POLITICS
Speaker: constitutional reform dependent on peace progress and national reconciliation
In a statement that might be well-received in military circles, Speaker U Win Myint has indicated that progress on national reconciliation needs to precede constitutional reform and that, without it, changes to the constitution are unlikely to be successful.
Although this implies the NLD’s plans for constitutional reform are being put back, the Speaker made it clear that the government still aims to make changes in its current term. In practice, however, the military still commands sufficient seats in parliament to block any change with which it disagrees.
There is also the question of how receptive the leaders of the ethnic minorities will be to the peace process if they cannot be confident that the constitution will be changed more towards that of a federal union giving them a greater say in government.
http://www.mmtimes.com/index.php/national-news/nay-pyi-taw/20803-constitutional-reform-on-backburner-for-now.html
Aung San Suu Kyi outlines priorities for poverty reduction to IDA conference in Nay Pyi Daw
In an address to a meeting of the International Development Agency in Nay Pyi Daw, Aung San Suu Kyi has outlined her priorities for poverty reduction: – the establishment of peace, tackling Myanmar’s vulnerability to climate change, promoting gender equality and sustainable job creation, and the establishment of democracy as a cornerstone for improving the institutions of government.
Please use the following link from the World Bank’s website to read a transcript of her address:
http://www.worldbank.org/en/news/speech/2016/06/22/ida-18-replenishment-meeting-remarks-by-daw-aung-san-suu-kyi
ECONOMICS
MIC re-constituted with a view to accelerating inward investment
After a period post the election in which it has been in abeyance, the government has reconstituted the Myanmar Investment Commission (MIC)—the body approves investments in Myanmar—with a view to clearing a backlog of 102 investment applications worth $2.3bn that has built up since April. MIC is to be chaired by Planning and Finance Minster U Kyaw Win and has ten other members. U Aung Naing Oo, the Director General of DICA, the outward face of MIC, who has been reconfirmed as its Secretary, has indicated that it would take eight weeks or so for the new body to work through the backlog. He commented, however, that MIC is awaiting guidance from the government on what it considers priority sectors.
He also criticized recent decisions by lawmakers to suspend approval given by MIC for IHH’s Yangon hospital project, over a dispute on the use of government land, and for a proposal to construct a jetty on the Yangon River near the Bothatung Pagoda.
In evidence that forward momentum has been re-established, MIC has announced it approved eight projects (four of them international) at the end of June. The foreign investments include a JV involving Thailand’s The Nation newspaper, an electric wire factory, a shoe pattern parts factory and a venture for storage services.
http://uk.reuters.com/article/us-myanmar-investment-idUKKCN0YW13O
Imports and re-exports receive a measure of liberalization
According to the Myanmar Times, the Ministry of Commerce has announced plans to exempt over 250 commodities from the need for an import licence. Details are to be published in July.
http://www.mmtimes.com/index.php/business/21091-commerce-ministry-lightens-licence-regs.html
At the same time, The Irrawaddy has reported that it is to permit re-exports of certain products such as car tyres, edible oil, cosmetics, foodstuffs and clothes for the first time, in order to increase business opportunities for smaller companies, to increase tax revenues and to reduce the trade deficit.
http://www.irrawaddy.com/business/govt-allows-14-items-for-re-export.html
Myanmar, Thailand to boost trade
After meetings between senior government officials in Nay Pyi Taw, Myanmar and Thailand have agreed to boost bilateral trade to $20bn in 2017. Specifically, the governments plan to finish construction of the Myawaddy-Mae Sot bridge and to make progress in the development of the Dawei port and SEZ in the south of Myanmar. Other topics discussed included protections for Burmese workers in Thailand.
A report on these meetings from The Irrawaddy follows:
http://www.irrawaddy.com/business/burma-thailand-agree-boost-trade.html
OPIC sanctions first investment in Myanmar
In an announcement to the London Stock Exchange, Myanmar Investments International (MIL) indicated that an investee company, Apollo Towers, has received the initial disbursement in a $250mn loan from OPIC, the US government’s overseas development finance institution. This is OPIC’s first investment in Myanmar. Apollo is a JV between Tillman Global Holdings, TPG and MIL and provides tower infrastructure to the telecom companies in Myanmar.
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/MIL/12854929.html
ADB to increase financial support for Myanmar
Following meetings with government ministers, the ADB has announced plans to expand annual sovereign concessional lending for projects from $150mn to $350mn from 2017, with a focus on infrastructure and job creation. It will also be expanding its lending, equity investment and guarantees to the private sector in the infrastructure and finance sectors.
Following the meetings, ADB President Takehiko Nakao commended Myanmar on its political transition and its commitment to economic inclusion. He welcomed the government’s PPP initiatives in telecom and power projects and its efforts to make the environment more business-friendly.
The ADB’s full press release follows:
http://www.adb.org/news/adb-president-commends-myanmar-s-progress-announces-expanded-assistance
Myanmar removed from FATF’s anti-money laundering watchlist
Following a session of its members in Korea, the Financial Action Taskforce (FATF) has removed Myanmar from the list of countries with strategic weaknesses in combatting money laundering and the financing of terrorism. Citing significant improvements in its AML/CTF regime and progress in correcting the deficiencies identified by FATF in 2010, the body announced it will no longer subject Myanmar to its compliance monitoring process but will work with it as it continues to address “the full range of AML/CFT issues identified in its mutual evaluation report.”
http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/fatf-compliance-june-2016.html
BUSINESS
Myanmar considering changes to insurance and leasing regulations
According to a report in the Myanmar Times, a parliamentary committee is considering making changes to the insurance laws, as the industry is pressing for a relaxation in the restrictions under which it is operating. At present, new private sector entrants into the market are permitted to offer only a few products at prices that are pre-determined for them by the Insurance Business Supervisory Board. Industry participants are also seeking to be permitted to act as brokers, connecting the local market to international insurance firms, which would help them to spread risk. The report suggests that consideration is being given by the Treasury Department to permitting insurance companies to participate in the treasury bond market.
http://www.mmtimes.com/index.php/business/20811-government-to-tackle-insurance-regulations.html
The Myanmar Times has also reported that the IFC is supporting the development of a new leasing law for Myanmar, and that it is hopeful it can be introduced within the year. Whilst there has been a take-up in hire purchase, the lack of a framework for repossessing assets in the event of default, particularly for higher value equipment, is said to have held back the leasing market.
http://www.mmtimes.com/index.php/business/20832-work-on-leasing-law-expected-to-start-this-year.html
Tata optimistic on beans and pulses
In his role as chair of the Overseas Agro Traders Association of Myanmar, Sunil Seth—who is Myanmar country head of India’s Tata group—has argued that exports of beans and pulses could potentially double over 3 to 4 years to as much as $2bn a year, given certain reforms. Key issues to address include the quality of seeds, and better protection against disease and pests. Mr Seth argued that Myanmar should aim to export higher value, finished pulses rather than simply raw, unprocessed products. Tata has been considering establishing a processing plant of its own, but seems to have concluded Myanmar needs to export more lower grade pulses (a by-product of premium grade pulse production) for this to be viable.
Mr Seth believes there is ready demand for Myanmar pulses and black beans in India, and that it would help the market if trading restrictions on trading in pulses were liberalised, rather as they have been recently for certain fertilisers and pesticides. In particular, he has requested that foreign firms be permitted to buy directly from the farmers in local currency, without having to make advance payments.
http://www.mmtimes.com/index.php/business/20938-the-potential-of-pulses.html
Steps to clear jams at ports
Myanmar’s media has been highlighting the problem of bottlenecks at the country’s ports for a few weeks—a consequence of the sharp increase in demand for imported goods, made worse by the blacklisting of Asia World Port, which is one of the companies controlled by SDN-listed Steven Law. It also appears Myanmar Industrial Port, which is to receive funding from the IFC for an expansion plan, underestimated demand in the run up to the April holiday season—a problem that coincided with changes to the licencing requirements for re-exports of sugar, which led to a build-up of sugar inventory.
The government has now introduced 24-hour port operation and customs clearance in an effort to clear the backlog and reports are that the worst of the immediate crisis is passing.
http://uk.reuters.com/article/us-myanmar-port-idUKKCN0YW0FD
