Weekly Business News from Myanmar

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  Myanmar and Thailand have agreed to resume deep sea port project this year after years of suspension

  Myanmar and Thailand have agreed to resume work on a deep sea port project this year, part of the infrastructure project of Myanmar's Dawei Special Economic Zone (SEZ) in southern Tanintharyi region, after several years of suspension, local media reported Wednesday. Under a fresh memorandum of understanding signed between the two countries, the Italian-Thai Development Public Company (ITD) is allowed to begin work again, according to a report by official media the Global New Light of Myanmar.
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  Baluchaung No.1 hydropower plant in Kayah State and Sedawgyi Power Plant in Mandalay Region will be renovated with loans of ¥10.787 billion yen from the Japanese government

  Baluchaung No.1 Hydropower Plant in Kayah State, and Sedawgi Power Plant in Mandalay Region will be renovated using ¥10.787 billion yen from Japanese Government. Baluchaung No.1 Hydropower Plant was built on the banks of Baluchaung Creek, 10 miles south east of Loikaw in Kayah State. A joint venture between NEWJEC Inc. and Nippon Co., Ltd. signed a contract with the Ministry of Electricity and Energy for consulting services to renovate the two hydropower plants on May 9. “Both of the plants have been operating for over 25 years under the ministry. In that time there hasn’t been a large scale renovation, so naturally this leads to mechanical malfunctions and lowered capacity. Therefore we decided to renovate,” U Win Khaing, Union Minister of the Minister of Electricity and Energy said.
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  Myanmar government’s efforts to accelerate reforms and to modernize the financial sector make Myanmar prepared for economic development amid growing global and domestic uncertainty

  GIVEN THE government’s efforts to accelerate reforms and to modernise the financial sector, Myanmar’s economy is projected to increase to 6.7 per cent next year, according to Ellen Goldstein, World Bank director for Myanmar, Cambodia, and Laos. She said at the launch of the latest Myanmar Economic Monitor that the medium term outlook for Myanmar remains positive despite some risks. She expects a surge in foreign investment flows to drive further growth. “The report shows that Myanmar’s economy is doing better this year, and we hope the country to maintain the momentum,” she said. “The government needs to ensure the growth is sustainable and inclusive. They need to find ways stimulate growth and investments to ensure financial inclusion.” Goldstein stressed an urgent need to address the emerging risks that could affect business sentiment and weaken future performance.
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  Myanmar Gems Enterprise suspended license renewals of expired blocks until new law stipulated, but over 8,000 acres of blocks are still actively mined with existing contracts

  More than 8,000 acres of jade and gem blocks backed by the State are expected to remain active until 2021, said U Aung Nyunt Thein, managing director of the Myanmar Gems Enterprise under the Ministry of Natural Resources and Environmental Conservation. This is after the Myanmar Gems Enterprise under the new government suspended renewals of expired blocks. As at April 30, there were 8,684 remaining jade and gem blocks in Mogok, Lonekhin, Hpakant, Mawlu, Mawhan, Khamti and Monghsu. “Since April 2016, the government has stopped renewing the licenses to mine at existing gem blocks. It has also suspended the licensing of new blocks. The remaining 8,000-odd blocks that are still actively mined are those with existing contracts. These will expire between this year and 2021,” said U Aung Nyunt Thein. In the past, permits to mine at the jade and gem blocks were given for terms of five years. “For now, all license renewals have been stopped. As the existing blocks expire, the number of active blocks will gradually be reduced,” he said.
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  U Win Myint has nominated U Soe Win as the new Minister of Planning and Finance, amid an ongoing investigation by the Anti-Corruption Commission on former Minister U Kyaw Win

  YANGON – President U Win Myint has nominated U Soe Win to become Minister of Planning and Finance, after approving the resignation on May 25 of former minister U Kyaw Win, amid an ongoing investigation by the Anti-Corruption Commission. Soe Win is the managing partner for Deloitte in Myanmar and a member of the National Economic Coordination Committee. He also sits on the board of the Renaissance Institute, a think-tank that advises the government on economic policy, and is a member of the Yangon Bar Council. A member of the NLD’s economic committee told Frontier that two other candidates had also been in the running for the role: U Myo Myint, chair of the Renaissance Institute, and Deputy Minister for Planning and Finance U “Winston” Set Aung.
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  Discussions on intellectual property rights for SME development took place in Yangon to share knowledge on IP laws, especially in trademark and design

  A discussion on Intellectual Property Rights for SME development took place in Yangon on Sunday. The forum on Trademark and Design was organized by the Intellectual Property Proprietors’ Association, Myanmar, IPPAM, with the support of USAID. It aims to share knowledge on IP laws, especially Trademark and design issues. The Intellectual Property Bill was drawn in 2013 and covers Trademark, Patent, Industrial Design and Copyright. IPPAM stresses the importance of the law. President, Intellectual Property Proprietors’ Association, Myanmar, Kyaw Kyaw Win said “Once the bill is approved by the People’s parliament and signed by the President, we will work on rules and regulations to apply for. Trademarks are very important for the growth of the country’s GDP and businesses. I think there are 60,000 trademarks registered in our country. Once we have rules and regulations, we can produce and register the geographical identity of the brand, like Sein Talone Mango, Ywar Ngan Coffee, Bagan lacquer ware.”
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  U Myint, Former Chief Presidential Economic Advisor, advocated policy areas which can help ensure economic development and better benefits for ordinary people

  EVEN as international agencies pronounce a favourable outlook for Myanmar, former chief presidential economic adviser U Myint has identified policy areas that can help ensure that an improving economy benefits ordinary people. The economist endorses a move that will see fresh studies conducted into patterns of expenditure in household consumption starting from 2010. He hailed the Central Statistical Organisation’s efforts to undertake such an update with the support of World Bank, which, with the International Monetary Fund, has maintained its positive outlook for the national economy. “I believe the study will provide useful information on the state of life and labour for the common folk in our country,” U Myint said. He said that average incomes of families in many parts of Myanmar were inadequate to meet household consumption expenditure. Estimated monthly incomes of average households were insufficient to cover consumption costs in all the states and regions except Yangon and Ayeyarwady.
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  Myanmar's first credit bureau, a joint venture between Singapore’s Asian Credit Bureau Holdings and Myanmar Banks Association, would significantly contribute to building trust between bankers and businesses

  FOLLOWING the recent issuing of Myanmar’s first credit bureau licence to a joint venture company between Singapore’s Asian Credit Bureau Holdings and Myanmar Banks Association, small and medium enterprises (SMEs) now have a chance for a brighter future, according to government officials and industry experts. The licence will allow it to provide credit reporting services. Within a year of licensing, the bureau should be in operation. Zayar Nyunt, chief executive officer at Small and Medium Industrial Development Bank, said the bureau would help a great deal in building trust between bankers and businesses. “Trust is really important. Many SMEs in Myanmar lack capacity, skilled labour, technology and finance. Policymakers are trying to address these issues, and the credit bureau is an outstanding outcome from that,” he said. “We urgently need to raise awareness about the credit bureau. The more people know about the credit bureau, the more they will make good use of that.”
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  Central Bank of Myanmar (CBM) loans Ks 640 billion to the government to finance the fiscal deficit for the six- month interim period between 1 April and 30 September

  The government will borrow around K640 billion from the Central Bank of Myanmar (CBM) to finance the fiscal deficit for the six-month interim period between April 1 and September 30, U Maung Maung Win, deputy minister at the Ministry of Planning and Finance, said in Parliament this week. The loan represents around 20 percent of the government’s total permitted local borrowings from the CBM, which is in line with the Union Budget Law. The government is permitted to borrow K4.2 trillion, of which K3.2 trillion must be from local sources, according to the law. The aim this year is to meet up to 80pc of the government’s debt requirements with Treasury bonds and the remaining 20pc with money from the CBM. In two years’ time, it has committed to eliminating its reliance on CBM borrowing to finance the fiscal deficit, now around 3.5pc of GDP on the back of higher spending on infrastructure and social services such as education and healthcare, according to the Asian Development Bank (ADB).
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  New Planning and Finance Minister expected to rescue confidence of business community and speed up reforms especially in the banking and financial sector

  The government has to find someone who can pick up the baton swiftly and restore confidence to an increasingly frustrated business community since U Kyaw Win has resigned as planning and finance minister. With economic reforms slowing and plummeting of investor confidence, the next office-holder needs to communicate the reform blueprint to the private sector, end ambiguity over laws and policies and revitalise the reform momentum, especially in the banking and financial sector. And all of these have to be done while the clock is ticking. The cabinet-level position taking charge of the Ministry of Planning and Finance as well as the upcoming appointment of the new Central Bank Governor are the two most important posts in the executive being watched by investors at home and abroad, according to Nick Powell, managing partner of private equity firm Delta Capital. The National League for Democracy-led government’s 12-point economic plan includes supporting competition and a robust private sector based on a market-oriented system by cutting down unnecessary red tape and expanding access to credit. “We have seen some positive developments were made in the area of promotion of financial inclusion and expansion of credit to the unbanked through relaxation of regulatory restrictions in the microfinance sector by the financial regulatory department. But, more recently, the pace of reform has slowed. Clearly, access to credit across all sectors of the economy and clear regulations are important to the positive development of Myanmar,” Mr Powell observed.