Weekly Business News from Myanmar

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  Ministry of Planning and Finance will allow foreign insurance firms to invest in Myanmar

  Ministry of Planning and Finance will invite a submission for Expression of Interest (EOI) and Request for Proposal (RFP) from foreign insurers as well as local ones in January, according to the ministry’s announcement on January 2. This will be the first time since 2013 that the ministry allows private insurers in to the insurance sector, in 2013 they allowed 11 local private insurance companies. “The government has been talking about allowing foreign insurers for a long time. This is the first official announcement. We have nothing to complain about, the decision to allow foreign insurers is necessary for the improvement of the country. However, we are worried that local insurance companies with little experience will have a hard time competing with foreign insurance companies,’’ U Thaung Han, Secretary of Myanmar Insurance Association, told Myanmar Business Today.
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  Myanmar is at losing end with little power to deal with border trade issues (Dr. Maung Maung Lay, Vice Chair of UMFCCI)

  Myanmar must take steps to negotiate bilateral trade agreements with its neighbours to avoid volatility in border trade with China and India, as the consequent losses for locals can be huge. “There is currently no precise policy for border trade. Every country should have a policy to deal with trade disagreements and volatility. Right now, Myanmar is on the losing end with little power to deal with trade issues,” said Dr Maung Maung Lay, vice chair of the Union of Myanmar Federal Chamber of Commerce and Industry. “There is unfinished business and no discussion on how to prepare for future disagreements. Those in ministry do not have the capacity to handle border trade issues. We need better leadership on this front,” he added.
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  Negotiations to open Kyin San Kyawt border gate are underway to facilitate smoother trade between Myanmar and China

  Dr. Than Myint, the Union Minister for Commerce, attended a coordination meeting with officials from the People’s Republic of China at his ministry yesterday, where they discussed opening the Kyin San Kyawt border gate in order to facilitate smoother trade between Myanmar and China. During the meeting, the Union Minister said officially designating Kyin San Kyawt as a regular border gate will alleviate the congested traffic between the countries during the watermelon and musk melon season. He said the congested traffic is negatively affecting both growers in Myanmar and merchants in Yunnan Province.
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  The employment rate may increase to six percent of the population if European Union’s Generalised Scheme of Preferences (GSP) right remains

  Thanks to the EU’s Generalised scheme of preferences (GSP) right, Myanmar can create 0.6 per cent jobs. If the GSP right remains, the employment rate may increase to six per cent of the total population, said Aung Naing Oo, Director General of Directorate of Investment and Company Administration (DICA), at a talk titled “Democracy, Poverty and GSP” at the Union of Myanmar Federation of Chambers of Commerce and Industry (headquarters) in Yangon on January 5. There were 24 factories—22 garment factories which export garment to the EU, one factory (non-CMP industry) and one factory (CMP industry) before the EU’s reinstatement of GSP right to Myanmar in 2013. At the time, these factories created more than 23,000 jobs. After Myanmar got the GSP rights beyond 2013, the number of factories has increased to 305—202 garment factories, 26 factories (non-CMP) and 77 factories (non-CMP garment). These factories can create more than 300,000 jobs. In Myanmar, 0.6 per cent in 1,000 people has to enjoy the EU’s GSP rights.
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  Rakhine State Chief Minister offered regional government’s assistance to potential investors for the development of State

  Rakhine State Chief Minister U Nyi Pu has offered the regional government’s assistance to potential investors to Rakhine State as the government is inviting investment for the development of the State. The Chief Minister made the comment at the Rakhine State Investment Committee Meeting 1/2019 in Sittway yesterday. Speaking at the meeting, U Nyi Pu, in his capacity as the Chairman of the Investment Committee, (RSIC), said the Rakhine State Government is inviting investments for the development of the state and will have to oversight the operations and developments of the companies in accord with the agreements that are applicable to the State. He also stressed the importance of granting permits to further companies in accord with the rules and regulations.
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  Ministry of Electricity and Energy is planning to open up more tenders for its offshore, deep-water acreages to investors with better contract terms and conditions

  The oil and gas sector is looking exciting this year, with opportunities emerging from an international tender scheduled to take place early this year for the first time since 2014. In addition to onshore and offshore blocks, the tender is expected to include work in “Improved Petroleum Recovery” blocks at older oil fields in Myanmar. One senior official from the Ministry of Electricity and Energy (MOEE) told The Myanmar Times that the tender will be launched “as early as possible this year”. According to the MOEE official, the ministry is now revising the terms and conditions of production sharing contracts (PSC) that will be offered to the winning bidders in the tender exercise. Once the revised terms are ready, they will be submitted to the Cabinet and the President’s Office for approval.
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  Myanmar sought continuous supports from EU which drive for the development of Myanmar’s Economy

  Daw Khaing Khaing Nwe, Joint General Secretary of the Union of Myanmar Federation of the Chambers of Commerce (UMFCCI), they met with European Union (EU) officials in Brussels, Belgium during the second week of December. At the meeting they requested the EU continue the Generalised Scheme of Preferences (GSP) and Everything But Arms (EBA) saying that EU’s GSP/EBA is a crucial drive for the development of Myanmar’s Economy. The GSP allows Myanmar to pay fewer or no duties on exports to the EU, giving them vital access to the EU market and contributing to their growth She was responding to the expression of EU’s officials on GSP expressed their wishes to see development in other sectors as well as garment sector, despite the fact that Myanmar is currently facing a lot of challenges. Daw Khaing Khiang Nwe, who also served as the general secretary of Myanmar Garment Manufacturer Association, met officials from Directorate General for Trade and Directorate-General for Employment, Social Affairs and Inclusion at Charlemagne Building of EU in Brussels.
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  EU has permitted 23 Factories in Myanmar to export wild-caught fish and prawn to EU market

  The number of factories in Myanmar allowed by the European Union to export naturally caught fish and prawns has increased from 21 to 23, according to the Fisheries Department. Since 2010, 21 local factories have been allowed to export wild-caught fish to EU countries, and two more permitted factories are TT Cold Store Factory and A&N Foods (Myanmar) Co Ltd. "Two more factories have now been permitted. All 23 factories are allowed to export wild-caught fish. Documents have been submitted for one more factory to get EU recognition," said Thet Naing, deputy director of Yangon Region Fisheries Department.
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  Banking sector in Myanmar is expected to be developed in 2019

  The banking sector is expected to make strides forward this year as fiercer competition forces banks in Myanmar to level up. “This year, the banking environment will be much better than before. There are still many hurdles left to cross to liberalise and strengthen this sector so that it can support the economy. Nevertheless, we have seen good progress over the last two years of reform,” said U Soe Thein, vice chair of the Central Bank of Myanmar (CBM). Following a CBM decision to level the playing field between local and foreign banks, competition for market share in the sector is expected to intensify, which is a positive development for Myanmar. Under Notification 6/2018, issued on November 8, 2018, foreign banks are now able to lend to domestic firms in the local currency at the standard lending rate of 13 percent. However, foreign banks are free to set their own interest rates if the loans are in foreign currencies. They will also be permitted to provide the full suite of trade financing services, the CBM said.
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  UMFCCI is planning to form an e-commerce association in order to organize and help online shops and SMEs

  With the aim of organizing and helping online shops and SMEs, the Union of Myanmar Federation of Chambers of Commerce and Industry is planning to form an e-commerce association. “Now, we are conducting online training. The Ministry of Commerce is also helping the e-commerce sector to grow so that SMEs can do e-commerce when they wish. Our federation is planning to organize an e-commerce association,’’ U Zaw Min Win, President of UMFCCI, said. The e-commerce sector needs to be monitored and organized because of the numerous reports that online shops are not delivering the ordered items, or even delivering different items than the customer ordered.