscal year 1988-1989 to June 30 of the current fiscal year 2018-2019, a total of 1,752 enterprises were permitted with 80.89 billion U.S. dollars so far, according to the DICA’s data. During the period, the oil and gas sector attracted 27.72 percent of total investments, followed by power sector with 26.18 percent and the manufacturing sector with 13.82 percent, respectively.

Oil and gas, power and manufacturing sectors are in the top-three list with most foreign investments during the period. Regionally, the Yangon region attracted 60 percent of investments from both home and abroad, followed by Mandalay with 30 percent and the rest flowed into other regions and states.

Source: Xinhua 

Oil and gas sector stands top FDI list

Related imageFrom 1988-1989 FY to 2018-2019 FY, the government gave the green-light to 1725 investments worth over 80.234 billion USD, with the oil and gas sector topping the list, according to the figures released by the Myanmar Investment Commission (MIC). The oil and gas sector topped the list with over 22 billion USD, accounting for 27.94 per cent of the total FDI, the energy sector, second, with over 21 billion USD or 26.40 per cent, the production sector, third, with nearly 11 billion USD or over 13 per cent, the transport and communication sector, over 10 billion USD or over 13 per cent.

The MIC allows the permits for special economic zones according to the relevant Special Economic Zone Laws. Since its inception till late May, the MIC allowed the permits to more than 110 foreign investments and FDI inflow into the Thilawa SEZ amounted to over 1.7 billion USD. The total investments during 30 years plus the inflow of FDI into the Thilawa SEZ reached nearly 82 billion USD. Myanmar is implementing the 20-year Myanmar Investment Promotion Plan to ensure that Myanmar becomes a middle-income country by 2030. In addition, the total FDI inflow is set to reach over 220 billion USD during the next 20 years.

Source: Eleven Myanmar

Bond market to deepen with higher fiscal deficit, growth levels expected

Image result for bond marketMyanmar is expecting to be K7 billion short of state funds to support development in fiscal 2019-20, a projected fiscal deficit of 5.9 percent GDP compared to the 5.4pc budgeted for the current year. Meanwhile, financing sources for the fiscal deficit have also become more diversified. The share of Central Bank financing has declined from a high of 61pc of total domestic financing in 2015-16 to almost zero during the transition period between April and September last year and the first two months of 2018-19, data showed. During the period, sovereign T-bill and T-bond auctions almost fully met the domestic financing needs.

U Soe Thein, deputy governor of the Central Bank of Myanmar, said the fiscal deficit would mainly be financed by bonds in the coming years. For fiscal 2018-19, half of the K4.7 trillion deficit will be financed through bonds, he said. Although the government has increased bond and bill auctions to K3.8 trillion from October 2018 to February 2019 compared to K3.6 trillion October 2017 to February 2018, market participation has remained below potential due to negative interest rates.

To help spur participation in the bond market, the World Bank said that more attractive coupon rates reflective of market conditions are needed. Meanwhile, observers said that for Myanmar to better develop its debt markets, speedier reforms are needed. Daw Sandar Oo, chair of Myanmar Insurance Association, said a more mature local insurance industry can help by buying these bonds and bills. “Everybody benefits, the government because it gets to sell its bonds, the insurance firms as it gets to hedge its premiums with more stable government debt and the people as they get to have more choice in financial products,” she said.

Source: Myanmar Times 

 

First Myanmar business environment index published

Related imageThe Asia Foundation has published the Myanmar Business Environment Index 2019 (MBEI), with support from the UK’s Department for International Development (DFID) through the DaNa Facility. The report is a diagnostic tool for government and the private sector to better understand the local business environment. It aims to provide the authorities at different levels with evidence to pursue decentralised economic governance reforms. Based on a nationwide survey of 4874 businesses in the services and manufacturing sectors, the MBEI reflects the feedback from private enterprises across the country. The study measures ten components of good economic governance and provides insights and analysis that government may use to further improve Myanmar’s business environment.

The key findings are:

85pc of Myanmar businesses have at least one documented proof of formalisation; in most cases it is an operating license from the township or City Development Committee. Regulation and administrative procedures for businesses after they have become legal to operate are not burdensome by international comparison; many SMEs in Myanmar are in sectors that could be impacted by environmental harm and therefore show a strong preference for a clean environment. Recruitment of qualified workers, particularly technicians and managers, is a major challenge for businesses in Myanmar. Quality of infrastructure is a severe concern for businesses, particularly with respect to road and electrical infrastructure. Critical documents for business planning, such as local budgets, are often unavailable to the average business owner.

Source: Myanmar Times 

New fuel storage farm opens in Mandalay

Image result for fuel storage farm

A tank facility capable of storing nine million litres of fuel has been officially opened in Mandalay Region. The tank farm, part of a port project where fuel is loaded and unloaded, was officially opened. It is located at the confluence of the Ayeyarwady and Duhtawady rivers in Amarapura township, Mandalay Region.

The facility located on a 40-hectare site features 32 storage tanks each measuring 35 metres high with a circumference of 32m.

Work on the project initially started in 2015, but was halted in August 2016 to conduct better studies of the impact the project would have on the people and the environment near the site.

The facility will also contribute to lowering fuel prices in the country due to improved efficiently, he added. The participation of the private sector in the fuel and energy sector is now being actively promoted, said Deputy Minister of Electricity and Energy, U Tun Naing.

Source: Myanmar Times

China Myanmar Media Forum held in Yangon

Image result for china myanmarBelt and Road Initiative (BRI) focused China-Myanmar Media Forum was held on Yangon in May.

Chinese Ambassador Hong Liang said ” It is pleased to witness the bilateral friendship becomes deeper and media persons from both countries should be praised for their efforts for being a bridge between two countries’ people for the promotion of the development of cooperation between China and Myanmar” at the event.

Monywa Aung Shin, Editor-in-chief of D-wave journal, pledged to continue efforts for the further cooperation between Myanmar and China, on the Belt and Road Initiative and on implementation of China-Myanmar economic corridor, the Xinhua news agency reported.

Source: Business Standard

Adani group plans to start container terminal port in Myanmar

Image result for adani group myanmarAdani Group received approvals to develop a new container terminal in Myanmar as the diversified conglomerate spreads its port operations beyond Indian shores.

The land where the port is proposed to be built has been leased from the Myanmar Economic Corporation (MEC). Adani operates five ports in India and one in Australia. This will be Adani’s second international port after Australia.

Adani Yangon International Terminal, a company incorporated in Singapore, received approval from the Myanmar Investment Commission on April 26 to develop, operate and maintain the Ahlone International Port Terminal-2 (AIPT-2) under a 50-year Build, Operate and Transfer agreement with the government, according to the Directorate of Investment and Company Administration (DICA).

Source: The Hindu Business Line

 

Myanmar to borrow money from Thailand’s NEDA for more electricity

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The Pyidaungsu Hluttaw has approved that the borrowing of 1.4 billion baht from Thailand’s Neighbouring Countries Economic Development Cooperation Agency (NEDA) to supply more electricity in Yangon Region.

Ministry of Electricity and Energy will make sure that Yangon’s power distribution system is improved and the frequency of power shortages reduced with this loan, said Deputy Minister U Tun Naing.

The project term is from 2020 to 2022 and power plants and transmission lines will be built and upgraded in North Dagon, North Okkalapa and Shwepaukkan in Yangon. Currently, many townships in Yangon are experiencing blackouts every day.

The interest rate for the loan is 1.5 percent per year and the loan term is 30 years. According to the agreement, 50pc of the contract’s value must be used for buying products and services from Thailand under an official tender system.

Source: Myanmar Times

 

State Counselor meets with Chinese President Xi Jinping in Beijing

Image result for state counsellor meets xi jinpingState Counsellor Daw Aung San Suu Kyi attends the Second Belt and Road Forum at the invitation of Chinese President Mr. Xi Jinping and to pay a goodwill visit to Cambodia at the invitation of Prime Minister, Samdech Akka Moha Sena Padei Techo Hun Sen.

Union Ministers U Thant Sin Maung, U Win Khaing and U Kyaw Tin, Deputy Ministers U Aung Htoo and U Sett Aung, and other officials accompanied the State Counsellor.

The two sides discussed increasing cooperation between Myanmar and China under the Belt and Road framework, increasing cooperation on improving socio-economic status of the peoples of the two countries in line with that program, and promoting bilateral relations during the meeting.

They also discussed China’s continued support on Myanmar’s peace and national reconciliation, regional stability and rule of law, and continuing endeavours for the success of receiving displaced persons in Rakhine State and China’s continued support for this process.

Source: Global New Light of Myanmar

MoU on rice exports signed with Yunnan Province Government

The Ministry of Commerce (MOC) and Government of Yunnan Province, China, signed a memorandum of understanding on the export of Myanmar rice and other crops to China on April 21.

Under the agreement, Myanmar will be able to legally export crops such as rice as well as fisheries to China via the Muse border trade gate.

The MoU, which is a part of barter system, will see Myanmar importing construction materials and farming machinery manufactured in Yunnan Province in exchange for an equal amount in value of Myanmar-produced agricultural products.

The Agriculture, Livestock and Fishery Development Committee under the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) will take charge of this agreement, which will take effect in May. Exporting rice to China will be the government’s top priority.

The barter agreement comes after tonnes of Myanmar agricultural products, including rice, sugar and maize, had accumulated at warehouses near the border after China, in an attempt to crack down on illegal border trade, temporarily banned all imports from Myanmar.

Since Chinese New Year in February, around one million bags of rice and 5000 head of cattle have been stuck in transit at Muse.

As a result, rice prices have decreased by up to 20 yuan per bag, while breeders were forced to sell their cattle at low prices. In total, trade volumes have fallen by a value of US$650 million year-to-date in the current fiscal year compared to the year before, according to the MOC.

China currently imports commodities based on a quota system. Myanmar’s official export quota, set in 2016, is 100,000 tonnes of rice. According to data from the MOC, over 50 percent of Myanmar-produced rice is sold to China via the border. As such traders are lobbying for that quota to be quadrupled, to 400,000 tonnes.

Traders have expressed skepticism at the agreement though. “The MoU is just an initial phase,” said U Mike, a rice trader from Mandalay. He pointed out that Myanmar had signed several MoUs on trade with China in the past. Myanmar agricultural products, which up until now have been deemed illegal by China, will be costly if they are made official so it might be not profitable for traders and farmers in the early stages of the MoU, rice traders said.

Although rice production in Myanmar hit its highest in 73 years last year, production is expected to taper this year as a result of declining demand in the Chinese market, which is the main buyer of Myanmar rice, according to rice traders.

Rice is a main export of the country, generating over K5 trillion annually of which 40pc is generated by exports. As it plays a major role in the country’s economy, it is very important for  rice producers to focus not only on the price but also on the quality, vice president U Henry Van Thio said at the Seminar for Development of Myanmar Rice and General Assembly and Annual General Meeting held by Myanmar Rice Federation on February 9.

Source: Myanmar Times

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