POLITICS
NLD government proposes new “21st Century Panglong Peace Conference”
The new NLD government has indicated it would like to give those ethnic forces that did not sign up to the previous government’s National Ceasefire Agreement another chance to participate in a new peace conference. This is to be conducted in the spirit of the 1947 Panglong Conference in which the Shan, Kachin and Shin peoples were promised a measure of regional autonomy in a federal union after Burmese independence.
Daw Aung San Suu Kyi is to chair a Union Peace Dialogue Joint Committee—a tripartite political negotiation body composed of government representatives from the executive, defence and legislative branches, armed ethnic groups, and political parties.
For his part, the commander in chief of the army has indicated that the army is willing to participate in the conference, but not in a secondary role, and also that participants in the conference will have to stop fighting first.
Meanwhile, in the last month fighting between the army and the SSPA and TNLA in Shan state and the KIA in Kachin state has continued. For a report on the C-in-C’s comments, use the following link to the Myanmar Times:
http://www.mmtimes.com/index.php/national-news/20303-tatmadaw-sets-out-peace-conference-conditions.html
Aung San Suu Kyi asks for “enough space” to deal with the “Rohingya” issue
The State Counsellor’s comments came in a press conference following a meeting with US Secretary of State John Kerry. She made similar remarks in a conference with representatives of development agencies such as the World Bank and ADB, cautioning that Myanmar faces many difficulties and that the “Rohingya” issue may not be the biggest.
Earlier, she had urged the new US ambassador to Myanmar not to use the word “Rohingya” in public statements—for which she was much criticized in sections of the US media—although she appears to be discouraging the practice of referring to them as “Bengalis” also.
http://www.mmtimes.com/index.php/national-news/20280-un-agencies-cautioned-on-rakhine.html
Former speaker U Shwe Mann one of seventeen expelled from opposition USDP
The opposition USDP has expelled seventeen members of the party, including U Shwe Mann—the former parliamentary speaker and current chair of the Legal Cases and Special Cases Assessment Commission—who was sacked as party chairman in the run up to the general election. The expulsions include eleven members of the legal affairs commission and two government ministers.
Shwe Mann is contesting the expulsions, but had denied he plans either to join the NLD (he has been criticized in USDP circles for being too close to Aung San Suu Kyi) or to set up a new party.
http://www.mmtimes.com/index.php/national-news/nay-pyi-taw/20002-u-shwe-mann-fights-party-expulsion.html
ECONOMICS
World Bank issues update on the Myanmar economy
The World Bank has issued a new report on the Myanmar economy in which, after a more “difficult” period caused by heavy flooding, a slowdown in investment in an election year and weaker commodity prices, it predicts a recovery in real GDP growth from 7% in 2015/16, to 7.8% in 2016/17 and 8.2% in the medium term.
It detects “a general sense of economic optimism” post the election, but also cautions on some short-term vulnerabilities, including the deterioration in the trade deficit and inflation caused, in part, by the drop in commodity prices and the flooding. It notes that, in response to these pressures, there has been a sharp increase in the monetizing of the fiscal deficit.
Looking forward, it suggests a balance needs to be struck between reducing the budget deficit and increasing spending on certain government services and growth, and that further improvements are needed in revenue administration and reform, as well in government spending efficiency. It projects that the deficit will average 3.5% of GDP in the medium term, with government revenue rising to around 14% of GDP by 2017/18.
Otherwise, if urges further steps on strengthening institutions and on establishing a well-functioning and flexible exchange rate system, to enable Myanmar to benefit from growing trade and investment opportunities.
In a separate policy section of the report, the World Bank says that access to electricity is a top priority for productivity and competitiveness, and that the industry needs appropriate tariff policies if it is to be viable. It also advises that further reform of the state-owned banks is required to promote transparency, stability and competitiveness in the financial sector, as the state banks still represent more than half of sector assets.
Please use the following link to read the World Bank’s report:
http://documents.worldbank.org/curated/en/2016/05/26408130/myanmar-economic-monitor
US makes some changes to sanctions regime
The US has extended sanctions against companies and individuals in Myanmar for a further year but, in doing so, has removed seven SOEs and three state-owned banks from the SDN list, whilst adopting some new measures against companies in Steven Law’s Asia World group.
Six companies that are controlled by Steven Law were added to the list—Asia Mega Link, Asia Mega Link Services, Pioneer Aerodrome Services, Green Asia Services, Global World Insurance Co, Shwe Nar Wah.
The state banks removed from the list are Myanma Economic Bank, Myanmar Foreign Trade Bank and Myanma Investment & Commercial Bank. Certain transactions involving Asia Green Development Bank, Ayeyarwaddy Bank, Innwa Bank and Myawaddy Bank have also been authorized.
A six month limit on “certain transactions ordinarily incident to exportations to or from Burma of goods, technology, or non-financial services” introduced in December 2015 has now been lifted, and this general licence has been extended to some transactions relating to the movement of goods within Burma.
Please use the following link to read the release issued by the US Department of Treasury on these changes:
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/31cfr537_burma.pdf
The full SDN list may be accessed using the following link from the US Embassy’s website.
http://burma.usembassy.gov/sdn-list.html
Government starts SOE review
According to the Myanmar Times, the government is launching a review of SoEs to see which should be restructured, corporatized or privatized. It suggests those most likely to be privatized are in the telecom and transport (airline) sectors and that there will be moves to make the accounts of SOEs involved in extractive industries less opaque. Apparently, it is believed that corporatizing or privatizing the companies themselves will be difficult because of the number of jointly operated projects in which they are involved.
http://www.mmtimes.com/index.php/business/20201-government-starts-soe-review.html
Central bank to issue regulations on credit bureau, plans electronic auctions by year end
Following the passing of the new Financial Institutions Law, which supersedes the earlier Banking Secrecy Act, the Central Bank has embarked on the preparation of the regulations to enable a national credit bureau to operate.
In 2014, the Myanmar Bankers Association signed an agreement with Singapore’s NSP Holdings to form a credit bureau JV, over which the Central Bank will act as regulator and supervisor. The hope is that the regulations will be enacted in June and that the Bureau will become operational within the following year.
Separately, the Myanmar Times has reported the Central Bank plans to introduce computerized daily FX auctions by the end of the year (bids and offers are currently submitted by the banks to the Central Bank in an envelope) and that it is to halve the number of its internal departments, in an effort to improve efficiency.
http://www.mmtimes.com/index.php/business/20295-credit-bureau-committee-awaits-cb-regs.html
BUSINESS
Yangon government plans to curtail land speculation in industrial zones; dusts off plans for new city in NE
The Yangon government has formed a new inspection team in an effort to reduce land speculation in its 29 industrial zones. In 2014, the previous government attempted to obtain a business plan from all landowners with a view to enforcing development, but relatively few were submitted before the election. As a consequence, according to the Myanmar Times, approximately 40% of industrial land in Yangon is idle, even though owners are meant to have started building within three months of contracting government land.
http://www.mmtimes.com/index.php/business/20566-yangon-government-surveys-industrial-land-speculation.html
Separately, Yangon’s City Development Committee has indicated it is dusting off plans for the development of a new city to be sited to the north east of Yangon, between the future international airport near Bago and the Thilawa special economic zone. The new city, the idea for which is supported by Japan’s International Cooperation Agency, is expected to cover an area of approximately 17,000 acres and to provide homes for up to one million people.
http://www.mmtimes.com/index.php/national-news/yangon/20096-ycdc-presses-forward-with-new-city.html
Yangon stock exchange to open to foreign investors
The Chairman of the Securities and Exchange Commission has indicated to the Myanmar Times that it is planning to allow foreign investors access the Yangon stock exchange (to improve liquidity) and for local-foreign JVs to list, once the new Companies Act is passed.
http://www.mmtimes.com/index.php/business/20612-yangon-stock-exchange-to-open-to-foreign-investors.html
During May, a second company—Thilawa SEZ Holdings—listed shares on the exchange. Other companies—Myanmar Citizens Bank, First Private Bank, Myanmar Agribusiness Corp. and Great Hor Kham—are also thought to be preparing for a listing, although none are expected to raise fresh capital through an IPO.
Chinese firm to restart coal-fired power plant
A Chinese company, Wuxi Huagaung Electric Power Engineering, has indicated that it will soon be re-commissioning a 120MW coal-fired power plant near the Inle Lake, under a BOT issued in October 2015. The plant first started operations in 2005, but only generated a peak of between 25MW and 30MW of power. The plant is expected to use coal sourced from within Mynamar, in Chin state.
http://www.mmtimes.com/index.php/business/20010-chinese-firm-to-restart-myanmar-s-only-coal-plant.html
Deutsche Bahn Schenker to invest in logistics
Germany’s DB Schenker has announced it is establishing a 100%-owned logistics entity in Myanmar, to manage contract logistics and warehousing for customers in the telecoms and consumer goods industries. The Yangon branch of Schenker Thailand will continue to handle freight, customs clearance and transport operations. The new company will have over 80 employees and will bring “expertise and technology in warehouse design & management, as well as employ and train the Myanmar talent pool with warehouse supply chain management skills to serve (its) customers’ needs.”
http://www.apac.dbschenker.com/log-ap-en/news_media/newsreleases/11432804/20160602_myanmarentity.html
Food sector—investments by Singapore’s Breadtalk and Crystal Jade, and Japan’s Acecook
The Straits Times has reported that Singapore’s Breadtalk chain of bakeries has signed a master franchise agreement with Myanmar Bakery, a subsidiary of the Shwe Taung real estate group, and has announced a plan to open its first outlet in one of Shwe Taung’s malls in Yangon in early 2017. This represents Shwe Taung’s first foray in the food and beverage sector.
http://www.straitstimes.com//business/breadtalk-to-open-in-myanmar-next-year
Singapore Myanmar Investco Limited (SMI) has entered into a franchise agreement with the Crystal Jade chain of Chinese restaurants and plans to open an outlet at Yangon International Airport Teminal 2 in the third quarter of this year. Crystal Jade has plans for another in Yangon’s Sedona hotel before year end.
SMI, which is listed on the Singapore stock exchange, has a diversified portfolio of businesses in Myanmar, including franchise agreements with Europcar car rental and Coffee Bean and Tea Leaf, a JV with Japan’s Senko in logistics, warehousing and cold storage and telecom tower infrastructure business.
http://sin-mi.listedcompany.com/newsroom/20160516_171053_Y45_8PUBQ4EL4QSSEI90.2.pdf
Finally, the Nikkei Asia has reported that Japan’s Acecook plans to start the manufacture of instant noodles in Myanmar in the summer of 2017 and is targeting a 10% share of the market – equivalent to an estimated 100mn servings a year – by 2020. It estimates the total market was 420mn servings in 2015, so is forecasting more than a doubling in the market over a five year period. Up until now, Acecook has been importing product from its Vietnam subsidiary into Myanmar, but now plans to invest $18.6mn in a new factory.
http://asia.nikkei.com/Business/Companies/Japan-s-Acecook-to-start-instant-noodle-production-in-Myanmar-in-2017
