Weekly Business News from Myanmar

Yangon’s standard land prices reduced 10 percent when compared to the same period of last fiscal year
Land prices on a per square foot basis in Yangon’s townships for the 2019/2020 fiscal year has been reduced by 10pc compared to the last fiscal year in order to support more sales transactions as well as encourage landowners to pay their taxes. The standard land prices were released by the Inland Revenue Department earlier this month and these prices would be used for tax assessments in real estate sales. iMyanmarHouse.com managing director U Nay Min Thu said the reduction in prices was implemented after it was found that government standard prices were higher than actual market prices.
The government has announced that electricity rates will increase substantially for both residents and businesses from July, 2019
Electricity rates will increase substantially from July for both residents and businesses in the first changes in tariffs for five years, the government has announced. Monthly bills for consumers of 100 units will go up by over 70 percent. Investors in the energy sector and analysts welcomed the increase, however. Myanmar’s present electricity price is financially unsustainable, with rates the lowest in ASEAN and unchanged despite years of discussions. The proposal by the Ministry of Electricity and Energy (MOEE) to raise prices was approved by parliament in April. At present even the wealthiest residents in Yangon purchase subsidised electricity below cost. These subsidies are incompatible with the ambitious electrification plan the government has set out. The state subsidy for power supply is a key obstacle to attract investors to scale up the country’s much-needed power generation.
The price of Myanmar fresh chili is on the rise due to the demand from China and Thailand
The price of Myanmar fresh chili is on the rise on account of good demand from China and Thailand, said U Khin Han, the chairman of Kitchen Crops Producers and Exporters Association. “There are two varieties of fresh chili grown in the delta region—tharmoe and deemore. We are purchasing fresh chili and transporting it in cold storage cars. If we dry the fresh chili, we will be able to sell it for about K24,000-25,000 per viss (1 viss=1.6 kg). Currently, we are only exporting fresh chili. So, dry chili is being imported from India and Viet Nam. These days, the price of chili has increased slightly,” he added. “Last year, fresh chili was fetching K1,500-2,000 per viss. Now, the price of fresh chili has increased to K8,500. Currently, fresh chilies are hard to find in the market. So, the Ministry of Commerce has been asked to import fresh chili via the border for local consumption,” he said. “We have already asked the Commerce Ministry to issue Food and Drug Administration (FDA) certification and grant permission to import fresh chili. We cannot make a decision on behalf of the government. They are making arrangements to hold a meeting in Kyaukse Township. Then, they will arrive at a decision. If they give permission to import fresh chili, the price will decline slightly. If not, the price of fresh chili will rise to K10,000 per viss,” said U Khin Han.
Thilawa Special Economic Zone has received 108 foreign companies from 19 different countries
Thilawa Special Economic Zone, located on the outskirts of Yangon and regarded as the most successful economic zone in Myanmar, has received 108 foreign companies from 19 different countries, according to the Special Economic Zones Central Committee. Countries who have made the greatest investment in Thilawa SEZ are Japan, Singapore, Thailand and Hong Kong. These countries stand at the top in terms of investment volume. “Given its strategic location, this special economic zone offers great opportunities and investments allowing it to grow gradually,” said Dr. Than Myint, President of the committee. The total investment in the zone has topped $1.6 billion so far from the time it opened. In this 2018-2019 fiscal year, it has received over $20 million in investments, according to the Directorate of Investment and Company Administration-DICA.
The Investment Promotion Committee (IPC) was formally launched by the Ministry of Investment and Foreign Economic Relations in Nay Pyi Taw
The Ministry of Investment and Foreign Economic Relations formally launched the Investment Promotion Committee (IPC) at a ceremony held in Thingaha Hotel in Nay Pyi Taw yesterday. The ceremony was attended by U Thaung Tun, Union Minister for Ministry of Investment and Foreign Economic Relations (MIFER), Deputy Ministers, U Aung Hla Tun, Ministry of Information,U Kyaw Myo, Ministry of Transport and Communications, U Set Aung, Ministry of Planning and Finance, Permanent Secretaries of Ministries concerned, representatives ofthe Japan International Cooperation Agency (JICA) and participants from various departments, the private sector and the media. U Thaung Tun, Union Minister of MIFER and Chairman of the IPCspeaking on the occasion noted the important role of the IPC and stressed that the success of the committee and its 5 task forces would help to ensure Myanmar’s economic growth. It would also create a fair and prosperous society by promoting quality investment. A project that aims to contribute to the enhancement of domestic industrial competitiveness of Myanmar was also introduced at the meeting. These endeavors reflect the government’s efforts to promote a responsible investment environment.
Foreign investments are increasing in the least-developed regions as Kachin, Kayin, Chin and Rakhine States
According to the Myanmar Investment Commission (MIC), the least-developed regions of the country are Kachin, Kayah, Kayin, Chin, and Rakhine States. Now, foreign investments in these least-developed areas are increasing, according to the Directorate of Investment and Company Administration. At least four or five foreign investments have recently flowed into these states. The investments in Rakhine, Kachin, and Kayin States have been in the manufacturing sector; meanwhile, due to electricity issues, the investments in Chin and Kayah States have been in the eco-tourism sector. At a recent press conference, U Thant Sin Lwin, Director General of the Directorate of Investment and Company Administration, said: “Less developed regions are receiving more interest from investors. However, states like Chin receive less interest because of transportation difficulties in that area. Meanwhile, places like Loikaw in Kayah State are receiving more investment than before.”
Myanmar authorities are encouraging the development of automobile assembly industry in Myanmar
Myanmar is encouraging the development of automobile assembly industry, allowing auto manufacturers to import products that are essential to make vehicles in the country, Xinhua reported. According to the Supervisory Committee for Motor Vehicle Imports and Related Business Monday, between April 2018 and January 2019, the committee has allowed eight auto manufacturers to import such products.
Myanmar is on the radar for business planning to shift funds from China to avoid the fallout from the trade war
Myanmar is well-positioned to benefit from the flight of capital to the Asean region as the trade war between China and the US plays out, officials said. ‘’Myanmar is one of the targeted countries for businesses planning to shift out of China to avoid the fallout from the trade war,” Li Fuquan, the chair of China Myanmar Economic Cooperation and Development Promotion Association, told The Myanmar Times. However, he warned that Myanmar faces stiff competition from other Asean hotspots like Vietnam and Cambodia. “Other regional countries are also attractive for investors. So, Myanmar needs to up its game to if it wants to draw businesses to its shores,” Mr Li said. He said businesses in China now expect the trade war between the two superpowers to be a long and drawn out one and many are making plans to move their factories and headquarters into the region to avoid US tariffs and stay competitive.
Myanmar Productivity Centre (MPC) launched in Yangon for the capacity building of industrial human resource for productivity improvement in Myanmar
For the capacity building of industrial human resource for productivity improvement, Myanmar Productivity Center (MPC) officially launched in Yangon on Saturday. The project for MPC started in December, 2016 with the financial assistance of Japan ASEAN Integration Fund (JAIF), supported by the Ministry of Industry and implemented by UMFCCI and Japan Productivity Center. MPC will carry out promoting productivity through management innovation, continuous improvement, and human resource development, achieving sustainable development by promoting responsible businesses and environmental protection as well as creating strong foundation for capacity building on development of all industries. Minister, Yangon Region Ministry of Planning and Finance, Myint Thaung said “Productivity is very important for the country economic development. Labor productivity improvement is also important. So I believe that MPC will conduct more training programs for improvement of labor productivity.”
Nippon Life Insurance Company will buy 35 percent of stake in an insurance firm under Myanmar’s Grand Guardian Life Insurance Holding Public Co., Ltd
Nippon Life Insurance Co. of Japan will buy a 35 percent stake in an insurance firm under Myanmar’s conglomerate Shwe Taung Development Co. to enter the underdeveloped market. The Japanese leading life insurer said Friday it has agreed with Grand Guardian Insurance Holding Public Co. to pay $21 million for the share of its life insurance arm Grand Guardian Life Insurance Co. Nippon Life expects to complete the transaction sometime between September and October, subject to the relevant regulatory approval, and will rename the joint venture Grand Guardian Nippon Life Insurance Co., it said in a statement. Nippon Life agreed with Grand Guardian Insurance Holding in April to form a joint venture to tap the market in an early stage of development, the Japanese company said