1. The Ideal Economic Cooperation
Between Korea and Myanmar
April 28. 2014
Dr. Lee, Nam Kee
Chairman
Global Business Cooperation Association
2. Dr. Lee, Nam Kee
• Chairman, Global Business Cooperation Association (GBCA) , Korea
• Former Economic Minister & Chairman of Fair Trade Commission, Th
e Korean Government
3. I. What is and what does the Korean global Busi
ness Cooperation Association.
1. Brief History
2. Main Function
3. Members.
4. Introduction of Korean Business Delegation
II. Present status of Economic Cooperation betw
een Korea and Myanmar
1. General Structure of Myanmar Industry
2. Export and Import Statistics between Korea and Myanmar
3. Export and Import by items between two countries.
4. Investment including JVC
Contents
4. III. Ideal Economic Cooperation between Korean
and Myanmar
1. SWOT Analysis of Myanmar Economy
2. Basic principle of Economic Cooperation
3. Useful Business Model
4. The Changing trend of important systems
5. Recommended Business Area with Myanmar
IV. Conclusion
Contents
5. I. What is and what does the Korean global Business Cooperation Association
1. Brief History
• June, 2013~Nov. 2013
Preparation to establish of GBCA
• Nov.10, 2013
Preparation committee to establish GBCA
• Feb.14, 2014
General Meeting for Establishment of GBCA
Dr. Lee, Nam Kee was invited as chairman of GBCA
• Fer.22, 2014
Agreement of Business Cooperation between GBCA and Mid-west university, U
SA
6. I. What is and what does the Korean global Business Cooperation Association
2. Main Function
• Business Matching with foreign business partner and support them
• Development of new Marketing and Job increasing through innovation and crea
tion
• Supply of ICT technology for SME Venture
• Training of global manpowers to develop global Industrial Market
• Survey and Advertising of domestic and foreign market
• Others related with above
7. 3. Members
• General Members(personal): 475
• Business Member(Corporation): 147
• Special Members(Corporation and Person): 6
• Advisory group(Person): 3
I. What is and what does the Korean global Business Cooperation Association
8. 4. Introduction of Korean Business Delegation
• Total: 13 person
• Business man by item
• Cosmetic: 3
• IT: 4
• Manufacture: 3
• Artist: 1
• Others: 2
I. What is and what does the Korean global Business Cooperation Association
9. II. Present status of Economic Cooperation between Korean Myanmar
1. General Structure of Myanmar Industry
• Industrial Struture
- Service: 41.8%
- Agriculture: 28.8%
- Manufacture:19.3%
- Others: 0.1%
• Main Export Items
- Natural gas , Crude Oil, Wood, Bean, Clothes(raw)
• Main Import Items
- Clothes, Petroleum, Fertilizer, Machinery
• Main Natural Resources:
- Oil, Led, Zinc, Natural Gas
10. II. Present status of Economic Cooperation between Korean Myanmar
2. Export and Import statistics between Korea and Myan
mar
(unit: million US$)
Year Export Import
2010 160 479
2011 299 667
2012 351 1,331
2013(P) 502 2,079
11. II. Present status of Economic Cooperation between Korean Myanmar
3. Export and Import by items between two Countries
Item Export & Import 2011 2012
Clothes Export 232.497 278.617
Agriculture Products Export 21.395 29.126
Forestry Products Export 13.145 14.351
Clothes Export 232.497 278.617
Rail and Iron Structure Import 19.866 757.565
Construction and
Mining Machinery
Import 152.067 67.692
Artificial silk Products. Import 44.793 46.313
(unit: million US$)
12. II. Present status of Economic Cooperation between Korean Myanmar
4. Investment including JVC
• Total direct investment from Korea to Myanmar by the end of 2012
- New establish of company:82 companies
- Invested Amount: 1387 million US$
- Main Invested Area: Mining, Hotel, Restaurant etc.
• Main Investment countries to Myanmar
- China: 34.3%
- Thailand: 23.5%
- Hong Kong: 15.5%
- Korea: 7.2%
• Total Investment from foreign countries to Myanmar
- 2010: US$1 billion
- 2011: US$1 billion
- 2012: US$1.9 billion
13. III. Ideal Economic Cooperation between Korea and Myanmar
1. SWOT Analysis of Myanmar Economy
Strength
• Plenty of Natural Resources(Forest,
Natural Gas)
• Low Labor cost and Good quality
Weak
• High Rely on Agriculture and Low Pro
ductivity
• Shortage of Infrastructure
Opportunity
• Big Neighbor Market
- China, India
• Logistics Base to connect East and W
est South Asia
Threat
• Low level of Index of Economic Freed
om(172/179): 2013 Heritage Foundati
on
• Shortage of transparency in Administr
ation.
14. 2. Basic Principle of Economic Cooperation
• Win-Win and Balance Strategy
• Maximum Synerge Effects
• Increasing Economic + Living Standard of both countries
• Mutual Benefits through supplementary activity
• Korea → High Technology Capability of planning
Myanmar → Execution on the site reasonable labor cost + plenty raw materials.
III. Ideal Economic Cooperation between Korea and Myanmar
15. 3. Useful Business Model
III. Ideal Economic Cooperation between Korea and Myanmar
Planning
Technology
Implementing
Execution
KOREA MYANMAR
INVESTOR
16. 4. The changing trend of important systems
< Investment policy >
• Life or soften economic sanction to Myanmar from EU & USA
• Legislation of special Economic Zone Law Tax Exemption, Favor of using land,
one- step service related with export & Import
• Amendment of Investment law from foreigner (Nov. 2012)
- Exemption of Income Tax for 5 years
- Guarantee to send profit to invested country
III. Ideal Economic Cooperation between Korea and Myanmar
17. 4. The changing trend of important systems
< Foreign currency >
• Farewell to “Foreign Exchange Certificate” (FEC) → US Currency (Jan. 2014)
• Fixed Rate System(1$ = 6kyat) → Management changing Rate system
※ Marketing Rate : 1$ = 8000 kyat
III. Ideal Economic Cooperation between Korea and Myanmar
18. 4. The changing trend of important systems
< Tax System >
• Business Tax to Foreign Invested Co. by Foreign Investment Law → 30%
• Foreign Currency Income Tax
- Foreigner → 15%
- Domestic → 10%
III. Ideal Economic Cooperation between Korea and Myanmar
19. 4. The changing trend of important systems
< Financing system >
• USA → General licensed to 4 big Myanmar Bank (MEB, MICB, AGD, Aveyarwa
dy Bank)
- Can do business with US Company
• Maintenance of Basic Rate
- 12% → 10%(2012) and Maintain
• Plan to have open stock Market in 2015.
III. Ideal Economic Cooperation between Korea and Myanmar
20. 4. The changing trend of important systems
< Labor system >
• Maintenance of low labor cost
- Cheaper than Vietnam and Indonesia
- US$70~80/ Month: Unskilled labor
• Unskilled labor: only Myanmar labor
Skilled labor: should increase domestic labor using
- 0~2 year : 25%
- 2~4 year : 50%
- 4~6 year : above 75%
III. Ideal Economic Cooperation between Korea and Myanmar
21. 4. The changing trend of important systems
< Trade system >
• Comparatively low custom tax
- More or less 5% except Jewelry & Luxury item
• Expecting to abolish licensing for Export and Import
- Import: 166 Export: 152 abolished (March, 2013)
• Agreement of Avoidance of double Taxation.
- Korea, UK, Malaysia, Singapore, Vietnam, India.
III. Ideal Economic Cooperation between Korea and Myanmar
22. 5. Recommendable Business Area with Myanmar
< Agriculture Area >
• Decreased weight, but still the largest Industry
- weight in GDP: 38.8% (2012)
- Cambodia: 34.7% , Vietnam: 21.5%
- Thailand: 8.6%
- Deregulation of Product Quantity and price control → continuously increasing
of production
III. Ideal Economic Cooperation between Korea and Myanmar
23. 5. Recommendable Business Area with Myanmar
• High Growth potentiality
- reasonable labor cost and plenty labor and land
• Ownership of land → Government (1960)
- ploughing right(Cultivated) → Tradable
• Still low foreign investment(1988~2012)
- Electricity: 47%
- Crude oil$ Gas: 34%
- Mining: 7%
- Manufacture: 4%
- Hotel& Tour: 3%
- Agriculture:1%
III. Ideal Economic Cooperation between Korea and Myanmar
24. 5. Recommendable Business Area with Myanmar
< Infrastructure Area >
• Poor Infra
- High Logistics cost: shortage of pavement road and rail road
- Difficulty to get raw materials & Export: Problem of sea port and Airport
- Logistic performance Index: 129/155
- Infrastructure Index: 133/ 155 (Same level with Laos, Cambodia)
• Expansion plan of Infrastructure for Tourism Master plan
- Expansion of Mandaley and Nai pyi Taco Airport
- Expansion of Industrial Meeting, Incentive tour, Convention, Exhibition, Faciliti
es (Yangon, Mandaley, Bargan, Inlei Lake)
• Concentration of Licensing power related with Infra in government
- Necessary to get final permission from Myanmar Investment Commission.
III. Ideal Economic Cooperation between Korea and Myanmar
25. 5. Recommendable Business Area with Myanmar
< Electricity-Power plant >
• Low Electricity supply (26%)
- production of Electricity: 7.346 million KWH
- Hydroelectric Power: 68%
- Steam Power : 32%
- Demand(2012) → 1890MW
- Capacity: 1500MW
- Loss Rate → 27% (shortage of skilled labor and Investment from Government)
III. Ideal Economic Cooperation between Korea and Myanmar
26. 5. Recommendable Business Area with Myanmar
< Electricity-Power plant >
• Increasing Steam Power Plant
• Big chance to invest in sending and distribution line of Electricity
- Decreasing loss rate
- 2001~2031: 6 stages five years plan
○ 2011.4~2016.3 1,576Mile → 1,623 Million Dollar
○ 2016.4~ 2021.3 1,928Mile → 1,810 Million Dollar
○ 2021.4~2026.3 675Mile → 1,552 Million Dollar
○ 2026.4~2031.3 140 Mile → 2,258 Million Dollar
III. Ideal Economic Cooperation between Korea and Myanmar
27. 5. Recommendable Business Area with Myanmar
< Solar Energy >
• The Merit of solar Energy
- Unlimited & 10,000times more than global energy consumption
- Sage & the life cycle of facility is about 20 years long
- No Pollution green Energy
• Stand-Alone off-Grid System(With Battery)
- Easy to operate & Maintenance system(the cost is comparatively low)
- cheap installation cost: under 1 dollar/Watt
※ Installation Budget for 200 houses: 3.8 Million Dollars
III. Ideal Economic Cooperation between Korea and Myanmar
28. 5. Recommendable Business Area with Myanmar
< General items >
• Instant Healthy Food
• Cosmetics
• Skin-care & Beauty
• Machinery(Agricultural)
• Forestry Product(Wood pellet)
• Educational Equipment.
III. Ideal Economic Cooperation between Korea and Myanmar
29. < Very Attractive country to have business >
1. Possibility of high Economic growth in Asia
2. Considering the relatively low labor cost and Geographical circumstance, Fit for
Manufacture Bases for south East Asia
3. Development of Plenty Natural Resources
4. Effective Marketing to consumer Goods Using First-Mover Advantage
IV. Conclusion