Weekly Business News from Myanmar

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  Seven foreign banks received approval to provide export financing and related services (U Soe Thein, Deputy Governor of the Central Bank of Myanmar)

  Seven foreign banks have received approval to provide export financing services, U Soe Thein, deputy governor at the Central Bank of Myanmar (CBM) told The Myanmar Times on Wednesday. Details of the banks have not been released, pending an official announcement. “Seven out of 13 banks have been given approval to provide export financing and its related services by the Central Bank. The others who have applied are being reviewed,” U Soe Thein said. The central bank will not restrict the rates and the volume of export financing provided by foreign banks. The loans will be disbursed according to the terms of individual banks, said U Soe Thein.
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  Myanmar Private Disaster Preparedness Network (MPD network) organized the business resilience forum in Yangon to promote knowledge on disaster preparedness and business resilience initiatives

  Private sector in Myanmar strengthens their efforts for promotion of knowledge in disaster preparedness and business resilience initiatives. The Myanmar Private Disaster Preparedness Network (MPD network) held the business resilience forum in Yangon on Wednesday. The forum explored an effective ways to engage private sector in disaster preparedness and business resilience initiatives in the country. Capacity Development Specialist, Asian Disaster Preparedness Center, Myat Thar said “In Myanmar, many of the businesses didn’t have much preparation for the disasters, most of them faced it and effected by it once it hit. During Nargis in 2008, damages and losses for the business sector estimated about 4 Billion US$. And in 2015 flooding, the business sector also losses over 119 million US$. So in today’s forum, we are aiming to share the knowledge on business resilience initiatives, good practices and will discuss possible challenges and effective ways to solve it.”
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  VisionFund Myanmar launches a new microfinance loan scheme for garment factory workers

  VisionFund Myanmar recently announced the launch of a new microfinance loan product exclusively for garment factory workers, funded by the Livelihoods and Food Security Trust Fund (LIFT), according to a press release on 16 February. The loans were first launched at the ZES garment factory located in Hlaing Thar Yar Township, with over 160 workers availing themselves of the facility, which will subsequently be extended to other factories. Many workers in the garment sector have migrated to Yangon from rural areas. Research informing LIFT’s migration programme shows that around 20 per cent – one in five people – in Myanmar are migrating within the country, moving from rural areas to urban areas to find better jobs and training opportunities to support themselves, their families and communities back in rural areas.
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  Thai imports at Myawady border gate has decreased, while Myanmar exports increased slightly

  Imports from Thailand crossing at the Myawady border gate have declined from last year’s volume. Between April and February, flow across the border totalled US$766.7 million – $66.2 million earned on exports and $700.5 million spent on imports from Thailand. That represented an increase of $15.8 million in exports and a decrease of $21.9 million in imports, compared to the figures from the same period last year. Merchants blame a policy shift in car imports and rising tax rates for the drop in imports. “According to the latest policy, only the cars with steering wheels on the left-hand side can be imported.
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  Inland Revenue Department (IRD) plans to stop levying withholding taxes from April 1 onwards in a bid to boost the economy

  The Inland Revenue Department (IRD) is planning to stop levying withholding tax starting April 1 onwards in a bid to boost the economy, it revealed during a weekend discussion. The discussions, which took place with the Yangon Regional Government, Union of Myanmar Federation of Chambers of Commerce and Industry and other business associations, were held in conjunction with preparations for new regulations under the 2018 Union Tax Law. The IRD issues new tax regulations every fiscal year, effective April 1. Among the changes for the new fiscal year will be the removal of withholding tax. The decision follows the IRD’s move last month to cancel a 2 percent withholding tax on exports, which came in response to feedback from a December 2017 discussion, during which businesses called for the tax to be withdrawn. The move was in line with the Ministry of Planning and Finance’s strategy to promote exports. Starting April 1, 2018, all forms of withholding taxes will be removed. For residents, a 2pc withholding tax is currently levied on goods, services and leases procured, while a 10pc withholding tax is levied on royalties paid. Residents are not taxed on interests paid.
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  Local banks are struggling to meet a set of regulations set by the Central Bank of Myanmar (CBM) in July 2017

  Local banks are finding it difficult to meet a set of new regulations set by the Central Bank of Myanmar (CBM) in July 2017 to modernise the domestic financial sector and better attract foreign direct investments at a time of slower growth. Under a new Financial Institutions Law, the CBM has ordered banks to maintain higher capital adequacy ratios, limit lending exposure to single borrowers, reclassify loans and advances and recover overdraft loans. Drafted with assistance from the International Monetary Fund, the regulations are in line with international Basel III standards. “The regulations imposed by the CBM are meant to align the Myanmar financial sector with the international banking industry. They are very good regulations and should be implemented,” said U Than Lwin, senior adviser at Kanbawza Bank and former CBM vice governor.
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  Infrastructure is crucial to attract more foreign direct investment (FDI) (Directorate of Investment and Company Administration – DICA)

  The local investments outnumbered that of foreign in Nay Pyi Taw council area, according to Director of DICA. At present, there are 21 businesses invested by local citizen and 6 businesses by foreigners in Nay Pyi Taw council area. Director, DICA (Nay Pyi Taw council). Aye Sandar Lwin said “There is 541 billion kyats of local investment and 59.65 million USD of foreign investments in Nay Pyi Taw council area. The local investment in Nay Pyi Taw council reaches 3.65% of the investment in the whole country.” More job opportunities will be created when more foreign investments are attracted, Director added. Nay Pyi Taw council area has potentials to do business due to the spacious land and electricity is fully provided, director said.
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  Gas production rates of the Yedagon and Zawtika projects, which mainly export to Thailand, are in decline (Ministry of Electricity and Energy)

  Production rates of the Yedagon and Zawtika projects, which mainly export natural gas to Thailand, are falling, according to the Ministry of Electricity and Energy. The Yedagon gas project is currently exporting 200 million cubic feet (mmcf) daily to Thailand, while the Zawtika gas project is exporting 200mmcf abroad and also produces 100mmcf for domestic use. The figures represent a drop from last year’s production levels. According to the figures released in June last year, the Yedagon project produced 250mmcf daily, while the Zawtika produced 250mmcf for export and 80mmcf for domestic use. The Yadana field now produces 650 million cubic feet (mmcf) of natural gas daily, most of which is exported, with 200mmcf used domestically. The Shwe site produced 400mmcf for export and another 100mmcf for domestic use.
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  Foreign investments are invited for the upgrade of jetties along the coast into international standard ports

  Foreign investments will be sought to upgrade jetties along the coast into international-standard ports as additional capacity is needed to supplement the Yangon port, which now handles 90 per cent of sea-based goods transport. “Jetties along the coast are mainly used for handling domestic cargo. They will become international ports when there is an inflow of additional investments,” said Dr Myo Nyein Aye, deputy general manager of the Ministry of Transport and Telecommunications. He was speaking on February 8 at the Myanmar-Korea Investment Promotion Seminar at Lotte Hotel in Yangon.
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  Ethnic entrepreneurs plan to establish a new business association in order to promote balanced development between urban and rural areas and ensure private sector development

  Ethnic entrepreneurs across Myanmar are planning to establish a new business association, according to the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), state media reported on 12 February. The new association will represent entrepreneurs in regions lagging behind in development. The formation of the ethnic entrepreneurs’ association is aimed at promoting balanced development between urban and rural areas, and ensuring private sector development.