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September 21, 2019

NEWS
ECONOMY

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

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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

Authorities eye safer route for China cattle exports

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To protect cattle exporters to China from armed groups on the Muse road in Shan State, government authorities are considering opening a new route.

U Aung Maung, deputy director general of the department, said officials are discussing the Bhamaw-Lwal Gel road as an alternative to the Muse road, where several armed groups have extorted money from exporters.

Exporters have said that at least eight armed groups on the Muse road have demanded money from cattle exporters.

They said China had offered to purchase 1500 head of cattle a day if they could be sent via the Bhamaw-Lwal Gel route.

“There are illegal exports on the Bhamaw-Lwal Gel route. Making it an official cattle export route would likely curb the smuggling.

The government said that 5833 companies exported 52,233 buffalos and 448,529 cows to China between December 2017 and March 15 2019.

It said that 22,431 buffalos worth US$29.158 million (K44.37 billion), and 195,722 cows worth $234.865 were exported to China in fiscal 2018-19.

The country has 9.62 million cows and 1.86 million buffalos, according to the latest count.

Source: Myanmar Times

DICA chief promoted as investment ministry’s top civil servant

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The government has appointed U Aung Naing Oo as permanent secretary of the recently-created Ministry of Investment and Foreign Economic Relations, the official gazette announced.

As the top civil servant leading the ministry, he will support and advise the cabinet minister, career diplomat U Thaung Tun, on how to drum up foreign investments and build on reform initiatives. Observers hope the new body will be the reflected voice of business in government, challenging line ministries on red tape while ensuring that related draft regulations are consulted on.

U Aung Naing Oo was transferred to be director general of the Office of the Union Investment and Foreign Economic Relations on March 29.

The civil servant is widely praised by the business community for drafting new laws and consulting stakeholders in an open and effective manner as director general of the Directorate of Investment and Company Administration (DICA).

It is under his guidance that the 2016 Investment Law and 2017 Companies Law “achieved their intended outcome,” said Nishant Choudhary, co-chair of EuroCham Myanmar’s legal group.

For Mandalay Technology managing director U Zaw Naing, U Aung Naing Oo’s “excellent leadership at DICA” has made a big difference for the private sector.

“Business people in Myanmar see him as a key driver for corporate reform, including MyCo Online Register, the new electronic registry system, and the digitalisation of the investment application process. He will be able to make a bigger impact on economic reform in his new position, and brings with him a wealth of experience to support the minister,” the businessman commented.

The investment ministry was established last November. Two departments formerly under the Ministry of Planning and Finance – DICA and the Foreign Economic Relations Department – were brought under the new body.

The move represents Daw Aung San Suu Kyi’s belated efforts intended to win support for her much-criticised handling of the economy. The National League for Democracy-led government is facing huge challenges from its economic governance, especially in the implementation of new policies and laws, and investor confidence is further hampered by sluggish reform and the northern Rakhine crisis.

From a peak of $9.4 billion in 2015-16, approved foreign investment has reduced to $6.6 billion in 2016-17 and $5.7 billion in 2017-18. A further $1.7 billion was recorded from April 1 to September 30, 2018, while in the 2018-19 fiscal year to March 15 it reached $1.9 billion.

The country’s GDP is expected to grow by 6.6 percent in 2019 and 6.8pc in 2020, according to the Asian Development Bank.

U Thaung Tun, who’s also the Myanmar Investment Commission chair, last November pledged to establish a “single-window” system for investment proposals, based on a list of standard operating procedures agreed on by relevant ministries. This is welcome by investors but yet to materialise.

Many local businessmen, U Zaw Naing observed, are looking at how the government, including the new ministry, manages Belt and Road-related projects as well as investments from China.

He is confident that the permanent secretary will work effectively with development partners, foreign governments and multilateral institutions to “mobilise external resources in order to assist Myanmar’s transition”.

“I am certain that U Aung Naing Oo would further work towards improving the business landscape and regulatory environment,” Mr Choudhary added.

U Thant Zin Lwin, who has been DICA deputy director general since 2016, is set to take over as DICA chief.

Source: Myanmar Times

UMFCCI sign MOU for trade and investment with MACC

Related imageThe Union of Myanmar Chamber of Commerce and Industry (UMFCCI) and Mercosur-ASEAN Chamber of Commerce (MACC), which is based in Argentina and Indonesia, was signed the Memorandum of Understanding (MOU) at the UMFCCI office for trade and investment promotion in April, 2019.

Representatives of MACC were from Argentina, Brazil, Paraguay and Uruguay branches and those branches were formed to conduct economic and political matters and the organisation is the one which is promoting the trade, investment and tourism sectors with ASEAN members.

UMFCCI and MACC was signed to share economic information, to exchange data on economic laws, rules and policies, to promote economy and trade, to reduce economic sanctions and to exchange technologies and trainings, said Vice Chair of UMFCCI Dr. Maung Maung Lay.

According to UMFCCI, cooperation for mutual interests in trade and investment in labour, legal, tourism and education sectors were discussed by representatives of MACC.

Source: Myanmar Times

 

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