Weekly Business News from Myanmar

Myanmar had “total underestimated” the impact of the Rakhine crisis on the economy and Foreign Direct Investment (FDI)
SINGAPORE—A Myanmar foreign investment official said on Wednesday he “totally underestimated” the economic damage of the Rohingya crisis, adding that the outcry over the jailing of two Reuters reporters would also have some impact on his country’s reputation. Asked at an investor forum in Singapore what impact the crisis had on Myanmar’s economy and investment, the director general of the Directorate of Investment and Company Administration (DICA), which promotes private sector development and investment, said previously the government had been able to control outbreaks of communal tension. But the crisis in Rakhine State was different. “I totally underestimated,” the official, U Aung Naing Oo, told the forum, referring to the impact of an eruption of violence in 2016, which snowballed in 2017. “But after two years … now you can see that FDI in Myanmar is heading down, it is declining,” he said, referring to foreign direct investment, though adding that he was confident the government could stabilize the situation.
Yoma Bank, one of the largest private bank in Myanmar plans to tap digital banking in Myanmar in order to make banking accessible and easier for everyone to enjoy digital banking
YOMA BANK, one of the largest private banks in Myanmar, plans to focus on providing digital products to millions of people in Myanmar , according to Hal Bosher, the bank’s chief executive officer. Bosher said in an exclusive interview that digital products would allow the bank to serve the country better, making banking accessible and easier for everyone. “Many Myanmar people do not enjoy banking, so our goal is to make them enjoy. As we believe convenience is important, the best way to provide quality services that are convenient for everyone is digital banking,” he said. “We are looking at ways to provide digital credit. If you are going to bank through your mobile phone, it is very easy to borrow money. We are going to provide digital credit to allow our customers access to short-term credit facilities.”
Business groups in Myanmar are furious about the introduction of jail term in the Labour Dispute Settlement Law, which is expected to deter foreign investment
Business groups are furious about a move to introduce jail terms for violations of a labour dispute settlement law, but lawmakers and trade unions say it is the only way to ensure compliance. BUSINESS LEADERS and the International Labour Organization have criticised proposed changes to a labour law that could see employers and workers jailed for even minor violations, such as failing to attend arbitration hearings. Lawmakers and labour groups have said the changes to the Settlement of Labour Disputes Law are necessary because the weak penalties in the law encourage employers to ignore labour council rulings. Businesses, however, have warned that the changes could deter foreign investment. The amendment bill proposes prison terms of up to six months for employers and a month for employees, as well as raising the minimum fine for some offences to K10 million. The current minimum penalty for violations ranges from K500,000 to K1 million depending on the nature of the offence.
Japan International Cooperation Agency (JICA) plans to offer two-step loan of 11.5 billion yen for 2018- 2019 fiscal year in order to help Myanmar SME sector development in states and regions
Japan International Cooperation Agency (JICA) will plan to offer two-step loan of 11.5 billion yen (about Ks151.6 billion) for next fiscal year 2018-2019, state media has reported. At the 9th day meeting of the seven regular the session of Second Pyidaungsu Hluttaw held on 22 February, 14.9 billion yen was approved for JICA SME two-step loan phase-2. The loan agreement was signed on 29 March. To implement this phase-2, Myanmar Citizens Bank, Kanbawza, Myanma Economic Bank, Myanmar Cooperative Bank, Ayeyawady Bank, Myanmar First Private Bank and United Amara Bank were selected as Participating Financial Institutions (PFIs), according to a working committee for loan access held on 2 August at the Ministry of Planning and Finance.
Anti-Illicit Trade Forum was held in Nay Pyi Taw to resolve illicit trade in Myanmar, which has a negative impact on the economy, environment and society, and leads to loss of tax revenue
The Anti-Illicit Trade Forum was held at the M Gallery Hotel in Nay Pyi Taw yesterday morning. Speaking at the opening ceremony of the forum, Anti-Corruption Commission Chairman U Aung Kyi called on participants of the forum for seeking ways for solving illicit trading in Myanmar. The forum was also attended by officials from Euro Cham Myanmar, local business persons, officials from international organizations and anti-illicit trade field experts. Executive Director from Euro Cham Myanmar, Mr. Filip Lauwerysen briefed about impacts of the illicit trade across the world and introduced facts to be taken into account by a government when it lays down policies on fighting the illicit trade. Next, Anti-Corruption Commission Chairman U Aung Kyi said massive potential tax revenue loss is caused by illicit trade which negatively impacts the economy, natural environment and society and the illicit trade cannot be easily controlled under law as it is operated by illegal groups.
Myanmar lawmakers complained about loopholes in the conditions of Korean loans which will be used to implement the Korean based industrial complex infrastructure project in Hlegu township
YANGON—Myanmar lawmakers have criticized loopholes in the president’s message regarding infrastructure loans from the EXIM Bank of Korea which would be a major element to the implementation of the Korean-backed industrial complex project in Hlegu Township, Yangon Region. On Tuesday, nine lawmakers discussed the president’s message given in the Union Parliament regarding the decision to take $61.8 million in loans from the EXIM Bank of Korea for the Korea-Myanmar Industrial Complex (KMIC) infrastructure project. According to lawmakers, the loans will be used for three infrastructure projects which would support the KMIC project: the upgrading of highway roads; building a new power plant for electricity; and constructing a new channel for a water supply. The infrastructure projects will start this year and are expected to be finished in 2021.
A 145 megawatts natural gas-fired power plant will be implemented in Kyaukse of Mandalay Region, which has more natural gas-fired power plants compared to other states and regions
A 145-megawatts natural gas-fired power plant will be built in Kyaukse of Mandalay Region, according to the Ministry of Electricity and Energy. The gas-fired power plant will be implemented within Baelin 230 kV substation by Powergen Kyaukse Company Limited. 18MW gas engines for the power plant, purchased from Wartsila Company, arrived to Ahlone international port in Yangon on September 1, and inspections were carried out by Dr Tun Naing, deputy electricity and energy minister. The ministry issued a Letter of Acceptance (LoA) to the company for the construction of the power plant during the first week of May 2018. Currently, Powergen Kyaukse Company Limited has already cleared the land for the project and started performing civil works to install the gas engines. If the plant is completed, Mandalay Region will be able to consume more electricity, according to the ministry. The Wartsila order has been issued by SEPCOIII Electric Power Construction Co. Ltd. (SEPCOIII), the China-based EPC contractor for the project and one of the major international power construction companies.
Construction of Butheedaung sub-power stations through the national grid are 80 % complete in Maungdaw district
Sub-power stations are being constructed in Maungdaw District through the national power grid and construction of the sub-power stations are now at 80 percent completion. “The construction of support pillars are nearly complete. Construction of the sub-power station is 80 percent completed. The project period dictates that we must complete in end of October. The building of the sub-power station in Maungdaw will be completed in December,” said Hein Moe Htet, electrical engineer of Maungdaw District. Power can be transmitted to Butheedaung in Maungdaw district in October, Maungdaw in December through power grid. In Maungdaw Township, there 15 surrounding villages which are 10 miles distant from Maungdaw. There are 14 surrounding villages which are 10 miles from Butheedaung Township.
Myanmar authorities will allow foreign insurance companies to offer insurance services in 2018- 2019 fiscal year
Myanmar will allow foreign insurance companies to offer insurance services as of the upcoming fiscal year, said Zaw Naing, Secretary of Insurance Businesses Supervisory Board. “This is a roadmap for the development of local insurance sector. The Union government has already given the nod for it. We will allow foreign insurance companies to sell life insurance and miscellaneous insurance services in the country. It will start in 2018-2019 FY,” he added. Currently, the Insurance Businesses Supervisory Board is carrying out step-by-step scrutiny of foreign insurance companies. Dr Sandar Oo, Managing Director of Myanmar Insurance said: “Buying insurance services in local insurance companies are relatively low. People will have more choices when foreign insurance companies enter the local insurance market.”
Air Mandalay temporarily suspended their operations from 4 September 2018 due to the increasingly challenging market for the aviation sector
YANGON — In another setback for Myanmar’s troubled aviation sector, Air Mandalay has temporarily suspended operations effective from September 4, the carrier said in a statement. Air Mandalay, which began operations in Myanmar 24 years ago, said it may resume services in the future subject to restructuring and an improvement in market conditions. The announcement comes after FMI Air ceased operations in July amid higher fuel prices and a slump in the tourism industry that has also forced other domestic carriers in the highly competitive domestic market to halt services. “It is increasingly challenging to operate in Myanmar’s aviation sector,” Air Mandalay spokesperson Daw May Thandar Win said. “Air Mandalay is presently working closely with the government to resolve a number of issues affecting the airline and the aviation industry. The first priority for the airline is to look after the welfare of its employees and their job security,” she said.