Myanmar Investment & Industry Information. Weekly News. Apr 19-25, Gunhong International

Transcription

1 Myanmar Investment & Industry Information Weekly News Apr 19-25, 2014 Gunhong International 1

2 1. Agriculture, Livestock & Fishery UNIDO to Help Myanmar Marine Products Processors A worker sits near fish at Sanpya Market, the biggest fish market in Yangon. The United Nations Industrial Development Organisation (UNIDO) will help eight out of 116 marine products processing factories in Myanmar to process high-quality products for export to European Union and American markets, Tin Hla, adviser to Marine Products Processors and Exporters Association, told local media. Twenty out of 116 factories have already got the licence to export their products to EU markets while most of them export to neighbouring China. Total proceeds from the export of marine products during the fiscal ending on March 31 were $530 million against the target of $700 million and the shortfall was attributed to the depletion of fish stocks in Myanmar waters and unsuccessful operations due to lack of commercial viability. Source:Myanmar Business Today,24 April 2014 Bean prices surge due to lower yields The prices of beans and pulses has been on the rise since early April due to a reduced crop yield this year and strong demand from India, according to traders from the Bayint naung Wholesale Centre. 2

3 Traders in India continue to buy up bean supplies in bulk following the Thingyan new yearperiod, with some purchases even taking place even during last weeks public holiday. Buyers from India are continuously purchasing beans here. This year s crop has also dropped. So bean prices won t go down. Instead, it s creeping up, said Tun Lwin, chairperson of beans and sesame seed traders association. On April 4, the market price of a tonne of green mung bean was around Ks 570,000 (US$ 570). A week later, the price went up to Ks 655,000 (US$ 650). The price of pigeon pea also rose to Ks 645,000 (US$ 645), according to wholesale traders. The purchase price of beans is also going up in rural areas. A 60-viss (97 kg) bag of green grams used to cost about Ks 90,000 (US$ 90) last year but it is now Ks 102,000 (US$ 102). A 60-viss bag of mung beans also rose from Ks 480,000 (US$ 480) last year to Ks 630,000 (US$ 630) this year. Source : Eleven Media, 23April Economy Myanmar to submit for EITI membership The Myanmar government is applying for membership of the Extractive Industries Transparency Initiative (EITI) and will submit its application in the first week of May. EITI is a global coalition of governments, companies and civil society working together to improve openness and accountable management of revenues from natural resources. In first week of May we will submit our application to the EITI International Secretariat. Reforming can be done when they give their comments. Later the EITI Board will decide whether Myanmar is recognised as a member or not, said Min Zar Ni Lin, from the Myanmar EITI Cooperation Office. EITI member countries implement the EITI Standard to ensure full disclosure of taxes and other payments made by oil, gas and mining companies to governments. 3

4 This is based on the idea that a country s citizens must be able to benefit from a country s natural resources. Therefore payments are disclosed in an annual report that allows citizens to see for themselves how much their government is receiving from companies involved in mining, oil and gas or other extractive industries. To become a member EITI, the government needs to explain clearly how it aims to implement EITI standards of transparency and accountability around the extraction of natural resources such as oil, gas, minerals and even timber. This must be done in full cooperation with private companies, civil society and government bodies. At present, 23 countries around the world follow the EITI Standard and 16 are members of EITI. For EITI member countries, citizens must be able to enjoy the benefits of the country s resources. Source: Eleven Media,24Apr Electric Power Hydropower project in Rakhine back on track Saidin waterfall where suspended Saidin hydropower project dwells The building of Thahtay hydropower project in Thandwe is back on track after projects in Rakhine State were suspended due to geological issues. 4

5 Thahtay hydropower project is located in 12 miles North West of Thandwe and will generate power from water flowing from the Rakhine mountain range. The electricity will supply Taunggok, Ma-i, Kyaukpyu, Ann in Thandwe district. At present, 34 percent of the hydropower plant has been completed while more works, including digging a reservoir, tunnels and inserting a permeation-proof wall on the primary dam foundation are underway. The geological condition around Rakhine State is prone to landslides in rainy season due to the unreliable solidity soil and rock layers. The base stone is also a problem so more permeationproof walls are necessary to protect leaking at the bottom of the dam, costing more time and expenses. There is even danger in digging the reservoir because of the stone condition and greater care is being taken in building tunnel that risks collapse. Other hydropower plants under construction in Rakhine State such as Ann Chaung, Saidin and Laymyo are still suspended pending a survey. Thahtay hydropower project will provide 111 Mega Watts and can generate 386 million Kilo Watt hours on an average annual basis. Attempts will be made to distribute electricity to Taunggok Township and Thandwe towns in June while the plants within the region are looking to be completed in December. Source; Eleven media,24apr2014 5

6 Myanmar to sign energy contracts in May Myanmar says it will sign production sharing contracts for onshore energy exploration next month. Energy companies rambling into Myanmar following onshore auctions. UPI/Gary C. Caske NAYPYITAW, Myanmar, April 24 (UPI) -- Production sharing contracts for energy companies tasked with exploring Myanmar's onshore reserves should be signed in May, a planning official said Thursday. More than a dozen blocks for onshore development were awarded to international energy companies during an October auction. Khin Khin Aye, director of energy planning at the Myanmar Ministry of Energy, said the government was working according to normal procedures. "We will sign the production sharing contracts in the middle 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. Human rights groups have said it was those sanctions that brought about reforms in the first place. Last month, the government awarded some of the biggest energy companies in the world with exploration contracts for frontier territory off the Myanmar coast. The first barrel of oil was exported 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 6

7 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 natural gas. Source : UPI, 24April2014 Old power grids cause frequent blackouts Photo shows power lines seen in Yangon Increased power cuts in populated areas of Yangon and Mandalay are due to the old power grids that have been in use since the British colonial era. The Ministry of Electric Power says it will be installing new transformers to reduce power outrages across the country but also blames increasing demand during the hot season. The major causes of power cuts are unbalanced load and increased power demands in the hot season, said Tun Gywe, deputy chief engineer of Yangon City Electricity Supply Board (YESB). Currently 500 MW of electricity is generated by gas-fired power plants and another 1600 MW by hydro power plants. The country s power consumption has increased by about 15 percent annually over the last few years. 7

8 We are making efforts to avoid power cuts during this summer at a time when the ministry has increased electricity fees, said Myint Aung, managing director of the ministry of electric power. It had achieved power generation capacity of 2000 MW, he added. Frequent power cuts continued occur shortly after the ministry announced increased power fees earlier this year, leading to public criticism over the poor quality of service. Power cuts have caused people additional expenditures. People criticised the ministry s double hike in electricity bills. Now due to frequent power blackouts, I have to buy charcoal and candles, said Ye Win who resides in Insein Township. The ministry has pledged that it is making efforts to ensure regular power distribution, insisting that water shortages in dams and reservoirs during the summer months also reduces the power generation for hydro-power plants. The ministry has increased electricity fees due to losses. The new move will have impact only on the large-scale industries, said Aung Khaing, YESB chairman.this, however, has not deflected public anger over the poor service provision since the hikes came into effect. Source: Eleven Media,24Apr Finance Credit Bureau Delayed by Second Thoughts About Foreign Stake 8

9 RANGOON Although financiers in Burma have been trying since 2012 to form the country s first credit bureau, concerns about how much foreign involvement in the process should be allowed have delayed their efforts, bankers said this week. The Central Bank of Myanmar aims to form the credit bureau to allow lenders to check the backgrounds of prospective borrowers, with assistance from the Credit Bureau Singapore, according to Ye Min Oo, the managing director of Asia Green Development Bank. Though the Central Bank of Myanmar and bankers have been trying to form a Myanmar credit bureau since then [2012], now it s been delayed by organizers because the CBM is having second thoughts about how to form it. [It is] considering whether or not to allow foreign participation, he said. Under the initial agreement made in 2012, the Credit Bureau Singapore was to take a 40 percent stake in shares of the yet-to-be-formed bureau, and Burma s Central Bank, along with domestic private lenders, were to take the remaining 60 percent. With this credit bureau, the Central Bank of Myanmar must participate, and private banks too, so now it s been delayed because of the CBM s second thoughts on allowing foreign contribution, Ye Min Oo said. Phone calls by The Irrawaddy to the spokesperson for the Central Bank of Myanmar went unanswered on Thursday. A credit bureau collects information from a range of sources to provide consumer credit information on individuals, which is used for a variety of purposes, including determining loan eligibility. Credit information, such as a person s previous loan performance and bill-paying habits, is used to predict future behavior and gauge credit worthiness. In Burma, proponents hope the bureau will help boost lending to people who otherwise would be denied loans due to their inability to meet the collateral requirements currently in place by banks as a form of insurance against defaults. Zaw Lin Htut, deputy managing director of Kanbawza Bank, said that in addition, Burma s banking sector needed to form the credit bureau before the government would allow the issuance of credit cards by private banks in Burma. It s difficult to collect customers credit history without a credit bureau, so we need to form a kind of bureau first. I heard that the government has been trying to form this, but it s been delayed. If we have a bureau, it will be easy to issue credit cards, he said. 9

10 If we have this credit bureau in Burma, we can get history information on people about whether they can be trusted to pay back loans. We can check out information through the bureau, that s why bankers have been trying to form this bureau, but I have no idea why the Central Bank of Myanmar is delaying its formation, Zaw Lin Htut added. Acceptance and use of credit cards in Burma remains limited, and only a few major hotels and shops that cater to foreign tourists will even consider taking Visa or MasterCard, much less cards issued by the Japan Credit Bureau (JCB) or China Union Pay all of which have had the green light to do business in Burma since October Despite the Central Bank s reluctance to give consumers credit cards, the Myanmar Payment Union (MPU) which includes 14 of Burma s 19 privately owned banks is moving forward with plans to work together with Japan s JCB to expand its network of domestic debit-card users. Source:Irrawaddy news,11 April 2014 Private banks open more branches A total of 366 private bank branches have opened in Myanmar since 2011 when the government initiated a series of political and economic reforms. The Central Bank of Myanmar is cooperating with World Bank and international organisations like International Monetary Fund Organisations to modernise financial services in Myanmar. During March 2011, the total number of private bank branches numbered only 292. The number has grown to 658 by January The Central Bank of Myanmar is working together with Daiwa Institute Research and JICA to modernise payment and settlement systems. The IMF, German International Cooperation, Central Bank of Malaysia and Central Bank of Thailand are also helping. Source : Eleven Media, 22April

11 IRD launches special taxation office A taxation office located on Pansoden Street in Yangon (Photo-EMG/ Aung Kyaw Htet) The Internal Revenue Department (IRD) has launched a taxation office on April 1 to improve tax services for large businesses and corporations. Experienced tax officers have been hired to provide high quality services at the newly opened Large Taxation Office, which will work together with the taxpayers to provide accurate information on filing taxes. The office will focus on large income businesses working in energy, construction, airlines and communication sectors. They classify large businesses under the rules and regulations of the IRD such as company s capital, total income, and taxes from previous years. The IRD has set a May 30 deadline to contact companies that need to pay taxes. Necessary services will be provided in accordance with taxation law. Kanbawza Bank, Myanmar Brewey, International Beverages Trading, Myanmar CP Livestock and Shwe Taung Development, paid the highest amount of tax over the fiscal year. The tax evasion will be charged under Section 46 and 47 of the current income tax law and Section 21 and 22 of the commercial tax law. Section 48 of the income tax law and Section 23 under the commercial law describe how to deal with tax corruption.the government formed the Tax Scrutiny Board last May to check on tax collection and fiscal responsibly meets international norms. Source: Eleven media,24apr

12 5. Foreign Investment Foreign investment in Myanmar totalling over US$46 billion Hotel project invested by Vietnam (Photo - EMG) Myanmar recorded US$4.1 billion in foreign investment for fiscal year , tallying the total investment from 34 countries to US$46 billion, according to Directorate of Investment and Companies Administration. The number of countries invested in Myanmar increased by two from 32 in the previous fiscal year. Some 50,571 jobs were created by December due to the inflow of foreign capital. Foreign investment projects include energy, petroleum and natural gas, commodities, mineral extraction, hotel and tourism, property development, livestock, fisheries and agriculture. Last year saw a steady flow of investment being channelled to the production of commodities, said the Myanmar Investment Commission. China ranks first with more than US$14 billion in investment, followed by Thailand (US$10 billion) and Hong Kong (US$6 billion). Source: Eleven Media,20Apr

13 Right local partner key for Thai SMEs looking to Myanmar From left, Thepchai Yong, Group Editor-in-Chief at Nation Multimedia Group, Siriporn Nurugsa, executive director, Thai Overseas Investment Promotion Division, Thailand Board of Investment, Manop Sangiambut, executive vice president and head of Internation Thai small and medium-sized enterprises looking to establish a footprint in Myanmar should find the right local distribution partners, and their products should not be dependent on the country's currently underdeveloped infrastructure, according to experts in doing business there. Speaking at the second session of the "Thailand-Myanmar Trade Investment Relations in the Age of AEC" seminar, Michael Lim, chairman of Today Group Myanmar - a leading marketing communications and media business network - said enterprises should understand Myanmar people's behaviour before selling their products in the market. In his view, Myanmar citizens are loyal to brands, and especially to products from Thailand, therefore Thai SMEs need to build up brand efficiency before penetrating the market. He suggested to SME members of the audience that they should find reliable local partners for distribution, rather than relying on border traders or cronies close to those with influence among the military, as proper distributors in Myanmar can access more consumers, which helps generate healthy revenue for Thai businesses. Apart from brands and strong distribution partners, Thai producers should maintain prices and quality in order to ensure sustainability in Myanmar, he added. Lim also recommended that SMEs wanting to do business in Myanmar should have good logistics and good public relations, and should understand what kind of media best access 13

14 Myanmar consumers. Social media has become increasignly powerful in communicating with local consumers, he said. Manop Sangiambut, executive vice president and head of International Banking Business at Siam Commercial Bank, said that although Myanmar was a potential market for Thai operators, there were risks involved in doing business there, too. Enterprises should, therefore, have strategies in place to achieve their business goals, while at the same developing tactics to defend against inherent risk. SCB, which has a representative office in Myanmar, sees consumer products and hotels as the first two opportunity businesses for Thai operators in the country, he said. Consumer products are a basic business with good prospects because they do not rely on infrastructure problems in Myanmar, which still faces power-supply issues. At the onset of doing business there, firms' financial costs should not be too high and they should have not to rely heavily on transportation, the executive said, adding that Thai operators should also consider the joint-venture model in order to reduce costs involved in renting office buildings. Manop said that Thai enterprises not yet considering Myanmar, should start thinking of penetrating the market because gross domestic product is set to grow by 7-8 per cent per year, while monthly per capita income will climb to US$200 (Bt6,470) in the near future, which will boost consumption and the need for more Thai goods. Siriporn Nurugsa, executive vice president of Thai Overseas Investment Promotion Division of the Board of Investment (BoI), told the event that that the agency had to broaden its role from inbound foreign direct investment to include outbound FDI, in order to deal with the trend of overseas investment by Thai companies. The BoI needs to prepare investment privileges and provide information to serve the trend of Thai companies in the manufacturing sector that are planning to set up plants abroad, especially in Myanmar, she said. "Thai firms in the manufacturing sector have to go outside [the Kingdom] to find lower-cost resources and labour, and Myanmar is one such presence for them," she added. Thailand's western neighbour will be changing its status from that of an agricultural country to that of an industrial country in the next years, and its government has announced the creation of 1 million jobs by the end of this year, she pointed out. 14

15 The move by the Myanmar authorities - via the foreign investment law and the Myanmar Investment Commission - in opening up the country to more foreign companies presents a good opportunity for Thai businesses, said Siriporn. Source : The Nation, 23April2014 ASA International Starts Myanmar Operation; Eyes $8m in Loan Portfolio by 2016 Women make brooms as part of MFI-funded home-based income generating activities at Chaung U village in Myanmar. ASA International (ASAI), one of the largest microfinance institutions in the world, has launched its operation in Myanmar, the organisation said. ASA Microfinance (Myanmar) Ltd, an affiliate of ASAI, launched its operation in Myanmar last month following its approval from the Directorate of Investment and Companies Administration (DICA). ASA International Holding Ltd entered into an agreement with the United Nations Capital Development Fund (UNCDF), under which UNCDF will provide grants of $2 million for greenfield operation in Myanmar for the next three years. ASAI will be providing $1 million as equity and $2-2.5 million as loan to ASA Microfinance (Myanmar) Ltd by 2016, the microfinance agency said. By 2016, about $8 million loan portfolio and $0.8 million savings balance is projected, it added. 15

16 We hope that our intervention in Myanmar will breakthrough in the poverty reduction of Myanmar which is complement to the Millennium Development Goal, Faridur Rahman, general manager of ASA Microfinance (Myanmar) Ltd, said. He said ASA intends to introduce its cost effective and sustainable microfinance model in different parts of Myanmar, where 50 percent of the service areas will be semi-urban and the rest rural. In the next three years we would like to set up 45 branches in Yangon, Bago, Mon, Ayeyarwaddy, Magway and Mandalay and provide microfinance services to 54,000 clients, Faridur said. The mission ASAI Myanmar is poverty reduction through economic empowerment by ensuring access to financial services to the underprivileged community of Myanmar. The eventual goal of the organisation is to reach poor and low income household with the services of microfinance sustainably, he added. Faridur said the company is going to open ten branches in peri-urban areas of Yangon soon. ASA International is a microfinance holding company and registered in Mauritius and the Netherlands. Currently, ASAI is operating in six countries in Asia and Africa with nine different entities through greenfielding, the company said. As of March 2013, ASA served about 4.9 million low-income households where more than 90 percent of the clients were female. Its loan portfolio stands at over $705 million while deposit is at $341 million. Source:Myanmar Business Today,21 April 2014 Mitsubishi Corporation Enters Elevator Business in Myanmar Mitsubishi Corporation teams up with affiliates of Serge Pun & Associates to distribute Mitsubishi Electric elevators in Myanmar Mitsubishi Corporation (MC) has entered into an agreement with First Myanmar Investment Co., Ltd (FMI) and Yoma Strategic Investments Ltd. (YSI)* for the purpose of establishing a joint venture company, MC Elevator (Myanmar) Ltd (MC Elevator), to provide, inter alia, technical 16

17 services and solutions, installation, testing and commissioning and import and supply of elevators, escalators and related products in Myanmar. FMI and YSI are part of the enlarged group of one of Myanmar's leading corporations, Serge Pun & Associates (Myanmar) Limited (SPA). The new company, MC Elevator, is scheduled to start operations this summer, pending completion of set-up procedures required in Myanmar. MC will hold 60% of shares, while FMI and YSI will each hold 20%. Urban development in Myanmar has gained remarkable momentum in recent years, following the government's moves towards democratization. This has led to increased foreign investment, particularly in the construction and real estate development sectors, where demand for elevators and escalators is projected to also grow. MC has been applying its trading functions in collaboration with SPA group companies for the distribution of Mitsubishi Electric elevators, escalators and related products in Myanmar since The aim of establishing MC Elevator is to further expand this business by strengthening capabilities for more effective customer support and maintenance services on the ground. MC intends to continue collaborating with Mitsubishi Electric in the elevator and escalator business, particularly in developing countries with high growth potential such as Myanmar. Source : JCN Newswire, 22April2014 Foreign investment up US$2 bn from January Myanmar Telecommunication Tower in Yankin T/S 17

18 Foreign direct investment to Myanmar for the fiscal year, ending March 31, has reached US$ 4.1 billion, with an increase of US$ 1.9 billion in the first three months of Most of the investment has gone into transportation and telecommunication industries, according to the Ministry of National Planning and Economic Development. According to the Directorate of Investment and Companies Administration (DICA) the total amount of foreign investment since Myanmar opened its markets in 1989 has reached US$ 46 billion. Most foreign investment goes into oil and gas extraction, mining, hotels and tourism, transportation and telecoms, livestock and fisheries, agriculture and construction. Nearly 50 percent of foreign investment is targeted at Myanmar s lucrative energy sector. However, in the first three months of 2014, over US$ 1.1 million was invested in transportation and telecoms. Currently 34 countries are investing in Myanmar, with China ranking first, followed by Thailand. The Myanmar Investment Commission scrutinises foreign investment with the aim of providing more jobs for citizens. The MIC created 153,456 jobs between 2011 and Source: Eleven Media,24Apr

19 6. Hotel & Tourism SCCP to invest in three-star hotel project Foreign investment going into hotel construction. (Photo-Aung Myo Thant/EMG) Singapore-based SCCP Lakeside Co will invest in a three-star hotel project in Hlaing Township in Yangon. Myanmar Investment Commission (MIC) gave the green light to the company on April 10, after approval by respective regional and government ministries. At the meeting, the MIC also granted approval for a 14-storey hotel project which will be run under the Myanmar Citizen Investment Law. The year 2014 has seen a steady inflow of foreign investment in Myanmar s manufacturing and garment industry as well as hotels and tourism. The Ministry of Hotels and Tourism has counted 26 new hotel projects being initiated with foreign investment, providing an additional 3,800 serviceable rooms across the country. Source: Eleven Media,18Apr

20 Mandalay leads tourism sector with 302 new hotels Mandalay Region leads other cities and tourist destinations in Myanmar with 302 new hotels approved, according to data from Ministry of Hotels and Tourism. Out of 960 hotels granted operating licences across Myanmar over the last year, 302 have been opened in Mandalay while 238 have opened in Yangon Region. The data released by the Ministry of Hotels and Tourism between July 2013 and February 2014 shows that 1,102 travel firm licenses, 190 transportation licenses and 3,341 tour guide firm licenses have been issued across the country. Over two million tourists visited Myanmar in 2013; a figure that has been consistently doubling every year since the government initiated a series of political and economic reforms in This year is expected to attract 3 million visitors. Many hotels are situated in popular cultural zones and tourist attractions with 90 percent of all hotels in Mandalay, Yangon, Ayeyawady, Bago regions, Shan State and Rakhine State. Local investment in hotels and tourism is up by US$ million by March Source : Eleven Media, 21April2014 Mandalay leads tourism sector with 302 new hotels Mandalay Region leads other cities and tourist destinations in Myanmar with 302 new hotels approved, according to data from Ministry of Hotels and Tourism. Out of 960 hotels granted operating licences across Myanmar over the last year, 302 have been opened in Mandalay while 238 have opened in Yangon Region. The data released by the Ministry of Hotels and Tourism between July 2013 and February 2014 shows that 1,102 travel firm licenses, 190 transportation licenses and 3,341 tour guide firm licenses have been issued across the country. 20

21 Over two million tourists visited Myanmar in 2013; a figure that has been consistently doubling every year since the government initiated a series of political and economic reforms in This year is expected to attract 3 million visitors. Many hotels are situated in popular cultural zones and tourist attractions with 90 percent of all hotels in Mandalay, Yangon, Ayeyawady, Bago regions, Shan State and Rakhine State. Local investment in hotels and tourism is up by US$ million by March Source: Eleven Media,21Apr2014 Foreign hotels to be completed by mid-year Shangrila buildings invested by Singapore (Photo -Aung Kyaw Htet) Foreign hotel projects currently under construction will be inaugurated by mid year according to the Ministry of Hotels and Tourism. Most of the projects, including international hotel chains, are located in Yangon, according to Director General Aung Zaw Win. Novotel Hotel will be opened in the mid year. Others such as Center Point and Shangrila will soon follow too, Aung Zaw Win said. New hotels will provide up to 2000 new rooms which will be available to cater for growing numbers of tourists expected in the coming high season. 21

22 A project co-owned by the Yangon City Development Committee plans to renovate colonial-era railway offices near Lahapyin market. Another hotel complex and business centre being built by Vietnamese company is also in the works. According to the ministry s press release in April, there are more than 900 hotels in the country among which 40 hotel buildings are foreign investments worth US$ 1.7 billion. Myanmar currently has only five five-star hotels in Yangon, according to the Myanmar Hotelier Community. As the country s tourism begins to boom, the price of hotel rooms has been rising high above neighbouring countries, mainly due to higher demand. There has also been criticism raised by tourists that the value of service is still weak relative to the high prices of accommodation. Source : Eleven Media, 23April2014 Mon State to promote ancient cities to boost tourism Ancient Cities being excavated in Winka Ancient Research Region at Kalatha Mountain in Mon State (Photo/EMG) MAWLAMYINE - Archeologists will begin excavating ancient cities in Mon State to promote cultural tourism in the region, according to a member of the Mon State Government Committee. 22

23 Mon State is rich in ancient heritages. That s why the government will excavate the ancient cities as much as they can for development of hotels and tourism industry, said Min Nwe Soe, regional minister for economic development. Mon State has many of ancient sites of archeological interest such as Kyaik katha in KyaiktoTownship, Yakan Thema, Taikkalar and Winka ancient cities around the foot of Kalatha Mountain. We are aiming for excavation of Thuwunna Bumi Ancient City as the next generation will enjoy the benefits earning from hotels and tourism industry and we will show these destinations to visitors, said archeologist San Win who is in charge of excavating the ancient City. At present, Kyaik Htee Yo region in Kyiakto Township is only ancient cultural zone in Mon State and a popular tourist attraction. Source : Eleven Media, 23April IT & Telecommunication No plan to cancel CDMA network: Union Minister of Ministry of Communications Emergency System for CDMA network shown at ICT show, Convention Hall (Photo EMG) Myanmar has no plans to cancel the Code Division Multiple Access (CDMA) network for mobile phones, said Myat Hein, Union Minister, Ministry of Communications and Information Technology. 23

24 The country presently has the CDMA as well as other mobile networks, such as GSM, WCDMA, CDMA 800 and CDMA 450. There isn t any plan to cancel the use of CDMA mobile network - only has plans for enlarging it, said Myat Hein. Several mobile networks are currently in operations such as GSM, WCDMA, CDMA 800 and CDMA 450. Therefore, there is difficulty like this tower is able to connect just GSM network and not CDMA, he added. Previously, only CDMA phones had better connection in rural areas. Later, network towers for GSM mobiles have been built across the country, hence the GSM network becomes larger and has more users. As the CDMA 450 has no internet service and the CDMA 800 has cancelled the internet service, their users flock to rely on the GSM network which boasts about its compatibility with more choices of handsets. Source : Eleven Media, 20April2014 Telenor plans to provide video call services Telenor is preparing to provide online and mobile services formaking video calls and will also launch Multimedia Messaging Service (MMS), sources from Telenor Myanmar say. 24

25 The video calls are not presently available in Myanmar and the mobile phone users are demanding for video telecommunication services, allowing two-way communications with live video and audio. The voice call and video call services will be included in our SIM cards. We will use current terrestrial internet lines and if there was not enough bandwidth, we will expand the internet lines. The internet speed will be averagely 1 Mbps but the speed will depend on location. We will announce the call charges just before we sell the SIM cards, Telenor Myanmar CEO Peter Furberg said. Although the call is made at live core network, we planned to give the service on mobile phones too, an engineer from Telenor Myanmar explained. The users have to use internet calling service such as Tango, Viber and Skype to make video calls. Should they call from mobile devices; the phones have to have the function installed. The 3G service is required to enable the mobile phones making video calls. The online video calls can be made anywhere with internet access. Communications and Information Technology Minister Myat Hein made a first video call on April 7 via Telenor Myanmar s live core network using a Huawei handset. The call was from Telenor Data Centre located about 22 kilometres from Yangon to Telenor Myanmar s headquarters in Bahan Township. The calling and internet surfing used the 3G network with the speed of 5Mbps. Source : Eleven Media, 20April2014 Yangon Online Delivers Amazon, ebay And Apple To Myanmar The website of the Yangon Online Store resembles an early, very pared-down Amazon or ebay site. The familiar categories of merchandise for sale include books, electronics, computers, sports equipment, health & beauty, clothing, automotive, and Apple products. Look a little closer and you will notice that only a few items have prices listed and that there s no way to pay for them online; there are no credit card or PayPal logos. Nor is there the option that 25

26 many Indonesian, Thai and Vietnamese shopping sites offer: payment by direct transfer from the customer s bank account to the website s bank. The explanation is that all payments are conducted in person in Yangon Online s shiny glassfronted brick-and-mortar shop on Yaw Min Gyi St. in Myanmar s capital. The shop is about a block from the cloth and jewelry vendors of traditional Bogyoke Market. The Yangon Online service is the four-year-old brainchild of a Burmese living in the United States. Would-be customers first browse the site and decide what they want to buy. Since the products have been culled from Amazon and ebay sites and Apple stores in the United States, customers can phone the Yangon Online shop and ask about buying Amazon and other online products not listed on the Yangon Online Store website. (Yes, obtaining an iffy internet connection in your home is still very expensive in Myanmar but time in a neighborhood internet shop runs around 30 cents an hour.) Eventually, though, customers must come into the Yangon store to put down a cash deposit of 50% of the total price. Yangon Online reps in the U.S. buy the items and package them for overseas shipment. Typically, delivery takes two or three weeks. Customers pay the remaining amount in cash when they come to the shop to pick up their order. Above machines, iphones and golf clubs A $50 Coach handbag from Amazon, for example, is shipped free within the United States but Yangon Online s delivery service to Myanmar plus taxes will add another $35 or so (or its kyat equivalent). A $599 fifth-generation iphone in the United States ends up costing $700 by the time it arrives in Myanmar (aka Burma). A $50 T-shirt ends up costing $67 on delivery. Naturally, the extra fees depend a lot on weight and size of the item. I found this business interesting if just because the Yangon Online website seems to be a window on what rich Burmese view as necessary luxuries, although of course expats are Yangon Online customers as well. Perhaps I should say it s a window on wealthy capital dwellers.it s a little strange that there isn t a Yangon Online branch in Mandalay, given that so many conspicuously consuming mainland Chinese reside in the northern second city. There might be no other place in the country to buy digital lasers, pipe threaders, GPS devices, sound cards, engineering software, golf clubs and tennis racquets. It would be a pain and big expense to haul some of these products on a plane from Thailand. But abs workout sytems? Lancome serum booster and Beyoncé Parfum spray? $700 for the latest iphone model? A $67 T-shirt? Who needs that stuff? The clerk in the shop told me that cosmetics, perfume and clothing are the most popular purchases. 26

27 I hasten to add that there are plenty of late-model smartphones, ipod accessories, computers and digital cameras for sale in Yangon and Mandalay. A few people obviously want and can afford very recent specific models. The iphones I have seen for sale in downtown Yangon are probably grey market or second-hand from Thailand. (Can we abandon the theme of Myanmar as some kind of hermit kingdom isolated from world events, technology, trade and Walt Disney? There are at least 2 million Burmese working in Thailand alone. Tens of thousands in Singapore and Malaysia. They go back and forth all the time, sometimes daily. They buy stuff to bring home.) In smaller towns and cities, small shops with glass-covered displays of mobile phones are favorite browsing hangouts. A surprising number of not particularly affluent Burmese have Blackberrys and the newer cheap Chinese-brand smartphones. Phones or rather, SIM cards are still expensive. Burmese (though not expats) can get one for less than $100 nowadays but I have met many not particularly rich Burmese that spent $300 just a few years ago for a basic phone or spent thousands several years before that. Consumer spending isn t now much of a growth engine in Myanmar. Annual per capita income is around $1,000. Government spending accounts for something like 25% of GDP. But maybe Yangon Online is a signal of future directions. Source: Forbes /Myanmar Business Today,22Apr2014 NSN opens two offices in Myanmar to manage 3G network of Ooredoo Nokia Solutions and Networks (NSN) has opened two new offices in Yangon, the former capital of Myanmar. The decision will assist NSN to support 3G network roll out of Ooredoo. NSN is currently supplying its core and radio infrastructure to Ooredoo for its 3G network in Myanmar. The new offices will enable NSN to work closely with domestic telecom operators who want to provide network coverage to a vast majority of users across the country. Raman Vattumalai, country head of Myanmar at NSN, said: The decision to open modern offices in Yangon is in line with our aim to help the government in providing telecom network coverage across 90 percent of Myanmar by

28 NSN s twin facilities in Myanmar will provide employment opportunities to local youth and empower the people of the country. Source : Telecom Lead, 23April2014 Myanmar s telecom dividend As Myanmar starts to see the development of its telecom sector after decades of inactivity, the investments by multinational businesses are creating an opportunity for new jobs for skilled Myanmar workers, especially those who have some kind of experience abroad. Telenor of Norway and Ooredoo of Qatar have promised to fill many job opportunities, and their arrival has energised people since they received their mobile licences last year after a hotly contested bidding process. Both operators have been hiring many local employees in recent months, while other telecom businesses have been setting up shop in Yangon to support future development of the industry. Ericsson, one of the world s largest telecom infrastructure providers, estimates that the mobile communications industry will employ approximately 66,000 full-time employees in Myanmar, with an additional 24,000 full-time jobs created in the wider economy as a result of interactions with mobile network operators. All of the new activity has led to the telecom sector topping the table of foreign direct investment in the country, with about 20% of the total, according to the Myanmar Investment Commission. Total FDI to Myanmar, which only began opening its economy to the world four years ago, is likely to reach at least $4 billion by next year, according to a commission spokesman. Telenor, which paid $500 million for its 15-year licence, has declared that it aims to provide mobile network coverage for 90% of the population within five years, while OOoredoo has already started building its 3G network. The Myanmar Investment Commission expects that more companies will enter Myanmar to support the mobile operators needs for infrastructure including towers, optical-fibre lines and other equipment. 28

29 Just last month Sweden-based Ericsson announced a framework agreement to supply a combination of 2G and 3G equipment for Telenor s mobile network, suggesting upgrade requirements would need to be met as well. We are pleased to add Ericsson to the group of global partners we will be working with as we develop the Telenor Myanmar telecommunications network, said Petter Furberg, the CEO of Telenor Myanmar. In preparation for network deployment, Ericsson said local hiring would continue over the next few months, and that those already on board were already being trained. Jan Wassenius, country manager of Ericsson Myanmar, said, We can create a robust infrastructure for Telenor that will give Myanmar citizens a rewarding mobile experience. We hope the deployment of this infrastructure will have an enormous positive impact on the economy of the country and on the lives of its citizens. In 2012, Ericsson commissioned a study to assess the potential economic impact of mobile communications in Myanmar. It estimates that the total economic impact of the mobile sector in the country will be between 1.5% and 9% of GDP over the first three years after licences are issued. In late March, Ericsson advertised job vacancies for local people, with a special focus on those with international experience. Since the middle of last year, many Myanmar nationals who have been working abroad (especially in Singapore, Thailand and Malaysia) have been returning home to pursue new job opportunities offered by foreign companies. Aye Chan Moe, an electrical engineer who works in Australia, is planning to return to Myanmar in late April and hopes to get a job with either Telenor or Ooredoo. I am applying for jobs with both telecoms as I have plans to return to Myanmar, he told Asia Focus. It s good for those of us who have work experience abroad, but conditions and salaries for foreign workers and local workers are still different in Myanmar. A lot of FDI is flowing into the country, so the government should fix minimum wages for Myanmar workers, and also workers need to push for better salaries in line with their skills. If foreign workers earn $2,000 a month, Myanmar workers should have at least $1,500, but I ve heard that in some areas, foreign and local workers salaries are quite different even though their responsibilities may be the same. 29

30 In addition to closing the salary gap, he said employers should welcome and encourage local workers creativity. Ma Khin Ye Thilar Aye, who joined Ooredoo as a marketing specialist a month ago after working as a manager in Singapore, said she was being treated equally to foreign workers at the Qatariowned company. I just came back to Myanmar because there are a lot of job opportunities awaiting us, she said. I ve received better treatment here, just like Singapore. We can learn the latest technology and can improve our abilities through work experience, so now there are many job opportunities attracting Myanmar employees. Being home is better than being a second-class citizen abroad; that s why many Myanmar employees from abroad are planning to come back. However, with foreign telecom companies offering experienced local employees more than double the prevailing salaries, local telecom companies including state-owned Myanmar Post and Telecommunication (MPT) are facing problems. One MPT employee said that when the government announced in 2012 that foreign firms could compete for mobile licences, some government employees switched to telecom companies including Jamaica-based Digicel and France-based Orange. When they failed to win bids, the employees jumped to Ooredoo and Telenor. They paid more than double the salaries to local employees; even the minimum wages started from 500,000 kyat (16,750 baht) a month, said the worker, who asked not to be named. I heard some local employees who have working experience abroad are earning $1,500 per month. Source : Bangkokpost, 23April

31 Telenor and Ooredoo to support Wiki Zero Myanmar Wikipedia page in Wikipedia Myanmar Wiki developers and the staff from Telenor are discussing to provide free mobile access to Wikipedia, the free online encyclopaedia. The project is called Wiki Zero and competitors Ooredoo have also pledged their support.organisers plan to train freelance developers to provide articles in Myanmar for free. Telenor asked for 50 articles to in initiate. Their recommendations are systematic. Ooredoo requested for 100,000 articles before their sim-card on sale. We can give 100,000 articles they want though I m afraid this would end up a perfunctory effort, said Mayar, a developer for Myanmar Wiki. There are only 30,000 articles in the Myanmar version of Wikipedia due to complications using Unicode which supports the Myanmar alphabet system. Wikipedia is the largest online encyclopaedia which provides publicly generated multi-language content for free. Source : Eleven Media, 24April

32 8. Mining, Oil & Gas Large-scale copper mining at Sabeitaung, Kyaysintaung project Sabei Mountain turns into deep hole and Kyaysin Mountain bound to follow (Photo/EMG) The mountainous landscape is fast disappearing as the mining project has been extracting about 70 tons of copper a day at Sabei and Kyaysin mountains, raising concern on environmental woes. Although the project is being billed with least environmental impacts, Letpadaungtaung Investigation Commission s report has voiced concern for harmful effects on the environment. Copper mining, jointly operated by Union of Myanmar Economic Holdings and Myanmar Yang Tse Copper, has the monthly capacity to move some eight million tons of dirt, out of which would yield about 1.5 million tons of copper ores. The ores would be smelted for the daily production of 70-ton copper. The mining revenue is estimated around US$460,000 per day at the current market price. From Sabei and Kyaysin mountains, the mine would extract eight million tons of soil containing 1.5 million tons of ores. Out of this, 70 tons of pure copper is produced daily, amounting to 2,100 tons for a month, said TheinHtun, official in-charge for Sabei and Kyaysin mountains copper mining site. A project official OhnLwinMyint said that the oxidized solution, by-product created by liquidizing the copper ores with mild acid in order to extract copper, will not be thrown away. Based on the mining regulations, the solution containing liquid copper is not allowed to be dumped. 32

33 The polluted solution contains copper, so it is precious. It cannot be brought outside. Once it is done so, ISO certificate together with our copper is depreciated. Depending on ISO certificate, we will gain more profitable price determined by London Metric Exchange. Mainly, it depends on how we can minimize impacts to the environment, said OhnLwinMyint. As the price of copper on April 18 is around US$ 6,647 per ton quoted in London Metric Exchange, the two mining operators are earning more than US$ per day. The operators are managing the mining project under contract based on production sharing agreement. The permit for large-scale mineral mining, required for the project, was granted on January 7, 2011 while the foreign investment approval was made on March 18, 2011 with the duration of 25 years to mine 6, acres located on two mountains. Sabei Mountain is presently a big hole in the aftermath of copper mining. Operators plan to level the landscape before transforming the site into a man-made lake. Source: Eleven Media,20Apr2014 US$100 million revenue per year expected from controversial Letpadaungtaung Project Myanmar Wanbao Mining Copper Limited, the chief operator of Letpadaungtaung Project (Photo - EMG) 33

34 The government is slated to receive more than US$100 million revenue per year from the Letpadaungtaung project despite the opposition from local residents. The master plan for the development of the project as well as the local community and people is being drawn up said Geng Yi, the chief director of Myanmar Wanbao Mining Copper Limited, the project operator. The government aspires for this project as the epitome of foreign investment. As we take the responsibilities for the stakeholders along with our business partner (UMEHL), the government and the local community, I m sure this project will run well. We also have the information that the government is drawing the master plan for the overall development of the local residents with the US$100 million revenue generated from this project, said Geng Yi. At the present, the MWMCL is facing with the land disputes covering 6,000 acres, therefore, it is unable to fully operate the project. The land seizure and the resettlement of the local residents are the responsibilities of the government and Union of Myanmar Economic Holding Limited U Paing. The two promised us they can handle the situation well. The government is proceeding to solve the disputes by economic, political, and judicial means. I think this project can be smoothly operated only after the problems have been solved, he added. Although the project is yet to be fully operational, the preparations for project launching have been accelerated. The environmental assessment report will be released and the Environmental Conservation and Forestry Ministry and the local authorities will check on the report compliance, said Nay Aye, the director general of the Environmental Conservation and Forestry Ministry said. Source: Eleven Media,19Apr