Weekly Business News from Myanmar

International Cooperation Review Group of the Financial Action Task Force will review Myanmar over money laundering concerns
YANGON — An assessment of Myanmar’s efforts to tackle money laundering and terrorist financing has found significant weaknesses, including a failure to recognise the “serious” money laundering risks that the country faces. The Asia/Pacific Group on Money Laundering released the Mutual Evaluation Report on October 22, three months after it was adopted at the APG annual meeting in July. The “poor results” on the evaluation mean Myanmar will automatically be reviewed by the International Co-operation Review Group of the Financial Action Task Force, and may be placed on a black or grey list following that review. Myanmar was removed from the FATF’s list of high-risk and monitored jurisdictions in 2016 following some limited reforms.
In December 2018, Myanmar Port Authority will invite international tenders to select a private port operator for the Kaladan multi-modal transit transport project
International tender will be invited to select a private port operator for the Kaladan multi-modal transit transport project in December, according to Myanma Port Authority. A MoU on the appointment of a Port Operator for the Operation and Maintenance of Sittwe Port, Pletwa Inland Water Terminal and Associated Facilities was signed at Hilton Hotel in Nay Pyi Taw on October 22. For the appointment of a private port operator, international tender will be invited and an Indian company or a Myanmar-India joint-venture company will be selected. The MoU was signed by Win Khant, permanent secretary of the Ministry of Transport and Communications and Foreign Secretary of India Vijay Gokhale.
Myanmar government is developing four economic corridors to increase investment in Myanmar
Myanmar is developing four economic corridors including northeast-southwest economic corridor connecting between Kyaukphyu and Muse by crossing Mandalay and east-west economic corridor connecting between Myanmar, India, China and Thailand, according to a project to elevate investment in Myanmar. The National Comprehensive Development Plan 2011-2030 (NCDP) stated regional development framework with many ways to approach and expressed four economic corridors as top priorities. The four economic corridors are Yangon-Myawady economic corridor connecting between bordering area with Thailand and Thilawa special economic zone, North-South economic corridor connecting between Yangon and Myitkyina by crossing Mandalay, northeast-southwest economic corridor connecting between Kyaukphyu and Muse by crossing Mandalay and east-west economic corridor connecting between Myanmar, India, China and Thailand.
International interest in Myanmar’s startups has been on the rise as investors scour the market for potential returns
Interest in Myanmar’s startups has been on the rise as investors scour the market for potential returns. Yesterday, Germany’s development finance institution DEG and agRIF, an impact focused fund which provides funding to financial intermediaries targeting smallholder farmers and the rural population, announced a joint investment of US$6 million in Rent 2 Own (Myanmar) Ltd (R2O). agRIF is managed by Incofin Investment Management, a global impact asset manager. Daiwa PI Partners, an investment arm of a major Japanese securities firm group, is also taking a stake in the venture by fully purchasing shares from one existing shareholder. R2O, which provides rural populations with easy access to motorcycles by offering flexible and affordable contracts, first launched in January 2016. Since then, R2O has served 70,000 clients through its network of 34 branches covering an area of Central Myanmar that ranges from the Ayerwaddy delta to the mountains of Shan State, the startup said.
Myanmar’s economy remains upbeat despite international pressures on the government from ongoing conflicts in Rakhine State (ASEAN+3 Macroeconomic Research Office)
DESPITE international pressures on the government driven by ongoing conflicts in Rakhine State, Myanmar’s economy is projected to post 7.1 per cent growth this year and 7.4 per cent next year, according to Hoe Ee Khor, chief economist of Asean+3 Macroeconomic Research Office (AMRO). At AMRO’s first-ever press conference in Myanmar earlier this month, Hoe said the growth would be driven by expanding public spending and exports as well as a pick-up in agriculture and manufacturing activities. He considers garment and tourism as the most promising sectors in the long run. “We see the conflicts in Rakhine State as ‘pretty localised’, although it may have some impacts on the business sentiment,” he said. Yet, he did not underestimate potential impacts of the international pressures on the government. If the European Union decides to withdraw its trade preference, then it will be a big blow for Myanmar’s economy, as garment is currently the main driver of Myanmar’s growth, he said.
In a joint operation between Petronas Carigali Myanmar Inc, Myanmar’s United National Oil and Gas Trading Co.,Ltd and Petroleum Brunei Myanmar (PBMA), drilling of an exploratory oil well started in Myanaung, Hninthda District, Ayeyarwady Region on 4th Nov
Drilling of an exploratory well – Shwesitaw Well No 1 in IOR 7 Block in Myanaung, Hinthada District, Ayeyarwady, has started on November 4. Based on 3D seismic survey data, oil and gas prospects were found in the block which Shwesitaw Well No 1 will explore. The target depth of the well is 2450 metres. The exploration of the block is joint operation by Petronas Carigali Myanmar Inc, the local arm of Malaysia’s national oil and gas company; Myanmar’s United National Oil and Gas Trading Co Ltd; and Petroleum Brunei Myanmar (PBMA) after a contract for oil and gas exploration and development in IOR-7 Vlock was signed in September 16, 2014.
In cooperation with Green Power Myanmar Co.,Ltd, Ministry of Industry will manufacture electric buses and set up charging stations in Myanmar by adopting the technology of Csepel Holding Limited of Hungary
“We need to use alternative fuels, as the fossil fuels we are burning today will be exhausted soon”, said Union Minister for Industry U Khin Maung Cho at the signing of an agreement to manufacture electric buses and erect charging stations in Myanmar. At the signing ceremony, held at the Research and Development Bureau in Yedhashe, the Union Minister said the country is promoting the use of renewable energy, while reducing the consumption of fossil fuels. Electricity may be the best tool in alleviating the consequences of burning fossil fuels. So, the global production and use of electric cars is on the rise, as fossil fuel-burning cars are being replaced by hybrid and electric cars. Myanmar also needs the assembling of electric cars to protect the natural environment and reduce carbon emissions.
Myanmar government authorities are taking measures to stop paddy export via illegal routes (U Yan Naing Tun, Permanent Secretary of Ministry of Commerce)
The Ministry of Commerce has not issued official permission for export of paddy, and measures are being taken to stop paddy export via illegal routes, said permanent secretary Yan Naing Tun. "Relevant organizations have complained to us that there are cases of exporting paddies. Our ministry has not allowed it officially. So they must have been exported through illegal routes. Now we are making coordinated efforts to inform respective states and regions about illegal paddy export and urge them to stop it," said Yan Naing Tun. The permanent secretary's remark came after a reporter asked him if the ministry knew about reports that Chinese citizens are entering the country to buy and take paddy to their country. "We cannot show evidence that Chinese citizens are entering our country to buy paddies. But what I learn is that paddies are being illegally exported. As a complaint comes to us, we are cooperating with state and region governments to stop this," he said.
Since February 2018, Microfinance Institutions (MFIs) in Myanmar have lent more than K 3.9 trillion to three million small-scale borrowers, but some are now deeper in debt
Microfinance institutions (MFIs) in Myanmar have lent more than K3.9 trillion to three million small-scale borrowers since the business of microfinance emerged in the country up until February this year, according to Financial Regulatory Department under the Ministry of Planning and Finance. But while the additional lifeline has brought financial relief to borrowers, many have also ended up further in debt. This is because MFIs tend to be crowded within a single area, so it is not uncommon for three institutions to have lent to the same borrower, said U Myint Swe, managing director at MIFIDA (Microfinance Delta International). Because of the easy access to funds, “many individual borrowers tend to borrow beyond their capacity to repay the loans, he said. “In my neighbourhood, there are around 12 microfinance companies. A person takes loan from six or seven companies. There are many people who are in deeply indebted to these institutions and I haven’t seen anyone who has recovered from it,” said Ma Thet, who took out a microfinance loan in Pyay, Bago Region.
Ministry of Natural Resources and Environmental Conservation (MNREC) invited the expression of interest (EOI) from foreign and local investors in order to study the feasibility of cement plant project in Chin State
The Ministry of Natural Resources and Environmental Conservation (MNREC) is inviting expressions of interest (EOI) from foreign and local investors to conduct detailed feasibility studies and measurement of limestone deposits before considering the setting up of a cement plant in Chin State. The proposed site for the project, covering some 4300 hectares, is located in Hakha Township, Chin State. A ministry spokesperson said it is inviting the expressions of interest in order to study the feasibility of the project in Chin State. “This project could have benefits both Chin State and the country. I believe this project will support the development of the state and its people,” Mang Hen Dal, the regional minister of agriculture, livestock and mines, said.