Weekly Business News from Myanmar

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  International Monetary Fund has warned Myanmar economy which is appeared to be losing momentum due to the concerns over fallout from the Rakhine crisis and weakness in the banking sector

  The International Monetary Fund has warned that the Myanmar economy “appears to be losing momentum”, citing concerns over fallout from the Rakhine crisis and weaknesses in the banking sector. The IMF said “risks are tilted to the downside” and that failure to address the humanitarian catastrophe or the refugee repatriation process would hurt the country economically. “A prolonged humanitarian crisis and any withdrawal of trade preferences could reduce concessional donor financing and investment leading to lower growth,” it said. The European Union is considering initiating a withdrawal process of the trade privileges it has offered Myanmar, owing to the human rights violations in northern Rakhine. The fragility of the banks presents another risk, the IMF added. Macrofinancial spillovers from the ongoing banking sector restructuring process may become more severe if banks delay recapitalisation. There is a need to improve compliance and loss recognition.
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  China is likely to decline imports of rare-earths from Myanmar starting from next month

  China is likely to trim imports of rare earths from Myanmar starting next month, which an analyst said will help relieve oversupply in China. The country will also tighten its exports in the future because of the increasingly high environmental costs. China imported 26,000 tons of rare earths carbonate from Myanmar in 2018, accounting for 25 percent of total domestic demand, financial news site jrj.com.cn reported Wednesday, citing an industry study. Among the imports, heavy rare earths from Myanmar accounted for about one-third of China's consumption in 2018, the report said. Amid a crackdown on illegal mining, China strengthened efforts to reduce illegal rare-earth capacity and halted approval for new mines after the end of 2016. Due to a relative domestic shortage of heavy rare earths, China increased imports from Myanmar and became a net importer of rare earths for the first time in 2018, according to the report.
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  Yangon subsidiary of an Indian agri-logistic group granted USD $ 3 million loan from IFC to expand warehousing and logistics services in Myanmar

  The Yangon subsidiary of an Indian agri¬-logistics group has secured a US$3 million loan from the International Finance Corporation (IFC), the investment arm of the World Bank. Delhi-based Sohan Lal Commodity Management (SLCM) will use the capital to expand its warehousing and logistics services in Myanmar. The terms of the loan were however not disclosed. The company handles cotton, black pepper, rice, wheat, pulses, maize, sugar and spices in Myanmar, for both imports/exports and domestic consumption, according to SCLM assistant manager Diksha Arora. The Myanmar unit has managed 3.24 million square feet of commodity storage space in 127 industrial zones and handled 10.14 million tonnes of commodities. Agriculture is the backbone of Myanmar’s economy, while more than half of the national population live in rural areas. But the infrastructure and technology necessary for farmers and traders is severely underdeveloped. Many local warehouses are completely lacking in operational equipment and technology, such as CCTVs, dock levellers or a stable power supply.
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  Code2LAB Pte Ltd, a local technology company, is focusing for the implementation a digital ecosystem for Myanmar’s restaurant industry in the first phase of its commercial operations

  In response to the growing cash flow in Myanmar’s food and beverage industry, Code2LAB Pte Ltd, a local technology company, has brought two innovative solutions to the market to help digitise the nation’s restaurant industry, according to Min Zeya Phyo, the firm’s founder and chief executive. In an exclusive interview, he said the firm would focus on establishing a digital ecosystem for Myanmar’s restaurant industry in the first phase of its commercial operations. “Everybody loves food, so it is like the centrepiece of everything. We expect the industry to grow further as the economy grows. So, we are trying to bring restaurants and customers together,” he said. “Our aim is to get all things connected in a fully-integrated ecosystem. We believe we can make it happen, but it may take time because the industry has yet to reach the mature stage. We are waiting for the market to fully develop.”
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  Smart Power Myanmar and The Asia Foundation launched two complementary studies of decentralization within Myanmar’s energy sector with the aim to answer Myanmar’s electrification challenge

  Mini-grids can supply electricity in off-grid areas before the main grid arrives, studies find. Smart Power Myanmar and The Asia Foundation, both international development nonprofit organisations, launched two complementary studies of decentralisation within Myanmar’s energy sector last month. Smart Power Myanmar’s latest study, Decentralized Energy Market Assessment for Myanmar, considers the potential role of mini-grids in bringing electricity to millions of people in Myanmar, as well as measures to increase their technical and economic viability. With limited electricity access in Myanmar, mini-grids could play a pivotal role in supplying electricity in off-grid areas while the expansion of the main grid progresses, and they can also be integrated into the main grid upon its arrival.
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  Myanmar’s economic growth is expected to pick up in 2019 and 2020 due to the high Foreign Direct Investment (FDI) and positive responses to the government’s economic and policy reforms

  Myanmar’s economic growth is expected to pick up in 2019 and 2020, thanks to higher foreign direct investment (FDI) and positive responses to the government’s economic and policy reforms, according to a new report by the Asian Development Bank (ADB). The Asian Development Outlook (ADO) 2019 forecasts Myanmar’s economy to grow 6.6% in the fiscal year ending in September 2019 and 6.8% a year later. By comparison, Myanmar’s gross domestic product (GDP) growth slowed to 6.2% from April to September last year. “Prospects for Myanmar’s economic growth for 2019 and 2020 looks positive as the country opens up the retail and wholesale sectors and continues to modernize corporate governance and management in Myanmar,” said ADB Country Director for Myanmar Mr. Newin Sinsiri. “Myanmar will continue to see steady growth in the next few years if the government successfully accelerates the wide range of economic reforms initiated since 2011.”
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  Liquefied petroleum Gas (LPG) use for cooking in Myanmar much lower than in other ASEAN countries

  Liquefied petroleum gas (LPG) is used much less for cooking in Myanmar than it is in other countries in ASEAN and needs to be promoted, industry officials say. Officials of the World Liquefied Petroleum Gas Association said this during the Myanmar LPG Summit 2019 in Yangon last week. The association represents the full LPG value chain, with members from over 260 firms in 125 countries. Compared with Thailand or Bangladesh, LPG use in Myanmar is low, and there are many things that can be done to increase its use in Myanmar, one association official said, adding that LPG is an excellent substitute for firewood and charcoal, and its wider use would help the environment. “The LPG market in Myanmar still has a lot of room for progress in the public and private sector,” said the association’s Communications Director, Alison Abbott.
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  Tourist arrival via Tachilek border reached nearly 22,900 in a week between 5 and 11 April 2019

  Tachilek, a Myanmar-Thailand border, hosted nearly 22,900 international visitors during a week between 5 and 11 April, according to the Directorate of Hotels and Tourism (Tachilek branch office). The figures included about 21,200 Thai people plus 343 visitors from third world countries paid one-day trip within Tachilek border town, while over 230 foreign travelers joined Mongphyat-Kengtung trip. According to an official data, there were more than one million foreigners visiting the country via the Tachilek border from 1 April, 2018, through 4 April, 2019. They visited the well-known destinations across Tachilek, including Lwemwe area, Pintauk Waterfall, Talaw market, Bayintnaung statue, Wankaung market, Koemyosin spirit house, the replica of Shwedagon Pagoda, Koehtet Waterfall, Padaung Village, Chinese temples and Buddhist monasteries.
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  Myanmar Investment Commission (MIC) has permitted London listed Myanmar Strategic Holdings (MSH) to operate an international school in Yangon

  The Myanmar Investment Commission (MIC) has greenlighted London-listed Myanmar Strategic Holdings (MSH) to operate an international school in Yangon. The investment permit for the US$1 million Yangon American International School was granted under the 2016 Investment Law, following the MIC’s liberalisation of investment activities in the education sector. After the MIC permitted foreign businesses to enter the education market last April, service providers from the UK, Singapore, Australia, and New Zealand are showing interest to enter the market. Last year, US Kaplan Inc has opened its first campus, Kaplan Myanmar University College, in Yangon and Singapore-based KI College Singapore has set up a new learning centre. Royal British International School also has a campus in the commercial capital. MSH's international school is due to complete construction by next month and is scheduled to launch in August.
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  Myanmar’s border trade using Individual Trading Cards (ITCs) reached over USD $23 million in the mid of 2018-2019 fiscal year

  Myanmar's border trade using Individual Trading Cards (ITCs) reached over 34.77 billion kyats ($23.18 million) over the first half of present fiscal year 2018-2019, according to Myanmar's Commerce Ministry on Sunday. From Oct. 1, 2018 to April 5 this year, the country's export through border checkpoints using ITCs amounted to 4.97 billion kyats ($3.31 million) while its import shared 29.8 billion kyats (19.87 million US dollars). Of 20 checkpoints at where Myanmar mainly conducts border trade, Myawady border gate topped the list with trade value of 18.6 billion kyats ($12.4 million) and 114 ITCs were issued during the period.