Vol 2, Issue 25

June 26-July 2, 2014
Myanmar Business Today
mmbiztoday.com
mmbiztoday.com June 26-July 2, 2014| Vol 2, Issue 25MYANMAR’S FIRST BILINGUAL BUSINESS JOURNAL
Myanmar Summary
Myanmar Summary
Contd. P 9...
Contd. P 9...
Inside MBT
Prescribesbroad-basedpolicyreformsandbettereconomicmanagement
Tom Stayner
T
he International
Monetary Fund
(IMF) has revised
its forecast for Myanmar’s
economic outlook for this
country’s rapid economic
expansion to continue
sures.
The Paris-based lender
said Myanmar’s economic
expansion will reach 8.5
percent this year, after
gross domestic produc-
tion (GDP) rose to 8.25
percent over the 2013-14
March.
In January, the IMF
predicted Myanmar’s eco-
nomic growth rate would
steady at 7.7 percent by
March 2015.
IMF Resident Repre-
Ching Wong said increas-
es in gas and agricultural
production have helped
Myanmar build on the
country’s economic mo-
mentum.
growth average of 7-8
percent is sustainable for
a developing country if
they can maintain their
economic stability and
manage macroeconomic
ing Wong told Myanmar
Business Today.
pected to remain at 6.5
from foreign investments
and local production con-
tinues to increase.
Myanmar mission chief,
Matt Davies, warned that
without proper economic
management Myanmar’s
favorable economic out-
look could be undercut.
demand-side pressures
the still-infant macro-
economic management
tjynfjynfqdkif&maiGaMu;
&efykHaiGtzGJUtpnf; (IMF) rS
May Soe San
Ia K750 million
($767,000) renova-
tion to its embankment
and shores this year
thanks to a grant from the
Shan State government.
The regional govern-
ment received K1.5 billion
($1.5 million) from fees
collected over the past
year from the visitors to
the lake.
U Win Myint, Inntha
Ethnic Minister of Shan
will be granted to a tender
winner [who will carry
out the project]. The State
Finance Ministry will dis-
burse the fund in four-
In the past the military
collected the foreign en-
try fee charged to visit
the lake but locals were
unaware of how much
money was being used
tives elected in 2011 have
established controls over
the proceeds.
To increase revenue
from the lake the price
per foreign entry visit, for
the almost 150,000 peo-
ple who visit the lake each
year, was doubled from
$5 (K5,000) to $10 in last
October.
from recent deforestation
with silt deposits and un-
forming deposits in the
lake.
rnfjzpfaMumif;&Srf;jynfe,ftpdk;&
A man pushes a cart past shipping containers stacked at a shipping terminal in Yangon. Myanmar’s GDP
will grow 8.5 percent this year, the IMF said.
DarioPignatelli/Bloomberg
Government to Impose ‘Property Tax’ to
P-6
Export Strategy Draft Complete,
Awaits Parliamentary Approval P-7

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2LOCAL BIZ
MYANMAR’S FIRST BILINGUAL BUSINESS JOURNAL
Board of Editors
Editor-in-Chief - Sherpa Hossainy
Email - sherpa.hossainy@gmail.com
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Ph - 09 40 157 9090
Regional Editor - Tom Stayner
International Editor - David Ross
Reporters & Contributors
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Tom Stayner, David Ross
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Govt invites consultants to help design new
postal services
The Ministry of Communications and Information
Technology has invited Expressions of Interest (EoI)
designing a new postal service policy and drafting a new
postal law, the ministry said in an announcement. The
EoI should be sent to the ministry by June 30.
CIMB bullish about Myanmar banking licence
to get a licence in Myanmar, Nazir Razak, group chief
executive of CIMB Group, told Thai media. Myanmar
is expected to grant as many as 10 licences to foreign
banks to operate their branches in the country. CIMB
17 years. Razak said the bank is also eyeing presence in
every market in the ASEAN region by 2015 and looks
to expand beyond the region into Australia and China.
August and hopes to get a licence to operate in Vietnam
this year.
Yangon stops issuing taxi licences due to heavy
the commercial city, local media reported the Regional
Transport Minister as saying. There are about 80,000
registered with the local authority.
Myanmar to adopt new monetary policy to
The government will introduce a new monetary policy
Bank Deputy Governor Khin Saw Oo said while speak-
risen to 5.76 percent in April 2014, from 5.53 percent
and 1.48 percent respectively in the same month in
2013 and 2012. The monetary policy will include allo-
cating the government budget with World Bank’s as-
banks, she explained.
Myanmar invites tenders to build Thilawa
ports
The Myanmar Ports Authority has announced eight
construction tenders to construct a general cargo port
and a container loading dock using Japanese develop-
ment aid. The port will be part of the Thilawa Special
gon, and building is due to start this year. The Ministry
of Transport has received $205 million loan from Ja-
pan to enlarge the Thilawa port.
Canadian mining company to be sued in My-
anmar
Mine in northwestern Myanmar, local media reported.
The company broke the law and it did not meet interna-
tional standards when it was running the project, Thein
Than Oo of Network was quoted as saying. Ivanhoe has
been under intense scrutiny by Canadian civil society
groups for more than 15 years, following widespread
allegations that it has been complicit in human rights
violations and environmental degradation in several of
the world’s most impoverished nations. Mining Watch
Canada detailed allegations of Ivanhoe’s misconduct
published in 2000.
Govt banks to pay foreign exchange licence fee
State-owned banks will have to pay foreign exchange
local media reported, referring to central bank sources.
The central bank has imposed this requirement to cre-
operations later this year.
Myanmar Summary
CIMB
CIMB
Taxi
City Taxi

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3

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LOCAL BIZ 4
Myanmar Summary
T
he Myanmar Gov-
ernment – along
with the regions
and states – is set to im-
pose a new ‘property tax’
to curb skyrocketing land
prices, a minister said.
The current property
taxation system works
through a levy collected
on all residents living on
land or in a building ac-
cording to a resident’s
location and income. Re-
gional and State govern-
ments currently levy the
tax for use in regional de-
velopments.
When a property chang-
es hands in Myanmar,
ownership must be reg-
istered with the Urban
Department and tax paid
to the City Development
some real-estate agencies
do not make legal con-
tracts, instead they buy
lands with ‘general power’
or ‘special power’ –which
allow for sale without
contract – the resulting
failure to collect tax fur-
bought lots of lands. So,
we will study the inter-
national taxation system
and techniques to control
those who trade lands
and manipulate the land
-
ion Minister for the Presi-
system in discussion with
regional and state par-
liament members, busi-
nessmen and authorities
from relevant regions and
Htun Htun Min &
Phyo Thu
Reforms to the 2012
address this problem,
-
ing, renting, pawning, ex-
changing and transferring
of farmland. But did not
include the collection of
tax on property sales.
To control land prices,
government set the land
price per foot in 2013.
Prices for downtown
reached K150,000 ($150)
to K300,000 ($300), but
actual prices are much
higher, more than dou-
ble in some rural areas of
The Department of In-
ternal Revenues plans to
revise land price per foot
with current prices and
halt speculative buying.
Thin, former professor of
law and parliament mem-
ber, cautioned against
government intervention
saying price hikes could
not be avoided through
simple law enforcement.
-
able laws and also watch
by forming the relevant
-
mediate control over the
land price. To control the
land prices, the govern-
ment must explore more
-
of Economics, said.
real estate. This is due to
-
The rise in the price of
land has caused increases
(Property Tax)}}
tcGefaumufpepfudk azmfaqmif
(Property Tax)
in the price of goods due
to high investment costs
for local and foreign manu-
foreign investment owing
to the high prices of land,
owning or possessing land,
member of the Parliament
Phyo Min Thein said.
To control the land prices, government set the land price per foot in 2013. Prices for downtown townships in Yangon reached K150,000
($150) to K300,000 ($300), but actual prices are much higher, more than double in some rural areas of Yangon.
WaiLinnKyaw

mmbiztoday.com
LOCAL BIZ 5
Myanmar Summary
A
s rapid infrastruc-
ture development
continues to in-
crease the demand for
cement, builders are pri-
marily utilising imported
cement due to the low
quality of domestically
produced cement, indus-
try insiders say.
When compared to im-
ported cement, locally
manufactured cement is
lower in terms of quality
but pricier because of the
low volume of production,
making it less desirable.
This phenomenon is the
result of sanctions that
have caused Chinese ma-
chines and spare parts to
replace German machines
in cement manufacturing
factories, said U Ko Ko
Thwe, owner of Taw Win
with a plethora of un-
skilled workers, who have
little or no knowledge of
ity of cement is unsafe
Htun Htun Minn
and there needs to be
improvement in the man-
agement and technical
Myanmar Business To-
day.
cement is used in making
bricks and building roads.
In 2012, Myanmar used
about 4 million tonnes of
cement. It’s predicted that
cement will increase by
10 percent, Kan Trakul-
hoon, CEO of Thailand’s
largest cement producer
Siam Cement Group, said
earlier.
Currently, there are
three state-owned and 12
private cement factories,
which have the capac-
ity to produce 4.02 mil-
lion tonnes of cement per
year. Myanmar Invest-
ment Commission has
given the go ahead to nine
new cement factories to
be constructed by 2015.
velopment, cement pro-
duction rate [is expected
to] be up to 10.53 mil-
Minister for Industry U
Maung Myint.
construction sector, for-
eign investors will play
a major role in supply-
ing the materials to ac-
complish infrastructure
projects such as building
roads, harbours, hotels
he added.
The minister said the in-
vestors have to take into
account the hazardous ef-
fects on health and social
welfare of the chemical
smoke released from us-
ing raw materials related
to cement manufacturing.
There also needs to be
innovation so that the
energy consumption rate
carbon production are re-
duced, he added.
SCG said it is going to
establish a $388-million
cement factory near Maw-
lamyine, Mon state, while
Indonesia’s state-run Se-
men Indonesia said it will
build a $200-million ce-
ment factory this year.
building cement factories
in Mandalay region, and
Mon, Kayin and Shan
states.
Myanmar imports ce-
ment mainly from Thai-
land and partly from In-
donesia, Malaysia and
Bangladesh.
Myanmar Summary
A
total of 30,436 foreigners visited Shwedagon pa-
goda in May this year, according to the pagoda’s
Board of Trustees.
During the period, visitors from Thailand topped the
table with 6,700 visitors, followed by the Chinese with
about 3,000 and South Koreans with 2,200.
On an average, 980 foreigners visited per day and
the entrance fee for foreign visitors is $8 – meaning a
$240,000 in tourism receipts for Myanmar.
In April, over 31,000 tourists visited the pagoda, with
5,865 Thais visiting the top tourist attraction in the
Southeast Asian country.
Shwedagon Pagoda is a repository of the best in My-
anmar heritage – architecture, sculpture and arts. It
consists of hundreds of colourful temples, stupas and
most 2,500 years.
Aung Phyo
terms of cement quality in the local industry. Thailand’s SCG said it is going to establish a $388-million
cement factory near Mawlamyine, Mon state, while Indonesia’s state-run Semen Indonesia said it will
build a $200-million cement factory this year.
KerekWongsa/Reuters

mmbiztoday.com
LOCAL BIZ 6
T
he increase in My-
anmar’s imports
has presented the
need to deploy mobile
teams to inspect cargo ar-
riving through the coun-
try’s air and waterways
for illegal goods.
Union Minister U Win
Myint said authorities will
organise mobile teams to
inspect cargo being car-
ried into Myanmar via the
country’s air and water
ways, to verify whether
it’s legal or not.
Usually, the Mobile
Team examines goods
being couriered across
Myanmar’s borders in ve-
hicles using the country’s
motorways.
Union Minister U Win
six-month test period
has been arranged to sur-
vey foreign goods, being
imported across Myan-
mar’s national boarders,
through alternative trans-
portation routes.
Commerce and Trade
said over 80 percent of
Htun Htun Minn Myanmar’s overseas
shipping carrier services.
-
cal cargo will have to be
measured simultaneously
According to interna-
tional rules, the transpor-
tation checking process
starts when cargo con-
tainers are loaded from
ships to ports in Myanmar
– vessels carrying foreign
Union of Myanmar Fed-
eration of Chambers of
Commerce and Industry
(UMFCCI) Joint Secre-
changes to Myanmar’s
cargo management are
needed to develop the
countries industrial sec-
tor.
laws for our business-
men, there is no way to
hide and protect illegal
Finance Union Minster
more border gates would
help Myanmar better deal
with illegal imports com-
ing into the country.
-
erates seven international
cargo ports checking the
arrival of goods being
transported into Myan-
mar – tax income has
increased by 20 percent
from these border gates.
Commerce and Trade
said adding water and
air transportation routes
to the country’s import
checklists will increase
state income, giving the
revenue to spend in other
sectors.
through water route
arranged to purchase mo-
bile X-ray machines hop-
ing to get more believable
said.
State trade reached
$24.97 billion in the 2013-
from $18.4 billion in the
Illegal border trade has
also dropped by over 20
percent in Myanmar over
Myanmar Summary
Containers at Asia World Port in Yangon.
SherpaHossainy
MobileTeam oversea
oversea and air
cargo
the past year, according to
A
t the Myanmar
Business Forum
hosted by KPMG
recently, Shinsuke Goto,
director of Daiwa Securi-
ties Group Inc – the com-
pany providing technical
assistance to the Myan-
mar government to es-
tablish the country’s stock
exchange – revealed the
draft listing requirements
for companies seeking to
list their IPO when the
exchange becomes opera-
tional next year.
Companies seeking to
required to demonstrate
two years or show K10
billion ($10 million) in
market capitalisation,
have a minimum capital
amount of K500 million
($511,000), and have a
minimum of 100 share-
holders where the minor-
ity must account for at
least 10 percent of the to-
Aundrea Montaño
tal equity. The corporate
listing requirements are
low in order to accommo-
date smaller businesses,
Shinsuke said.
be operational by October
2015; however, many an-
alysts have doubts about
the government’s ability
to establish policy and a
-
vironment in such a short
time frame. In an attempt
to increase assure the au-
dience, Shinsuke Goto
in the process and noted
that the Securities and
Exchange Commission
(SEC) is expected to be
formed by mid-July and
SEC rules are expected
to be revealed in the next
couple months.
In addition to the for-
mal listing requirements,
much attention is being
paid to the challenges
companies face in prepar-
ing to establish an IPO.
who are considering a
listing on the exchange
is the right choice and at
the right time given their
stage of development and
Fujii, managing partner
of KPMG in Myanmar.
Companies preparing
assess and institute in-
ternationally recognised
standards for accounting,
-
nancial reporting, trans-
parency and strategic
planning.
Instituting strong cor-
porate governance re-
-
cult for many businesses
deemed desirable for
listing on the exchange.
These companies face
immense challenges in
terms of human resource
capacity, information
technology, low govern-
ment capacity, and lack
of knowledge on behalf of
the general public.
Additionally, the estab-
lishment of the ASEAN
Economic Community
(AEC) and regional capi-
tal integration will chal-
competition for the nas-
cent exchange.
Companies with the
greatest potential for list-
from banking, agricul-
ture, consumer products,
infrastructure, construc-
tion, manufacturing, and
real estate sectors, said
Fujii.
Myanmar currently
has an over the counter
market (OTC) called the
Myanmar Securities Ex-
change Centre, which
has two companies with
tradable shares, and is ex-
pected to be replaced by
While no announce-
ment has been made if
foreign companies will be
much emphasis is being
placed on readying local
companies.
Five companies are ex-
pected to be listed when
-
ber of 2015.
Myanmar Summary
Shinsuke Goto, director of Daiwa Securities Group Inc.
KPMG
KPMG

mmbiztoday.com
7LOCAL BIZ
Myanmar Summary
M
yanmar’s long-
awaited Na-
tional Export
Strategy (NES) has been
drafted and is awaiting
parliamentary approv-
al, said Daw Thida Win
the Department of Export
Development.
The drafting of the plan,
which started in 2012, is a
response to the need to in-
crease exports by expand-
ing market access for local
producers and products,
and will help Myanmar’s
rapid growth continue
to gain momentum, said
strategy have been fully
drafted. Once we get con-
-
ment we can implement
Advisor to the Myanmar
Beans, Pulses and Sesame
Entrepreneurs Associa-
tion, U Soe Win Myint, said
the NES includes strategies
targeting the country’s ag-
riculture, rubber, textiles,
tourism and marine prod-
uct industries.
and pulse exports were
the main export sector.
Once one NES is ap-
proved, it’s going to be a
challenge to break into
the market and access the
technology needed to re-
Win Myint said.
The German Federal
Enterprise for Interna-
tional Cooperation (GIZ)
Phyo Thu
provided technical assis-
tance to authorities and
local entrepreneurs draft-
ing the NES.
GIZ policy advisor, Dr
-
ing international organi-
sations other than GIZ in
the future will help the
NES manage export strat-
egies more closely in each
sector.
GIZ transfers its opera-
tion to the International
The International Trade
Centre has already be-
gun implementing NES
schemes targeting the
travel and tourism indus-
try in Kayah state.
Secretary of Myanmar
Rubber Plantation and
Production Association,
U Khaing Myint, said the
quality, quantity and op-
eration times of exports
must be supervised for
the national strategy to
succeed.
approves the NES, there
are many processes which
said.
udef; (NES)
NES
NES
tpnf; (GIZ) rS enf;ynmydkif;
]]GIZ
NES
Sector
GIZ
ITC
GIZ
T
he local Fish Food
Producers Asso-
ciation announced
that it has decided to
prawn rather than man-
ufacturing locally, re-
sponding to a hike in local
prices.
Increasing demand for
from China has driven up
the past year.
In June 2013, the price
of one viss (1.6 kg) of
sesame, which is used
around K1,200-1,400
($1.2-$1.4) but this year
has increased to K1,450-
1,500 ($1.4-$1.5).
-
eries import sesame and
bean from India, Argen-
tina, Brazil and America
food will support Myan-
association.
With weak government
assistance, the number
of entrepreneurs in the
livestock industry has de-
creased, directly impact-
he added.
for the price hike. Trans-
portation costs and the de-
mand from China are part
-
stock businessman.
Since the new govern-
ment came to power, the
May Soe San -
terial exports to China
-
ly, which has caused the
price hikes, the entrepre-
neur criticised.
Myanmar Summary
SoeZeyaTun/Reuters

mmbiztoday.com
LOCAL BIZ 8
Myanmar Summary
A
$1 per gallon dif-
ference in the price
of jet fuel between
Myanmar and its neigh-
bours is causing domestic
and international airlines
to increasingly look out-
side for cheaper prices.
The issue of fuel costs is
considered to be a major
issue in the competitive-
ness of Myanmar domes-
tic airlines.
even to Thailand, one
plane uses over 10,000
gallons of fuel. Domestic
airplane fuel is a dollar
more expensive than for-
eign prices, which causes
refuelling in Myanmar to
Mandalay Airlines Chair-
said.
Phyu Thit Lwin this. Therefore, we refuel
he said.
Many airlines have pe-
titioned the government
to remedy this disparity
in prices, with the govern-
ment agreeing to address
the income imbalance.
In May, the Myanma
Petroleum Products En-
terprise (MPPE) invited
foreign companies to
form a joint venture to
improve its jet fuel distri-
bution system.
The MPPE, which is re-
sponsible for carrying out
the retail and wholesale
distribution of petroleum
products under the Min-
istry of Energy (MOE),
currently distributes
about 127 million litres
of jet fuel a year at 11 air-
ports around Myanmar,
-
dalay and Nay Pyi Taw.
-
ternational Airport.
Myanmar Summary
B
ordertradebetween
Myanmar and most
of its neighbours
has slowed, according to
the Department of Com-
merce and Consumer Af-
fairs (DCCA).
Director of DCCA U
Tay Za Aung Win said,
remains normal but due
to instabilities in other
countries the trade has
from Thailand have de-
creased and trade has
dwindled especially in
During April-May, ex-
ports through border
crossings with Bangla-
desh, China, India and
Thailand increased by
$116.97 million, while
imports increased only
$7.66 million compared
with the same period last
year, according to the
is attributed to only the
growth in Myanmar-Chi-
na border trade.
The coup in Thailand
recently caused trade to
be restricted to daylight
hours at border crossings
between Myanmar and
Htun Htun Min Thailand, causing a fall in
exchange of $12.9 million
compared to the same
time last year.
of Department of Trade
Thailand has now de-
creased. We gained yearly
increases in trade because
of our easing of regula-
tions, but have not in-
creased the value of those
commodities.
our exports we will be in
A border row with In-
dia and also its recently-
concluded general election
have also caused a fall in
trade between the two na-
tions. Frequent road and
bridge blockages have re-
duced trade value by $8.02
million, DCCA data shows.
Trade with Bangladesh,
worth only $1.96 million
over the April-May pe-
riod, has also fallen from
its high in 2012 due to se-
curity and border issues
between the two nations.
In April and May, bor-
der trade between China
and Thailand was worth
$571.557 million and
$69.109 million respec-
tively.
Myanmar Summary
T
he government
up to K5 million
($5,000) to breeders in-
terested in entering the
aquaculture industry in
a bid to counteract the
industry and collapse in
catch-sizes due to over
The loan can now be
-
tive costs of brick or soil
upwards of K10 million,
May Soe San &
Phyu Thit Lwin
and is widely seen as an
attempt to boost domes-
-
bers.
The fall in salt and
combined with issues in
transportation and pro-
export revenues fall from
a high of $650 million to
$536 million in 2013-14.
This falls short of the
exports from the Myan-
mar Fishery Federation
(MFF).
but since then tonnage
has fallen every year. This
is because the amount
we can catch at sea has
of the MFF, Daw Toe
Nandar Tin, said.
-
time waters possess
we require high quality
products for export and
we currently don’t have
Breeders can obtain the
loan through an applica-
tion to the ministry with
the interest and charges
totaling K1.3 million
($1,300).
by the Myanmar gov-
ernment are expected to
boost the country’s trou-
shifting it towards man-
aged catch farms.
The government also
moved to protect the do-
this year, banning all for-
-
sels from its waters, in a
bid to stop rampant ille-
This move may see do-
-
crease; however, there re-
main further issues in the
delivery of fresh or frozen
-
gon’s industrial zones due
to power outages.
WaiLinnKyaw
A Myanmar Airways International (MAI) aircraft refuels at Yangon International Airport.
SherpaHossainy

mmbiztoday.com
LOCAL BIZ 9
Myanmar Summary
Aung Hla Tun
M
yanmar’s earnings
from natural gas ex-
-
cal year as more of the resource
was consumed domestically
but shipments of greater vol-
umes to China as a new pipeline
comes up to speed are expected
to boost earnings this year.
Myanmar earned $3.299 bil-
lion from the export of gas
during the 2013-14 (April/
$3.666 billion in 2012-13 and
compared to $3.502 billion in
2011-2012 and $580 million in
2003-2004, according to data
released by the state-run Cen-
tral Statistical Organisation
(CSO).
Gas exports are a crucial rev-
enue source for the Southeast
Asian nation, accounting for
nearly 30 percent of its total
exports of $11.204 billion in the
Win Maw, a senior ener-
-
cal year was due to the alloca-
tion of more gas for domestic
consumption after redrawing
the agreement with Thailand’s
PTT, previously the sole buyer
the Mottama Sea in southern
Myanmar.
the gas was exported during
2013-2014 to energy-hungry
neighbour China but more will
be exported this year as a new
to capacity.
China through the 793 km-long
cross-country pipeline around
the end of last year, but the
amount was rather small since
it was not technically feasible to
send much through a new pipe-
a new pipeline with gas gradu-
ally and it takes about a year to
this year, we’ll be able to trans-
port to China through the pipe-
Domestic power consump-
tion in Myanmar has been ris-
ing steeply as the country has
undertaken economic reforms
since a quasi-military govern-
rule.
According to CSO data, total
generation of electric power
13.048 billion kwh, up from
10.964 billion kwh in the 2012-
kwh in 2011-2012.
Generation by gas was 2.794
-
cal, up from 2.377 billion kwh in
2012-13 and 1.763 billion kwh
in 2011-2012.
-
mestic demand for electricity is
growing speedily, but we have
prepared to increase generation
Close supervision needs
to be paid to infrastruc-
ture to ensure the coun-
try’s modernisation is
properly regulated, he
added.
well placed to build on
its recent economic re-
forms and embark on an
extended period of rapid
growth, emulating its re-
gional peers.
is sustainable and in-
clusive requires deci-
sive implementation of
a broad range of policies
Davies said.
After decades of mis-
management under the
repressive junta, the new
regime headed by Presi-
dent U Thein Sein has
introduced nationwide
economic and political
reforms since coming to
power in 2011.
According to the IMF,
-
pected to remain consist-
ent with the government’s
target – in large part due
telecommunications
licences.
expects the country’s
strong economic outlook
to increase international
investment interest in the
developing nation.
communications, agricul-
ture and mining sector
can increase investment
country’s trade opportuni-
Withmoreforeignbanks
set to enter the country’s
economic framework, the
rapid economic growth
sector is expected to con-
to meet the demand without af-
-
-
tric Power told Reuters. Reuters
tinue.
Davies said the IMF will
work closely with authori-
ties to ensure expansion
demands on Myanmar’s
macroeconomic policy
don’t outweigh the coun-
try’s supervision capacity.
-
ernised prudential regu-
lations for all banks as
soon as possible will lay
the foundation for the
development of a sound
IMF
IMF
Matt
Davis
Central
Statistical Organization
The Chinese gas pipeline in Rakhine state.
KyawMin

mmbiztoday.com
LOCAL BIZ 10
Myanmar Summary
T
he Myanmar Rub-
ber Planters and
Manufacturers As-
sociation (MRPMA) says
Japan is the next logical
step in the export of My-
anmar’s rubber and latex
products.
Amidst the falling price
of rubber, gross national
rubber exports are esti-
mated to reach 100,000
tonnes by the end of this
-
pean and global economic
crisis, as well as ample
Chinese stockpiles are
Phyo Thu
on rubber prices.
-
duction has increased,
exports have not reached
Khing Myint, secretary of
the MRPMA.
must increase the quanti-
ty and quality of our rub-
ber. At the moment we
have a low quality prod-
uct going for $400-500
less per tonne compared
he said.
The current rubber har-
vest of 500,000 acres –
planted mainly in Mon
and Kayin state and Than-
intharyi region – have
yielded latex harvests ris-
ing to 160,000 tonnes this
year.
Current plans for a new
export strategy have been
it will boost rubber ex-
ports, which last year fell
12,000 tonnes short of
the 95,000-tonne target.
Myanmar Summary
D
elays are expected
in construction of
as import permits from
the Myanmar Investment
Commission (MIC) for the
required machinery have
not been forthcoming.
-
Chosun Korea Co and
signed a deal to produce
electricity from waste at
Dawei Chaung and Thein-
-
ary.
-
ered import permits, so
we are unable to start. As
soon as we get the permits
we will be able to begin
-
partment of Pollution
Phyu Thit Lwin Control and Cleansing at
A total of $200 million
will be spent on the con-
struction and operation
of the generator facility,
construction is expected
to take two years and test-
ing an additional three
months.
When fully operational
it is expected the gen-
erators will produce 45.4
megawatts (MW), with
electricity to be sold to
($0.15) per unit, largely
for industrial use.
Further discussion as
from the 25-year deal will
the companies involved.
with foreign experts to
ensure smoke and waste
water from the generators
is least harmful to the en-
Mon, executive director of
said.
Myanmar Summary
T
he joint secretary
of Union of Myan-
mar Federation of
Chambers of Commerce
and Industry (UMFCCI)
U Myo Thant says there is
growing interest from Vi-
etnamese entrepreneurs
in the Myanmar gem in-
dustry.
Vietnamese business-
men came to the Myan-
mar Gems Emporium
held from May 26 to June
7 to seek investment op-
portunities in the sector.
jewellery after purchas-
ing Myanmar jade lots
and manufacturing value-
Thant said.
Kyaw Min The increased invest-
ment interest in the gem
industry comes as more
Vietnamese entrepre-
neurs try to penetrate
Myanmar’s consumer
market.
Joint Secretary U Than
Aung Kyaw said the food
industry is another key
sector being eyed by Eu-
ropean and Asian coun-
tries as a promising in-
vestment opportunity.
The 2014 Vietnam-My-
anmar Trade and Tour-
ism Fair will be held from
June 26-30 at Tatmadaw
The fair will feature
over 80 Vietnamese busi-
nesses in the foods, plas-
tic and electronic items
sector in nearly 100 stalls.
UMFCCI
d
Zeya & Associates Co.,Ltd
BOT
MIC
&aMumif; YCDC
DimasArdian/Bloomberg
WMC
SoeZeyaTun/Reuters

mmbiztoday.com
LOCAL BIZ 11
Myanmar Summary
M
y a n m a r ’ s
e m e r g e n c e
in the last 24
months as Southeast Asia’s
most exciting business
opportunity has rarely
been out of the press.
It has a large, youthful
population, a strategically
advantageous geographical
location within the ASEAN
community and, most
importantly following
decades of authoritarian
rule, a renewed desire to
undertake the political
and economic reforms
necessary to position itself
as a key economy in the
region.
economy, one of the most
important building blocks
for Myanmar’s economic
development will be access
to electricity. Without
power, Myanmar’s industry
will not reach its full
potential. In this article we
outline some of the reasons
why Myanmar’s power
sector has attracted the
interest of the international
and provide an overview of
the key challenges that the
power sector is facing.
Opportunities
Strong demand and
potential growth
Presently, only 30
percent of Myanmar’s
population have access
to electricity (with that
percentage decreasing to
around 6 percent in rural
areas) and there were
demonstrations last year
power cuts. Power cuts
and brown-outs are an
unfortunate feature of
daily life, as anyone who
has visited the city this
year will be aware. The
power sector is therefore
a top priority for the
government, and the
latest announced goal is
to increase capacity to
20,000MW by the year
2030 – a monumental
plan given the current
installed capacity of only
4,000MW.
The government also
plans to revise the
existing electricity law
(dating from 1984, it
Nathan Dodd &
Ben Thompson
was enacted during the
years of isolation), and is
working with the Asian
Development Bank to
understand the scope of
this challenging task. The
government is also in the
process of drafting a new
energy policy, through
the National Energy
Management Committee.
In terms of fuel sources,
have seen the most initial
activity. The 120MW
Ahlone power project,
being developed by Toyo
Thai, is one of the most
progressedpowerprojects
involving international
sponsors, with 80MW
already being dispatched.
under development
include a 500MW gas-
Thakayta province, being
developed by a South
Korean consortium, and
three locally developed
power projects of 50MW
each.
Myanmar also has
potential of about
100,000MW, with
around 40,000MW of
hydropower having so
possible development.
have their own
challenges, however, due
to seasonality of power
resettlement issues.
The distance of the
hydropower resource
from the main demand
also an issue, with
of the transmission
network required to avoid
substantial transmission
losses. As such, there
is a recognition by
the government that
hydropower (which
currently accounts for the
bulk of the country’s base-
load) may be better suited
to peak load supply, with
thermal power capacity
being stepped up to
provide base-load.
Other renewables could
role, particularly micro
power projects for smaller
areas. Suitable sites
for solar and biomass
power projects have been
a successful renewables
sector typically requires
a solid underlying
regulatory framework,
which Myanmar does not
for example.
Government funds
limited
markets, and indeed
some more developed
markets, government
funds are currently over-
stretched. There is simply
not the cash available
in the public purse to
make the substantial
investments required
to upgrade Myanmar’s
power infrastructure in
order to keep pace with its
economic development.
While government-to-
government lending
term gap, the private
sector is going to have a
injecting the necessary
capital, and that will be
by means of both private
company investment
as well as international
bank funding. The most
likely form of funding
for the power sector is
by multilaterals or
export credit agencies.
The question remains
however, how great is
the commercial lender
appetite to provide project
Keen interest from
international
banking sector
In spite of the
challenges, there is
relatively strong interest
from the international
lending community in
Myanmar; the challenge
is to convert this interest
into debt funding
for suitable projects.
Myanmar presents a new
frontier market in the
Southeast Asia region
for the international
banks, especially as
markets such as Thailand
and the Philippines are
increasingly dominated
by strong local banks.
The international banks
know that the lender that
takes a leading role in the
when the sector expands.
Many of the key regional
and international project
establishedrepresentative
number of them now have
a clear mandate to lend –
provided it is to the right
project.
movers
The same early
mover advantage is
being pursued even
more aggressively by
international sponsors
seeking to gain
recognition with the
various governmental
and local players in the
market, which is going
to be key in getting deals
done in Myanmar. Some
companies are more
cautious than others.
Some will wait for
opportunities to invest
by acquiring shares in
projects that the more
bullish early movers have
developed.
Chinese, Japanese,
South Korean, Thai
and Singaporean
companies are looking
at this market. China has
dominated investment
in Myanmar in recent
years, particularly for
cross-border hydropower
schemes. Although
Myanmar appears to want
to loosen its reliance on
its powerful neighbour,
Chinese investment
Through institutions such
as Japan International
Cooperation Agency
(JICA), the world’s largest
bilateral aid agency,
Japan has been a key
provider of development
building assistance to
Myanmar over the last
12 months, leaving the
Japanese well-positioned
with the government.
The South Koreans have
also been key investors
in the ASEAN region
in recent years and are
similarlyintentongaining
a foothold in Myanmar.
The Korean Development
Bank is showing early
interest, as have a number
of South Korean power
at a government-to-
government level, we are
not seeing the same level
of investment as that
Thailand has a long
history with Myanmar and,
although geographically
close, the relationship
between the countries is
also tinged with a healthy
rivalry. Thailand’s power
sector is, however, one
of the success stories of
South-East Asia over the
last 20 years. With Thai
investment-starved power sector.
WaiLinnKyaw
“
The power sector is a top
priority for the government,
and the latest announced
goal is to increase capacity
to 20,000MW by the year 2030 – a
monumental plan given the current
installed capacity of only 4,000MW.”

mmbiztoday.com
LOCAL BIZ 12
eager to follow Thailand’s
increasinglyinternationally
focused sponsors into the
Myanmar market, the
opportunities are there
and learn from the Thai
experience. Singapore, as
centre, is home to some
ambitious developers and
is also likely to play a key
role, not least due to its
favourable tax treaty with
Myanmar.
Multilateral/
Development funding
assistance
Given the risks involved
and Myanmar’s early
stage of development,
multilateral and ECA
development funding
assistance is key. If
there was ever a market
that should attract
development funding,
Myanmar is that market.
Institutions such as the
World Bank, the IFC, and
the Asian Development
opportunities to provide
development assistance
to the country. Various
high-ranking delegations
from these institutions
have visited the country
over the last 12 months to
pledge support, which will
be essential in ensuring
the transition of the
power sector to a model
that is bankable.
Nathan Dodd and Ben
Thompson are partners
Myanmar Summary
Myanmar Summary
T
he small and Me-
dium Enterprise
Development Bank
(SMIDB) will contribute
K1 billion ($1 million) in
loans in each of Myan-
mar’s seven states in a bid
to support the countries’
local business sector, an
The loans will be distrib-
uted regionally through-
out Myanmar at an in-
terest rate of 8.5 percent
over three years.
SMIDB has already
granted K20 billion ($20
million) with an 8.5 per-
cent interest rate to SMEs
throughout Myanmar this
managing director of
SMIDB, said the state
loans will provide mone-
tary support for the small
and medium enterprises
(SME) in the country.
bursed this month, fol-
lowing recommendations
from representatives
from the state and region-
State-run SMIDB was
established in 1996 and
currently has 13 branches
May Soe San in Myanmar.
Daw Khin Thein, man-
Kaung Manufacturing,
said the comparatively
by SMIDB will draw local
businesses in Myanmar to
the loans.
She said SMIDB will
provide bank loans of up
to K150 million for a col-
lateral worth K600 mil-
lion, and when compared
with other private banks
the interest rate is cheap.
The K1 billion state con-
tributions from SMIDB
will see small and me-
dium enterprises become
more competitive in My-
anmar’s growing econo-
my, she added.
port provided through the
regional loans can help
increase the production
capacity of local business-
es in Myanmar, then the
T
he authorities will
spend more than K1
billion ($1 million)
to repair seven domestic
airports in Myanmar in
cal year, a Department of
cial said.
Since the process for
improving 30 domestic
airports began, 48 local
and foreign companies
have bid to handle the op-
erations, she said on con-
dition of anonymity.
The repairs will include
and installing security de-
vices, she added.
pair the runways. As rainy
season has arrived we will
prepare everything neces-
sary to prevent airplane
cial said.
The airports to be re-
paired are Thandwe Air-
port in Rakhine state,
Tachileik and Mae Sot
Htun Htun Minn Airport in Shan state,
Naung Mon Airport in
port in Kayah state, Kalay
Airport in Sagaing region
and Koe Koe Island Air-
Four foreign companies
have also made proposals
waddy International Air-
port – set to become the
largest airport in South-
east Asia once complete.
One of those four com-
lected for the project in
June.
Thandwe Airport in Ngapali, Rakhine State.
The small and Medium Enterprise Development Bank (SMIDB) will contribute K1 billion ($1 million) in
loans in a bid to support small local businesses.
the legal system. This
Reuters.
SMIDB
SMEs
UAung/Xinhua
SherpaHossainy
“
There is simply not the cash
available in the public purse
to make the substantial in-
vestments required to up-
grade Myanmar’s power infrastruc-
ture in order to keep pace with its
economic development.”

mmbiztoday.com
REGIONAL BIZ 13
Myanmar Summary
Myanmar Summary
CBritain last Monday
focused on moving the
relationship beyond the
the past and signing more
than $30 billion of deals.
Britain’s relations
withChinatookanosedive
in 2012 after Prime
Minister David Cameron
Tibetan spiritual leader
whom Beijing says is
a separatist. Ties have
recovered somewhat
since, and Cameron
visited China last year.
Tensions remain,
however. Beijing warned
visit not to lecture it on
the subject if it wanted
good economic ties, after
Britain angered China in
April when it criticized its
human rights record in a
report. Britain is expected
to take the opportunity
to announce it is easing
some visa restrictions
on Chinese citizens, a
ANDREW OSBORN
AND BEN BLANCHARD
long-standing request
from Beijing which has
complained current
arrangements are overly
lengthy, bureaucratic and
opaque.
Cameron and will also
meet the Queen. China’s
ambassador to Britain on
Friday robustly rejected
local media reports that
Beijing had threatened to
not granted an audience.
In speeches to Chinese
and British business
people, as well as think
to make reassuring
comments about slowing
growth in China to try
in the world’s second
biggest economy.
A Reuters poll in April
forecast China’s economic
growth could slow to 7.3
percent in the second
quarter from a 18-month
low of 7.4 percent in the
previous quarter, with
full-year growth of 7.3
percent in 2014, the
weakest in 24 years.
year’s 7.5 percent growth
target, but analysts say
the government needs
to prevent growth from
falling towards 7 percent,
something that could fuel
job losses and threaten
social stability.
DEALS
Boosting business
between Britain and
China is one of the visit’s
main aims. China views
Britain as Europe’s most
open economy and is
in nuclear and high-speed
rail projects.
It also wants the
government to ensure
airport is expanded.
Two large Chinese
investment funds are
expected to announce
plans to plough’s new
money into Britain during
the trip.
yuan trading hub and
there may also be deals
related to that. China has
said the visit should yield
business deals worth a
total value of over $30
billion.
Ahead of the trip, Vice
Commerce Minister
investment in Britain
had jumped from $840
million in 2008 to $12.4
billion in 2013.
import even more high-
tech goods, services and
Gao said.
She said she hoped
Britain would push
Europe to lift curbs on
exports of high-tech
goods to China and said
Beijing wanted British
help to explore an EU-
China free trade deal.
Reuters
T
he Philippines
said last Monday
that China’s
the disputed South China
Sea threatened security
and stability in the region,
calling on all claimant
states to halt construction
activities that may raise
tensions.
Albert del Rosario,
said he supported U.S.
Assistant Secretary of
State for East Asia Daniel
Russel’s proposal for
China and Southeast
Asian states to get
together for dialogue.
moratorium in terms of
activities that escalate
told ANC Television
let’s do that while we
work on an expeditious
conclusion of the code
Del Rosario said China
and other claimant
states have been rushing
construction activities in
their respective claimed
territories to expand,
citing works in Fiery
Cross Reef, Johnson
South Reef, Gaven Reef,
and Cuarteron Reef.
their expansion agenda
for the following reasons
... one is they want to do
this before the conclusion
of the code of conduct.
They’re also trying to
do this very quickly
in anticipation of the
handing down of the
Southeast Asian states
have been pressing China
to conclude a Code of
Conduct - a set of rules
governing naval actions -
for the South China Sea.
Arbitral Court in The
to explore and exploit
resources under the U.N.
the Sea. China has refused
to participate in the case.
Chinese Foreign
Ministry spokeswoman
had a right to do what
it wanted on its islands
in the South China Sea
as they were Chinese
territory, and criticised
the Philippines for what
it called Manila’s illegal
occupation of some of the
islands and construction
work there.
Philippines keep making
further provocative
moves, and one the other
hand make thoughtless
remarks about China’s
appropriate moves
within the scope of our
China claims 90 percent
of the South China Sea,
believed to have huge
oil-and-gas deposits and
Brunei, Malaysia, the
Philippines, Vietnam and
Taiwan also have claims
over the sea where about
$5 trillion of ship-borne
trade passes every year.
DelRosariosaidChinese
construction in the
Spratlys was an attempt
to alter the character of
the features, converting
reefs into islands to be
able to increase maritime
entitlements.
China and Vietnam
are also involved in an
increasingly bitter spat
over the operations of a
Chinese oil rig in another
part of the South China
Sea, around the Paracel
Islands.
China has made Woody
Island, which Beijing
calls Sansha city, the
hub of its operations on
the Paracels, including
building a port and
airport facilities there.
Reuters
Manuel Mogato &
Lara Murallos
British Prime Minister David Cameron (L) and Chinese Premier Li Keqiang.
NgHanGuan/Bloomberg
A China Coast Guard ship, top, and a Philippine supply boat engage in a stand off as the Philippine boat
attempts to reach Ayungin Shoal.
JayDirecto/GettyImages
Li Keqiang
Li

mmbiztoday.com
REGIONAL BIZ 14
A worker rakes the pulped outer layers of arabica coffee berries as the waste pours.
Bloomberg
Cin India, the third-
largest grower
in Asia, will probably
decline in six years after
plentiful rains spurred
bean development, an
exporters’ group said.
Shares of exporters
gained in Mumbai.
The harvest in the 12
months starting Oct. 1
is set to expand from
300,000 metric tons
this year, Ramesh Rajah,
Exporters Association,
said without providing
an estimate. While he
expects an increase, the
crop still faces the risk of
pest attacks and reduced
rainfall from a possible
El Nino later this year, he
said by phone on June 13.
Swansy Afonso may boost shipments,
expanding global supplies
andpotentiallypressuring
prices. Arabica futures
abear market this month
and have tumbled 20
percent from a two-year
high in April after rains
eased drought damage for
plants in Brazil. Robusta
percent from the highest
level in 17 months in
March.
much better next year,
specially for robusta,
because rains have been
Gurjer, a member
and past chairman of
the Karnataka Planters
Association, said by
phone June 12 from
Bengaluru, formerly
known as Bangalore. The
group represents 650
growers from the state,
which supplies about 70
percent of the nation’s
crop.
Total production may
increase by 7 percent from
the 280,000 tons that
the planters’ association
estimates for this year,
Gurjer said. The robusta
crop, which makes up 70
percent of the total, may
expand by 15 percent, he
said.
El Nino Concern
Karnataka received
9 to 75 percent more
rain than the 50-year
average from March
to May, according to
the India Meteorological
Department. The
monsoon from June
to September, which
supplies more than 70
percent of annual rainfall,
will be below normal at
93 percent of the 50-year
average because of the
emergence of El Nino, the
bureau said.
While Rajah from the
exporters’ association
said a weak monsoon may
hurt the crop, Gurjer of
the planters’ group said
the absence of heavy rain
later in the year may be
happen and the monsoon
isn’t as vigorous as last
year, the risk associated
with a heavy monsoon
explaining fewer cherries
would be lost.
Board cut its output
forecast for this year to
311,500 tons in January
from 347,000 tons at the
start of the season, citing
heavy rain in Karnataka in
September and October.
The board hasn’t updated
its estimate. The crop was
a record 318,200 tons last
year, board data show.
A weak monsoon might
increase the incidence of
the white stem borer pest
in arabica plantations,
according to Rajah.
Brazilian Supplies
much as 2.8 percent to
994 rupees in Mumbai
trading, the biggest gain
in more than a week,
before trading at 986.35
exporter, climbed as
much as 1.5 percent to
63.70 rupees.
Arabica prices may
drop by 10 percent to 15
percent in the next couple
of months, while robusta
may decline 5 percent to
10 percent, Rajah said.
coming in better than
expected and we are
heading into the lean
demand season as the
summer months begin in
Brazilian growers are
facing less severe crop
losses than estimated
after showers reduced
the impact of the worst
dry spell in 50 years,
Agriculture Minister
Neri Geller said on June
2. Output this year may
be 50.5 million bags,
according to Mercon
Group. That’s higher than
the 49.5 million estimated
by the U.S. government in
May.
S h i p m e n t s
from India may fall in
the second half because
of the smaller crop and
weaker prices, Rajah said.
Exports in 2014 will drop
by 5 percent to 10 percent
from 312,756 tons a year
earlier, he said, reiterating
estimates made in April.
Exports declined to
167,714 tons between
Jan. 1 and June 10 from
168,089 tons a year
earlier, board data show.
Buyers from Italy, Russia
and Germany accounted
for about 40 percent of
exports last year, the data
showed.
Robusta rose 0.1 percent
to settle at $1,999 a ton
while arabica fell 0.4
percent to $1.758 a pound
on ICE Futures U.S.
Myanmar Summary
Myanmar Summary
Premier Li
Cwill hit its growth
target of 7.5
percent this year, Chinese
last Monday, adding the
government was ready to
adjust policy to make sure
it does.
Writing in Britain’s The
Times newspaper on the
the world’s second-largest
economy was normal and
not a problem.
to grow at a proper rate,
expected to be around
downward pressure,
China’s economy is
moving on a steady
course. We will continue
to make anticipatory and
moderate adjustments
when necessary. We are
well prepared to defuse
various risks. We are
growth target will be
A Reuters poll in April
forecast China’s economic
growth could slow to 7.3
percent in the second
quarter from a 18-month
low of 7.4 percent in the
previous quarter, with
full-year growth of 7.3
percent in 2014, the
weakest in 24 years.
in achieving this
year’s growth target
although analysts say
the government wants
to prevent growth from
falling towards 7 percent,
as that could fuel job
losses and threaten social
stability. Reuters
Andrew Osborn
Bloomberg
Ramesh Rajah rS ajym
Arabica
Li
Keqiang
Times
Li

mmbiztoday.com
REGIONAL BIZ 15
Myanmar Summary
Myanmar Summary
nd
A
sia’s diesel demand
is expected to grow
this year at the
second lowest rate since
as slowing economies
and subsidy cuts squeeze
consumption and help
build a surplus for which
there are few markets.
Demand in top regional
consumers China, India
and Indonesia is expected
to remain stagnant or
capacity is added in Asia
and the Middle East,
excess diesel is seen
hitting an annual average
of more than a million
barrels per day (bpd) in
2014, according to one oil
and gas consultancy.
That means regional
returns or cracks from
processing crude into the
fuel - already near 3-1/2-
year lows - will remain
slim, analysts said. Since
diesel or gasoil accounts
for nearly 40 percent
of the typical Asian oil
plant’s output, overall
also be pressured and
already slowing run rates.
Asia’s surplus diesel
would normally be
shipped west but Europe
is facing a glut as well,
with diesel margins there
holding at multi-year
lows.
this year is expected but
growth will probably still
fall short of the levels seen
FGE.
JANE CHUNG AND
ALICE WOODHOUSE
Asia’s diesel demand
will grow slightly faster
this year than in 2013,
when it rose less than 1
percent - the lowest in 15
years, FGE said.
Oil consultancy Wood
Mackenzie (Woodmac)
has lower numbers,
forecasting diesel use
in Asia to grow at 0.45
percent compared to
average annual growth
3.9 percent.
For the second quarter
this year, Woodmac
estimated Asian diesel
demand 0.7 percent
higher than last year,
while forecasting growth
in 2015 at 1.7 percent.
This slow growth amid
increasing capacity will
result in a diesel surplus
of around 1.2 million bpd
this year, said Suresh
Sivanandam, an analyst
at Woodmac, with China’s
diesel exports averaging
around 90,000 bpd,
nearly double from 2013.
China is bringing on
demand growth there
drops to its slowest in
decades, forcing Asia’s
top consumer to turn
region with supplies far in
excess of demand.
New plants in India and
the Middle East are also
contributing to diesel’s
overhang, analysts said.
Diesel is Asia’s most
widely consumed fuel,
used in everything from
power generators and
factories to trains and
trucks. Given its broad
applications, the product
is often seen as an
indicator of a country’s
economic health.
LITTLE ROOM
There is some room
but not a lot for Asian
products to be soaked up
elsewhere, said Amrita
Sen, chief oil market
analyst at Energy Aspects.
move out of Asia ... but
competition from other
players such as the Middle
East, Russia and the U.S.
Given the excess supply,
in South Korea and Japan
which account for about
a third of Asian middle
distillates exports - have
lowered crude runs
slightly.
may consider cutting
run rates if the supply
glut continues, but
actually they have already
trimmed by 30,000 bpd
a source at a North Asian
average operating rate
from January to April this
year was 80.7 percent,
down from 83.1 percent
during the same period
last year, data from state-
run Korea National Oil
Corp (KNOC) showed.
this year, South Korean
processed less crude than
last year amid a regional
supply glut.
PARING SUBSIDIES
A gradual reduction
of subsidies in India
and Indonesia to bring
domestic gasoil prices
in line with global
markets is also hurting
consumption, analysts
and industry sources said.
Indonesia’s diesel
demand is expected to
drop 4.6 percent this
year, further than last
year’s fall of 3.7 percent,
Woodmac’s Sivanandam
said.
India’s diesel use fell
year that ended March
in more than a decade in
the world’s fourth-largest
oil consumer, according
to data from the oil
ministry’s Petroleum
Planning and Analysis
Cell.
New Delhi last year
hike diesel prices by small
amounts every month
with the aim to end
subsidies eventually.
That should keep
pressing down the
country’s demand for
diesel, said a trading
source based in India.
Western oil advisors
and economists have
for years been saying
that fuel subsidies have
distorted Asian oil
markets, encouraged
overconsumption and
capacity surpluses in
some countries such as
China.
reduced subsidies in
India and Indonesia may
not be long-lasting as
economic growth in the
two countries will likely
bolster demand for diesel
in coming years.
played a role in lower
demand but we anticipate
that the impact of price
hikes on Indonesian
diesel demand will be
temporary, as road-
freight demand for diesel
will grow in tandem with
Sivanandam said.
shutdowns in Australia
is also likely to support
demand for the fuel,
helping soak up some of
the regional surplus.
Reuters
B
rent crude jumped
to a nine-month
high on June 13
on concern violence
in Iraq will disrupt sup-
plies, threatening to in-
crease costs for Asia’s
third-largest economy
that imports almost 80
percent of its oil. India’s
accelerated to 6.01 per-
cent in May, the fastest
data showed yesterday.
a 10-month high of $11.24
billion in May, a report
showed last week.
The rupee slid 1.9 per-
cent in the past three
days to 60.38 per dollar
the biggest loss since the
period ended Jan. 27, ac-
cording to prices from
local banks compiled by
Bloomberg. It fell 0.4 per-
cent today and dropped as
low as 60.5250, the weak-
est level since April 29.
is mainly due to dollar
buying by importers on
expectation oil prices may
surge because of Iraq ten-
-
veri, co-head of currency
and rates in Mumbai at
brokerage Edelweiss Fi-
currency may fall as low
as 60.80 today, he said.
India’s currency and in-
terest rates will withstand
the surge in oil prices
as the nation’s political
stability draws capital,
Ashima Goyal, a member
of the Reserve Bank of
India’s technical advisory
committee, which advises
Governor Raghuram Ra-
jan on monetary policy,
said in a phone interview
yesterday. The rupee is
and may trade mostly
between 58 and 60 this
year, she said.
Foreigners have
pumped more than $10
billion into Indian bonds
and stocks this quarter,
exchange data show, as
the nation’s most deci-
sive election in 30 years
Kartik Goyal
Brent crude
tjrefqkH;jzpfaMumif; tpdk;&

mmbiztoday.com
INTERNATIONAL BIZ 16
A
sian shares struck
a cautious tone
last Tuesday as
the double-whammy of a
and a gas dispute between
Ukraine and Russia
sapped investors’ appetite
for risk.
MSCI’s broadest index
outside Japan fell 0.3
percent. Japan’s Nikkei
bucked the trend with rise
of a 0.5 percent, though
it was still down on the
week so far.
Oil prices remained
near nine-month highs
after militants from the
Islamic State of Iraq and
swathe of northern Iraq
and threatened to capture
The insurgent advance
forced Washington to
not only consider options
for military action but
also hold brief talks with
Iran, its long-time foe,
to support the besieged
government in Baghdad.
U.S. crude futures
edged down to $106.76
per barrel after having
climbed as high as
$107.68, but investors
remain wary of potential
disruptions to oil exports.
Hideyuki Sano
extremists to Baghdad
or bombing by U.S
forces will be a trigger
to justify rise in U.S. oil
prices above $110. That
would be a burden for
the world economy in the
Uno, chief strategist
at Sumitomo Mitsui
Banking Corp.
likely to curb growth in
oil-importing economies,
with the Indian rupee
already falling victim
to worries over rising
month low.
Tension in Ukraine
showed no sign of abating
Ukraine in a dispute over
unpaid bills that could
disrupt supplies to the
rest of Europe and set
back hopes for peace
between the former Soviet
neighbours.
As investor risk
sentiment was hit,
underpinned U.S.
Treasuries prices despite
solid U.S. industrial
output data.
The 10-year yield stood
week’s peak of 2.662
percent. Immediate
focus is on the Federal
Reserve’s monetary policy
statement on Wednesday,
when the U.S. central
bank is expected to
announce it will continue
paring its bond purchase
programme and cut its
growth projections.
In the currency market,
the Australian dollar
slipped after minutes of
the Australian central
bank’s June 3 meeting
were more dovish than
expected.
The Aussie dipped 0.4
percent to $0.9361 as
the minutes showed the
Reserve Bank of Australia
was not sure the current
stimulus would be enough
falling mining investment
and government belt-
tightening.
The British pound held
maintaining momentum
after Bank of England
chief Mark Carney
surprised markets last
Thursday by suggesting
the Bank of England may
tighten its policy before
year-end.
The pound stood at
$1.6975, near Monday’s
high of $1.7011, with
close attention falling on
due later in the day given
the focus on the BoE’s
policy.
Elsewhere, Argentina’s
Merval index fell 10.1
percent after the U.S.
Supreme Court declined
to hear the country’s
appeal over its battle with
hedge funds that refused
to take part in its debt
Myanmar Summary
F
or more than eight
Kim Oanh bought
cases of thread from
China for her garment
month, rattled by an anti-
China riot in her country,
from South Korea.
percent of my thread
52, who employs about
Garments & Embroidery.
cost us more, but we need
to think of it now, or it
know how things may
Oanh fears a further
disruption in trade after
last month’s violent
Nguyen Dieu Tu Uyen protests following China’s
placement of an oil rig
in disputed waters. The
unrest halted production
at foreign-owned factories
and caused Chinese
China is the nation’s
largest trading partner,
Vietnam must reduce its
dependence and develop
a contingency plan to
Chamber of Commerce
and Industry Chairman
month.
More Vietnamese
businesses may have to
consider alternatives
as the country prepares
challenging China’s
claims to the disputed
waters. Prime Minister
Nguyen Tan Dung said in
an interview last month
that his administration
had prepared evidence
and was ready for legal
action against the world’s
second-largest economy.
businesses to look into
other markets where the
political risk is absent,
Singapore-based regional
economist at Bank of
good to diversify, anyway.
much on another country,
especially where political
The Vietnam Textile
and Apparel Association
has asked its more than
1,000 members including
Oanh to consider
alternative supply sources
to China, according to
Deputy General Secretary
Nguyen Van Tuan, even
as bilateral trade between
the two countries rose 84
percent to $50.2 billion
last year from $27.3
billion in 2010, according
to government data.
About 31 percent of
Vietnam’s exports to
China last year comprised
agricultural products,
while apparel and
footwear made up 13
percent, trade ministry
data showed. Forty-two
percent of imports from
China were telephone
components, electronic
spare parts, and fabric
and leather for garments
and footwear, with tools
and machinery making
up 18 percent.
Vietnam’s policy makers
Bloomberg
MISCI
Nikkei
restructurings.
The move risks sending
Argentina into a fresh
sovereign default,
although Argentine
shares have risen 34
percent so far this year.

mmbiztoday.com
INTERNATIONAL BIZ 17
Myanmar Summary
Myanmar Summary
T
he number of
companies on
Cambodia’s stock
exchange doubled on
Monday - to two.
The debut by a Taiwan
garment maker is an
important baby step for
long road to listing and
a lack of clarity on the
number of companies to
follow underscore just
how far Cambodia has to
go before it becomes a hot
frontier market.
While neighbouring
Vietnam has seen around
660 companies go public
since the opening of its
which has three listed
up to early expectations
that came when their
exchanges opened for
business in 2011.
That the newly listed
company - Grand
Twins International
(Cambodia) Plc, a major
clothing manufacturer
in the country - is
not Cambodian but
Taiwanese only serves to
highlight local corporate
reluctance. As does
the two-year gap since
Companies planning
to list must provide
statements, have made a
Prak Chan Thul and
Lawrence White requirements to have a
variety of shareholders.
TheCambodiaSecurities
Exchange, a joint venture
with Korea’s bourse,
initially announced plans
to list three state-owned
companies by the end
of 2012 but so far only
the Phnom Penh Water
Supply Authority has
made it to market.
And there is not a whole
lot of turnover, with no
shares changing hands in
one in three trading days
last month. The trading
computers sat switched
reporter visited in June.
While some 100 people,
mostly media, were
in attendance for the
ringing of the bell for
Grand Twins, it was a
subdued debut with the
stock falling 5 percent in
extremely thin trade.
of the exchange, has said
around 10 companies
are exploring a listing
and there would likely
be one more before the
end of the year, but
statements continued to
be a challenge.
news conference earlier
this month.
Frontier markets,
a subset of emerging
markets but which are
more illiquid, less stable
and carry more risk,
have increasingly found
favour with investors
and without change,
Cambodia has much to
lose in potential capital.
they risk being eclipsed
by Myanmar, says Asia
Myanmar, which has
enacted sweeping political
and economic reforms
since 2011, is drawing
huge foreign investor
interest with some of that
beginning to bear fruit.
Gap Inc, for example, just
announced plans to open
Myanmar, which
currently has two listed
brand new exchange in
October next year with
Japanese help. It says
half a dozen companies
will list in the early stages
including Myanmar
Agribusiness Public
Corporation and Asia
Green Development
Bank.
While experts say that
both Cambodia and
companies that would
be attractive investment
targets, there needs to
a change in mindset as
business tycoons have yet
to be convinced about the
Pervasive corruption
hasalsofosteredasenseof
distrust that is hindering
the development of a local
institutional base, despite
most of the necessary
regulatory framework
being in place.
to my surprise, even quite
anumberoflocalinvestors
are still questioning
the trustworthiness
of local companies’
head of Southeast Asia
investment banking at
Tongyang Securities
(Cambodia) Plc, who
Cambodian IPO.
The Cambodian
government could
out of the books of other
frontier markets such as
Bangladesh, said Douglas
Clayton, CEO of frontier
Capital.
Public companies in
Bangladesh pay 27.5
percent tax, while most
private companies
must pay 37.5 percent.
Cambodia could, for
example, cut corporate
taxes in half for three
companies, he said.
transparency this would
bring might actually
increase tax collections
added. Reuters
are trying to bolster
an economy that the
World Bank estimates will
grow 5.4 percent this year,
target of 5.8 percent.
The government is
studying the impact of the
tensions, and will closely
monitor sectors that may
trade, infrastructure
development and
tourism, and take
Prime Minister Nguyen
Xuan Phuc said June 12.
Vietnam’s Transport
said he has not seen any
indication of Chinese
companies pulling back
on investment in the
Southeast Asian nation,
even as the South China
Morning Post reported
June 9 that state-owned
temporarily halt bidding
for Vietnam contracts.
economic growth will be
economist and former
question is how much, 0.5
or 1 percentage point. It’ll
depend on how we cope
The benchmark VN
Index (VNINDEX) has
slipped almost 5 percent
in the past three months.
The dong has weakened
0.6 percent against the
dollar this year.
Vietnam isn’t the only
country in the region that
China has clashed with.
China, which controls the
bulk of global rare-earth
supply, in 2010 turned
imposed a de facto ban
on exports to the nation
after the captain of a
a collision with Japanese
Coast Guard boats was
detained. Anti-Japan
protests sparked by a
territorial dispute in 2012
hurt carmakers including
Toyota Motor Corp.
China’s growing
assertiveness has spurred
Japan to turn its attention
to Southeast Asia and
pledge billions of dollars
of investment. Vietnam
Partnership that would
cover an area with about
$28 trillion in annual
economic output and
excludes China.
Vietnam would also gain
from an Asean Economic
Community planned
for 2015. It has already
seen overseas makers
of apparel, footwear
and electronics set up
factories, spurring a six-
fold increase in foreign
direct investment to $8.4
billion in 2012 from $1.4
billion in 2002, according
to World Bank data.
The tensions between
Vietnam and China in
the South China Sea are
Vietnamese leaders to
of the country’s supply
chains and development
of domestic industries
that can feed critical raw
materials to the country’s
factories, said Trinh
Minh City-based chief
economist at VinaCapital
Group, Vietnam’s
biggest fund manager
that oversees about $1.6
an urgent message that
Vietnam should take
measures to lessen its
economic dependence on
China. It’s never good to
put all your chips on one
Reuters
Luong THi Kim Oanh
Vu Tien Loc rS

mmbiztoday.com
INVESTMENT & FINANCE 18
T
he Japan Interna-
tional Cooperation
Agency (JICA) will
fund ¥2.5 billion ($24.51
million) to help improve
Myanmar’s education
sector, the agency said.
The project aims to im-
prove quality of teacher
education in the educa-
tional college, JICA said.
Education colleges in
Myanmar are institutes
to train teachers in basic
education.
The said grant amount
will cover for administra-
tion building including
assembly hall and gymna-
sium, classrooms build-
ing, hostels and dining
hall with kitchen. Neces-
sary equipment will be set
up as necessary.
The Japanese agency
said the quality of the ed-
Aye Myat
ucation, especially teach-
ers’ education, is one of
the reasons that deter
motivation of students to
continue learning.
JICA said the project
will improve education
colleges which will pro-
duce teachers of higher
quality and greater com-
petence who will in turn
upgrade the quality of the
students as well as the
quality of basic education
of the country.
The grant agreement
-
provement of Education
-
tween the Department of
Educational Planning and
Training under the Min-
istry of Education and
JICA, a statement said.
Myanmar Summary
Students attend a local school on the outskirts of Yangon.
UAung/Xinhua
(JICA)
JICA

mmbiztoday.com
Myanmar Summary
David Mayes
P
-
selves suddenly coming
into a chunk of unex-
pected money and they need to
decide the best way to invest it.
As we are in a situation where
the broad markets continue
to be highly overvalued, the
downside risks of just throwing
the money into the market are
very high. One way to avoid get-
ting caught at the peak before a
crash is to put the money into
a discount brokerage account
-
lio that you would want if the
individual stocks were trading
at the right valuation. The key
to this strategy is that you pa-
tiently wait with the money in
cash until each company hits
your desired price before pur-
chasing it.
Many of the top investors
of the world follow a simi-
lar strategy. Rather than wait
for the markets to be crash-
out when you are close to the
-
ing out which companies you
want, it is much better to have
a wish list put together ahead of
time. Then you do not need to
try and pick the bottom of the
just need to know which prices
you have determined are fair to
buy the companies you want to
hold long term. When the stock
trades down to that price, you
have a pre-set alert inform you
that it is time to make the pur-
chase.
A good rule of thumb is to try
and buy companies trading at
price to earnings ratios of 10 or
below. If you want a portfolio
of say 20 companies, you may
in fact need to make a wish list
of about 40 (some may unfor-
tunately not dip down to your
valuation target even in a se-
vere crisis). When the market
begins a serious retracement,
desired targets dip into buy
range without the broad mar-
kets even crashing. In the event
that within the space of a few
days they all tend to end up as
value buys at about the same
time. Thus it also makes sense
to make a priority list in the
event this happens.
The great thing about this
strategy is that if you pick solid
companies and they survive,
you will almost certainly double
your money at the peak of the
following bull market, even if
that may be some time away. If
the broad markets peak at over
a price to earnings ratio of at
least 20, which they always do
at the end of a cyclical bull mar-
ket, most likely your stock hold-
ings will all be valued similarly.
This assumes earnings can even
-
as in reality they could grow if
you have picked stocks where
the companies are still in the
growth phase of the business
life cycle. A few may see declin-
ing revenues if you have not
picked good companies, hence
be the better your odds of hav-
ing the majority continuing to
grow.
bottom of a crashing market in
the same way you can never pick
the exact top of a bull market.
It’s a fool’s game to even try, but
by following the long time hori-
zon cycles and using valuation
as a decision making criteria
you can assure that you get a
safe chunk out of the middle of
-
uals stock holdings will almost
always immediately drop after
your purchase when you follow
this strategy, and your account
value could stay negative for a
few years even. This is because
of the very nature of buying in
the midst of a falling market,
but don’t worry as it won’t last.
Bear markets are usually fast
and furious, and the following
bull market will always bring
the markets back to their previ-
ous highs if not higher.
-
es to expatriates throughout
-
-
pensions.
Reuters
P
eople should not
pin their hopes on
Myanmar’s new
stock exchange even as the
government announced
plans to launch a share
market by October 2015,
experts say.
Companies who
originally expressed
interest in forming a
stock exchange are now
hesitant, citing further
capital needs should
the government follow
through with its plan.
expect much in the initial
stages of a stock market.
There will be some trades
May Soe San at start-up, but there
won’t be many companies
to trade. It’ll be just a
Thura, CEO of Thura
Swiss, a local market
research and business
advisory company.
Japan planned to help
Myanmar establish its
stock exchange but pro-
gress has proven slow
with delays arising due to
-
-
ing suitable premises.
Training of government
Japanese company, has
been underway since
2011 with Japan also
sending members of its
Financial Services Agency
to oversee development.
and also sent people
overseas. The Minister of
Finance expects the stock
exchange to be in place by
2015, but for now we are
still seeking companies to
Myanmar Stock Exchange
program said.
Daiwa Securities Group
Inc.signedamemorandum
of understanding with the
Myanmar government
in 1994. In 1996, Daiwa
Institute of Research
Group and the Myanmar
Economic Bank formed
the Myanmar Securities
objective of launching a
Myanmar stock exchange.
Myanmar Summary
Thura Swiss CEO
Bloomberg

mmbiztoday.com
Aung Phyo
T
he World Bank has
approved a $107
million credit for
the Mizoram State Roads
II – Regional Transport
Connectivity Project to
improve transport con-
nectivity for India’s land-
locked state of Mizoram
and to help open up the
potential for regional
trade among neighbour-
ing countries.
The Washington-based
lender said the project
will enhance India’s Mi-
zoram and other north-
eastern states’ road links
with Bangladesh, as well
as with Myanmar, Nepal
and Bhutan.
-
cated between Myanmar
and Bangladesh, a bet-
ter connected Mizoram
can open up huge trade
potential for the entire
northeastern region of In-
dia with South and East
Asian countries.
able to export and import
goods cheaper and faster.
Consumers will also bene-
World Bank Country Di-
rector in India.
Connectivity is crucial
for a distant hill state such
asMizoramwhich,likethe
other northeastern states,
is geographically isolated
-
tion routes over predomi-
nantly mountainous ter-
rain have long hampered
trade and development.
Stage I of the project re-
habilitated over 400 kilo-
metres of the state’s core
road network, reducing
travel time by half, and
-
the project area.
The link to Bangladesh
will facilitate greater bi-
lateral trade and access
to the Port of Chittagong
– the nearest shipping
port for the northeastern
region of India, while the
link to the border with
Myanmar will facilitate
connectivity to Myanmar
and the rest of East Asia
and beyond, the World
Bank said.
Mizoram’s road net-
work is of poor quality
and under developed, and
has among the lowest
density in all of India. It
faces severe constraints
in its connectivity with
larger markets. Travel
from Aizawl to the nearest
Indian port of Kolkata via
the congested, 11 km-wide
Siliguri corridor, also
journey. Prices for basic
staples like rice, sugar, tea
and tomatoes can cost as
much as three times more
in Mizoram and other
northeastern states when
compared with most In-
dian cities or neighbour-
ing countries like Bangla-
desh.
According to estimates,
annual intra-regional
trade in the region can
more than double from
$16 billion to $38 billion
annually, if barriers to
trading with neighbours
were removed. Accord-
ing to another estimate,
investments in transport
infrastructure could re-
duce trade costs by more
than 20 percent in India,
and 12.5 percent in Bang-
ladesh.
The project will fund
91 km of roads that are
design-ready. Roads
that will be widened or
-
glei – Tlabung – Kawr-
puichhuah road on the
border with Bangladesh;
the 27.5km Champhai-
Zokhawthar road on the
border with Myanmar;
and the 41.7km Chhum-
khum-Chawngte North-
South alignment connect-
ing to the border roads
with Bangladesh to the
west and Myanmar to the
south.
Another 330km of road
works may be considered
for a follow-on project
-
ing when the designs are
ready. The current project
will fund detailed stud-
ies and designs for these
roads (330km) mostly in
the North-South corri-
dor. Many of these roads,
to be taken up in the next
projects and will increase
the connectivity both
within the state – improv-
ing access to transport in-
frastructure and services
for isolated communities
– as well as to key inter-
national trunk roads and
transport corridors that
connect to other north-
east Indian states, Bang-
ladesh, Chittagong Port
and the rest of South Asia,
and to Myanmar.
The bank said the pro-
ject will strengthen road
safety management sys-
tems and initiate pilot
projects to demonstrate
good practices in road
safety engineering meas-
-
dress road safety hazards.
connectivity can play a
vital role in enhancing
growth in Mizoram, a re-
mote, hilly, and moun-
tainous region where
road transport is the
only mode of transport
senior transport special-
ist and the World Bank’s
project.
can help reduce freight
and passenger transport
costs, and provide quick-
er and safer access to all
parts of the state and to
neighbouring states and
Myanmar Summary
Myanmar Summary
Aye Myat
M
yanmar and the
United States
talks on trade and invest-
ment framework agree-
ment (TIFA) in Nay Pyi
Taw last week.
The dialogue covered
update on Myanmar trade
initiatives and policy
reform, import licens-
ing regime, intellectual
property rights and op-
portunities for bilateral
cooperation as well as ex-
panded economic engage-
ment between ASEAN
and the United States.
The opening of the dia-
logue was respectively
addressed by Myanmar
Deputy Minister of Na-
tional Planning and Eco-
nomic Development Daw
Deputy Assistant of US
Trade Representative for
Southeast Asia and the
Aimed at promoting
an attractive investment
climate and expanding
and diversifying trade
in products and services
between the two coun-
tries, the governments of
Myanmar and the United
States signed the trade
and investment frame-
work agreement on May
21 last year, creating a
platform for ongoing dia-
logue and cooperation
on trade and investment
issues between the two
sides.
Under the agreement,
a Trade and Investment
Council was established
to monitor trade and in-
vestment relations be-
tween the two countries,
identify opportunities for
expanding trade and in-
vestment and identifying
issues such as strengthen-
ing of rule of law and pro-
moting transparent and
corruption-free public in-
stitutions and the protec-
tion of intellectual prop-
erty rights, workers’ right
and the environment.
Following the easing
of sanctions in 2012, the
United States claimed
that Myanmar-US bilat-
eral trade has been in-
creasing but still remains
small.
According to Myanmar
-
mar-US bilateral trade
reached $104.44 million
which ended in March, of
which Myanmar’s export
to the United States stood
at $24.78 million.
US Department of Com-
merce has also disclosed
that as of the end of April,
US companies had in-
vested $243.6 million in
Myanmar and US exports
have increased from $9.8
million in 2010 to $145.7
million in 2013.
A worker drives a road roller during the construction of a road link between India and Myanmar at Wang-
zing village, south of the northeastern Indian city of Imphal.
RupakDeChowdhuri/Reuters

mmbiztoday.com
Myanmar Summary
A
uthorities in
Myanmar are
determined to
foster economic progress
inclusion on their list of
priorities. In an attempt
to tackle demand for
services, Myanmar has
taken numerous steps in
the last 24 months, such
currency, liberalisation of
theinsuranceindustryand
the independence of the
Central Bank of Myanmar
(CBM). Following these
adjustments, 2014 is set
to see the CBM grant
operating licences to
foreign banks, while 2015
has been set as the target
date for the establishment
Exchange.
The unbanked
population
According to a recent
joint study by the UN
Capital Development
Fund (UNCDF) and
the UN Development
Programme called
Making Access Possible
(MAP), only 4 percent of
families surveyed have
bank accounts in their
own names, 39 percent
have no access to any
while 31 percent opt for
assistance such as money
lenders or borrowing
money from family or
friends. Sponsored by the
UNCDF and the multi-
Food Security Trust Fund
survey covered 5,100
households and suggested
that while there is strong
potential demand for
regulated services,
do not match the needs of
the unbanked population.
are being undertaken to
address the issue, and
Dr Maung Maung Thein,
the deputy minister for
the Financial Inclusion
Roadmap Conference
in Nay Pyi Taw in May
that the ministry aims
to increase the banked
Michael Nesbitt
population from 30
percent to 40 percent by
2020.
Branchless banking
In an attempt to increase
services, many local banks
are opening branches in
critical momentum for
expected to be gained
once infrastructure
improvements are made
within the telecoms
sector. Similar to other
emerging economies,
localbanksarepositioning
mobile banking services.
U Pe Myint, managing
director of CB Bank,
of people have limited
access to the internet.
Mobile banking gives our
people the chance to do
their banking activities
With two international
telecoms providers set
to launch their services
in 2014, Myanmar is
well positioned for
a rapid rise in both
mobile penetration and
mobile banking activity.
payments in this country
is SMS banking, similar to
success stories in Africa,
such as Kenya where
mobile banking plays a
Bennett, a consultant for
Tun Foundation Bank,
told OBG.
Foreign participation
According to the
Myanmar Investment
Commission, approved
foreign investment
nearly tripled to $4.1
year from $1.4 billion in
the previous year. With
an expanding economy
and underdeveloped
banking system, many
international banks are
vying for an operating
licence in the once
feelings are mixed, as
Daw Kim Chawsu, head
of transformations at
Kanbawza Bank (KBZ),
two trains of thought.
First the entrance of
foreign banks will assist
in the development of
the sector, and second
that they will squash
local competitors out of
from this development.
Infrastructure, funding,
technology and expertise
are all things that
international banks bring
Foreign banks can only
enter the market in the
form of representative
the CBM plans to grant
media reports suggest
that the newcomers will
be faced with certain
restrictions, such as
not being allowed to
engage in retail banking
or dealing uniquely in
foreign currency.
Although local banks
may be concerned by
the possible role of
foreign-owned banks
in the future, there is
some recognition that
their presence may also
encourage international
companies to invest in
the deputy chairman of
banks should be allowed
in on a step-by-step basis.
This will assist with the
development, as well as
the protection, of the
sector in Myanmar is still
decadesbehinditsASEAN
neighbours, progressive
steps within insurance,
accounting and telecoms
place the country in good
stead to leapfrog years of
technology and establish
a modern banking
this depends greatly
on the CBM’s decisions
regarding the entrance
of foreign banks and the
restrictions they will face.
in Myanmar. Based
in Yangon he works
OBG’s Flagship annual
opportunities in key
The Visa Inc and Mastercard Inc logos are displayed on the side of an automated teller machine (ATM) as
a customer withdraws money at a shopping mall in downtown Yangon.
DarioPignatelli/Bloomberg
UN Capital
DevelopmentFund(UNCDF)
Making Access
Possible (MAP)
UNCDF Livelihoods
and Food Security Trust Fund
(LIFT)
MAP

mmbiztoday.com
Myanmar Summary
TM
2 colx x 26 cm
Giti Notice
Ministries join hands to support responsible tourism in Indawgyi Lake
A
new ecotourism
initiative will be
developed to en-
sure visitors to Indawgyi
in Kachin state contribute
positively to its ongoing
conservation manage-
ment, a nature conserva-
tion group said.
-
tives from the Ministry of
Environmental Conser-
vation and Forestry and
hands to agree on the im-
portance of engaging local
stakeholders in develop-
ing a tourism strategy for
the lake and its globally
important wildlife.
Dr Sai Kyaw Ohne, said
that creating a responsi-
ble, sustainable tourism
strategy that involved
and engaged local com-
munities could prevent
mistakes that have been
made during the devel-
opment of other regions,
can lead to serious envi-
ronmental degradation.
help to support everyone
who lives here and is a
good example for other
communities in the coun-
try, other countries in the
region, and in fact other
Kyaw Ohne said.
A workshop to discuss
the new strategy was held,
involving local commu-
nity representatives, the
Myanmar Tourism Feder-
ation and Myanmar Tour-
ism Association repre-
senting the private sector,
and relevant government
agencies.
Wai Linn Kyaw
Attendees agreed on
a vision for responsible
tourism development at
help to conserve the natu-
ral and cultural heritage
of the area, while provid-
to local people.
The workshop builds on
the momentum created
by Fauna & Flora Inter-
national’s (FFI) launch of
a community-based eco-
tourism initiative at In-
FFI helped commu-
-
ton Village at Indawgyi
-
gyi’, a community group
dedicated to support local
livelihoods through the
development of ecotour-
ism.
FFI has provided train-
ing to the young villag-
ers, as well as kayaks and
mountain bikes that can
be rented to tourists to
explore the beautiful na-
ture of the lake and its
surrounding forests.
sustainable ecotourism
which creates revenues
says Frank Momberg, FFI
Myanmar Director.
-
-
ence in complete lake se-
renity, instead of joining
the tourist hordes in noisy
which is Myanmar’s most
Before FFI’s Inn Chit
Thu initiative, Indawgyi
tourists could only expe-
rience the lake through an
expensive motorboat ride
– now tourists can choose
kayaks, bicycles and
walks instead, having an
opportunity to feel closer
to nature, and without us-
ing noisy, unsustainable
and expensive methods.
Despite quadrupling
visitors since the launch
of Inn Chit Thu, inter-
national tourists to In-
small, an area the group
hope to build in coming
seasons.
a pristine state with thou-
sands of migratory birds
arriving each winter from
their long journey start-
ing in Siberia for resting
and wintering in Indaw-
gyi, turning the lake into
a heaven for bird watch-
ers and nature tourists. It
is hoped that by following
a strategy for responsible
tourism in a protected
area, tourism can help
to balance the needs for
nature conservation and
economic development.
Indawgyi Lake.
Flickr/Morgenstund
Brown-headed gulls at Shwemyintzu Pagoda at Indawgyi Lake.
BjornOlesen/FFI

mmbiztoday.com
PROPERTY & REAL ESTATE 23
Myanmar Summary
F
oreign companies
are to be allowed
to bid for road and
bridge construction con-
tracts thanks to changes
in rules from the Ministry
of Construction.
In the past, only local
companies were allowed
to invest through Build-
Operate-Transfer (BOT)
agreements with the gov-
ernment, while it was
mandatory for foreign
partner.
Foreign investment in
the construction sector
currently stands at $37
million, with South Ko-
rea, Japan, Singapore and
Thailand being the high-
est investing countries.
Domestic investment
stands at K733 billion
($751 million), according
-
construction was limited
to foreign companies col-
Phyu Thit Lwin laborating with local
companies. Now, with
foreign companies bid-
ding for road and bridge
construction local compa-
-
businessperson U Paing
The lack of skilled work-
ers and access to technol-
ogy deters local business-
es from infrastructure
development programs,
industry insiders say.
The Myanmar Construc-
tion Business Association
said it intends to tackle
skills shortages through
training programs.
Myanmar Summary
Mahabandoola bridge in Yangon.
The Department of Human Settlement and Housing Development (DHSHD) is formulating urban man-
agement strategies to cope with Myanmar’s growing municipalities.
WaiLinnKyaw
DavidRoss
in any town plan. If we
implement this project,
we require properly im-
plemented technology
-
ing expert and the advisor
to the Myanmar City Plan
-
gon City Master Plan.
After drafting the new
projects, the department
intends to implement
projects in Mandalay,
Mawlamyine, Meikhtila,
Taunggyi, Moe Gok, Pyin
priority.
Remaining cities will
be dealt with in the long-
term (30 year), with these
projects requiring addi-
tional technical support
from overseas.
T
he Department
-
has released a draft plan
detailing urban manage-
ment strategies to cope
with populations exceed-
ing 100,000 people in
growing municipalities.
The department, which
is under the Ministry of
Htun Htun Minn Construction, says the
plan for new towns aims
to direct and manage pop-
ulation growth in both the
short- and long-term.
draft we will submit it
to the president. We will
then implement the pro-
the drafting of the plan
of the department said.
The current draft in-
cludes the expansion of
existing town and city
footprints, land man-
agement, new roads and
housing zones in conjunc-
tion with economic devel-
opment for 32 townships,
which have populations
exceeding 100,000.
-
pand a city. We need to
manage according to
its area. Transportation
plays an important role

mmbiztoday.com
24PROPERTY & REAL ESTATE
Myanmar Summary
J
apan is going to pro-
vide ¥4.22 billion
($41.25 million) to
build a new bridge in Tha-
-
ternational Cooperation
Agency (JICA) said.
Under the grant, a new
four-lane extradosed type
bridge and access roads
will be constructed.
its kind in Myanmar, is
to have 253 metre length
with construction starting
April 2015.
The Public Works de-
partment, Ministry of
Construction, will con-
Zwe Wai struct expansion of ap-
proach roads to the new
bridge, JICA said.
The project aims to en-
sure better mobility and
accessibility in greater
to smooth transportation
to cope with increases
in economic activity and
-
rounding area.
The agreement was
managing director of
Public Works, Ministry of
Construction, and Masa-
hiko Tanaka, chief repre-
sentative of JICA Myan-
mar.
Pansodan bridge in Yangon which connects downtown to Thaketa.
WaiLinnKyaw
JICA
JICA Myanmar
T
-
nese home prices
in two years has
crystallised worries of a
messy end to a housing
boom, but some analysts
say fears of an imminent
collapse similar to that in
the United States after the
sub-prime crisis are over-
blown.
The property market
-
ing this year, and is cited
as one of the main risks to
the health of the world’s
second-largest economy.
But high down pay-
ments, low household
debt, some government
support – and expecta-
tions of more to come –
have some experts fore-
casting the downturn will
be short lived, with prices
expected to recover as
economic growth steadies
in the second half of the
year.
Average new home pric-
es across 70 cities fell 0.2
percent in May from April,
and the annual rise of 5.6
percent was the slowest in
13 months. Prices fell on a
monthly basis in 35 cities,
from the balance sheet
point of view, the only
balance sheet that has
not been destroyed is the
said Bo Zhuang, an econ-
omist at Trusted Sources,
a UK-based investment
consultant.
Xiaoyi Shao and
Koh Gui Qing
balance sheet at the mo-
The International Mon-
etary Fund agrees. In a
paper published in April,
it ranked China as having
the fourth-lowest level of
household debt among
11 Asian countries, at
around 12 percent of its
gross domestic product
(GDP).
In New Zealand and
Australia, where house-
holds are the most indebt-
ed, debt levels exceed 90
percent of GDP, IMF data
shows.
Downpayments of 30
purchases and between
60-70 percent for second
homes, and laws which
make borrowers liable
for debts even if they de-
fault on repayments have
banks viewing mortgages
as among their safest as-
sets.
It also means those who
fear that a sharp decline
in home prices would rock
inundating banks with
bad debt may be overstat-
ing the case.
Further, a reduction in
the amount of reserves
that banks must hold to
boost lending to small
has inadvertently freed up
some cash for the proper-
ty sector.
said Fan Xiongchong,
vice-president of Sun-
shine 100 China, a mid-
sized developer based in
the property market via
Not without risks
This is not to say the
housing market, which
accounts for about 15 per-
cent of GDP, is without
risks.
For one, despite the
moderation this year,
prices are still near record
rates near an all-time low.
Construction has also
fallen sharply this year,
-
ployment and spending.
The statistics show that
Wenzhou, a wealthy city
with a thriving private
sector, has been hardest
hit in the current slow-
down with prices down
4 percent in May from a
year ago.
Experts disagree about
the extent of housing
oversupply in China, but
agree that slower prop-
erty investment would be
a drag on the economy. A
sharp drop in home prices
would destroy household
wealth, undermining con-
the fact that we see the
Chinese government tak-
ing action - they are not
oblivious to what is hap-
an emerging markets debt
fund manager at Pioneer
Investments.
go’ policy... on one hand
market, and on the other
they don’t want it to hurt
referring to earlier and
prolonged government
attempts to rein in red-
hot home prices.
No big crash
The biggest problem is a
misallocation of resourc-
-
omist at Bank of America-
With only about one-
third of the 1.3 billion
population living in ur-
ban centres, too many
homes that will never be
small cities. That would
likely see a sharp spike
in bankruptcies among
Wages in China are still
growing faster than house
prices, with average in-
comes in cities and rural
areas climbing 10-12 per-
cent last year, on par or
faster than a 10 percent
rise in property prices.
-
an economist at Gavekal
no signs of imminent col-
Reuters
Myanmar Summary
Bloomberg

mmbiztoday.com
AUTOMOBILE 25
Myanmar Summary
Myanmar Summary
Ipolice groups stepped up
problems, according to Second
The police groups will take
action against cars that violate
and reckless driving, he said.
K10,000 and K500,000 ($10
to $500) depending on the
violation.
Drivers issued citations must
City Development Committee
will cooperate with police units
from township administrations
illegally parked cars.
will vary and can range from a
warning to suspension of their
a designated no parking zone
will be towed, he added.
Kyaw Min From the end of 2013 through
May of this year, nearly 1,900
illegally parked cars were
police unit.
During the third week of
violations. From end-2013 to
April 15, 2014, 8,154 cars were
towed from no parking zones,
the Vehicle Control Committee
announced.
ay;aqmif&rnfjzpfaMumif; ,if;u quf
Myanmar Summary
S
akura Car Sales Cen-
tre will give buyers
who purchase cars
from the centre free vehi-
cle services for one year, a
The centre opened on
Kabar Aye Pagoda road
last month with new auto-
mobiles and used cars for
sale.
Over 90 percent of the
automobiles at the centre
are Japanese, 80 percent
of those vehicles manu-
factured by Toyota, the
company’s director Ko
Kyaw Min Zaw Aung said.
with maintenance and sup-
port services, we hope to
increase consumer interest
Sakura will provide in-
surance to customers who
purchase cars from its
dealership with cost de-
pending on the type and
age of the vehicle sold.
The company will co-
operate with the World
Treasure Bank to organ-
ise the long-term install-
ments of these agree-
ments.
But another car dealer
Brand New
Service
Free
Service
Plan
Train
Free
Service
Ko Aung Thein said de-
spite the improvements in
Myanmar’s car industry it
will take time for consum-
er demand to increase.
-
rybody in Myanmar can
purchase a car.
People earning low in-
the cost of purchasing
said.
T
he Japanese gov-
ernment is plan-
support to popularise fuel
cell vehicle technology as
Toyota Motor Corp and
to launch hydrogen-pow-
ered cars in 2015.
The government drafted
a timeline that spelled out
targets and actions over
the next 25 years to com-
mercialise fuel cell vehi-
cles and boost use of hy-
drogen energy in general.
The move comes as
Democratic Party consid-
ers supporting the tech-
nology through subsidies
and tax breaks, so that by
2025 fuel cell vehicles can
sell for around $20,000
or a little more, the same
price as popular gas-elec-
tric hybrids.
A fuel cell vehicle,
which runs on electric-
ity generated from cells
that combine hydrogen
with oxygen, emits only
water vapour and heat.
Yoko Kubota
times longer than battery-
operated electric cars, and
their hydrogen tanks can
-
utes. Reuters
SherpaHossainy
A car service centre in Yangon.
SherpaHossainy

Vol 2, Issue 25

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