Weekly Business News from Myanmar

Consumers urged Government intervention to fix ceiling prices for commodities
Government intervention is needed to fix ceiling prices for certain agricultural products because they are sold at exorbitant prices, regardless of whether agricultural production costs are high or not, according to consumers. However, traders and merchants are opposed to this, saying that this is a time when a market economy is being pursued, and it is the market that adjusts prices, depending upon the principle of supply and demand. They argue that according to economists, the market automatically adjusts prices and government intervention is not needed. Nevertheless, when there arises market failures, it is usual that governments intervene, argue those who advocate for the protection of consumers. What is happening now is that some staple foods are being sold at exorbitant prices, irrespective of production costs. The worst scenario can be seen in the rice and onion markets. On the other hand, farmers and growers are also making demands on authorities to fix a floor price at which traders must buy their produce. In this regard, the Myanmar Rice Federation (MRF) has responded to this demand by issuing an announcement that the floor price of paddy is to be fixed at K 500,000 per 100 baskets (one basket weighs 46 lb) for the 2019 paddy harvesting period. This is the first time the MRF has intervened to protect farmers. As a consequence, the prices of rice and the broken rice declined in the local market in 2019. It is true that the MRF will also fix the floor price for 2019. However, it could not fix the floor price for rice until 28 March, 2019. Therefore, rice-related NGOs have urged rice merchants to purchase rice at the 2018 floor price.
Government will announce a list of preferred foreign life insurers permitted to operate in Myanmar on 5th April 2019
A list of preferred foreign life insurers permitted to operate in Myanmar will be announced on April 5,the Ministry of Planning and Finance (MOPF) said last week. The MOPF is currently still in the midst of processing and selecting a list of qualified, foreign-owned life insurance providers to which it will issue licenses to operate after formally accepting Request for Proposal documents. The list was originally scheduled for release on March 29. Foreign insurance providers that do not qualify to operate as a wholly-owned foreign subsidiary or wish to cooperate with a local firm, should submit an Expression of Interest to form a joint venture with an eligible local insurance provider. The deadline to submit the relevant documents has been scheduled for May 3, the MOPF said.
Singapore based SembCorp industries opened 225 MW power plant in Myin Gyan to provide electricity to five million people
Singapore based SembCorp Industries opened the SembCorp Myingyan Independent Power Plant on March 16. The facility has an installed power capacity of 225 megawatts, which is sufficient of provide electricity to five million people, on March 16. The $310 million power plant is a combines gas and solar power resources to generate electricity from which government purchases and resells to consumers. According to the contract agreement, SembCorp will operate the plant for the next 22 years, and then hand over the plant to the government. However, no important details were disclosed from either Sembcorp or the government, details such as the buy and resell rate at which the government will work with. “SembCorp Myingyan will never existed without the support from local people from beginning to end of the construction period,”said Mr. Dennis Foo Say Yi, Managing Director of SembCorp Myingyan Power Company.
Property developers and investors are expecting to stable regulations and foreign participation in the local real estate sector and gradually enforced
Property developers and investors have been looking forward to stable regulations and foreign participation in the local real estate sector since the Condominium Law was enacted in 2016 and gradually enforced. Firmer home ownership laws are expected to draw higher volumes of foreign investment, which, in turn, will benefit businesses along the supply chain, from construction to interior design. The 2016 Condominium Law addresses land ownership as well as foreign participation in the local property market. According to the law, foreigners now have the right to own up to 40 percent of the units in a condominium project, while each individual can buy up to 25pc of the units. “Direct sales or reselling in the second hand market can be carried out by anyone until the foreign-ownership threshold is reached,” said U Wai San Thein, registering officer for collectively owned buildings in Yangon Region.
The Central Bank of Myanmar (CBM) has introduced regulations and equity to facilitate foreign investment in domestic lenders
As part of ongoing efforts to liberalise the financial services industry and increase credit to the private sector, the Central Bank of Myanmar (CBM) has introduced regulations to facilitate foreign investment in domestic lenders. On January 29 the CBM issued Regulation No 1/2019, allowing foreign banks and financial institutions to hold equity of up to 35pc in local banks. To obtain approval from the CBM, a domestic lender will have to provide a copy of the agreement with the overseas institution along with the proposed equity ratio. It is hoped the change will enhance competition in the market, bring gains in lending and improve service quality. Prior to the reform, the Myanmar Companies Law, which came into force on August 1, 2018, made it possible for foreign investors to hold a minority stake of up to 35pc in domestic firms, although this had not yet been applied in practice in the banking sector as the CBM had maintained strict supervision.
In partnership between farmers and Myanmar Rice Federation (MRF), Global World Insurance will provide crop insurance services for contracting farming
Global World Insurance is working on providing crops insurance services for contract farming implemented under partnership between farmers and Myanmar Rice Federation (MRF). Corp insurance is a type of insurance which insures farmers against the loss of their crops due to natural disasters such as hail, drought, and floods. “In our first year of testing the services, we could not provide wide coverage. Therefore, we are committed to expanding our services to thousands of acres. MRF has around ten thousand acres of contract farming. If they want to have crop insurance, we will accept the offer, but we need to provide the crops insurance as reinsurance because of its huge size. After reaching the agreement with MRF, we will negotiate with reinsurer. After that we will request permit from IBRB,” said U Soe Win Thant, Director of Global World Insurance, at the press conference “Micro Insurance & Liberalization” held at Bahosi Development’s office on March 12.
Rakhine State Government inaugurated 24 hours power supply services in Sanae, Kyauk Phyu T0wnship
A 24-hour power supply service was inaugurated by the Rakhine Government yesterday in Sanae, Kyaukpyu Township, Rakhine State. At the ceremony, Rakhine Chief Minister U Nyi Pu stressed the need to develop the region by making the best use of completed infrastructure, such as electricity and roads, in the State. The Chief Minister said he took pride in the government’s achievements in its three years in office, adding that out of 17 townships, 16 townships have got access to electricity. “Plans are under way to supply power to the remaining township, Manaung, using solar energy,” said the Chief Minister. U Nyi Pu also asked the local people to use the opportunity to promote investment in agriculture, tourism, trade, and industry, in cooperation with the Rakhine government. He said he was delighted that the local people had obtained access to electricity, which many people wish for, and expressed his hope that education, health, and economic sectors in Rakhine would improve thanks to the infrastructure.
Mon communities should have a say in how commercial activities and business development are determined and planned and all investments in the state and it will come under official inspection within the next few months
The current approach in rushing through investment proposals concerning Mon State by authorities in Nay Pyi Taw is alarming. Projects should not be approved without proper community consultation because communities should have a say in how commercial activities and business development are determined and planned. Questions around investments in Mon State are heating up these days. The Economic Affairs Reviewing Committee of Mon’s parliament has announced that, within the next few months, all investments in the state will come under official inspection. This inspection is taking place in the context of a recent surge of investments in the state – particularly following the New Mon State Party’s (NMSP) signing of the Nationwide Ceasefire Agreement (NCA) with the National League for Democracy-led (NLD) government in February 2018. Despite the concern in the state legislature about the ramifications of the investment inflow, the Union Parliament has rubber-stamped all of these investments. The Union Parliament appears to be taking its cue from the NLD administration. At the Invest Myanmar Summit 2019, the State Counsellor proclaimed that “As Southeast Asia’s final frontier market – final and best – we offer a world of opportunities… Investment opportunities are everywhere in Myanmar; some are there to be seen, and others are waiting to be found.”
Soft shell crab production which is among the promising income generating businesses in the region has offered series of job opportunities for local residents
Fisheries industry is one of the major livelihoods of locals in Labutta of Ayeyawady Region. Production soft-shell crab is among the promising income generating businesses in the region since it achieves a great market demand in local and export. The industry also received support from international organizations, and the very first crab hatchery was also established in the area which creates job opportunities for local residents. Worker, Zar Chi Aye said “We have to rake and look whether the crabs are molting or dead in the basket. If the crab becomes a soft shell one, we will see a shell and a body. It will be 2 year that I’m working here in this April.” The farm is run by the technical support of Texchem. It also receives the student interns to study about artificial hatching of mud crabs under the EU funded Myanmar Aquaculture Programme (MYSAP). At present, two students from Pathien University are working as interns at the farm.
Myanmar Insurance Summit 2019 will be hosting in Yangon from 11-12 June 2019 to deliver insights on Myanmar insurance market opportunities
In a long-awaited move, foreign insurance providers have finally been given the green light to operate in Myanmar, according to a press release. Myanmar is the last frontier in South East Asia that has a great potential insurance market, with general insurance growing at 16.1% a year and life insurance at 25.3% a year, and with insurance density only estimated to be US$0.99537 and penetration at 0.07%. This liberalization is expected to accelerate economic growth through risk transfer and dramatic transformation is likely to affect the insurance industry over the coming months. Magenta Global (Singapore), in consultations with the industry regulator and players, will be hosting a two-day summit providing a platform for the gathering of local, regional and international participants. INTO MYANMAR Insurance Summit 2019 will be taking place at the Park Royal Hotel Yangon in Myanmar from 11-12 June. A distinguished panel of speakers has been invited to discuss the changing insurance landscape and how to position for growth.