Weekly Business News from Myanmar

Bago Region Investment Committee (BRIC) endorses three foreign enterprises which will create over 1,200 jobs opportunities
The Bago Region Investment Committee (BRIC), at a videoconference held on 24 June, has endorsed three foreign projects and approved one foreign enterprise to increase capital. The investments of those projects including the expansion of capital by one existing enterprise are estimated at US$13.325 million. The projects will create over 1,200 jobs. They will invest in manufacturing of various kinds of the garment; weaving and dyeing; and non-sterilized disposable surgical scrubs and related clinical wears on CMP basis, and service for construction and leasing factories and office building, according to the Directorate of Investment and Company Administration (DICA).
Myanmar government has approved international funding for domestics food production industry
Myanmar has approved a K92 billion COVID-19 relief plan for the domestic food production industry, U Hla Kyaw, Deputy Minister for Agriculture, Livestock and Irrigation, said on June 26. The approved funding will enable the ministry to support people in the rural areas amid the pandemic. Under the government’s plan, nearly K15 billion will be spent on establishing contract farming jobs on 100,000 acres of farmland. Investment capital totalling K41 billion will be allocated to more than 1700 villages in all the states and regions. Around K25 billion will be used to acquire and distribute agricultural machinery to farmers in 11 regions and states including Nay Pyi Taw. Furthermore, about K6 billion will be spent on assisting local fish farms and training, while K1.5 billion will be used to create jobs in the livestock industry in 100 townships.
Myanmar approached target with USD $ 4.4 billion foreign investments in the first nine months of current fiscal year
“With US$4.4 billion foreign investment in nine months of this fiscal year (FY), Myanmar is likely to meet foreign investment target in this FY,” said DICA Director-General U Thant Sin Lwin. Myanmar Investment Commission (MIC) set a target to attract USD5.8 billion in this FY. To meet the set target, $1.4 billion is still needed. “Foreign investments worth only $4.1 billion flowed into the country last year. Now, FDI flow into Myanmar totalled $4.4 billion in nine months of this FY. Our FDI target is $5.8 billion. We only need $1.4 billion to meet our target. We need to make sure our guideline such as less economic impact by the coronavirus pandemic, encouragement through coronavirus economic relief plan (CERP), giving priority to creating job opportunities and paying attention by the government over the recovery of the economic impact by the pandemic. By combining these four sectors, we expected $1.4 billion FDI will flow into the country,” he stated. In the pandemic period, some existing investment businesses have increased their capital amount of investment. The new investments are also entering the country. The remaining new investments will be continued to be given green light in the next three months, according to DICA.
Myanmar commits to International Monetary Fund (IMF) emergency funding as pandemic persists
The International Monetary Fund said Friday it will provide Myanmar with $356.5 million in emergency funding, as the southeast Asian country battles an economic slump due to the coronavirus pandemic. "The Myanmar economy is being impacted by the outbreak of COVID-19 through a sharp decline in tourism and remittances and supply chain disruptions," Mitsuhiro Furusawa, IMF deputy managing director, said in a statement. The fund "will help address Myanmar's urgent financing needs related to COVID-19 shock, and catalyze support from development partners."
Myanmar Railways (MR) plans to sign an agreement with Korea EXIM Bank to take loans for the upgrading of Mandalay – Myintgyina railroad
YANGON-Myanmar Railways(MR) is now planning to sign an agreement with Korea EXIM Bank aiming to take loans US$125 million for the upgrading of Mandalay-Myintgyina railroad section. The Union Parliament session on March 26th had approved taking loans from Korea EXIM Bank. The new air-conditioned trains will take about 17 hours to travel the Mandalay-Myitkyina route, one hour less than other trains. Myanma Railways (MR) signed a contract agreement with the Dawonsys Company to buy 100 new modernized train carriages under the Korean loans on December 5th, 2018. The Ministry will use a US$ 45 million loan from Economic Development Cooperation Fund (EDCF) of the EXIM Bank to buy the train carriages.
Ministry of Commerce (MOC) will support banks in the provision of loans for planting Myanmar corn due to high demands
The Ministry of Commerce will support banks in the provision of loans for planting Myanmar corn, demand for which is expected to rise in the coming years. The agreement was made between the ministry and the newly formed Myanmar Corn Industrial Association on June 26. “As we expect demand to be very high, the Ministry of Commerce accepted our request for it to provide government loans or connect us to the banks so that we can obtain the funding we need to expand the plantations,” said U Min Khang chair of the association. There are about 1.9 million acres of corn plantations across the Ayeyarwady Region, Nay Pyi Taw, Shan State, Kayah State and Kayin State, yielding more than 3 million tonnes a year, according to last year’s data. Domestic consumption is less than half of what is produced, with the other half of the crop exported mainly to Thailand. Myanmar is currently also the second largest exporter of corn in Asean.
The viable China Myanmar Economic Corridor (CMEC) projects to be included in Myanmar Project Bank
Depending on their commercial viability, projects from the China Myanmar Economic Corridor (CMEC) will be selected and included in Myanmar Project Bank, Deputy Minister of Planning, Finance and Industry U Set Aung said on June 24. The two governments have signed a co-operation plan for the CMEC, under which Myanmar has the authority to choose the projects it wants to execute. “We will choose the projects only after feasibility studies have been done and if they are commercially viability and have strategic significance to Myanmar,” he said. The Myanmar Project Bank is an open web-based platform designed to highlight investment projects which will further the implementation of the Myanmar Sustainable Development Plan 2018-2030. This establishes a predictable and transparent system linking major investment projects with appropriate sources of finance.
Yangon Region Investment Committee has approved USD $ 9.17 million worth 3 foreign projects and K 2.29 billion valued 1 domestic proposal
The Yangon Region Investment Committee, at a videoconference held on 24 June, has approved three foreign projects from China, with an estimated capital of US$9.17 million and one domestic project worth K2.29 billion. The projects will create over 3,000 jobs. They will invest in the production of spice; belt and bags; and manufacturing of bra cup underwear mould for local CMP enterprises, according to the Directorate of Investment and Company Administration (DICA). The manufacturing sector has attracted the most foreign investments in Yangon Region, with enterprises engaging in the production of pharmaceuticals, vehicles, container boxes, and garments on a Cutting, Making, and Packing (CMP) basis. The investments in the regions also flowing into the hotel services, and other services sectors as well. To date, foreign investments from China, Singapore, Japan, Hong Kong, the Republic of Korea, Viet Nam, India, China (Taipei), Malaysia, the British Virgin Islands and Seychelles are arriving in the region.
World Bank warns of severe blow to Myanmar’s economy due to COVID – 19
The global COVID-19 pandemic is dealing a severe blow to Myanmar’s economy. Economic growth in a baseline scenario is projected to drop from 6.8 percent in FY18/19 to just 0.5 percent in FY2019/20, according to the World Bank’s Myanmar Economic Monitor, released yesterday. If the pandemic is protracted, the economy could contract by as much as 2.5 percent in FY2019/20, with the expected recovery in 2020/21 subject to further downside risks. The slowing economic growth threatens to partially reverse Myanmar’s recent progress in poverty reduction while reducing the incomes of households that are already poor. Under the baseline scenario, in which the domestic spread of the coronavirus is brought under control, the global economy swiftly recovers, and Myanmar’s GDP growth rate is projected to bounce back to 7.2 percent in FY2020/21, poverty rates would increase in the short term and will not return to pre-crisis levels until FY2021/22. Under the downside scenario, poverty rates would remain above their pre-crisis level until at least FY2022/23.
Myanmar government will consider loan support and easing regulations for retail sector in Myanmar
Myanmar will consider granting loans to retail businesses hard hit by falling demand due to COVID-19, said State Counsellor Daw Aung San Suu Kyi. “We will re-consider the avenues available to provide assistance to retail businesses,” she said during a video conference on June 23. In March, the government set up an emergency soft-loan of K100 billion with an interest rate of 1 percent for a term of one year for small businesses in tourism and garment manufacturing affected by the global pandemic. Under its COVID-19 Economic Relief Plan (CERP) launched in April, the government raised the loan amount to K200 billion- K500 billion, to be disbursed before the end of the year. But the conditions set by the government for most retailers to qualify for and repay the loans are too onerous, business owners said.