Weekly Business News from Myanmar

Taiwan’s top aluminum maker, Abba Aluminum Co., launched its first manufacturing plant in Thilawa Special Economic Zone (SEZ) which cost 13 USD million worth
Taiwan’s top aluminium maker has launched its first manufacturing plant in Myanmar. Abba Aluminium Co, headquartered in Taoyuan, held the opening ceremony for its factory in Thilawa Special Economic Zone (SEZ) on December 24. Initial investment amounted to US$13 million and 300-500 local employees will be hired, according to Abba’s chair Chen Pai-chin. The estimated production value is expected to reach $32.5 million per year. Mr Chen said the presence of a large number of “ethnic Chinese people in Myanmar” gives the country an edge over other CLMV economies (Cambodia, Laos, Myanmar and Vietnam) for manufacturers from Chinese-speaking countries. He added that Myanmar’s young workforce is another attraction.
Ministry of Planning and Finance will increase tax on imports in order to expand the market of local products instead of importing goods
In an effort to reduce imports, the Ministry of Planning and Finance will levy more tax on imports instead of placing tax on locally produced products with high quality that can replace the imported products, according to U Soe Win, Union Minister of the Ministry of Planning and Finance, during the regular meeting between vice president of Myanmar and local businessmen held at UMFCCI on December 14. “With the aim of nurturing the manufacturing sector for import substitution, we will raise tax on the products imported even though the same kind of products produced locally are present in the market,’’he said. However, he did not identify the imported products on which more tax will be placed. For import of raw materials which are necessary for local industry, the ministry has plans to lower the tax for a certain period, he added.
According to a report by the Central Statistical Organization (CSO), average inflation rate based on the Consumer Price Index (CPI) increased from 6.34 percent in October to 6.66 percent in November 2018
The average inflation rate, based on the Consumer Price Index (CPI), increased to 6.66 per cent in November from 6.34 per cent in October, according to a recent report issued by the Central Statistical Organization (CSO), under the Ministry of Planning and Finance, state media reported. China’s suspension on importation of some agro products through the border since October has halted some freight forwarding services, hiking up commodity prices and pushing up the inflation rate.
Mandalay property market still cool with renting despite the fact that the government has changed the property tax rate
Although the government has changed the property tax rate, the property market is still cool in the city and suburban areas in Mandalay Region. However, the rental market for apartments located in Chanayethazan Township and Yadanarbon market is slightly rise as more and more shops and showrooms are being opened these days. Most of the shop owners are renting some apartments, and houses which are located on 73rd Street between 26th and 35th streets as well as on the 78th street between 26th and 38th streets in Chanayethatzan Township to open mobile shops, online stores, motorcycle showrooms and auto accessories shops. The rental for a 20×40 foot room is around K1 million per month while for the whole house it is over K2 million per month, according to real estate agents.
Directorate of Investment and Company Administration (DICA) plans to held Chin State Investment Forum in Yangon on 16 March 2019 in order to bring more investment to Chin State
With the aim of bringing in more investment to Chin State, the Directorate of Investment and Companies Administration will hold Chin State Investment Forum at MCC Hall in Yangon on March 16 next year. Chin State receives least amount of investments in Myanmar, so the forum will showcase investment opportunities in Chin State such as products and potential tourist destinations. “We have plans to showcase Chin State, but we want the forum to be more effective than forms held in the past that were not effective in bringing in investment,’’said U Aung Naing Oo, General Director of DICA.
Myanmar authorities seized illegal trade worth over K5 billion through border routes in 2018 in order to fight illegal trade (U Myint Swe, Vice President of Myanmar)
In order to fight illegal trade, Myanmar has been increasingly seizing illegally imported products through border routes. There are 240 cases of where they seized illegal products totaling K5.14 billion in 2018, U Myint Swe, Vice President of Myanmar, commented at the meeting held at UMFCCI on December 14. There are 59 cases of illegal imports which were seized in October and the amount of the seized products totaled K1.3 billion. “The abundant amount of illegal imports through border gates have had a serious impact to our SMEs causing them to nearly collapse. Therefore, we are fighting against illegal imports,’’the vice president said.
The Central Bank’s intervention of buying USD $ 34 million at the rate of Ks 1,570 per dollar within two days had an impact on the market (U Than Soe (Economics), Parliament Public Accounts Committee Member)
Parliament Public Accounts Committee member Than Soe (Economics) said that the intervention of the Central Bank in the market by buying US$34 million within two days at the rate of 1,570 Kyat per dollar had an impact on the market. “A committee member told me that the market exchange rate was about 1,510 kyats at that time. We have to calculate the loss in difference of these two exchange rates. US$34 million at the exchange rate of 1,570 will be about 53 billion kyats. This amount had been put in the market. In the clarification and explanation given by the central bank, they did it in accordance with their procedures and practices under their guideline,” he said. Public Account Committee invited officials from Central Bank on December 20 in the evening and discussed with them the frequent seizures of fake currency in 10,000 kyat denomination notes and the buying of US 34 million dollars in the market
IFC report recommended the area where Myitsone is located should be protected for long-term environmental and social sustainability and alternatives to develop the country’s hydropower sector
A government-sponsored study warned against restarting the highly controversial Myitsone dam and recommended alternatives to develop the country’s hydropower sector. The final version of the Strategic Environmental Assessment (SEA) of the hydropower sector, supported by the energy and environment ministries and authored by the International Finance Corporation, has been published. The SEA involved a range of hydropower, environmental, social and conflict experts and offered government, business and civil society stakeholders a chance to make an input. The report proposes cascade development -- multiple dams on certain rivers, allowing other rivers to be left intact. It also makes clear recommendations that dams on mainstem rivers such as the Ayeyarwady - where Myitsone is located - and Thanlwin are high risk for Myanmar through their impacts on the ecosystems on which the populations downstream depend. Hence, Myitsone, Mongton and the other dams should be avoided because of their negative downstream impacts, and development of new hydropower should focus on other opportunities and prioritise those in river sub-basins with lower environmental values.
US-ASEAN Business Council official urged SMEs to use Information and Communication Technology (ICT) in order to enhance competitiveness and development into digital economy
Michael W. Michalak, Senior Vice President and Regional Managing Director of US-ABC (US-ASEAN Business Council, urged small and medium enterprises (SME) to use ICT in order to enhance competitiveness and development during a one day workshop for SMEs named “Digital Transformation to Boost Competitiveness” held at Novotel Hotel, Yangon. Information and Communication Technology (ICT) “98 percent of enterprises in Myanmar are SMEs, and we have not seen Digital Economy Growth. In order to improve competitiveness, SMEs need to grab potential benefits by transforming into digital economy. It is important that Myanmar’s SMEs are well-prepared,’’ he added. The workshop was jointly held by US-ASEAN Business Council, US ICT Council for Myanmar, Max Myanmar Holdings Co., Ltd, UMFCCI and Myanmar Young Entrepreneurs Association with the aim of creating New Technology and E-commerce Platform to enhance digital transformation.
Livestock and fisheries sectors in Myanmar need further development along the entire supply chain to link with the global market and promote exports
The Myanmar livestock and fisheries sectors have not lived up to their potential under the remit of the Ministry of Agriculture, Livestock and Irrigation and needs to be a separate ministry in order to fully grow and develop, said U Zaw Aye Maung, Rakhine ethnic minister in Yangon Regional Government. “In the past, livestock and fisheries were growing successfully as they were managed separately from agriculture. If we want to develop the fisheries industry, we need it to be under a different ministry with decision makers both at the Union and regional level,” U Zaw Aye Maung said, adding that new legislation is needed to replace the existing outdated rules and regulations for the fisheries sector. The calls for more leadership and focus on fisheries come as the sector struggles with issues such as lack of finance, transport infrastructure, data and communications and even land for fish farming.