POLITICS
Speculation about the relationship between government & military in the run-up to the Panglong Conference
There has been much speculation about a possible thawing in relations between the NLD-led government and the military in the run-up to the “21st Century Panglong Conference.”
The speculation reached its height when, on Martyrs’ Day (July 19th), Commander-in-Chief Min Aung Hlaing joined Aung San Suu Kyi at her home for lunch Another member of the party was former parliament speaker, U Shwe Mann, who was expelled from the military’s political party before the recent elections.
Myanmar’s State Counsellor has indicated that she wishes the Panglong Conference to be held before the end of August and that she would like it to be as inclusive as possible— indeed including those ethnic groups that have so far refused to give up their fight against the Tatmadaw.
For a more detailed perspective, please use the following link to an article in the Myanmar Times:
http://www.mmtimes.com/index.php/national-news/nay-pyi-taw/21567-are-frosty-nld-military-relations-finally-thawing.html
Government releases religious data from recent census
Having delayed the release of census data on the religious composition of the population of Myanmar for fear that it could cause an increase in ethnic tension, the government made the data public on 26th July. The increase in the size of the Muslim population appears to have been quite minor, and certainly rather smaller than anti-Muslim extremists have been claiming it would be. No doubt there will be much dispute over the veracity of the numbers but, on the face of it, the data could take some of the sting out of their more extremist rhetoric.
Please use the following link to the Myanmar Times for more details:
http://www.mmtimes.com/index.php/national-news/21542-after-long-delay-religious-census-data-proves-less-sensitive-than-anticipated.html
ECONOMICS
New government outlines economic priorities
At the end of July, the NLD-led government issued a short paper outlining their economic priorities for the current term. To summarise, the main points centered on:
- National reconciliation, based on a just balance of resource mobilization and allocation across regions. The Extractive Industries Transparency Initiative is to be extended to mining.
- Support for competition in a market-oriented system in every sector, with cutting of red tape, expanded access to credit, and a diminution in the power of monopolies.
- In the public sector, spending is to be made more efficient and transparent, and “appropriate” state-owned enterprises are to be privatized. There is to be tighter control on smuggling, and foreign exchange earnings—including from natural resources—are to be made more transparent. On the fiscal side, the tax system is to be streamlined in an effort to boost revenues and the capital and money markets are to be developed to help with financing of the expected deficit.
- In infrastructure, the priorities are to be power, roads and ports.
- There is to be support for the agriculture sector, to increase exports and boost living standards.
- Policies for job creation are to be developed to reduce inequality and to encourage overseas workers to return to Myanmar. SEZ and rural infrastructure projects are expected to help in this area.
- There is to be continued support for FDI. The government will seek to promote a stable business environment to attract inward investment.
- The government plans to make investments in improved healthcare and skills, to strengthen human capital.
- Both the banking and insurance sectors are to be liberalised to foster growth. The government will seek to obtain a foreign credit rating.
- There is to be reform of the SoEs, which are to be privatized, where possible.
- To support SMEs, the government will promote increased access to finance and an improvement in skills.
Please use the following link for the Myanmar Times’ report on the government’s paper:
http://www.mmtimes.com/index.php/business/21664-nld-12-point-economic-policy-announcement.html
ADB report on transportation sector
In a new report on the transport sector, the ADB has estimated that Myanmar needs to invest $60bn in its transport infrastructure in 2016–30. It suggests government spending be increased from today’s 1% to 1.5% towards 3% to 4% of GDP. This would put Myanmar on par with other countries at a similar level of economic development. Inter alia, the ADB advocates a focus on key national corridors (eg the road to Muse and the railway to Mandalay), Yangon (eg. the Circular Railway, rapid transit lines for buses) and maintenance.
It also says the Ministry of Transport and Communications should be empowered to oversee and co-ordinate policy, using a new department of policy and planning.
Please use the following link for access to the ADB’s full report:
http://www.adb.org/sites/default/files/publication/184794/mya-transport-policy-note-es.pdf
H2 FY 2016 tax receipts behind target
Parliament’s public accounts committee has reported that tax receipts for the second half of the last financial year fell approximately 16% short of plan (at Ks 923bn vs target Ks 1,103bn). In the main, it blamed the shortfall on weak collection.
http://www.mmtimes.com/index.php/business/21605-tax-receipts-fail-to-meet-target.html
Q1 FY 2016-17 trade deficit narrows slightly
The trade deficit reportedly narrowed a little in the first quarter of the current financial year. Exports rose from $2.2bn to $2.5bn, whilst imports rose from $3.3bn to $3.4bn.
http://www.mmtimes.com/index.php/business/21676-exports-for-first-quarter-up-260m-year-on-year.html
BUSINESS
MIC’s priority shifting towards manufacturing; warns companies to follow reporting requirements
In a report that featured in the Myanmar Times in early July, the secretary of MIC, U Aing Naing Oo, indicated that the body that approves investments in Myanmar is considering favouring manufacturing projects more over resources and mining. He also indicated that he expects MIC to relax restrictions on investment contained in the draft investment law in the coming parliament.
http://www.mmtimes.com/index.php/business/21191-mic-to-remain-under-ministry-control.html
MIC and the Ministry of Planning are also reported to be planning the central consolidation of company registrations, to improve the quality of statistics and so facilitate better economic planning. At present, MIC does not collect data on all SMEs, which are required to register only with local authorities.
http://www.mmtimes.com/index.php/business/21324-mic-to-strengthen-data-on-local-companies.html
In a similar vein, towards the end of July, MIC warned companies with MIC-approved projects that they are required to report quarterly to the body, noting that several had failed to match the Q1 2016–17 deadline.
http://www.mmtimes.com/index.php/business/21617-mic-warns-companies-to-follow-reporting-requirements.html
Yangon officials complete industrial land review, Thilawa Phase 2 work to start after monsoon
Officials in the Yangon regional government have completed a review of empty plots in the city’s industrial parks, in an effort to reduce speculation and free up land for investment. Originally, holders of these plots were given two years to build units on them, but there have been reports that up to 40% of the land so allocated continues to lie empty. The expectation is that holders may be obliged to relinquish their land, or at least pay an increase in tax, if they are to retain them.
http://www.mmtimes.com/index.php/business/21552-yangon-officials-wind-up-industrial-land-review.html
Meanwhile, the Myanmar Times has reported that the Thilawa SEZ will start accepting proposals for “Zone B” after the monsoon season ends. “Zone A”, of 400 Ha, is almost complete, having attracted projects worth a combined $760mn. “Zone B” is potentially as large at 2,000 Ha.
http://www.mmtimes.com/index.php/business/21484-work-on-thilawa-zone-b-to-begin-after-rainy-season.html
Construction materials opened to foreign/local JVs
The Myanmar Times has reported that the Ministry of Commerce has opened the onshore trade in construction materials to foreign-local JVs. The motive appears to be to improve the quality of materials available, which are often counterfeit / smuggled, and therefore JVs will be expected to meet the standards required by the appropriate department. They will also be subject to limits on the value of such trade, in line with local companies.
http://www.mmtimes.com/index.php/business/21303-construction-materials-trade-opened-to-local-foreign-joint-ventures.html
Aeon / CMGC in retail venture
Japan’s Nikkei has reported that Aeon will be the first foreign retailer to enter the Myanmar market. It is doing so through a JV with Myanmar’s Creation Group, which is taking over 14 existing “Orange” supermarkets in and around Yangon. It also plans to open some new stores by the end of the year.
http://asia.nikkei.com/Business/Companies/Japan-s-Aeon-first-foreign-retailer-in-post-reform-Myanmar
Yoma’s Landmark property development to start by end 2016
Singapore-listed Yoma Strategic Holding has issued a statement indicating that it has signed a new master lease with the Ministry of Transport on its Landmark Development site in central Yangon. A revised development plan has increased the floor area of the hotel and mixed-use project by 15% to 2.44mn square feet. The Yoma-led consortium, which includes Hong Kong and Shanghai Hotels and Japan’s Mitsubishi Group, targets completion of the development in FY 2021.
Please use the following link to read the full text of YSH’s press release:
http://www.yomastrategic.com/attachment/201607260904291729855297_en.pdf
Hitachi outlines plans for Myanmar
According to a report in the Nikkei Asia Review, Japan’s Hitachi plans to extend its involvement in Myanmar’s transport infrastructure by deploying its advanced mapping technology to identify the weakest spots in the network. It also believes that there is work for it to do in the digitalization of financial and harbour infrastructure—and it is starting with the money order system used by Myanmar Post.
http://asia.nikkei.com/Business/Companies/Hitachi-looks-to-expand-infrastructure-business-in-Myanmar
SMI forms restaurant venture with Japan’s Ippudo ramen; Korea’s Yojin to set up cement plant at Thilawa
DealStreetAsia has reported that Singapore-listed SMI is partnering with the Japanese Ippudo ramen chain in a Myanmar restaurant venture. (SMI also has franchise agreements with the Crystal Jade and Coffee Bean and Tea Leaf).
Deal Street Asia used the same article to report that Korea’s Yojin Construction and Engineering is to establish a 1 million tpa cement plant at the Thilawa SEZ.
http://www.dealstreetasia.com/stories/myanmar-dealbook-smi-to-operate-japanese-ramen-chain-ippudo-south-koreas-yojin-approved-60-m-for-portland-cement-ops-47742/
Investments in cinemas
DealStreetAsia has reported that a Myanmar company, Maze, is to invest $20mn in the cinema sector in the coming two years. The plan, in the long term, is to build up to 100 cinemas in less densely populated cities that have no cinema today.
http://www.dealstreetasia.com/stories/locals-maze-to-set-up-100-cinemas-countrywide-with-20-m-investment-48300/
Separately, the Myanmar Times has reported that Maze is to use projection and audio equipment supplied by Belgian company Barco.
http://www.mmtimes.com/index.php/business/21323-local-firm-signs-6m-deal-to-install-barco-cinema-equipment-across-myanmar.html
Golden Rock private equity fund raises $20mn in funds
DealStreetAsia has reported that Myanmar-centric private equity firm Golden Rock Capital has raised $20mn towards a $100mn fund, which will be focusing on the consumer and service sectors. According to the article, the fund is looking at investments of between $7mn and $10mn and has already made an allocation to the perfume sector.
http://www.dealstreetasia.com/stories/golden-rock-capital-completed-20-m-of-raising-fund-on-process-for-more-48337/
