Jun 23, 2016

Myanmar Business News in Brief

Mekong countries mull single-visa system

To help boost tourism in Southeast Asia, representatives from Myanmar, Cambodia, Laos, Vietnam and Thailand met in Bangkok to discuss using the countries’ combined strengths to make the region a single destination for tourists. The representatives discussed difficulties in obtaining multiple visas for each country, especially Vietnam, and proposed establishing a single visa program for tourists that would include each nation. In order to promote the region as a single destination, representatives said more cooperation between the countries as well as coordination of strengths would be needed, the Vietnam News Service reports.

India looks for inter-governmental pulse trade

Amid a sharp rise in the price of pulses in India, the Indian government is looking to round out its supply by importing from Myanmar and African countries. In May, the prices of pulses in India increased by 33.63 percent, the Press Times of India reports. The government is looking to import 150,000 tonnes of pulses to help supply the market and reduce inflation. Representatives from the Indian government have been dispatched to Myanmar and the African nations to establish government to government trade agreements.

Myanmar to export anti-venom

Pending approval from the World Health Organization, state-owned Myanmar Pharmaceutical Factory will export snake anti-venom to neighbouring countries. Xinhua reports that the company produced about 80,000 doses of liquid and freeze-dried anti-venom for cobras and vipers during the 2015-16 fiscal year with hopes of reducing the number of snake bite fatalities, which sits around 10,000 annually in Myanmar.

China reneges on tunnel project

Financial assistance, pledged by China to the Irrawady Irrigation Department, to build a tunnel across the Irrawady River never come to fruition which puts hundreds of thousands at risk of flooding if the levy were to break, the Irrawady reports. Without the pledged assistance, the irrigation department is now roughly $4.6 million in debt. The department’s assistant director said Chinese officials cited a policy for not funding ongoing or completed projects as a reason to cease funding.

Singapore leads in Thilawa SEZ investment

With more than $298 million invested in the Thilawa Special Economic Zone, Singapore holds a $60 million lead over Japan as the top investor of the zone. The two financial powerhouses hold major leads over other invested countries such as Hong Kong, Thailand, United Arab Emirates, Panama, China and others by approximately $200 million. Thilawa SEZ is jointly owns between Myanmar with a 51 percent stake and Japan at 49 percent.

Workshop aims to increase tiger protections

A workshop bringing together non-governmental organizations, government officials and local communities and business leaders in Myeik sought to raise awareness of the declining number of tigers in Myanmar, sponsored by Fauna and Flora International and the Myanmar Forest Department. The large cats are on the brink of extinction due to loss of habitat, hunting and illegal wildlife trade. Some estimates place the population of tigers left in the wild around 3,200.

Budget emphasises economic growth

An amended budget for the 2016-17 fiscal year was presented by Myanmar President U Htin Kyaw in Naypyitaw last week which emphasised a focus on improving education, health and social welfare. The president said development projects would focus on rural development, electrification, reducing poverty and other infrastructure development projects, Reuters reports.

Telecom company OCK sets up shop in Myanmar

Malaysia-based Telecom provider OCK has established a subsidiary company in Myanmar to develop business relations in areas of tower facilities, utilities and communication networks for mobile and broadband operators, StarBizWeek reports. The company has partnered with Norway-based telecom provider Telenor to construct 920 towers throughout Myanmar which it will own and lease space on.

Source: Myanmar Business Today

Myanmar's mobile revolution

Myanmar has seen massive growth in internet penetration, mobile phone adoption and social media usage in the past few years, spurred by the end of direct military rule and rapid opening up of its market after decades of isolation.

The consumer market in Myanmar has essentially bypassed the development stages seen in other economies and moved straight to digital and mobile, making the company a potentially interesting test bed for internet-enabled businesses.

The mobile phone penetration rate in Myanmar, which barely touched double digits in 2013, has now reached around 50% of its estimated 54 million population last year.

A report last year by the telecom equipment supplier Ericsson suggested that 6% of the world's new mobile subscribers came from Myanmar, making it the fourth fastest-growing mobile market on earth.

In addition, smartphones are the first handsets owned by 80% of Myanmar's mobile users, according to the two main operators, Telenor and Ooredoo.

"Mobile penetration in Myanmar is growing faster than ever before, thanks to the cheaper cost of mobile phones and internet penetration over recent years," Thet Win, executive director of Shwe Than Lwin Co Ltd (Sky Net) told Asia Focus on the sidelines of the CLMVT Forum 2016 on Friday in Bangkok.

Just six years ago, a SIM card in Myanmar cost as much as US$1,500, but after the government awarded licences to foreign operators in 2011, they began selling data-enabled SIM cards for only about $1.50, which everyone could afford. A boom in sales of low-cost Android smartphones from China quickly followed.

"Our neighbouring countries have been able to quickly skip to the latest technologies. There's a great chance for them to leapfrog to something entirely different at a very much lower cost," said Arak Sutivong, head of corporate strategy and business development at Siam Commercial Bank (SCB) during a panel discussion.

"They can pick up where we left off and not have to go through the same journey as other developed countries."

Mr Arak said technologies were moving fast and countries around the region needed to find the best ways deal with the digitised world.

"Technologies are here to stay and they move so fast that the future is unknown," he said, encouraging officials to be more open-minded about digital development and understand that regulations can quickly become obsolete.

Rami Sharaf, senior vice-president of Royal Group of Companies Ltd in Cambodia, said he was seeing the growth of a socio-economic middle class and the rise of "netizenship" — those who have access to the internet.

"It's more of the age of M-commerce because we spend more time on our smartphones than on personal computers or laptops," he said.

The challenge, he observes, is that the digital transformation is happening so quickly, it's difficult for countries in the region to keep up in terms of talent.

"If we are talking about the future, we need more digital, IT and new-media specialists that will support the aim to increase digitisation in the region. We need to build human resource capacity and education," he said.

Sky Net's Mr Win also said that people needed greater analytical and critical thinking skills to assess the information they obtain online.

"Without these skills, they will be easily persuaded and that could be very dangerous," he said, adding that social media education in Myanmar was still very limited as the country was still in the early stage of adoption.

"Technology is like a wild horse. If we don't use it properly or if we don't educate the users properly, it could be very dangerous," he said.

The upside of the new digital wave in Myanmar is that it creates new markets for local and foreign tech startups and e-commerce around the region. "With more users, more businesses will come because the market is here," he said.

Source: http://www.bangkokpost.com/news/asean/1015225/myanmars-mobile-revolution

Jun 22, 2016

Myanmar Real Estate Developer looking for a loan (offshore guarantee available)

For more information, please contact evi@myanmar-business.org

Myanmar to export 515 billion cubic feet of natural gas this fiscal year

The Yadana, Yetagon, Zawtika and Shwe gas projects are expected to collectively produce 515 billion cubic feet of natural gas for export and 160.6 billion cubic feet for local use in the 2016-2017 fiscal year, according to the second five-year National Development Plan (from 2016-2017 to 2020-2021).

According to the plan’s projections, the Yadana project will produce 206.2 billion cubic feet; Yetagon, 73.4 billion cubic feet; Zawtika, 89.4 billion cubic feet; and Shwe, 146 billion cubic feet.

Source: Eleven Weekly Media

Jun 21, 2016

$120-million South Korean project eyes 2018 finish

Inno City complex, the first building project to include a highway terminal, is due for completion by the end of 2018, according to the project’s developer.

The $120-million, mixed-development complex will include six buildings which can hold about 5,000 people, according to South Korea-based Inno Group.

The foundation of the project – situated at the corner of Parami Road and Waizayandar Road in South Okkalappa Township in Yangon – was laid late last month.

“This project will be convenient for people as it will include apartments, hotels, a shopping centre and a highway terminal,” Seog-Chang Son, chairman of Inno Group, said.

The 7.6-acre project will include two 30-storey serviced apartment buildings, each holding 216 apartments.

Also, three 29-storey serviced-apartment buildings with 104 apartments will be erected, a 13-storey hotel with an international-standard highway terminal, a shopping centre and a 1,139-car garage.

Inno Group entered Myanmar in 2007 to build the Hanthawaddy Golf Club in Yangon and are currently involved in a range of businesses including paper box making, garment and currency exchange.

Source: Myanmar Business Today

Western Union Introduces first outbound money transfer service

American payment services provider Western Union has launched an outbound money transfer service in Myanmar.

The first international outbound money transfer service in the country will allow customers to send money through nine participating banks in Myanmar.

The nine participating banks – Kanbawza Bank, Cooperative Bank (CB), Ayeyarwaddy Bank, Yoma Bank, Myanmar Oriental Bank, First Private Bank, Global Treasure Bank, Myanma Apex Bank and United Amara Bank – will offer the services via their various branches in Yangon and key cities across Myanmar.

A customer can send up to a maximum of $3,000 per day and are limited to a maximum of $10,000 within a year. A flat-transfer fee of $25 will be charged per transaction.

“Western Union strongly believes that moving money in a fast, reliable and convenient way helps boost the economic development of a country. It also promotes trade as it opens opportunities for cross-border trade and payments,” Patricia Riingen, senior vice president of South East Asia and Oceania of Western Union, said.

“Money transfers from Myanmar to agents of Western Union in 200 countries and territories can be withdrawn within a few minutes,” Riingen added.

Myanmar is currently the fastest growing economy in Southeast Asia and promises a lot of potential for foreign investment. Nevertheless, as a developing country, only about five percent of the total population (5.1 million) has a bank account, which opens the door for banking service providers like Western Union.

U Min Han Soe, director of Foreign Currency Management Department of the Central Bank of Myanmar, said the Central Bank would not interfere in the money transfer process to check where the money is going.

“The agent banks around the world have a responsibility to check transfers as well as Western Union. There is no limitation from us or any of the ministries.”

Western Union started its inbound services in January 2013

Source: Myanmar Business Today

Jun 17, 2016

ADB aims rise in loans to Myanmar

YANGON - Asian Development Bank (ADB) aims to lend at least US$350 million (Bt12.3 billion) a year to Myanmar during 2017-2022, targeting to finance government and privately-owned projects mainly to improve the country’s infrastructure and create jobs.

At the press conference on Wednesday afternoon, ADB President Takehiko Nakao said that the bank would scale up lending to both the government and private sector.

"We are also thinking of a higher number for lending. This $350 million is only for the concessional lending to the government. We are also supporting the private sector. We are also thinking of expanding our lending to the commercial banking sector," he said.

"The $350 million sum is just our baseline target of concessional lending (to the government). We can consider raising the amount. That number can be even larger if we are successful."

Completing his 3-day visit to Myanmar, Nakao said lending to the private sector would depend on negotiations. Borrowers will shoulder a slightly higher interest rate than the government. Loans to the private sector could reach $250 million per year.

Since 2013 until 2015, the bank has loaned nearly $1 billion to Myanmar.

Nakao said that ADB is currently working with the Myanmar government on a new country partnership strategy (2017-2021) to support sustainable inclusive growth. The new five-year strategy will prioritise three key sectors - infrastructure, education, and rural and agricultural development.

As part of the strategy, ADB will support road connectivity, transport, energy, power generation and transmission, agriculture and irrigation, telecommunications, energy sector, urban infrastructure including water supply and sanitation, curriculum reforms in secondary education, health projects to address HIV/AIDS, malaria, and other communicable diseases, climate resilience, and private sector initiatives. Priority is placed on strengthening business regulations, improving access to finance, and promoting public-private partnerships.

"A strong focus on structural reforms in key areas is also critical to the country's development. Further improvement of the business environment is essential to attract foreign direct investment, which will boost financial resources as well as transfer of knowledge and technology," he said.

Yet, he said the government should ensure that no foreign investor violated international labour standards, particularly in the area of child and forced labour. He also urged the government pay attention to the safety of workers, complaints-receiving mechanisms and corruption.

Starting from next year, ADB would allocate $5 million per year to technical assistance for capacity building.

Nakao also sees the possibility that Myanmar would receive some forms of co-financing from other development lenders such as World Bank and Asia Infrastructure Improvement Bank (AIIB). ADB this month joined hand with AIIB for a $100 million loan for a highway project in Pakistan.

"AIIB can play a role as China has been important to Asean for some projects. But Myanmar is also close to India and Southeast Asian countries. So I do not think Myanmar will entirely lean on AIIB. ADB will continue to play a very important role in this country."

On Wednesday, Overseas Private Investment Corporation (OPIC), the US government’s development finance institution, launched operations in Myanmar with a US$250 million loan to Yangon-based Apollo Towers Myanmar Limited, which is focused on the construction and maintenance of telecommunications towers.

Nakao noted that Myanmar needed a good strategy for future growth, saying good policies would speed up development pace.

"Every country needs a certain policy or strategy or planning for the future_ what kind of country they want to be, what kind of investment they will make, what kind of education they would like to strengthen, etc. So they need a strategy which should be flexible and realistic," he said.

The government is urged to improve infrastructure, mobilise resources, raise revenue by strengthening the tax system, approve projects quickly without causing any trouble and risk to the government, and work more with development partners. Infrastructure and peace building are the key challenges to Myanmar's growth, he said. But he admitted that there is no single solution.

"Myanmar is very important to the international community. It is also important for the prosperity of Asia. If Myanmar becomes a peaceful and stable country, it will positively impact on Asean countries. In this regard, Myanmar is so important."

Source: The Nation