Weekly Business News from Myanmar

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  Two foreign joint business proposals in airline and oil refinery have been withdrawn despite the Myanmar Investment Commission's approval, due to obstacles from related ministries

  Two foreign joint business proposals – an airline and an oil refinery – have been withdrawn despite approval from the Myanmar Investment Commission, the MIC has reported. A proposed 78-billion kyat joint investment by Japan and Myanmar companies for a new airline was withdrawn after the Ministry of Tansportation and Telecommunications refused to issue a permit despite MIC approval. The second proposed investment was an oil finery in Dawei, a joint project of Chinese owned Guandong Zhenrong Energy (GDZR) and three Myanmar enterprises – the military-linked Myanmar Economic Holdings Ltd, state- owned Myanma Petrochemical Enterprise (MPE) and Yangon Engineering Group controlled by Htoo Group.
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  Central Bank of Myanmar (CBM) gives private banks more time to deal with “overdraft loans”.

  YANGON — Private banks have welcomed a move by the Central Bank of Myanmar to allow them more time to clear most of their loan books, a concession that followed warnings of a scenario that could have destabilised the financial system. The central bank announced in late November that a maximum of three years – instead of the original deadline of six months – would be given to lenders to recover the mostly open-ended “overdraft loans” that make up most of their lending. The move ends a tussle over regulations introduced in July to bring the country’s banks closer to international standards. The central bank decision came days after Reuters reported the authorities would back off from a demand that private banks clear most of their loans by January and that it would allow overdraft loans to be converted into three-year loans.
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  The Myanmar government is making efforts to restart development of the suspended Dawei Special Economic Zone (SEZ)

  The government is exploring ways to restart development of the suspended Dawei Special Economic Zone (SEZ), saying the SEZ will benefit Myanmar as well as the region. The Dawei SEZ includes construction of the highway as well as a deep-sea port which will link Thailand, Cambodia and Vietnam in the ASEAN region to India, the Middle East, Europe and Africa. A port at Dawei will also shorten transportation time by eliminating the need to navigate around Singapore through the Malacca Straits. “To implement the project, ways must be sought to hold talks between Myanmar, Thailand and Japan,” Vice President U Henry Van Thio said during a meeting with local authorities at the site of the project in Dawei, which is the capital of Tanintharyi region near the Thai-Myanmar border.
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  Social Enterprise Development Association Myanmar (SeDAM) was established by social enterprises consultant to strengthen social enterprise in Myanmar

  Support is forthcoming for social enterprises operating in Myanmar with the establishment of Social Enterprise Development Association Myanmar (SeDAM). “We have been dealing with various international associations and finding ways to contribute towards building up the economy by supporting social businesses in Myanmar,” said U Mo Lwin, vice president of SeDAM. Plans are also underway for SeDAM to work with the Yangon government to collect data on social small and medium enterprises (SMEs) and their requirements, U Mo Lwin added. “We are also planning to partner with different institutions to conduct social start-up programs and provide training to existing enterprises. We hope these activities will help us collect the needed data to support social enterprises,” he said.
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  The Permanent Secretary of Ministry of the Commerce provided an exclusive interview on policy, trade liberalization, and ASEAN free trade

  Myanmar Business Today’s deputy editor, Ko Phyo Thu, interviewed the Permanent Secretary of Ministry of Commerce, U Toe Aung Myint about the trade situation in Myanmar including, policy, trade liberalization, and ASEAN free trade. One goal of the interview is to provide helpful information to business wishing to extend their trade with Myanmar
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  Myanmar Investment Commission (MIC) announced that 100 percent export-oriented investments can apply for tax exemption

  The Myanmar Investment Commission announced on Sunday that it would consider businesses as 100 per cent export-oriented investments if investors supply all their finished goods and semi-finished goods locally manufactured to local businesses which are 100 per cent export oriented without supplying the domestic market. The distinction is important, because such total export-oriented investments can apply for tax exemption or relief in accordance with the section 77 (b) of Myanmar Investment Law, according to this announcement. According to section 77 (b) of Myanmar Investment Law, exemptions or relief are granted from the customs duty or other internal taxes or both on the importation of the raw materials and partially manufactured goods conducted by an export-oriented business for the purpose of the manufacture of products for export. According to section 100 (B) of Myanmar Investment Law, those currently operating enterprises without seeking approval or endorsement of MIC can submit endorsement applications in line with Myanmar Investment Law. Even if those enterprises are endorsed by MIC, they are not allowed to apply for income tax exemption embodied in section 75 of Myanmar Investment Law.
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  In cooperation with JCB Bank, AYA Bank launched AYA Universal Corporate MPU-JCB Card in Myanmar to promote smooth commercial corporation with neighboring countries

  AYA Bank an¬nounced that it has launched a cor¬porate card in Myanmar. This is the first corporate credit card targeted for business payment use ever issued in the country. The AYA Universal Corporate MPU-JCB Co-Branded Card has 2 different products: The Universal Corporate Platinum Credit Card and the Universal Corporate Gold Credit Card. All the cardmembers can enjoy the same JCB privileges as personal credit card¬members, such as JCB Plaza and special offers at selected merchants all over the world. Univer¬sal Corporate Platinum Credit Card cardmembers can also use exclusive JCB Platinum services, such as JCB Platinum Airport Lounge service, JCB Plati¬num Concierge Desk, and Special JCB Platinum Ho¬tel Services.
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  Due to lack of resources, Myanmar-based garment business have barely developed beyond cut-make-package (CMP) since 1993

  When entrepreneurs in the garment industry launch a business in newly industrialising countries, they often begin by adopting the cut-make-package (CMP) model, in which a garment factory is contracted to cut fabric, produce a product such as a dress, and then package it to be ready for shipment to another company. Moving beyond the CMP stage is a challenge for all newly industrialising countries, and perhaps more so for Myanmar, according to industry experts. While transformation from CMP to an all-inclusive company may take only a couple of years in other countries, Myanmar-based garment businesses have barely budged beyond CMP since the rise of the sector in 1993.
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  TMH Telecom Public Company will be the fifth company to list on the Yangon Stock Exchange (YSX) as trading volumes hit all- time low

  TMH Telecom Public Company will become the fifth company to list on the Yangon Stock Exchange (YSX), the exchange said Tuesday. However, it will be at least another month or more before trading in shares of TMH can commence. “TMH will be listed as a company in the official stock exchange list however trading of the company’s shares on the YSX will only begin in January 2018 at the earliest. As of now, the company still needs to conduct an Initial Public Offering which would take at least one month,” said U Thet Tun O0, senior executive manager at the YSX.
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  Since Myanmar’s economy is rebounding, International Monetary Fund (IMF) expects to see 6.7 percent growth in this fiscal year 2017-18

  An International Monetary Fund (IMF) team led by Mr. Shanaka J. Peiris visited Myanmar from November 6 −17 to conduct discussions for the 2017 Article IV consultations. The team says Myanmar’s economy is rebounding and macroeconomic imbalances are stabilizing with growth expected to rebound to 6.7 percent in 2017/18. The medium-term outlook remains favourable, albeit moderately weaker than previously anticipated and with greater downside risks. They say a second wave of reforms is needed to accelerate the growth momentum and foster inclusion, anchored on a medium-term economic plan linked to capacity development.