Myanmar Business Today - Vol 2, Issue 17

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Myanmar Business Today is Myanmar’s first and the only bilingual (English-Myanmar) business newspaper, distributed in both Myanmar and Thailand. MBT covers a range of news encompassing local business stories, special reports and in-depth analysis focusing on Myanmar’s nascent economy, investment and finance, business opportunities, foreign trade, property and real estate, automobile, among others. MBT also provides detailed coverage of regional (ASEAN) and international business stories. For more information please visit www.mmbiztoday.com.
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Myanmar Business Today - Vol 2, Issue 17

  1. 1. May 1-7, 2014 Myanmar Business Today mmbiztoday.com mmbiztoday.com May 1-7, 2014| Vol 2, Issue 17MYANMAR’S FIRST BILINGUAL BUSINESS JOURNAL Myanmar Summary Myanmar Summary Contd. P 6... Contd. P 6... Inside MBT National Export Strategy to Be Ready by 2014 .. p-4 Myanmar’s Palm Oil Industry: Chal- lenges and Way Forward .. P-9 Myanmar’s Economic Prospects And Its Real Potential .. P-21 Securing Myanmar Hydrocarbon Investments M yanmar’s hydro- carbon sector is an attractive target for foreign inves- tors. Three major issues, however, present a signif- icant challenge to foreign companies planning to invest in Myanmar: oner- ous government policies, community resistance to infrastructure projects, and security concerns. Companies are rela- tively powerless to af- fect government policy, but by employing com- munity engagement pro- grams, they can mitigate community resistance and security concerns. As shown by the experi- ence of the Sino-Burmese pipeline project, energy sector investors should engage with local com- munities when carrying out such programs, and they should not rely sole- ly upon interfacing with government entities. Hydrocarbon pros- pects As Myanmar continues Nicholas Borroz its dramatic opening to international markets, oil and gas projects will be an attractive investment tar- get. There are numerous media articles speculating that Myanmar contains vast oil reserves, with a recent estimate that My- anmar has potential re- serves on par with Brazil. There are also reports of small-scale homegrown oil extraction projects that have transformed local communities. The country has yet to un- dergo rigorous testing to determine the exact size of its reserves, but such speculation and anecdo- tal evidence is a tantalis- ing prospect for foreign businesses. China’s development panying Sino-Burmese pipelines are the most bon projects currently underway in Myanmar. After China, Thailand is the most active player in Myanmar’s hydrocarbon sector. It is engaged in the licence that covers much Gulf of Martaban. Opera- tions in Zawtika are due to start shortly, with two thirds of gas production destined for the Thai mar- ket. In March 2014, sever- al Western majors joined game; Shell, Chevron, and Statoil all acquired acreage in a highly publi- Investment chal- lenges Despite the appeal of Myanmar’s hydrocarbon sector, government poli- cies could decrease oil and gas companies’ de- sire to invest. There are reports, for instance, that Nay Pyi Taw will impose onerous revenue-sharing requirements well above the international average, channelling up to 85 per- cent of earnings to gov- more vocal about the need to reserve some gas jrefrmEdkifiH [dkuf'½dkumbGef u@rSmEdkifiHjcm;om;&if;ESD;jr§KyfESH olrsm;tm;qGJaqmifaeonfhu@ wpfckjzpfonf/odkYaomf tpdk;& rl0g'? vlrI0ef;usiftajccHpDrH udef;rsm;tm; qefYusifrIESifh vkHNcHK a&;qdkif&m jyóemrsm;u EdkifiH jcm;om;ukrÜPDrsm;tm; jrefrm EdkifiHwGif &if;ESD;jr§KyfESH&ef pdefac:rI wpf&yftjzpf wnf&Sdaeonf/ ukrÜPDrsm;taejzifhtpdk;&rl0g' rsm;tm;oufa&mufEkdif&eftiftm; r&Sdaomfvnf; vlrIaphpyfa&;tpD tpOfrsm;tm;jzifh vlrI0ef;usif qefYusifrIrsm;ESifh vkHNcHKa&;qdkif&m jyóemrsm;tm; avsmhyg;apEdkif onf/ vuf&Sdjzpfay:aeonfh w½kwf-jrefrm"mwfaiGUydkufvdkif; pDrHudef;tawGUtBuHKrsm;udk Munfhjcif;tm;jzifh pGrf;tifqdkif&m &if;ESD;jr§KyfESHolrsm;taejzifh jynf wGif;vlrItzGJUtpnf;rsm;ESifh tqdkygaphpyfa&;tpDtpOfrsm; vkyfaqmifoifhNyD; tpdk;&tm; rSDcdk tumtuG,fr,loifhaMumif; awGU&onf/ jrefrmEdkifiHtaejzifh tjynfjynf qdkif&maps;uGufodkY 0ifa&mufvm FDI Almost Triples to $4.1b in FY2013-14 M yanmar bagged $4.1 billion in foreign direct in- vestments in the 2013-14 in March, almost tripling from $1.4 billion it re- ceived in FY2012-13, the Directorate of Investment and Companies Admin- istration’s (DICA) recent data shows. Injected by 34 countries, the foreign investment Pann Nu into manufacturing, en- ergy, oil and gas, mining, hotels and tourism, real and agriculture. Total FDI from 34 coun- tries in Myanmar now stands at $46 billion, ac- cording to DICA statistics. China still stands as the largest investor with $14 billion in investments in the Southeast Asian coun- try, followed by Thailand ($10 billion) and Hong Kong ($6 billion). The 71 foreign-invested projects in 2013-14 up to December last year has created over 50,000 jobs for local people, accord- ing to DICA. jrefrmEdkifiHtaejzifh 2013-14 b@ma&;ESpfwGif tar&duef a':vm 4 'or 1 bDvD,Htm; EdkifiHjcm;wdkuf½dkuf&if;ESD;jr§KyfESHrIrS &&SdcJhNyD; 2012-13 wGif &&SdcJhonfh tar&duefa':vm 1 'or 4 bDvD,Hxuf okH;qjrifhwufvm aMumif; &if;ESD;jr§KyfESHrIESifhukrÜPD rsm;ñTefMum;a&;rSL;½Hk; (DICA) pm&if;rsm;t& od&onf/
  2. 2. May 1-7, 2014 Myanmar Business Today mmbiztoday.com 2LOCAL BIZ MYANMAR’S FIRST BILINGUAL BUSINESS JOURNAL Board of Editors Editor-in-Chief - Sherpa Hossainy Email - sherpa.hossainy@gmail.com Ph - 09 42 110 8150 Editor-in-Charge - Wai Linn Kyaw Email - linnkhant18@gmail.com Ph - 09 40 157 9090 Reporters &Writers Sherpa Hossainy, Kyaw Min, Wai Linn Kyaw, Phyu Thit Lwin, Aye Myat, Pann Nu, Htun Htun Min, May Soe San Art & Design Zarni Min Naing (Circle) Email - zarni.circle@gmail.com Ph - 09 7310 5793 Ko Naing Email - nzlinn.13@gmail.com Ph - 09 730 38114 DTP May Su Hlaing Translators Wai Linn Kyaw, Phyu Maung, Bone Pyae Sone Advertising Seint Seint Aye, Moe Hsann Pann, Htet Wai Yan, Zin Wai Oo Advertising Hotline - 09 420 237 625, 09 4211 567 05, 09 31 450 345 Email - sales.mbtweekly@gmail.com Managing Director Prasert Lekavanichkajorn pkajorn@hotmail.com 09421149720 Publisher U Myo Oo (04622) No. 1A-3, Myintha 11th Street, South Okkalapa Township, Yangon. Tel: 951-850 0763, Fax: 951-8603288 ext: 007 Shwe Naing Ngan Printing (04193) Printing Subscription & Circulation Aung Khin Sint - aksint2008@gmail.com 09 20 435 59 Nilar Myint - manilarmyint76@gmail.com 09 4210 855 11 Khaing Zaw Hnin - snowkz34@gmail.com 09 4211 30133 Business News in Brief Myanmar Investment Commission to become independent Arrangements are underway to make Myanmar In- vestment Commission (MIC) an independent body, local media reported, citing Aung Naing Oo, director general of the Directorate of Investment and Company Administration. Set up by former military government in 1989 with intent to encourage local and foreign pri- vate investment, the MIC is currently chaired by Win Shein, minister for Finance and National Planning, and based in capital Nay Pyi Taw. Another senior MIC of- based in Yangon. Five new tax laws enacted cluding Revenue Law 2014, Income Tax Law, Commer- cial Tax Law, Stamp Duty Law and Court Fee Act. For personal taxes, top rate was increased from 20 percent to 25 percent, while the income band was set higher from K500,000 ($520) to K2 million ($2,080). Corpo- rate income tax rate was unchanged at 25 percent. Health ministry plans labs at border gates to check imports The Food and Drugs Administration department un- der the Ministry of Health will open laboratories at all 15 border-trade gates to inspect food and goods legally and illegally imported into the country, local media re- ported, quoting Khin Chit, a director from the ministry. Khin Chit said the general public would be informed about unhealthy food and goods imported into the country. In 2013, consumer rights activists demanded a close and thorough inspection of ready-made snacks illegally imported through the Chinese border. Taw na’s Yunnan Province, and Myanmar’s capital Nay Pyi Taw twice a week, on Tuesdays and Thursdays, from Pyi Taw airport. Currently, there are four local airlines the only foreign airline. Air Asia suspended its sched- due to low seat occupancy. Consumer prices have risen by 25 to 100 percent af- ter a hike in power supply fees and salary increases for nancial year, making it harder for those who live from hand to mouth, local media reported, citing data from wholesale and retail outlets. Consumer prices normally climb around the Myanmar New Year, which falls in the middle of April, and then decline a few days later. But prices of some consumer items remain high while oth- ers are still rising. Deforestation far higher than reforestation Over 900,000 acres of forests are destroyed in Myan- mar every year while only over 150,000 acres of forests have been grown by private companies since private forests grown by private companies include 107,543 acres of teak and 46,180 acres of hardwood, data re- leased by the Ministry of Forest said. EU extends arms embargo EU’s sanctions against Myanmar by one year, until 30 April 2015. The sanctions comprise an arms embargo and an embargo on equipment that may be used for in- ternal repression, said the Council in a statement after the end of its meeting in Luxembourg last month. Myanmar’s 2014 nationwide census covered 10.719 million households except some restive areas in north- ernmost Kachin state and western Rakhine state, said a statement of the Ministry of Immigration and Popu- lation. Myanmar’s national census from March 30 to economic and social data, aimed at working out a na- tional development plan. Myanmar Summary jrefrmh&if;ESD;jr§KyfESHrIaumfr&Sif (MIC) taejzifh vGwfvyfonfh aumfr&Sifwpf&yfjzpfvmap&ef jyifqifvsuf&SdaMumif; &if;ESD;jr§KyfESHa&; ESifh ukkefoG,fa&;OD;pD;Xme ñTefMum;a&;rIcsKyf OD;atmifEdkifOD;rS jynfwGif; owif;XmewpfckodkY ajymMum;xm;onf/ MIC rS tBuD;wef;t&m&Sd wpfOD;rSvnf;tqdkygjyifqifrItm;&efukefNrdKUwGiftajcjyKvkyfaqmif rnfjzpfaMumif; xyfrHtwnffjyKcJhonf/ jrefrmEdkifiHtaejzifh 2014 taumuftcGefOya'? 0ifaiGcGefOya'? ukefoG,fcGefOya'? wHqdyfacgif;cGefOya'ESifh w&m;½kH;cGefOya'tyg t0if tcGefOya'ig;cktm; jy|mef;NyD;jzpfaMumif; od&onf/ 0ifaiGcGef Oay't& trsm;qkH;taejzifh 20 &mcdkifEIef;rS 25 &mcdkifEIef;odkY wdk;jrifhxm;NyD; 0ifaiGcGeftm;usyf ig;odef;txuf (tar&duefa':vm 520) rS usyfESpfoef; (tar&duefa':vm 2080) odkY wdk;jr§ifh owfrSwfxm;onf/ Air China avaMumif;vdkif;taejzifh w½kwfEdkifiH ulrif;NrdKUESifh jrefrmEdkifiHNrdKUawmf aejynfawmfodkY tywfpOf t*FgESifh Mumoyaw; aeYrsm;wGif ysHoef;ajy;qGJoGm;rnfjzpfaMumif; od&NyD; {NyD 29 &uf wGif pwifrnfjzpfonf/
  3. 3. May 1-7, 2014 Myanmar Business Today mmbiztoday.com 3LOCAL BIZ Myanmar Summary Myanmar Summary EnergyContractsSigningThisMonth Gov’t says it will sign production sharing contracts for onshore energy exploration in mid-May P roduction sharing con- tracts for energy compa- nies tasked with exploring Myanmar’s onshore reserves is expected to be signed in May, a last week. This is later than an earlier timeline planned for January. The Ministry of Energy award- ed 16 of the 18 onshore blocks tober. Italy’s Eni, India’s ONGC Videsh Ltd., Malaysia’s Petro- Energy Hunt Corp., Pakistan’s Petroleum Exploration (PVT) Ltd and British Virgin Islands- registered MRPL E&P Pte Ltd. were each awarded 2 blocks. The government also awarded one block each to Thailand’s PTTEP, Brunei National Petro- leum Co, Luxembourg’s CAOG and Russia’s JSOC Bashneft. A total of 26 foreign compa- nies bid for the onshore blocks, the production sharing con- tracts. Khin Khin Aye, director of en- ergy planning at the Ministry Kyaw Min of Energy, said the government was working according to nor- mal procedures. “We will sign the production sharing contracts in the mid- dle of May,” he told the energy news website Rigzone. International investors have moved into the wake created when Myanmar earned relief from economic sanctions when in 2010 it ended a long period of military rule through general elections. Last month, the government awarded some of the biggest energy companies in the world with exploration contracts for mar coast. ported from Myanmar in 1853, though the country’s energy sector was largely idled during the long period of military rule. French energy company Total, a pioneer developer in Myanmar, estimates the country produces about 180,000 barrels of oil equivalent per day and nearly all of that is in the form of natu- ral gas. Investors Invited to Develop Yangon Railway Station Complex M yanmar’s rail trans- port authorities are working on a massive plan to transform the Yangon Central Railway Station into one of the city’s most sparkling new projects, and are inviting ideas and expression of interest from local and international in- vestors for the move. The state-run Myanmar Railways said it intends the investors to undertake de- sign-and-build work for the comprehensive development of the largest railway station in the country, according to state-run media. The department called for de- velopment of the colonial-era- left station on 25.3 hectares of land plot as a rail concerned business including high-rise buildings and hotels up to in- ternational standards. The authorities have set May 6 as the deadline for submission of the expression of interest. The rail transport authorities have also planned to privatise Yangon city circular trains as run the rail transport busi- Phyu THit Lwin ness under a build, operate and transfer (BOT) system. About 130,000 passengers depend on rail transport in Yangon daily, according to gov- ernment estimates. jrefrmhrD;&xm;vkyfief;tmPmydkifrsm; taejzifh &efukefblwmBuD;tm; NrdKUawmf txif&Sm;qkH;pDrHudef;wpfckjzpfvmap &ef pDrHudef;a&;qGJvsuf&SdNyD; tqdkygpDrH udef;twGuftBuHÓPfrsm;tm; jynfwGif; jynfy&if;ESD;jr§KyfESHolrsm;?pdwf0ifpm;olrsm; xHrS awmif;cHvsuf&SdaMumif; od&onf/ tpdk;&ydkif jrefrmhrD;&xm;taejzifh tqdk ygblwm½kHtm; EdkifiHtBuD;qkH;aom blwm½kHBuD;tjzpf&if;ESD;jr§KyfESHolrsm;tm; 'DZdkif;qGJ? aqmufvkyfap&ef qkH;jzwfxm; aMumif; tpdk;&owif;pmrsm;u azmfjy xm;onf/tus,ft0ef; 25 'or 3 [ufwm&Sdonfh tqdkygudkvdkeDacwf blwm½kHwGif rD;&xm;vkyfief;ESifhqufpyf onfhvkyfief;rsm;tjyif ½kH;cef;rsm;? [dkw,f rsm;tm; tjynfjynfqdkif&mpHcsdefpHñTef;rsm; jzifh vkyfudkifEdkif&ef zdwfac:oGm;rnfjzpf aMumif;tqdkygXmerSajymMum;xm;onf/ wm0ef&Sdolrsm;taejzifh pdwf0ifpm;ol rsm;tm; arv 6 &ufaeYaemufqkH;xm; pm&if;oGif;&efzdwfac:xm;onf/ jrefrmhukef;wGif;ydkif; a&eH&SmazGwl;azmf aeonfhukrÜPDrsm;taejzifh tpdk;&ESifh xkwfvkyfrIqdkif&moabmwlnDrIpmcsKyf tm; Zefe0g&DvwGif a&;xdk;&ef pDpOfcJh aomfvnf; arvtwGif;wGif a&;xkd; zG,f&SdaMumif; pGrff;tif0efMuD;XmerS wm0ef &SdolwpfOD;rS ,ciftywfu ajymMum; cJhonf/ pGrf;tif0efBuD;Xmetaejzifh atmufwdk bmvv,fwGif ukef;wGif;a&eHvkyfuGuf 18 uGuf&Sdonfh teuf 16 uGuftm; wif'gac:,lcJhonf/tDwvDrSEni,tdE´d, rS ONGC Videsh Ltd., rav;&Sm;rS Petronas Carigali, uae'grS Energy Hunt Corp., ygupöwefrS Petroleum Exploration (PVT) Ltd ESifh British Virgin Islands-registered MRPLE&PPteLtd wdkYonfvkyfuGuf ESpfckpD vkyfydkifcGifh&&SdcJhjcif;jzpfonf/ tpdk;&taejzifh xdkif;EdkifiHrS PTTEP, b½lEdkif;rS National Petroleum Co, vlZifbwfrS CAOG ESifh ½k&Sm;rS JSOC Bashneft wdkYudkvnf; wpfckpD csxm;ay;cJhonf/ EdkifiHjcm;ukrÜPDaygif; 26 ckrS ukef;wGif;vkyfuGufrsm; twGuf 0ifa&muf,SOfNydKifcJhjcif;jzpfNyD; tpdk;&rS ukrÜPD 10 cktm; a&G;cs,fcJhonf/
  4. 4. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 4 Myanmar Summary Myanmar Summary NationalExportStrategytoBeReadyby2014 T he National Export Strat- egy (NES) will be drafted by this year in a bid to im- prove trade and attract foreign investments, according to U Aung Min, in-charge of coordi- nation of the NES. Previously, the government strategy by December last year, but the Ministry of Commerce later asked to include the trade and commerce sectors along- side export in the strategy. - ised by 2014. There are a total of 11 sectors in the draft and most of them have been completed,” he said. “Both foreign investment and trade will become more conven- ient after we develop this plan. drafting by this year.” The UN’s World Food Pro- gram (WFP) is assisting in the drafting process with regards to - ery products. Operations such as data sourcing, collecting Htun Htun Min and processing are carried out by separate teams and the in- charge of trade information of the NES, U Aung Min said. He said the comprehensive sectors will help foreign in- vestors during their research. - ties in terms of gathering illegal border trade data, he added. In March, London-based Environ- mental Investigation Agency (EIA) said that Myanmar had lost over $6 billion because of illegal logging during 2000 to 2013. President U Thein Sein initi- ated the NES in 2012. At that time, the plan focussed on rice, rubber and tourism sectors on the sidelines. ukefoG,frIydkrdkwdk;jr§ifha&;ESifh EdkifiHjcm; &if;ESD;jr§KyfESHrIrsm; ydkrdktqifajyap&ef trsKd;om;ydkYukefr[mAsL[ma&;qGJa&; tpDtpOfudk 2014 ckESpftwGif; tNyD; a&;qGJoGm;rnfjzpfaMumif; trsKd;om; ydkYukefr[mAsL[ma&;qGJa&;rS wm0efcH n§dEIdif;a&;rSL; OD;atmifrif;u ajymonf/ trsKd;om;ydkYukefr[mAsL[ma&;qGJa&; udk 2013 ckESpf 'DZifbmvtwGif; tNyD; a&;qGJí pDpOfxm;aomfvnf; pD;yGm;a&; ESifhul;oef;a&mif;0,fa&;0efBuD;XmerS ukefoG,frIjr§ifhwifa&;twGufydkYukefomru ukefoG,frIudkyg wdk;csJUa&;qGJ&ef pDpOfae aomaMumifh 2014 ckESpfrSom tNyD; qufajymonf/ ]]a&;qGJwm t"du Sector 11 ck&Sd w,f/'DtxJuawmfawmfrsm;rsm;NyD;ae ygNyD/ EdkifiHjcm;&if;ESD;jr§KyfESHrIawGtwGuf aum?ukefoG,frItwGufaum'DtpDtpOf tjrefNyD;rS tqifajyEdkifr,f/ 'gaMumifh u qufajymonf/ trsKd;om;ydkYukefr[mAsL[ma&;qGJjcif; udk 2012 ckESpfrSpwifí EdkifiHawmf or®wu ñTefMum;csufjzifh pwifjyKvkyf cJhNyD; qefpyg;? yJtrsKd;rsKd;? t0wftxnf? a&xGufypönf;ESifhopfESifhopfawmxGuf ypönf;rsm;udk t"duydkYukeftjzpf owfrSwf xm;um a&mfbmESifh EdkifiHjcm;om;c&D; oGm;vmjcif;vkyfief;udk t&eftjzpf owfrSwfum a&;qGJcJhjcif;jzpfonf/ MAPCO, Mitsui to Form Irrigated Rice Complex Product JV M yanmar Agribusiness Public Corp (MAPCO) and Japanese con- glomerate Mitsui Co will form a joint venture in a bid to de- velop Myanmar’s rice industry, according to the Myanmar Rice Federation (MRF). According to the deal, MAP- CO and Mitsui will establish Myanmar-Japan Rice Industry Co Ltd and start the initial im- plementation of the Irrigated Rice Complex Product (IRCP) project in Twante township in Yangon region. The project, which will con- tain value-added facilities for crops including rice, will cost - ised by December 2015, MRF said. The project will play an im- portant role in Myanmar’s agriculture sector and will ac- celerate the agricultural de- velopment of Yangon and Ay- eyarwaddy regions, MRF said. The project will also facilitate between Myanmar and Japan, Phyu Thit Lwin the foundation added. The joint venture company will produce value-added prod- ucts based on rice, generate - ment the production of paddy seeds and distribute fertilisers, in collaboration with farmers, MRF said. MAPCO ESifh *syefEdkifiHrS rpfql&D ukrÜPDyl;aygif;aqmif&GufrIESifh Irrigation Rice Complex Product (IRCP) Project udkjrefrmEdkifiHqefpyg;avmu zGHUNzdK;wdk;wufap&eftwGuf taumif txnfazmfaqmif&GufoGm;rnfjzpfaMumif; jrefrmEdkifiHqefpyg;vkyfief;toif;csKyf rS od&onf/ tqdkygpDrHcsufaqmif&Guf&eftwGuf MAPCO ESifh *syefEdkifiHrS rpfql&DukrÜPD wdkYrS Myanmar-Japan Rice Industry Co.,Ltd udkvnf; Joint Venture tae jzifh wnfaxmifxm;NyD;jzpfaMumif; od& onf/ Irragrated Rice Complex Product (IRCPProject) udk &efukefwdkif;a'o BuD; wHGaw;NrdKUe,fwGif yxrOD;qHk; taumiftxnfazmfaqmif&GufoGm;rnf jzpfonf/ Reuters Reuters
  5. 5. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 5 Myanmar Summary G erman power solutions provider Heliocentris Energy Solutions AG has to deliver hybrid power solu- tions for the ongoing mobile network rollout in Myanmar, This is the largest single pur- chase order since the compa- ny’s foundation in 1995, it said. The order comprises the de- livery and installation of hybrid power solutions for the build- out of 150 mobile base stations in Myanmar and has a value of $4-6 million depending on the delivered, said the Berlin-based company, which deals in solu- tions and services for energy ef- systems. The orders will be shipped and installed within the next 3-4 months, Heliocentris said. The power solutions comprise Heliocentris’ proprietary “En- ergy Management System” and Wai Linn Kyaw also include diesel generators, batteries, power electronics, cabinets and peripheral mate- rial from other power compo- nents suppliers. The two foreign mobile opera- tors, Telenor from Norway and Ooredoo from Qatar, who were awarded 15-year-licences to op- erate mobile phone networks in Myanmar in June last year have now started their initial rollout phases which entail construc- tion of more than 2,000 mobile base stations within the next 12 months. The towers for these mobile base stations will be installed and operated by tower compa- nies such as Apollo Towers and Irrawaddy Green Towers and require power solutions for a - ing from on-grid to bad-grid “Participating in the roll-out from its initial phase creates an outstanding op- portunity for Helio- centris to gain a sig- coming build-out of the mobile networks in Myanmar,” Ayad Abul-Ella, CEO of Heliocentris, said. Myanmar is one of the few remaining telecommunications frontiers, with only 10 percent of its 60 million people holding a mobile-phone subscription, according to industry estimates. That compares to penetration rates of 70 percent in Cambo- dia, 90 percent in Laos and over 100 percent in Thailand. - ments, the Myanmar govern- ment plans to increase the per- centage of phone owners to 80 percent by 2016. In order to achieve this ambi- tious goal, new mobile licences were awarded to Telenor from Norway and Qatar Telecom in June of last year. Both opera- tors will have to meet popula- tion and geographical coverage targets to ensure that the coun- try’s large rural population is covered. This is expected to require more than 18,000 mobile base stations being erected green- three years, with most of them - tions. Ayad said: “We have designed - ments of our customers in an optimal manner: best energy ownership with maximum up- time, the security of multiple sourcing for the key power com- ponents and seamless upgrad- ing options to higher capacities for multi tenant usage. He said with this order the - cant business in Myanmar” has forward to winning “additional multi-million purchase orders in the coming months.” - uct “Energy Manager” enables components in hybrid energy supply clusters, such as batter- ies, solar panels, conventional diesel generators or fuel cells. It targets primarily base stations GermanFirmReceivesMajor MyanmarPowerSystemsOrder *smreDvQyfppfxkwfvkyfjzefYjzL;a&;ukrÜPD wpfckjzpfonfh Heliocentris Energy Solutions AG taejzifh jrefrmEdkifiH qufoG,fa&;uGef&ufwGif tokH;jyK&ef twGuf vQyfppfESifhpGrf;tifqdkif&m0,f,lrI trSmpmvufcH&&Sdxm;aMumif; tqdkyg ukrÜPDrS ajymMum;xm;onf/ tqdkyg0,f,lrIrSm ukrÜPDpwifwnf axmifonfh 1995 ckESpfrS ,cktwGif; yrmPtBuD;qkH;aom0,f,lrIjzpfaMumif; vnf; od&onf/tqdkygtrSmpmt& ukrÜPDtaejzifh jrefrmEdkifiH&Sd qufoG,f a&;½Hk 150 wGif vQyfppfESifh pGrf;tif xkwfvkyfjcif;tm; o,f,lwyfqifay; &rnfjzpfNyD; tar&duef a':vm 4 oef; rS 6oef;wefzdk;&SdaMumif; od&onf/ tqdkyg vQyfppfESifhpGrf;tifxkwfvkyfrI wGif Heliocentris ukrÜPD pGrf;tif pDrHxdef;odrf;rIpepftygt0if 'DZ,fjzifh vQyfppfxkwfvkyfa&;? bufx&Drsm;? "mwf tm; tDvufxa&mepfrsm;ESifh tjcm; "mwftm;ay;ud&d,mrsm;vnf; yg0ifonf/ jrefrmEdkifiHonf qufoG,fa&;zGHUNzdK; rIaemufusonfh EdkifiHtenf;i,fwGif wpfck tygt0ifjzpfNyD;vlOD;a& oef; 60 10 &mcdkifEIef;om zkef;udkifEdkifaMumif; cefYrSef;csufrsm;t& od&onf/ of mobile telecom operators in world regions with poor and unreliable grid-coverage such as the Middle East and South- east Asia. Myanmar Summary NEXI to Insure JFI’s Myanmar venture N ippon Export and Investment In- surance will pro- vide up to about ¥700 million ($6.83 million) in trade insurance for an infrastructure construc- tion joint venture set up in Myanmar by JFE En- said last week. support project of the - ter known as NEXI, since it sharply expanded the scope of insurance for My- anmar in January 2012 as part of Japan’s economic assistance to the country. The trade insurance will cover J&M Steel Solu- tions Co, the joint venture JFE Engineering estab- Aye Myat lished with Myanmar’s Construction Ministry in December 2013 to con- struct bridges, Jiji Press reported. - tal of ¥1.2 billion, NEXI will insure up to about ¥700 million, or 95 per- cent of JFE Engineering’s interest of 60 percent. Myanmar Summary Nippon Export and Invest- ment Insurance vkyfief;tae jzifh,Grfoef;700 (tar&duefa': vm6'or83oef;) tm; jrefrm EdkifiH tajccHwnf aqmufa&; qdkif&myl;aygif;aqmif&GufrItwGuf ukefoG,fa&;tmrcHtjzpf JFE Engineering Corp odkYaxmuf yHhrnfjzpfaMumif; od&onf/ Reuters
  6. 6. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 6 Myanmar Summary production for domestic consumption; the country - tricity access, a dilemma it wishes to address with gas-fuelled power plants. Corporate social respon- sibility requirements re- main unclear, but they will likely be implement- ed, thereby siphoning fur- community development initiatives. Another issue that dampens Myanmar’s at- tractiveness to energy investors is local com- munity resistance to in- frastructure projects. Communities fear los- ing land, jobs, and liveli- hoods, and this popular discontent could pressure the government to enact measures against the in- terests of investors. Chi- na’s turbulent experience with the Sino-Burmese pipeline project best illus- trates vocal community resistance. There are sev- eral local interest groups in Myanmar, most nota- bly the Shwe Gas Move- ment, which regularly demonstrates against the project. Their discontent is augmented by reports that the Burmese govern- ment has not distributed funds intended to com- communities. A third factor that chal- lenges investment pros- pects in Myanmar is secu- rity concerns, once again illustrated by the Sino- Burmese pipeline project experience. In May 2013, ethnic minority guerril- las attacked a compound owned by the Burmese company involved in that project, killing two peo- ple. The compound was located in Shan State near the Chinese border, close to the pipeline’s route. In January 2014, clashes be- tween Burmese and Chi- nese workers at a work- site along the pipelines’ route reportedly led to the destruction of an oil stor- age facility. Such security concerns are likely at least partially responsible for delays in the project’s de- velopment, which was to become fully operational in late 2013. - ment Although energy com- panies are relatively - erous government poli- cies, they could employ community engagement programs in Myanmar to overcome the challenges of community resistance and security concerns. Community engagement programs are driven by comprehensive consul- tations with community leaders that identify their concerns and grievances. Those concerns and griev- ances are then addressed through negotiations and local partnerships. Com- munity engagement pro- grams are directly driven by business concerns; by including local com- munities as stakeholders in an infrastructure pro- ject, those communities become invested in the project’s success, thereby eliminating community resistance. Equally important, community engagement provides an intangible layer of security around large infrastructure pro- jects. In the chance that an infrastructure project is targeted by an impend- ing attack, community members will either ac- tively protect the project, or at the very least notify authorities of the danger. In some ways, commu- nity engagement is simi- lar to the strategies used by development workers to ensure their own safe- ty; instead of protecting themselves with weap- onry or armed guards, development workers in- tegrate themselves into local communities to en- sure that other commu- nity members will assist them in a dangerous situ- ation. Although similar, com- munity engagement is dis- tinct from corporate so- cial responsibility (CSR). CSR is primarily driven by a desire to do good, as well as by an intention to improve a company’s im- age through community development work, which is vaguely expected to improve the company’s business prospects. The problem is that, from a business perspective, CSR is unsustainable because it doesn’t explicitly align private company. “There are reports, for instance, that Nay Pyi Taw will impose onerous revenue-sharing requirements well above the international average, channel- ling up to 85 percent of earnings to government coffers.” Lessons from the pipelines As previously men- tioned, the Sino-Burmese pipeline project has faced communityresistanceand security concerns. There are indications, however, that the consortium in charge of the project has attempted some form of community engagement; it has reportedly allotted $20 million in “liveli- hood security” for local the project. The money has been channelled into numerous projects, in- cluding schools, kinder- gartens, hospitals, health care centres, a reservoir, and electricity transmis- sion lines. The consortium’s at- tempts did not have the for two reasons. First, the consortium directed the money through the Bur- mese government, and it wasn’t clear to local com- munities that the con- sortium was intending communities. Second, the Burmese government reportedly withheld some of the money and local communities were there- fore unaware that they were intended to receive any funding at all. This experience highlights the need for energy sector in- vestors to directly engage with local communities in Myanmar, rather than solely rely upon interfac- ing with government enti- ties. Investors should ac- tively engage community stakeholders and align infrastructure projects to meet their needs. - tributor an independent analyst of energy geo- politics with an emphasis on oil and gas transpor- tation infrastructure. He works for a DC-based risk consultancy and has three years’ experiencing working for the US gov- ernment in international on development, energy, and macroeconomics. onfESifhtrQ a&eHESifhobm0 "mwfaiGUpDrHudef;rsm;onf &if;ESD; jr§KyfESHrItwGufqGJaqmifrIwpfckjzpf vmonf/rMumao;rDujrefrmEdkifiH wGif a&eHrsm;rsm;pGm&SdaeaMumif; rD'D,mrsm;u azmfjycJhMuNyD; jrefrm EdkifiH&Sda&eHwGif;xGufonf b&mZD; EdkifiHuJhodkYrsm;jym;aMumif; cefYrSef; xm;Muonf/xdkYtwl wpfEdkifwpf ydkifa&eHxkwfvkyfjcif;rsm;vnf;&Sd aMumif; azmfjyxm;Muonf/EdkifiH taejzifh rnfrQyrmP&SdaMumif; prf;oyfrIrsm;jyKvkyf&ef vdktyf csuf&SdNyD; tqdkygykHjyifqefonfh tcsufrsm;onfEdkifiHjcm;vkyfief; rsm;twGuf ra&r&mjzpfaponf/ w½kwfEdkifiHa&T*wfpfpDrHudef; ESifh w½kwf-jrefrmydkifvdkif;pDrHudef; onf jrefrmEdkifiHwGif vuf&Sdvkyf aqmifaeonfh [dkuf'½kdumbGef pDrHudef;rsm;wGif xif&Sm;onfh pDrH udef;jzpfonf/w½kwfEdkifiHaemuf wGif xdkif;EdkifiHtaejzifh jrefrm EdkifiH[dkuf'½dkumbGefu@wGif 'kwd,tBuD;qkH;vkyfaqmifaeonfh EdkifiHjzpfonf/xdkif;EdkifiHtaejzifh &wemESifh &JwHcGefurf;vGefwGif; rsm;wGif vkyfudkifvsuf&SdNyD; rkwår yifv,fauGU&Sd aZmwduvkyfuGuf twGufvnf;vdkifpif&&Sdxm;onf/ ThePhilippinesSetsAirTalks withMyanmarEyeingDirectLink T he Philippines will hold air talks with Myanmar and Canada next month, followed by talks with Macau, which could result in increased those destinations and help bolster the Philippines’ tourism goals, according to a Filipino The Philippines’ Civil Aero- nautics Board executive direc- tor Carmelo Arcilla said in an interview recently that talks from May 19 to 20, according to Filipino media reports. The move is set to result in the - ippines and Myanmar, often frontier, and follows strength- ened bilateral ties between both countries late last year. Kyaw Min There is strong potential for tourism links with Myanmar has expressed interest in serv- Talks with Canada will be held later in May aimed at expand- Arcilla noted that the time was right for talks with Myan- mar given the potential for in- creased tourism and business. Among local carriers, he said interest to operate in Myanmar. “It’s a very young emerging market and there are political reforms being implemented,” Arcilla was quoted as saying. “For a while, Myanmar was at the receiving end of economic sanctions but now, there is rec- ognition and support coming from other ASEAN members.” At present Philippines Air- - looking at doubling the maxi- week, in the aviation agreement to give more scope for growth in the long-term. Talks with Macau are set for 17 to 18 June, also to cater to - mand. There is speculation that the Philippines will seek talks with Russia and African countries like Ethiopia, South Africa and Kenya to create more air links. So far this year, the Philip- pines has completed successful air talks with New Zealand, Sin- gapore and France. Talks with France resulted in - vious four, which can be used by Philippine Airlines, and also the slots following its removal from a European Union black- list. However, both airlines have not indicated if they are prepared to increase services to Europe until there are clear signs of economic recovery to to Southeast Asia. zdvpfydkifavaMumif;tmPmydkifrsm; taejzifh jrefrm? uae'gESifh rumtdk tmPmydkifwdkYESifh avaMumif;qdkif&m aqG;aEG;rIrsm;jyKvkyfvsuf&SdNyD; zdvpfydkif EdkifiH c&D;oGm;vkyfief;tm; jr§ifhwif&ef twGuf reDvmEdkifiHESifh tjcm;EdkifiHrsm; odkY avaMumif;vrf;csJUxGif&ef pDpOfae aMumif; ajymMum;cJhonf/ zdvpfydkifEdkifiH Civil Aeronautics Board rS trIaqmif'g½dkufwm Carmelo Arcilla rS vmrnfh ar 19-20 wGif jrefrmEdkifiHESifhawGYqkHaqG;aEG;rnfjzpfaMumif; zdvpfydkifEdkifiH owif;rD'D,mrsm;u azmfjy xm;onf/tqdkygaqG;aEG;rIonf jrefrm EdkifiHESifhzdvpfydkifEdkifiHtMum; wdkuf½ddkufav aMumif;ajy;qGJ&efjzpfNyD;,cifESpfaESmif;ydkif; u pwifcJhonfh ESpfEdkifiHqufqHa&;tm; wdk;jr§ihfaprnfjzpfonf/ tqdkygaqG;aEG;rIonf jrefrmEdkifiHESifh c&D;oGm;vkyfief;qdkif&mcdkifrmonfh tvm; tvmjzpfNyD; rS &efukef odkY aeYpOfajy;qGJvdkaMumif; xkwfazmf ajymMum;cJhzl;onf/ Philippine Airlines Airbus A320. MRadziDesa/WMC
  7. 7. May 1-7, 2014 Myanmar Business Today mmbiztoday.com 7LOCAL BIZ Myanmar Summary Myanmar Summary S ingapore-based Wil- mar International Ltd announced last into Myanmar’s sugar market, forming a joint venture with a local pro- ducer. The company said it WilmarSeeksMyanmarSugarMarketEntryThroughJV Phyu Thit Lwin has signed a joint ven- ture agreement with My- anmar’s Great Wall Food and sell sugar and its by- products in the emerging Southeast Asian market. Wilmar will hold a 55 percent stake in the joint venture company, Great Wall-Wilmar Holdings. The deal will see the new joint venture company buying all of the existing sugar-related business, mills and plants Great Wall and its associates. That includes two sugar mills with a total milling capacity of 4,000 metric tonnes of sugarcane per day and a total production capacity of 65,000 metric tonnes of sugar per year, a bio-ethanol plant and one organic compound ferti- liser plant. Wilmar is the world’s top palm oil processor, but it has been steadily growing its sugar busi- ness through a series of deals over the past four years. In February it an- nounced it was buying a major stake in India’s Shree Renuka Sugars for up to $145 million. Financial terms of the deal were not announced and Wilmar says it does not expect the investment to have a material impact on its earnings for the The joint venture is still subject to regulatory ap- proval. Bags of sugar. Singapore’s Wilmar said it has signed a joint venture agreement with Myanmar’s Great Wall Food Stuff Industry to pro- duce and sell sugar and its by-products in the emerging Southeast Asian market. JeanPierrePingoud/Bloomberg pifumyltajcpdkuf Wilmar International Ltd taejzifh jynfwGif;xkwfvkyfolwpfOD;ESifh yl;aygif;vkyfudkifum jrefrmEdkifiH oMum;aps;uGufodkY 0ifa&muf awmhrnfjzpfaMumif; ,ciftywf u aMunmcJhonf/ Wilmar International Ltd taejzifh jrefrmEdkifiHrS Great Wall Food Stuff Industry ESifhyl;aygif;um oMum;ESifh quf pyfxkwfukefrsm; xkwfvkyfNyD; ta&SUawmiftm&Saps;uGufodkY wifydkYa&mif;csoGm;rnfjzpfaMumif;? tqdkygyl;aygif;aqmif&GufrIt wGuf Great Wall-Wilmar Holdings tm; zGJUpnf;rnfjzpfNyD; Wilmar rS 55 &mcdkifEIef; &S,f,m xnfh0ifrnf[k od&onf/ Great Wall-Wilmar Holdings ukrÜPDtaejzifhoMum;ESifhqufpyf pD;yGm;a&;vkyfief;rsm;? oMum;puf ½kH?BuHyifESifh Great Wall quf pyfvkyfief;rsm;wGif0ifa&mufvkyf udkifrnfjzpfonf/ Investors Eye Fish Feed Production Jchairman of Myanmar Eel Farming Entrepreneur Association. showed similar interest. According to the Myanmar Fisheries Federation (MFF), those countries want to invest in the sector as that can guarantee international standards. in Phyapon district of Ayeyarwaddy region and some farming is done in Rakhine state. its growth, exporters said. sector, according to MFF. coming months, and also arrange technical training, the federation said. Recently, MFF also invited experts from the United States to provide technical assistant for the improve- Kyaw Min *syef?udk&D;,m;ESifh'def;rwfEdkifiHrsm;rS ig;arG;jrLa&;tpmrsm;xkwfvkyf a&mif;cs&efurf;vSrf;vmaMumif;ig;&SOfhxkwfvkyfa&mif;csolrsm;toif; Ouú| OD;baomf uajymonf/ 'def;rwfEdkifiHuig;&SOfh?ig;vifAef;ESifhywfoufNyD;arG;jrLa&;tpmrsm;udk xkwf vkyfa&mif;cs&efpdwf0ifwpm;&SdaeaMumif;? *syefEdkifiHtaejzifhvnf; ig;&SOfhtpmarG;jrLxkwfvkyf&efurf;vSrf;xm;aMumif;? xdkYjyif*syefEdkifiHu vnf; ,if;uJhodkYurf;vSrf;rIrsm;&SdaeaMumif;,if;uqufvufajym onf/ tqdkygEdkifiHrsm;rS ig;&SOfhESifhig;vifAef;arG;jrLa&;twGuftpmudkpepf wusauR;enf;rsm;ESifharG;jrLa&;enf;ynmrsm;udkyHhydk;ay;&eftpDtpOf rsm;&SdaMumif;vnf;od&onf/tqdkygEdkifiHrsm;taejzifhig;&SOfh? ig;vif Aef;rsm;udkarG;jrLNyD;tpmudkpepfwusauR;arG;oGm;rnfjzpfNyD; wd&pämef tpmrsm;twGufvnf;xkwfvkyfa&mif;cscsifMuaMumif;?tpmESifhywf oufNyD;EdkifiHwumtqifhrDt&nftaoG;&SdrnfjzpfaMumif;udkvnf; tmrcHaMumif; jrefrmEdkifiHig;vkyfief;tzGJUcsKyfrS od&onf/ xdkYjyifudk&D;,m;EdkifiHtaejzifhvnf; ig;vifAef;arG;jrLa&;ESifhywfouf NyD; enf;ynmrsm;ay;&efurf;vSrf;xm;aMumif;? jrefrmEdkifiHtaejzifh ig;vifAef;rsm;udkzsmyHkc½dkifwGift"duarG;jrLMuNyD; &cdkifjynfe,fwGif vnf; awGU&aMumif; od&onf/ Foreign investors are getting increasingly interested in investing in Reuters
  8. 8. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 8 Myanmar Summary ADB, Japan to Give $2m to Upgrade Youth Skills to Lift Economy Grant to develop three month-long courses in construction, welding, and use and repair of rural machinery T he Asian Development Bank (ADB) and Japan are to help Myanmar upgrade and modernise tech- nical and vocational training programs to meet the country’s pressing need for skilled young workers. A $2 million Japan Fund for Poverty Reduction grant, ad- ministered by ADB, will be used to develop and pilot three month-long competency-based courses in skills such as con- struction, welding, and use and repair of rural machinery, the Manila-based lender said. “Overhauling technical and vocational training to make them more relevant, modern and accessible is critical for de- veloping the foundational skills needed to support Myanmar’s economic transformation and help cut poverty,” said Chris- topher Spohr, senior education economist based in Myanmar. ADB said the target is to train at least 1,000 young people, and steps will be taken to en- sure that places are reserved for women and young adults from Pann Nu poor and disadvantaged fami- lies. Courses will be launched in Yangon, Mandalay, and Pakok- ku starting this November, and will be free of charge. - ings from Myanmar’s forth- coming costed education sector plan, which is helping pinpoint gaps and “quick win” opportu- nities in the country’s education sector, ADB said. Myanmar’s workforce lacks well-trained workers to im- mediately step into positions opening up as a result of re- cent reforms. Existing technical training is focused on long-term programs in urban niche skills, such as operating computers, with less than 2 percent of 16- 19 year olds engaged in skills training courses. In rural areas the situation is even worse, ADB said, with less than 0.5 percent of rural males and females enrolled in technical or vocational training programs. The lender said as well as set- ting up short courses, the tech- nical assistance project will help relevant government agen- cies gain the necessary capacity to develop and oversee youth skills training programs. ADB said the course outcomes will also be assessed to provide a potential model for replica- tion in future. Along with the grant sup- port from Japan, Myanmar will provide counterpart assistance equivalent to $500,000 for a to- tal project cost of $2.5 million. DefTechTargetsMyanmarProjects M alaysia’s leading ar- moured vehicle maker DRB-Hicom Defence Technologies Sdn Bhd (DefT- ech) is in talks about new pro- jects with the relevant authori- ties in Myanmar, a top company - ing a deal with the Cambodian government for a new main- tenance, repair and overhaul (MRO) contract for T-55 tanks, Samsudin told Malaysia’s na- tional news agency Bernama. The project, which has an es- timated worth of $50-$60 mil- set to commence by October, he said on the sidelines of the Defence Services Asia Exhibi- tion and Conference 2014 (DSA 2014). DefTech was also in talks with the authorities in Myanmar for similar MRO contracts, he add- ed. Another Malaysia defence - gies Sdn Bhd is also reportedly planning to make an overseas foray this year. Corporation Sdn Bhd has set its sights closer to Malaysia, eye- Kyaw Min ing ASEAN countries such as Indonesia, Thailand and Brunei for a further growth, Bernama reported. The four-day biennial DSA 2014 ushered in a total of 33,544 trade visitors from 77 countries and regions, up from 26,980 two years ago. A total of 1,000 companies from 60 coun- - ings at the exposition this year. Myanmar Summary Myanmar Summary tm&SzGHUNzdK;a&;bPf (ADB) ESifh *syef EdkifiHwdkYtaejzifh jrefrmEdkifiHuRrf;usif tvkyform;vdktyfcsuftm; jznfhqnf; Edkif&ef toufarG;0rf;ausmif;oifwef; ESifh enf;ynmqdkif&mtultnDrsm; ay; tyfoGm;rnfjzpfonf/ ADB rS BuD;Muyfrnfh *syefEdkifiH qif;&JEGrf;yg;rIavQmhcsa&;&efykHaiG tar &duefa':vm 2 oef;tm; aqmufvkyf a&;?*a[qufjcif;ESifhpufrIjyifqifa&; okH;voifwef;rsm;wGif okH;pGJoGm;rnfjzpf aMumif; ADB xkwfjyefcsuft& od&onf/ ADB taejzifh tenf;qkH; vli,f 1000 tm; oifwef;ay;Edkif&ef &nfrSef; xm;NyD; qif;&JEGrf;yg;onfh rdom;pkrsm;rS vli,frsm;ESifh trsKd;orD;rsm;tm; oifwef; ay;oGm;rnfjzpfonf/ rav;&Sm;EdkifiHppfokH;,mOfxkwfvkyf a&;ukrÜPDBuD;wpfckjzpfonfh DRB- Hicom Defence Technologies Sdn Bhd (DefTech) onf jrefrmEdkkifiHrS oufqdkif&mtmPmydkifrsm;ESifh pDrHudef; topfwpfcktm; aqG;aEG;vsuf&SdaMumif; ukrÜPD t&m&SdMuD;wpfOD;rS ajymMum; cJhonf/ tqdkygpDrHudef;onf tar&duefa':vm oef; 50 rS oef; 60 wefzdk;&SdrnfjzpfNyD; oufwrf;tm;jzpf ig;ESpf&Sdrnfjzpfum vmrnfhatmufwdkbmvwGif pwifzG,f &SdaMumif; tqdkygt&m&Sdu Defence Services Asia Exhibition and Conference 2014 (DSA 2014) wGif ajymMum;cJhjcif;jzpfonf/ DefTech onf jrefrmEdkifiHtmPmydkif rsm;ESifh ppfzufokH;,mOfrsm;tm; xdef; odrf;? jyifqifrGrf;rHonfh (MRO) uJhodkY pmcsKyfrsm;csKyfqdka&;twGufaqG;aEG;cJh aMumif; od&onf/ YongmaoBags$2.4-mMyanmarCranesOrder C hinese tower crane man- ufacturer Yongmao has sold ten cranes to Sin- gapore crane sales and rental house Erect Group, for an end user in Myanmar. The $2.39-million deal will see Yongmao deliver 10 of its STT cranes through 2014-2015. It follows the manufacturer’s start of this year. As Myanmar democratises and its economy opens up from years of sanctions and restric- tion, companies like Yongmao are seeing new opportunities. Yongmao executive director and group general manager Sun Tian said deals like this are an important part of his company’s export strategy. the Myanmar market, we are expanding our foothold in this region. We foresee that urbani- sation and economic develop- ment will drive higher con- struction activities to support this progression. “Eyeing the potential demand for infrastructure across Asia, we hope to continue to pro- mote the Yongmao brand, qual- ity and service in order to cater to the need for quality tower Aye Myat cranes. We believe our competi- tive edge lies in our product and service: our tower cranes have obtained the relevant product safety and design approval of various countries and we pro- vide premium after-sales ser- vice. “Moving ahead, we hope to continue our push into Myan- mar by securing more contract wins with well-established tow- Revenue from Asia, besides China, contributes 25.1 percent of Yongmao’s turnover for its nine months ended 31 Decem- ber 2013. Revenue from this geographical segment has in- creased 11.6 percent during this time. Yongmao is on the lookout for collaborations with existing customers who have plans to enter the Southeast Asian mar- ket. Such partnerships include working with Singapore rental companies and contractors to provide towercranes in Myan- mar, Vietnam and Indonesia. The company also aims to par- ticipate actively in various trade fair and exhibition in Southeast Asia. Tower cranes from Yongmao are seen. Yongmao foresees that urbanisation and economic development will drive higher construction activities in Myanmar, hence the demand for its cranes. A $2 million Japan Fund for Poverty Reduction grant, administered by ADB, will be used to develop and pilot three month-long competency-based courses in skills such as construction, welding, and use and repair of rural machiner. SoeZeyaTun/Reuters TatHongHoldingsLtd w½kwfEdkifiH arQmfpifu&def;xkwfvkyf a&;vkyfief; Yongmao taejzifh u&def; iSm;&rf;? a&mif;csjcif;rsm;jyKvkyfaeonfh pifumyl Erect Group jrefrmEdkifiH twGuf u&def;q,fpD;a&mif;cscJhaMumif; od&onf/ tar&duefa':vm 2 'or 39 oef; wefzdk;&Sdonfh tqdkyg STT u&def;q,fpD; tm; Yongmao ukrÜPDtaejzifh 2014- 2015 wGif ay;ydkY&rnfjzpfonf/
  9. 9. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 9 Myanmar Summary Myanmar’s Palm Oil Industry: Challenges and Way Forward P alm oil as edible oil is the second biggest important food item after rice in an average Myanmar household. However, Myanmar’s domes- tic edible oil production is not enough to meet the demand, so it imports palm oil from some of the world’s largest palm oil producing nations like Indone- sia and Malaysia. During the military rule palm oil import was controlled by state enterprises. But the recent economic and democratic tran- sition has resulted in a market- based economy, which resulted in the Ministry of Commerce opening up the previously-re- stricted palm oil import market to local private players in April palm olein, which is the liquid form of palm kernel oil after a process called fractionation, Vijay Dhayal and is used for cooking and fry- ing. In Year 2012 Myanmar im- ported 400,000 tonnes of palm Oil and which has grown to 485,000 tonnes in 2013. Market is expected to expand further to 700,000 tonnes by 2017-18 due to growing demand, rising in- come of Myanmar households and shifting from costlier pea- nut oil. One of the biggest challenges for palm oil trade is the cargo storage facility at Yangon port, which results into long waiting period for vessels at the port to discharge the cargo, leading majority of importers to face demurrage claims from their suppliers. Due to shortage of storage space, importers are pushed to liquidate the cargo as soon as possible. Another concern is usage of delivery order mecha- nism in the local market where speculators and distributors play with forward contracts, creating speculation and de- faults. Road infrastructure is also underdeveloped in My- anmar, so transportation cost also becomes very high, hurting margins and causing delays in delivery of cargoes to northern Myanmar. Another major area of chal- lenge is illegal border trade of palm oil from Thailand to Mon state and Tanintharyi region which impacts importers who are brining cargoes to Yangon legally after paying customs duty, commercial tax and in- come tax. Private players have invested in palm plantation in southern Myanmar to increase domes- tic production but it will take at least two to three years to on the palm oil trade. Various stake holders from government and industry can pursue the idea of promoting manufac- turing industry for converting oil which could create technical know-how and employment. Currently in the local mar- ket palm oil is traded in loose which results into quantity loss and quality deterioration. How- ever, that also provides great opportunity for investors to set up blowing units for jerry can production and packaging and distribution with right quantity and quality. modities market for more than two years. He is an agri com- modity trader by profession. He can be contacted at vijay- dhayal.eca@gmail.com. This the author in his own person- al capacity. The opinions and views expressed here are his own. A worker unloads palm fruit at a local palm oil factory in Langkat of Indonesia’s north Sumatra province. RoniBintang/Reuters pm;tkH;qDtm; tdrfokH;qDDtjzpf jrefrm EdkifiH&Sd omreftdrfaxmifpkrsm;wGif okH;pGJ MuNyD; qefNyD;vQif 'kwd,ta&;tBuD; qkH;aom pm;aomufukefvnf;jzpfonf/ odkYaomf jrefrmEdkifiH jynfwGif;pm;okH;qD xkwfvkyfrIonf pm;okH;olvdktyfcsuft& ravmufiSonfhtwGuf urÇmhtBuD;qkH; pm;tkef;qDxkwfvkyfonfh tif'dkeD;&Sm; ESifh rav;&Sm;EdkifiHwdkYrS pm;tkef;qDrsm; jyefvnfwifoGif;ae&onf/ ,cifppftpdk;&vufxufu pm;tkef; qDwifoGif;rIrsm;tm; EdkifiHydkifpD;yGm;a&; vkyfief;rsm;u xdef;csKyfcJhonf/ odkYaomf rMumrDujyKvkyfcJhonfh pD;yGm;a&;ESifh'Drdk ua&pDjyKjyifajymif;vJrIrsm;t& aps; uGuftajccHpD;yGm;a&;odkY ul;ajymif;cJhNyD; pD;yGm;a&;ESifhul;oef;a&mif;0,fa&;0efBuD; Xmeu 2011 ckESpf {NyDvwGif pm;tkef; qdDwifoGif;rIrsm;tm; jynfwGif;yk*¾vdu vkyfief;rsm;odkY csxm;ay;cJhonf/
  10. 10. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 10 Myanmar Summary Economic Opportunities Continue to Grow in Myanmar This bulletin by Canadian law firm Davis LLP provides an update on the significant changes Myanmar is experiencing in government, legislation, trade and tourism and outlines the opportunities in this growing country. W ith a population of more than 60 million people, opportunities in Myanmar are not limited to extractive industries, but also exist in manufacturing and the domestic market for consumer goods. Even so, Myanmar’s natural resources should not be underestimated: natural gas, petroleum, timber, zinc, cop- per, lead, coal, precious stones, and agricultural land exist in abundance. foreign investors A general election is set to be held in Myanmar in November 2015. These elections could see Aung San Suu Kyi, Nobel lau- reate and leader of Myanmar’s main opposition party, the Na- tional League for Democracy (NLD), brought to power. Her release in 2010 after almost eleven years of house arrest imposed by the previous mili- tary regime, was instrumental in opening up trade relations with the West. Regardless of whether the current ruling Union Solidarity and Develop- ment Party (USDP) or the NLD forms a government next year, it is expected that political and begun in 2010 by current Presi- dent, Thein Sein, will continue. However, it is important to note that at this time, Aung San Suu Kyi is barred from becom- ing President of Myanmar by virtue of the country’s Consti- tution, which prohibits anyone with family members who are citizens of another country from holding the country’s highest prevent her from being elected to Parliament in 2012, when vacancies in 8 percent of the following by-elections, with the NLD capturing all 43 seats in which they ran candidates. Another round of by-elections is anticipated late in 2014, to - cancies. It remains to be seen whether the Constitution will be amended to enable Suu Kyi’s candidacy for President prior to the general election expected in late 2015. Other legal reform is ongo- ing, making it more practical for multi-national companies to invest in Myanmar. It is an- ticipated that a new Companies Law will be introduced in 2014, to replace the current law that dates back 100 years. A draft Trademark Law is before Par- liament and a proposed Con- dominium Law, that will allow foreign citizens to own a form of also placed before Parliament in November 2013. New incentives draw foreign investment despite trade re- strictions The government of Myanmar places restrictions on foreign investment within the country. The State-Owned Economic En- terprises Law (1989), Foreign Investment Law (2012) and the Foreign Investment Rules (January 2013) restrict certain types of business activities from occurring without government approval. Foreign investment is monitored and approved by the Myanmar Investment Commis- sion (MIC) which has published a list of activities in which for- eign investors are prohibited from participating or which re- quire a joint venture with a local business. At the same time, the country is also providing incentives to foreign investors. In January, 2014 a new Myanmar Special Economic Zone Law (MSEZL) was enacted, repealing earlier legislation regarding special economic zones. The MSEZL of- fers up to seven years of income tax exemptions for foreign in- vestors, with further 50 percent discounts on income tax for an- law applies in Myanmar’s three Special Economic Zones: Kyauk Phyu, Dawei and Thilawa. The MSELZ provides for the estab- lishment of additional zones and contains dispute resolution procedures. Economic sanctions Domestic strife and ongoing corruption issues have certainly not disappeared. While Cana- da’s Special Economic Measure Regulations (sanctions) have been relaxed in recent years, Canadians are still prohibited from dealing with certain busi- nesses and individuals, includ- ing the state banks of Myanmar. Military shipments are also prohibited. These sanctions are enforced by the Export Controls International Trade Canada, of Foreign Assets Control. It is worth noting, however, that the Canadian list of restricted per- sons is more limited than com- parable US prohibitions. While Japan did not impose economic sanctions against My- anmar, there was a pronounced slowdown in government aid and private sector investment during the years that Aung San Suu Kyi was under house arrest. China expanded its economic this period, but faces greater competition now that other countries, including Japan, are investing heavily. The Japanese government has pledged almost $2 billion in loans and grants since Prime Minister Shinzo Abe was elected in December 2012. Japan and Myanmar are jointly developing the ambi- tious Thilawa special economic zone just outside of Yangon, the country’s largest city. Plans call for a deep sea port, a power plant and waste water treat- ment facility, all in support of a 2,400 hectare industrial park. Construction began in Novem- ber, 2013 and commercial op- erations are expected to start in mid-2015. Financial growth: foreign banks increase presence in Myanmar Despite some remaining trade restrictions imposed by vari- ous countries, growth of for- eign investment in Myanmar has been substantial. At least 14 banks in Myanmar now per- mit foreign currency accounts. Even though foreign banks are currently permitted to only conduct research in Myanmar, 35 foreign banks have opened expected that some licences for foreign branches may be ten- dered within the year. Daiwa Securities from Japan is one of In late 2012, automated tell- er machines (ATMs) linked to the international payment sys- tem were introduced in Myan- mar. There are now hundreds of ATMs around the country, and while not as reliable as similar-looking ATMs in North America, they are providing much needed convenience and liquidity. On a visit this year, one of the authors of this bul- letin found it’s possible to ac- cess funds held in Canadian ac- counts using some ATMs. Further bank reform is needed and is on the way, with the IMF assisting in changes to the cen- tral bank and the launch of the Yangon stock exchange planned for 2015. Myanmar has also ac- ceded to the New York Conven- tion on the Recognition and Enforcement of Foreign Arbi- tral Awards, as of July 15, 2013. This will allow multi-national companies to settle commercial disputes outside the domestic legal system. Myanmar has also drafted a new arbitration law, expected to be enacted in 2014, which is required to allow for the enforcement of foreign ar- bitration awards by the courts of Myanmar. At the end of 2013, Myanmar became the 180th member of the Multilateral Investment Guarantee Agency (MIGA), meaning MIGA guarantees are now available for foreign direct investments. The US Ex-Im Bank also opened in Myanmar support for short and medium- term US export sales to Myan- mar. “The electricity grid is inadequate by western standards. Companies offering a distributed power generation model are taking up the chal- lenge, particularly outside Yangon. Large scale thermal and clean energy projects are also ex- pected over in next few years.” Reforms initiated by Myanmar’s quasi-civilian government have sparked growth in the poor Southeast Asian nation’s economy. 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  11. 11. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 11 Myanmar Summary LiuRui/GT China’sBackyardPlatformforCooperation W hile Chinese enter- prises are entering the US “backyard,” Latin America and the Carib- bean, one after another and set- tling down, the US also acceler- ates its entrance into China’s “backyard.” Right before US President Ba- rack Obama’s Asia trip, the US Department of State announced - It has been widely noticed that the US is back. However, it isn’t back just for a new mar- from China’s seeking develop- ment drives across the world or transferring competitive in- dustries to other countries and regions. In January, the US embassy in Myanmar provided techno- logical training for 150 civil so- ciety activists in Myanmar. And in February, the US funded the social activities of BarCamp, an international network of open online workshops, which has attracted more than 5,000 par- ticipants. These moves have naturally triggered China’s worries, and some media outlets exclaimed that Washington is nosing around China’s backyard. Ding Gang This is reminiscent of simi- lar arguments from some US media outlets during Chinese President Xi Jinping’s Latin America visit last year that Chi- na was entering the backyard of the US. Certainly, compared with the US, China is still a latecomer and is way behind in terms of soft power. Even with close neighbours like Myanmar, Chi- na still faces the challenge of winning more trust from them. In a recent interview with the Beijing-based Caijing magazine, Elizabeth Economy, director for Asia studies at the Council on Foreign Relations, said that ul- timately who would lead Asia would depend on the country’s development route and its dip- lomatic attitude in wider areas. According to the historic logic of a great power’s rise and espe- cially when a new order is still leadership may provide more room for speculation about Si- - ly? Just as a Chinese poem once quoted by Hillary Clinton goes, “After endless mountains and rivers that leave doubt whether there is a path out, suddenly one encounters the shade of lovely village.” If we see each other’s “back- yard” as a platform to know more about each other and con- tribute more to that region, we new order in the future. Take Myanmar. Currently what’s most urgently needed in this country is to boost ethnic reconciliation, without which further realization of democrat- ic politics and stable develop- ment will be unlikely. The stability of northern My- anmar is very important for China, and it is not meaningless for Washington’s promotion of its own human rights values in Myanmar. This is where the two sides’ in- terests converge, and coopera- tion on this point will enhance mutual trust. So far the US has started to promote some activities facili- tating the fostering of civil soci- ety, which is helpful for Myan- mar’s good governance in the future. However, the arrange- ment of similar projects should ethnic reconciliation. in this regard, such as collabo- rating and arranging nego- tiations between the Myanmar government and ethnic minor- ity independent armed forces in northern Myanmar. It needs to consider how to also bring Washington in to promote such negotiations. If China and the US can strengthen collaboration, com- municate on these issues and accumulate experience of co- operation, this will be more im- portant than increasing invest- ment in Myanmar in the short term. There are more than a few similarly thorny issues in the China’s neighbourhood. If the two powers can cooperate over third parties in this region and the construction of the future re- gional order, and will provide a future leadership. China and the US have already established diplomatic mecha- and the situation in Myanmar has been on the agenda. None- theless, the two should not just exchange information, but also issues. The author is a senior editor w½kwfpD;yGm;a&;vkyfief;rsm;taejzifh tar&duefEdkifiHtaemufbuf&Sd Latin America ESifh Caribbean wdkYwGif 0ifa&mufvkyfudkifvmonfhenf;wkl tar&duefEdkifiHonfvnf; w½kwf taemufbufa'oodkY t&Sdeft[kefjzifh 0ifa&mufvmNyDjzpfonf/ tar&duefor®w Barack Obama tm&Sc&D;pOfrwdkifrDrSmyif US Department of State rS jrefrmEdkifiHwGif yxrOD;qkH; aom pD;yGm;a&;0efaqmifrI½kH;zGifhvSpfawmh rnfjzpfaMumif;aMunmcJhonf/Zefe0g&Dv wGif jrefrmEdkifiH&Sd tar&duefoH½kH;rS vlrI vIyf&Sm;ol150tm;enf;ynmoifwef; rsm;ay;cJhonf/azazmf0g&DvwGifvnf; tar&dueftaejzifh ESpfpOf vl 5000 cefY wufa&mufonfh vlrIvIyf&Sm;wpfck jzpfonfh BarCamp tm; &efykHaiG axmufyHhay;cJhonf/ xdkodkYaqmif&GufrIrsm;onf w½kwfEdkifiH tm; pdk;&drfrIrsm;jzpfay:apcJhNyD; tcsKdU rD'D,mrsm;taejzifh0g&Sifwefonf w½kwf taemufbufydkif;tm; a&S;½IaeaMumif; xkwfazmfa&;om;vmMuonf/ jrefrmEdkifiHajrmufydkif;a'o wnfNidrf at;csrf;a&;onf w½kwfEdkifiHtwGuf ta&;ygouJhodkY 0g&Sifwef jrefrmEdkifiH wGif; vlUtcGifhta&; jrifhwifrItwGuf vnf;ta&;ygvsuf&Sdonf/ US President Barack Obama (L) shakes hands with Japanese Prime Minister Shinzo Abe (R) at the Akasaka guesthouse in Tokyo. Obama’s “Asia Pivot” is widely seen Xinhua
  12. 12. May 1-7, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 12 - tential The country is endowed with of oil was exported in 1853 but little production or explora- tion took place during the past 50 years of military rule. How- ever, Myanmar has 50 million barrels of proven oil reserves and 280 billion cubic meters of natural gas. This is expected to increase with the recent arrival of foreign oil and gas compa- nies. After a tender process for 16 on-shore blocks, Canadian won two oil concessions in My- anmar last year. Even more recently, in March the government announced and gas blocks. Majors such as Shell (in partnership with Mit- sui) British Gas (with partner Woodside Petroleum), Total, Chevron and Statoil (in part- nership with ConocoPhillips) were among the successful bid- ders. In the manufacturing sector, GM and Ford have both entered Myanmar. Coca-Cola re-en- tered the country in September 2013 after an absence of more than 60 years. GE, VISA, and MasterCard are all increasing their presence in Myanmar. Telenor (Norway) and Oore- doo (Qatar) both received in- vestment permits after winning a tender in June 2013 for pro- vision of telecom services. Sig- growth is expected in the wire- less sector. In the garment industry, H&M has started placing test orders to explore possibilities, and a group of 12 Hong Kong garment manufacturers look to - awa special economic zone. Tosustainongoinginvestment in Myanmar, parallel growth in infrastructure is required. In addition to the ambitious Thilawa special economic zone project already mentioned, two other major port development projects are planned: a deep sea port at Dawei, 300km west of Bangkok, supported by Thai- land and a smaller port on the Bay of Bengal, a joint project between India and Myanmar. Completion of these projects may not be imminent, but the need for related bridges, roads, highways and water systems are major opportunities. The electricity grid is inad- equate by western standards. - ed power generation model are taking up the challenge, par- ticularly outside Yangon. Large scale thermal and clean energy projects are also expected over in next few years. In March, 2014 the Japanese government pledged approximately $450 - nance additions to Myanmar’s electrical system. Mitsubishi, Marubeni, Fuji Electric, Toshi- ba and Hitachi are among the or actively pursuing involve- ment in this sector. The Environmental Conser- vation Law was passed in 2012, but implementing rules to gov- ern environmental impact as- sessments are still being draft- the government are eagerly awaited. travellers bring economic The tourism industry is grow- ing at a rapid pace. Myanmar is welcoming almost two million tourists each year. While this is less than 10 percent of the num- ber of visits to neighbouring Thailand, this gap is starting to narrow. Those plane loads of tourists are looking for a place to stay, and hotel chains such as Accor and Best Western are responding to the opportunity presented by nightly rates that have tripled in recent years. This also creates strong op- into Myanmar. Expansion of the country’s largest airport, Yangon International, has been announced, with a goal to handle 3.3 million passengers per year. A new international airport is expected to open in Bago in 2018, and expansion projects at other airports are expected. The private sector has been encouraged to participate but delays have hit some pro- jects, particularly the planned new $1.1 billion Hanthawaddy International Airport, 100km from Yangon International Air- port. There are eight domestic air carriers operating in Myanmar, with at least four more prepar- ing to launch. However, these carriers only operate a com- bined total of 40 aircraft and only two, Myanma Airways and aircraft. Consolidation of do- mestic airlines seems probable, even as growth in domestic air travel continues. Myanmar is also looking out- wards and is playing a more active role in the international economy. The country hosted the East Asia World Economic Forum in its new capital city, Nay Pyi Taw, in June 2013. My- anmar also hosted the Foreign Ministers Meeting of the Asso- ciation of Southeast Asian Na- tions (ASEAN) in January 2014, - anmar is now chair of ASEAN. The biggest newsmaker, how- ever, was when the 27th South- east Asian Games were held in Myanmar just before Christmas 2013. Other information to con- sider For those considering doing business in Myanmar, the cost reasonable accommodation in Yangon can be daunting. Rents currently surpass $100/square foot, which is higher than the average rental rate in Manhat- tan. Relief may be on the way, however, as construction cranes are sprouting across the city. Although the tight real estate market seems to have delayed the promised opening of Cana- (it was intended to open in mid- 2013), Mark McDowell was named last year as Canada’s He and a small contingent of of the British Embassy, but for now Canadian citizens requir- ing consular services are still required to seek assistance at the Australian Embassy. Cana- da’s Embassy is now expected to open in mid-2014. Myanmar’s rich resources and untapped market and labour potential have made it a hot bed of new international economic development. Still, there re- - cial and legal systems. Caution and careful planning is recom- mended. - “Legal reform is ongoing, making it more practical for multinational companies to invest in Myanmar. It is anticipated that a new Companies Law will be introduced in 2014, to replace the current law that dates back 100 years.” SoeZeyaTun/Reuters Myanmar opposition leader Aung San Suu Kyi smiles after signing on the guest- - most eleven years of house arrest imposed by the previous military regime, was instrumental in opening up trade relations with the West. 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  13. 13. May 1-7, 2014 Myanmar Business Today mmbiztoday.com REGIONAL BIZ 13 Myanmar Summary Myanmar Summary With an Eye on TPP, Garment Companies Flock to Vietnam Lien Hoang A s China and its work- ers get wealthier, glob- al manufacturers are looking south for less expen- sive places to do business. But Cambodia faces labour strikes. endless protests and Myanmar needs infrastructure updates. As a result, many companies are setting their sights on Viet- nam. Hundreds of them, in fact, de- scended on Ho Chi Minh City last month for Saigon Tex, a gar- ment and textile expo. Sharing a border with China, Vietnam boasts geographic convenience, as well as political stability and low costs. Those attract compa- nies like Spain-based Jeanolo- on-denim technology at the expo. “It is becoming such an im- portant hub for American and European brands,” Jeanolo- gia area manager Borja Trenor Casanova said of Vietnam. (TPP) helps, too. As one of 12 countries negotiating the trade most from a clause that would - parel, which are among the na- tion’s top exports. To take advantage of the tax reduction, foreign companies are shifting their factories to Vietnam. Nguyen Thi Cam Tu is general manager at Thach Anh Vang, which represents manufacturers from Germany, Turkey, the United States, and others. She said the TPP is part of the reason her company saw a 50 percent increase in annual turnover in 2013, “I see a lot of investment go- ing on, because we see quite a lot of inquiries recently,” Cam Tu said, as a giant yarn spinner roared at the vendor slot next to hers at the expo. the country. Textile exports in- quarter of 2014, compared with the same period last year, ac- cording to the General Statistics While production and rev- enues have risen steadily, Viet- recognise a gaping weakness in the garment industry: It buys most of its materials from other countries. The Vice Minister of Industry and Trade Ho Thi Kim Thoa told an audience at the expo that Vietnam must set tar- gets to produce more fabrics on its own. “These targets demonstrate an urgent need for technologi- cal innovation, improvement of quality control, labour manage- ment, environmental manage- ment, as well as improvement in the textile and garment sup- ply chain in accordance with international standards,” Kim Thoa said. If it doesn’t develop more lo- cal suppliers, Vietnam won’t be able to tap the full potential - ship. The agreement is likely to include a yarn-forward rule, which requires Vietnam to make clothes with materials from TPP member countries in order to receive tax-free import But people are looking to im- prove the garment sector in other ways, too. Casanova said Jeanologia’s laser-printing is one of the technologies that could help Vietnam become a value-adding step in the pro- duction chain. The country, which achieved lower middle income status in2010, is still very dependent on cheap la- bour. But to avoid the middle- ways to add value to its exports. Casanova said it seems to want technology for that purpose, as well as to promote environmen- tal sustainability in business. “Vietnam is showing interest in a change in the industry,” he said. Airasia to Launch Long-Haul Services to Thailand John Ruwitch T hai AirAsia X, Thailand’s airline, will take to the skies in June despite the tour- ism market being dragged down by the country’s political turmoil. The new long-haul low-cost an event in Bangkok last week, with CEO Nadda Buranasiri Operating from its home base at Bangkok Don Mueang Inter- national Airport, Thai AirAsia X daily services to Seoul. It will then expand its operations with Tokyo and Osaka commencing later in the year. “We are absolutely thrilled long-haul carrier,” said Nadda. “While Thai AirAsia’s Airbus the best connectivity for short- haul destinations, Thai AirA- sia X will be operating Airbus A330-300 wide-body aircraft to destinations that are further from Bangkok.” Nadda revealed that future destinations could include Aus- tralia and China, as long as the airline’s strategy. “We know that Thailand is a preferred destination for Aus- tralians,” Nadda told Travel would [also] consider Chinese destinations over four hours in length.” Thai AirA- sia has already established a strong presence in China, with mainland cities. And while Tas- sapon Bijleveld, CEO of Thai AirAsia X will not take over any routes from Thai AirAsia”, the new airline’s four-to-nine-hour destinations as Beijing. Thai AirAsia X will also be looking to use Thai AirAsia’s network of short-haul routes to - tions for its passengers. For ex- ample, passengers on inbound Osaka will be able to connect to a range of Thai domestic desti- nations such as Phuket, Krabi and Chiang Mai, or regional hubs like Siem Reap and Yan- gon, via Bangkok. Thai AirAsia X will initially operate two Airbus A330-300 – 12 in business class and 365 in economy. Thai AirAsia X received its last year, but delayed its launch – initially planned for Febru- ary 2014 – due to the impact of Bangkok’s political protests on the country’s travel industry. But Nadda said he remained - cord load factors of up to 80 percent on both its new routes. The CEO also predicted that Japanese services would be a 50-50 mix between Thai and international. The destinations were selected in part due to the fact that South Korea and Japan Thai nationals. Thai AirAsia X becomes the seventh branch of the AirAsia group, following AirAsia Malay- sia, Indonesia, Thailand, Phil- ippines and India, and AirAsia X in Malaysia. w½kwfEdkifiHonf tvkyform;<u,fvm onfESifhtrQ urÇmhukefxkwfvkyfief;&Sif rsm;onf pD;yGm;a&;vkyfief;rsm;twGuf ukefusp&dwfoufomonfh awmifbuf ydkif;odkY pdwf0ifpm;rIrsm;jyovmMuonf/ odkYaomf uarÇm'D;,m;wGifrl tvkyf orm;qE´jyrIrsm;BuHKawGUae&NyD; xdkif; EdkifiHwGif xdkif;tpdk;&taejzifh tqkH; rowfEdkifonfh qE´jyrIrsm;ESifh BuHKawGUae &onf/jrefrmEdkifiHtaejzifhvnf; tajccH vdktyfcsufrsm;jr§ifhwif&efvdktyfaeao; onfhtwGufukrÜPDtrsm;pkonf AD,uferf tm; oabmusvmMujcif;jzpfonf/ &maygif;rsm;pGmaom vkyfief;&Sifrsm; onf ,ck&ufowåywftwGif; NrdKUawmf [dkcsDrif;odkY Saigon Tex txnfESifh csnfrQifjyyGJBuD;twGufa&muf&SdaeMuNyDjzpf onf/w½kwfEdkifiHESifh e,ferdwfcsif;xdpyf aeonfh AD,uferfEdkifiHwGif yx0D0if qdkif&m tqifajyrI? EdkifiHa&;wnfNidrfrI ESifh ukefusp&dwfoufomrIwdkYu pydef tajcpdkuf Jeanologia uJhodkYaom ukrÜPDBuD;rsm;tm; qGJaqmifvsuf&Sdonf/ tqdkygwdk;wufrIrsm;rSm wpfEdkifiHvkH; wGif jzpfay:vsuf&SdNyD; 2014 yxrokH;v ywfwGif AD,uferfEdkifiHcsnfrQifwifydkYrI rSm ,cifESpfxuf 20 &mcdkifEIef; ydkrdk wdk;wufcJhaMumif; od&onf/xdkodkYxkwf vkyfrIESifhtcGefaiGrsm; wnfNidrfpGmjrifhwuf aeaomfvnf; AD,uferfukrÜPDrsm;ESifh tpdk;&t&m&Sdrsm;onf EdkifiH txnf csKyfvkyfief;twGuf tjcm;EdkifiHrS ukef Murf;wifoGif;ae&onfh csKdU,Gif;csuftm; aumif;pGmowdjyKrdaeMuNyDjzpfonf/ xdkif;EdkifiH AirAsia X taejzifh EdkifiH a&;rwnfNidrfrIaMumifh c&D;oGm;aps;uGuf usqif;aeaomfvnf; xdkif;EdkifiH yxr qkH;wef;zdk;enf;c&D;a0;avaMumif;vdkif; tm; ZGefvwGif pwifrnfjzpfaMumif; aMunmvdkufonf/ tqdkygtpDtpOftm; befaumufNrdKU wGif avaMumif;vdkif;trIaqmift&m&Sd csKyf Nadda Buranasiri u w&m;0if xkwfazmfajymMum;cJhjcif;jzpfNyD; avaMumif; vdkif;yxrc&D;pOfESifh0efaqmifrIrsm;udk yg xnfhoGif;aMunmcJhonf/ befaumufNrdKU Don Mueang tjynf jynfqdkif&mavqdyfwGif tajcpdkufonfh Thai AirAsia X taejzifh ZGefv 17 wGif awmifudk&D;,m;EdkifiH Seoul odkY pwifysHoef;rnfjzpfNyD; ,ckESpfaemufydkif; wGif *syefEdkifiH Tokyo ESifh Oska wdkY udkyg ajy;qGJoGm;Edkif&ef pDpOfvsuf&Sdonf/ Reuters
  14. 14. May 1-7, 2014 Myanmar Business Today mmbiztoday.com REGIONAL BIZ 14 Myanmar Summary Myanmar Summary Myanmar Summary IFCProbesHAGLInvestmentLinkedtoLand-Grabbing Aye Myat T he International Finance Corporation (IFC), the World Bank’s private sec- tor lending arm, has launched an internal investigation into a complaint lodged against the in- stitution for investing in a Viet- illegal logging and land grabbing in Ratanakkiri, an NGO and a vil- lager said last week, according to Cambodian media reports. Earlier in April, representa- tives of the IFC’s Compliance Advisor Ombudsman (CAO) met with leaders from 17 indig- enous communities in Andong Meas and O’Chum districts, along with representatives of Vietnam-based Hoang Anh Gia Lai (HAGL), which operates rubber plantations on econom- ic land concessions in the King- dom’s northeast, according to Eang Vuthy, executive director at NGO Equitable Cambodia. The IFC is accused of support- ing HAGL’s actions by investing millions through an intermedi- ary fund called Dragon Capital Group since 2002. Last year, HAGL came under Witness published a report ac- cusing the rubber giant of ille- gally logging outside concession areas and being in possession of at least 47,000 hectares of eco- nomic land concessions – al- ChinaActivistMissingAfterTryingtoHelpStrikingWorkers John Ruwitch A prominent Chinese la- bour activist has been missing and his wife suspects he was detained by state security agents after try- ing to help workers involved in China’s biggest strike in years organise their case. Zhang Zhiru was last heard from when he spoke to his wife, Xiao Hongxia, by telephone at around noon on April 22. He told her he had been sum- moned to a meeting with state security agents from the indus- trial southern city of Dongguan. Workers at a Yue Yuen Indus- trial Holdings Ltd shoe factory complex with about 40,000 employees have been on strike since April 14 over social insur- ance payments. Labour activists say the strike, in the Dongguan town of Ga- obu, is one of China’s biggest since market reforms started in the late 1970s. “When he went out in the morning he said he was meet- ing Dongguan state security,” Xiao said by telephone from Shenzhen, where Zhang lives. “Yesterday afternoon, and at night when it was very late and he had not come home, a lot of us tried to call him, but couldn’t get through.” Zhang’s mobile telephone ap- tried to call him. The Ministry of State Security (MSS) is the Chinese equivalent of the KGB in the former Soviet Union, an intelligence-gather- ing agency that also suppresses dissent and other activities it deems threats to Communist Party rule. A man surnamed Wang who answered the telephone at the Dongguan branch of the MSS said he had not heard of Zhang’s possible detention. “Nothing wrong” Zhang had been closely fol- lowing the Yue Yuen strike and was working with other activ- ists and lawyers to try to help the workers organise to press their demands. Lin Dong, a colleague of Zhang’s at the Shenzhen Chun- feng Labour Dispute Service Center, may also have been de- tained, Xiao said. Calls to the centre went unanswered. On April 21, however, Zhang and a lawyer involved in la- bour issues went to Gaobu and met several workers to discuss their options, said Wang Jiang- song, a Beijing-based labour re- searcher. “That’s why this has hap- pened,” said Wang, referring to Zhang’s possible detention. “But there was nothing wrong with what they did, trying to help the workers.” May Have Beat BOJ: Kuroda Deputy governor says Japan can withstand tax hike pain Leika Kihara B ank of Japan Governor Haruhiko Kuroda said exceed the central bank’s pro- - dence the world’s third-largest economy continues to make headway in meeting its price target. Deputy Governor Hiroshi Na- kaso added to the optimism, stressing that Japan can with- stand the pain from a sales tax as companies are increasing hiring and wages due to bright- er prospects for the economy. was actually slightly higher - rent projection of 0.7 percent,” Kuroda told a parliamentary session last week. “For now, we can say Japan is making steady progress toward His remarks suggest the BOJ year’s price forecast and main- tain its bullish projections for subsequent years in its twice- yearly outlook report due this week. But both Kuroda and Nakaso reiterated the BOJ’s readiness to “adjust policy” with addition- al monetary stimulus should risks threaten achievement of the price target. “There are various ways to adjust policy. We will decide what among these measures is appropriate depending on eco- nomic and price developments at the time,” Kuroda said. Reuters w½kwfEdkifiHwGif xif&Sm;onfh tvkyf orm;ta&;vIyf&Sm;olwpfOD;jzpfol Zhang Zhiru onf aysmufqkH;vsuf&SdNyD; xdef;odrf;jcif;cH&Edkifjcif;&SdaMumif; oHo, &Sdaeonf/ Zhang Zhiru onf {NyD 22 &ufaeY aeYv,fydkif; ZeD;jzpfol Xiao Hongxia tm; EdkifiHawmfvkHNcHKa&;at;*sifhESifh awGUqkH aeaMumif; zkef;qufajymMum;tNyD;wGif tquftoG,fjywfawmufoGm;jcif;jzpf Yue Yuen Industrial Holdings Ltd zdeyfpuf½kHrS tvkyf orm;aygif; 40ç000 yg0ifonfh {NyD 14&ufvlrItmrcHay;ajcrIqE´jyyGJtm; ulnDay;cJholwpfOD;jzpfonf/ w½kwfEdkifiHGaobu a'o&Sd Dongguan NrdKUwGif jyKvkyfcJhonfh tqdkygqE´jyyGJonf 1970 aemufydkif;wGif jyKvkyfcJhonhf qE´jy yGJrsm;wGif tBuD;qkH;jzpfaMumif; tvkyf orm; ta&;vIyf&Sm;olrsm;u ajymMum; onf/ Japan bPfOuú| Haruhiko Kuroda rS rwfvu NyD;qkH;cJhonfh b@ma&;ESpf twGif; aiGaMu;azmif;yGrItaejzifh A[dk bPf cefYrSef;csufxuf ausmfvGefcJh aMumif; ajymMum;cJhonf/ 'kwd,bPfOuú| Hiroshi Nakaso rS ukrÜPDrsm; jrifhwufvmonfh tvkyf cefYxm;rIESifh vkyfcwdk;jrifhvmrIwdkYonf a&mif;cGefwdk;jrifhrItm; usm;uefxm;Edkif NyD;pD;yGm;a&;ydkrdkwdk;wufvmjcif;jzpfaMumif; &Sif;jyxm;onf/ *syefEdkifiH pD;yGm;a&;wdk;wufrIonf ,cifESpf ESpfukefydkif;rS pwifum aES;auG; cJhNyD; wifydkYrItm; usqif;rIESifh tdrfokH; ypönf;0,f,lrIwGif a&mif;cGefrsm;wdk;jr§ifh rIwdkYaMumifh vmrnfhvrsm;wGif xyfrH usqif;EdkifaMumif; okH;oyfolrsm;u owd ay;xm;onf/ Workers protest during a strike as police stand guard at the factory area of Yue Yuen Industrial, in Dongguan, Guangdong fears that they have been scammed by an opaque and convoluted welfare payment system. Stringer/Reuters SamrangPring/Reuters tjynfjynfqdkif&maiGaMu;yl;aygif; aqmif&Gufa&;tzGJU (IFC) taejzifh AD,uferfEdkifiH Ratanakkiri a'owGif w&m;r0ifopfxkwfvkyfjcif;ESifhajrodrf; qnf;jcif;wdkYtwGuf pGyfpGJrIcHae&onfh AD,uferf&mbmukrÜPDwGif &if;ESD;jr§KyfESH xm;onfhtzGJUtpnf;wpf&yftm; pkHprf; ppfaq;rIrsm;jyKvkyfvsuf&SdaMumif; uarÇm 'D;,m;owif;rsm;u a&;om;azmfjyxm; onf/ ,refESpftwGif; HAGL onf &mbm pdkufysKd;rItwGuf ykHrSefw&m;0if owf rSwfcsufxuf ig;qrsm;jym;onfh tenf; qHk; ajr 47000 [ufwm odrf;,lcJh aMumif; NGO wpfckjzpfonfh Global Witness u tpD&ifcHa&;om;cJhonf/ IFC taejzifhvnf; 2002 ckESpfwGif pwifcJhonfh Dragon Capital Group wGif &if;ESD;jr§KyfESHcJhonfh HAGL tm; axmufyHhay;onfhtwGuf pGyfpGJrIrsm;ESSifh &ifqdkifae&jcif;jzpfonf/
  15. 15. May 1-7, 2014 Myanmar Business Today mmbiztoday.com REGIONAL BIZ 15 Myanmar Summary IndonesiatoMakeItEvenHarderforForeignMiners Clyde Russell I ndonesia’s decision to start cancelling investment trea- ties with 62 countries has passed with little comment, but the move may have a greater impact than the recent banning of mineral ore exports. Indonesia in March kick- started the process of terminat- ing all of its bilateral treaties by notifying the Netherlands that its agreement to protect and promote investment would end in 2015, and signalling that the others would end as soon as possible. The agreements, which are common between states, pro- tect the rights of investors in each other’s country, and typi- cally include clauses about fair treatment, no expropriation be repatriated. Most importantly for many investors in countries like In- donesia, with its patchy record on legal certainty, is the right of appeal to the Washington- based International Centre for Settlement of Investment Dis- putes (ICSID). Among the countries that have treaties with Indonesia are major foreign investors in- cluding China, India, Australia, Britain, Singapore and Russia. However, the United States and Japan are among nations that don’t have agreements. Why would the Indonesian government seek to end agree- ments that were designed to foster foreign investment and economic development, as well as protect Indonesian invest- ments abroad? The main argument seems to be that their time has passed and they belong to an earlier era when foreigners feared as- sets would be nationalised. The treaties are seen favour- ing foreigners over domestic investors, something at odds with the government’s drive to ensure greater control of Indo- nesia’s mineral resources. This can be seen against the backdrop of a raft of changes to Indonesian law and regulations, which among others enforced a ban on exporting unprocessed ores, mandated the building of smelters and introduced laws to force the sale of stakes to locals of foreign-owned mines. Indonesia is the world’s big- gest exporter of nickel ore and supplies about two-thirds of top buyer China’s imported baux- ite, the raw ingredient for mak- ing aluminium. London-traded nickel has gained almost 32 percent so far this year after the export ban came into force in January, with China’s imports of nickel ore from Indonesia plunging 79 percent in March from a year earlier and bauxite slumping 86 percent. Indonesia is also the world’s biggest exporter of thermal coal used in power-stations, but the impact on coal has been mut- ed so far as it isn’t subject to a ban, but foreign owners will be caught by the need to divest. The problem for many foreign investors is that they will doubt whether the need for invest- ment protection has passed. I doubt that any investor in the Southeast Asian nation would privately agree that his company would get a fair hear- ing in the legislative and court processes, especially if the op- ponent was the government or a well-connected local. It seems that the decision to end investment treaties is part of the ongoing process to ensure that Indonesia’s resources are controlled by the government, and/or domestic investors. The dispute between the gov- ernment and London-listed Churchill Mining provides a short-term impetus for the end of investment treaties. of its dispute over coal assets with the Indonesian govern- ment in February at an ICSID tribunal. The Jakarta Globe reported on February 28 that the govern- ment will appeal the decision and it doesn’t want to face the risk of paying compensation to Churchill, which the newspaper said could be as much as $1.05 billion. The risk for the Indonesian government is that it could be hit with dozens of cases in the ICSID from disgruntled foreign investors. It’s not hard to imagine In- dian or Australian coal miners challenging the rule that they have to sell half of their stake in a mine once it has been produc- ing for 10 years. Ending the investment agree- ments will mean foreign com- panies having to take their chances in Indonesian courts, a far better prospect for the gov- ernment. However, cancelling the trea- ties will take time, as some run for extended periods and have additional protection clauses once notice of termination is served. This means the Indonesian government may well have to deal with foreigners in an inter- national tribunal, but it’s a safe bet they will play for time if this is the case. The trend still appears clear, Indonesia is doing all it can to get control of its natural re- sources from foreign investors. Clyde Russell is a Reuters col- umnist. The views expressed are his own. owåK½dkif;wifydkYrItm; rMumao;rDu wm;jrpfvdkufonfh tif'dkeD;&Sm;EdkifiHonf EdkifiHaygif; 62 EdkifiHESifh &if;ESD;jr§KyfESHrIpmcsKyf rsm;tm; zsufodrf;&ef qkH;jzwfvdkufonf/ tif'dkeD;&Sm;EdkifiHonf e,fomvefEdkifiH ESifh csKyfqdkxm;aom ESpfEdkifiHoabmwl pmcsKyfrsm;tm; tqkH;owf&eftwGuf owday;csuftm; rwfvtwGif;wGif ay;ydkYcJhNyD; &if;ESD;jr§KyfESHrIrsm;tm; 2015 wGif &yfqdkif;&ef vkyfaqmifvsuf&Sdonf/ tif'dkeD;&Sm;EdkifiHwGif &if;ESD;jr§KyfESHrIpmcsKyf csKyfqdkonfhEdkifiHrsm;wGif w½kwf? tdEd´,? MoaMw;vs? NAdwdef? pifumylESifh &S&Sm;wdkY jzpfNyD; *syefESifh tar&duefwdkYrSm pmcsKyf csKyfqdkxm;jcif;r&Sday/xdkodkYpmcsKyfzsufodrf; onfhtwGuf &if;ESD;jr§KyfESHxm;olrsm;tae jzifh 0g&Sifweftajcpdkuf International CentreforSettlementofInvestment Disputes (ICSID) wGif t,lcH0ifa&muf Edkifonf/ tif'dkeD;&Sm;tpdk;&taejzifh Churchill owåKwl;azmfa&;vkyfief;ESifhvnf; pmcsKyf zsufodrf;a&;twGuf oabmxm;uGJvGJrI jzihf&ifqdkifae&onf/tqdkygowåKwl;azmf a&;vkyfief;onf azazmf0g&DvwGif tif'dk eD;&Sm;tpdk;&ESifh ausmufrD;aoG;wefzdk;jzwf rI tjiif;yGm;rItm; ICSID ckHorm"dwGif tqkH;tjzwf&,l&mwGif tEdkif&&SdcJhonf/ tif'dkeD;&Sm;tpdk;&taejzifh tjcm;EdkifiH jcm;&if;ESD;jr§KyfESHolrsm;ESifh ICSID wGif xyfrHw&m;&ifqdkif&zG,f&SdaMumif;vnf; od&onf/ A miner carries baskets of sulphur stones out of the crater at the Kawan Ijen volcano, Indonesia. AngelNavarrete/Bloomberg
  16. 16. May 1-7, 2014 Myanmar Business Today mmbiztoday.com INTERNATIONAL BIZ 16 Myanmar Summary Myanmar Summary Underlying inflation surprisingly restrained in Q1 at 2.6pc Awas surprisingly tame last quar- ter showing a modera- tion that greatly lessened the pressure for a hike in interest rates this year and sent the local dollar sharply lower. A key measure of un- by only 0.5 percent in percent for the year, well below forecasts of 0.7 per- cent and 2.9 percent re- spectively. That was a big relief fol- lowing a high reading the previous quarter and sup- ported the Reserve Bank - stay consistent with its long-term target of 2 to 3 percent. “The coast is relatively for the RBA to keep rates low,” said Ben Jarman, and economist at JPMor- Wayne Cole front itself, things look relatively benign still.” Investors reacted by paring back the risk of a hike in the 2.5 percent cash rate at least until very late in the year. That in turn knocked the Aus- tralian dollar down over half a US cent to $0.9303, though local yields still remain high by rich-world standards. The anxiously awaited report from the Austral- ian Bureau of Statistics showed the headline con- sumer price index (CPI) rose 0.6 percent in the previous quarter when it climbed 0.8 percent. The annual pace did edge up to 2.9 percent, the highest since late 2011, but that was well below forecasts of 3.2 percent. The quarterly increase was driven in part by sea- sonal increases in some sectors such as health- care, transport and school fees, and by a large hike in tobacco duties. Education costs have been one of the main driv- by 5.1 percent in the year to March. That was balanced by falls in the cost of cloth- ing, furniture, holiday travel and car mainte- nance. The RBA had argued the last year was temporary and that sluggish wage growth would keep it consistent with the target band over time. “That high Q4 reading wage growth and rising unemployment,” said Mi- chael Turner, a strategist at RBC Capital Markets. “Today’s data show the underlying pulse of in- Market prices ex-volatiles services moderated.” Reuters MopaMw;vsEdkifiH aiGaMu; azmif;yGrIrSm,cifokH;vywftwGif; tHMozG,f&mxdef;csKyfEdkifcJhNyD; ,ck ESpfwGif twdk;EIef;jrifhwufjcif;tm; avQmhcsEdkifcJhNyD; jynfwGif;a':vm wefzdk;tm; avQmhcsEdkifcJhonf/ aiGaMu;azmif;yGrItm; yxr okH;vywfwGif okn'or 7&mcdkif EIef;ESifh wpfESpfvkH;twGuf 2 'or 9&mcdkifEIef;omjrifhwuf&efcefYrSef; xm;aomfvnf; okn'or 5 &mcdkif EIef;ESifh 2 'or 6 &mcdkifEIef;om jrifhwufcJhonf/ Reserve Bank of Australia’s (RBA) taejzifh aiGaMu;azmif;yG rItm; a&&SnfwGif 2 &mcdkifEIef;rS 3 &mcdkifEIef;jzifh wnfNidrf&ef arQmf rSef;xm;onf/ESpfpOf wefzdk;tm; jzifh 3'or 2 &mcdkifEIef;jrifhwuf EdkifaMumif; cefYrSef;xm;aomfvnf; 2 'or 9 &mcdkifEIef;jzifh 2011 ckESpfaemufydkif; tjrifhqkH;taejzifh a&muf&SdcJhonf/ aiGaMu;azmif;yGrIrsm;onf jynfolUusef;rma&;?o,f,lydkYaqmif a&;? ausmif;vcESifh aq;&GufBuD; tcGefwdkYaMumifhjzpfNyD; ausmif;p&dwf rsm;onf rwfvtwGif; 5 'or 1 &mcdkifEIef; jrifhwufcJhonf/ odkY aomf t0wftxnf? y&dabm*? tm;vyf&uftyef;ajzp&dwfESifh um;jyifqifrIp&dwfusqif;rIwdkY aMumifh aiGaMu;azmif;yGrItm; xdef;odrf;Edkifjcif;jzpfonf/ Mark Felsenthal and Linda Sieg U S President Ba- rack Obama as- sured ally Japan last week that Washing- ton was committed to its defence, including of tiny isles at the heart of a row with China, but denied he had drawn any new “red line” and urged peaceful dialogue over the islands. Obama also urged Ja- pan to take “bold steps” to clinch a two-way trade pact seen as crucial to a broad regional agreement that is a central part of the US leader’s “pivot” of mil- itary, diplomatic and eco- nomic resources towards US and Japanese trade negotiators failed to re- for Obama and Prime Minister Shinzo Abe to shake hands on a deal at the summit, but the two leaders reported progress and ordered their teams to keep working. Obama, on the start of a four-nation tour, is be- ing treated to a display of pomp and ceremony meant to show that the US-Japan alliance, the main pillar of America’s security strategy in Asia, is solid at a time of ris- ing tensions over growing Chinese assertiveness and North Korean nuclear threats. “We don’t take a posi- determinations with re- spect to Senkaku, but his- torically they have been administered by Japan and we do not believe that they should be subject to change unilaterally and what is a consistent part of the alliance is that the treaty covers all territo- ries administered by Ja- pan,” Obama said. “This is not a new posi- tion, this is a consistent one,” he told a joint news conference after his sum- mit with Abe, using the Japanese name for the islands that China, which also claims sovereignty over them, calls the Di- aoyu. “In our discussions, I em- phasized with Prime Min- ister Abe the importance of resolving this issue peace- fully,” Obama added. Obama also said there were opportunities to work with China – which complains that his real aim is to contain its rise – but called on the Asian power to stick to interna- tional rules. “Whatwe’vealsoempha- sised, and I will continue to emphasise throughout this trip, is that all of us have responsibilities to help maintain basic rules of the world and interna- tional order, so that large countries, small countries, all have to abide by what is considered just and fair,” he said. Some of China’s neigh- bours with territorial dis- putes with Beijing worry that Obama’s apparent inability to rein in Russia, which annexed Crimea last month, could send a message of weakness to China. Obama told the news conference that additional sanctions were “teed up” against Russia if it does not deliver on promises in an agreement reached in Geneva last week to ease tensions in Ukraine. The two leaders also agreed that their top trade aides, US Trade Representative Michael Froman and Japanese Economy Minister Akira Amari would keep trying to narrow gaps in their trade talks. Abe has touted the TPP as key to “Third Arrow” reforms needed to gener- ate growth in the world’s third-biggest economy, along with hyper-easy - cal spending. Both sides have also stressed that the TPP would have strategic im- plications by creating a framework for business that could entice China to play by global rules. But the talks have been to protect politically pow- erful agriculture sectors such as beef, and disputes over both countries’ auto markets. Pointing to restrictions on access to Japan’s farm and auto sectors, Obama said: “Those are all issues that people are all famil- iar with and at some point have to be resolved. I be- lieve that point is now.” Reuters Pedestrians walk through a laneway lined with boutiques and street cafes in central Melbourne, Aus- tralia. 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