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PwC Myanmar Weekly Business Intelligence Issue 139 14 December 2018 www.pwc.com/mm
PwC MyanmarWeekly Business Intelligence
Issue 13914 December 2018
www.pwc.com/mm
PwC | December 2018
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PwC | December 2018
1. Weekly Key Financial & Business News
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PwC | December 2018
Weekly Key Financial & Business NewsHeadlines
More affordable housing becoming available in Yangon
YEX Project Phase-1 to start after concessional agreement signing
Central Bank Denies Huge Dollar Purchase Made to Benefit Local Banks
Myanmar to Borrow $24.3 Million from Thailand’s NEDA for Development of Mekong Economic Corridor
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Lower interest rates, collateral-free loans on the cards
PwC | December 2018
Weekly Key Financial & Business NewsHeadlines
Business confidence in Myanmar sinks as scepticism mounts
Credit bureau to be up and running within next 12 months
Govt hurries to fix regulatory issues which are the main concern for European firms
Restoration project reopens ‘best view in Yangon’
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China-Myanmar Economic Corridor a 'Win-Win'
PwC | December 2018
Weekly Key Financial & Business NewsHeadlines
Myanmar’s economy depends on Rakhines stability: trade body
World Bank downgrades Myanmar’s GDP forecast, flags rising risks
Myanmar plans to sell natural gas produced from PTTEP block mainly for local use
43% of households in Myanmar gain access to national grip
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More than 2.84 mln tourists visited Myanmar in first 10 months of 2018
PwC | December 2018 7
YEX Project Phase-1 to start after concessional agreement signing
The construction work for Yangon ElevatedExpressway project phase-1 will start only after aconcession agreement has been signed, deputydirector general Kyi Zaw Myint from the Ministryof Construction told the Daily Eleven.The ministry invited interested companies tosubmit prequalification applications for YEXProject Phase-1, not later than November 13.YEX Project Phase-1 will be jointly implementedby the Ministry of Construction and the YangonRegion government under a public privatepartnership (PPP) programme.The ministry received 12 prequalificationapplications from potential investors.Currently, 10 companies have been shortlisted.They are mostly Chinese companies while someare from France, Korea, Japan, Thailand andMyanmar.The elevated expressway connects downtownYangon, Yangon port, Yangon InternationalAirport, Mingladon Industrial Park and Yangon-Mandalay Expressway. The aim of the project is toease traffic congestion in Yangon city.
Source: Eleven Myanmarhttps://elevenmyanmar.com/news/yex-project-phase-1-to-start-after-concessional-agreement-signing
NewspapersEleven Myanmar
10 Dec 2018
PwC | December 2018 8
More affordable housing becoming available in Yangon
The Department of Urban Housing andDevelopment (DUHD) under the Ministry ofConstruction will stop new housing projects butwill allow the completion of projects currentlyunderway, said Daw Mi Mi Tin, deputy directorgeneral of the Policy and Project Section of thedepartment.DUHD is now selling completed flats this monthas well as those meant for completion in 2018-19fiscal year.In Hlaing Tharyar Township, five areas of theKyan Sit Min Housing Estate, two featuringaffordable housing and three with low-costhousing have been completed. The completedprojects offer 2372 units in 73 buildings and flatsfrom 24 buildings will be sold this month. Theunits range in size from 324 to 650 square feet.Units in the Shwe Lin Ban and Hti Laing Shinlow-cost housing projects will also be sold thismonth. In Shwe Pyi Thar Township, theremaining units of affordable housing in the ShwePyi Thar housing estate will continue to be sold.housing-2.jpgIn Dagon Seikkan Township construction work on
phase three of the Yuzana Housing Estatecontinues and is expected to be completedsometime next year.Remaining units in phase one and two, whichhave been completed, are being sold this month.Priority is being given to account holders withCHD Bank and those who have yet to draw lotseven though it is their turn to buy housing. Unitsin the Kanaung Housing Estate are also beingsold. Elsewhere, units in the Yoma HousingEstate located near Kyi Su Cemetery in SouthDagon Township, and units in the Aung Myint MoHousing Estated between Yoma Revenue Roadand Aung Myint Mo Road will be available for salein the coming year.There will be some 3000 units in the Yomaproject with sizes from 324 square feet to 650square feet. Additionally, housing projects nearthe Thilawa Industrial Zone are expected to beavailable for sale by the middle of next year.Source: Myanmar Timeshttps://www.mmtimes.com/news/more-affordable-housing-becoming-available-yangon.html
NewspapersMyanmar Times
11 Dec 2018
PwC | December 2018 9
Central Bank Denies Huge Dollar Purchase Made to Benefit Local Banks
YANGON—The Central Bank of Myanmar hasdenied claims that its purchase of more thanUS$30 million from local private banks last week,at a time when the currency was weak, was madespecifically in order to benefit the lenders.“The greenback weakened steeply that day [Dec.4]. Media reports claimed that the central bankbought U.S. dollars fearing that it would weaken.That is wrong. Secondly, the accusation that weintentionally bought U.S. dollars to benefit banksis totally inaccurate,” Central Bank of Myanmarvice governor U Soe Thein said on Monday at theMyanmar Banks Association in Yangon.The exchange rate was 1 dollar to 1,545 kyats onthe morning of Dec. 4, but the dollar hadweakened to 1,490 kyats by that evening.The central bank then bought dollars from privatebanks, causing the kyat to slump against thedollar again.At that time, private banks bought U.S. dollars forbetween 1,500 and 1,515 kyats per dollar fromoutside dealers and sold them to the central bankfor 1,570 kyats.Local private banks made billions of kyats in a
single day thanks to the Central Bank’s decision tobuy millions of US dollars from them, critics said.U Soe Thein said it was normal procedure for thecentral bank to intervene in the market to cushionthe blow.“Not every decision can be right. It depends onone’s point of view,” he said about the bank’smove.“We have to try to make a better decision, andmake the market more transparent. We also haveto bear in mind that our objective is to make aprofit,” he said.On Monday, the central bank’s referenceexchange rate was 1,561 kyats to the dollar, whilethe buying and selling prices in the market were1,552 kyats and 1,542 kyats respectively.
Source: The Irrawaddyhttps://www.irrawaddy.com/business/central-bank-denies-huge-dollar-purchase-made-to-benefit-local-banks.html
NewspapersThe Irrawaddy
11 Dec 2018
PwC | December 2018 10
Myanmar to Borrow $24.3 Million from Thailand’s NEDA for Development of Mekong Economic Corridor
Pyidaungsu Hluttaw (Assembly of the Union)approved a proposal to borrow $24.3 million fromThailand’s Neighboring Countries EconomicDevelopment Cooperation Agency (NEDA) forimplementing development projects in citiesalong Greater Mekong Sub-region EconomicCorridors.The Ministry of Construction and Karen StateGovernment will use the loan to upgrade waterdistribution and waste management in the townof Myawaddy, as well as conducting publicawareness program civil servants capabilities.“We will use $11.3 million for water distribution,$7.6 million for waste management, and $2.2million for capacity building of civil servant,’’saidU Kyaw Lin, Deputy Minister of the Ministry ofCommerce.Moreover, $900 thousand from ADB Bank will beused for Joint Spatial Development Plan tobalance development of the economic zones andindustrial zones, which will be implemented inMyawaddy, Myanmar and Mae Sot, Thailand.In order to implement the development projects,the government will hire a consultant team for
designing the projects and procurement in 2019-2020.The development project will be helpful fordevelopment for Myawaddy as well as economicdevelopment related to hotel and tourismdevelopment and industrial development.
Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/myanmar-borrow-243-million-thailand-s-neda-development-mekong-economic-corridor
NewspapersMyanmar Business Today
11 Dec 2018
PwC | December 2018 11
Lower interest rates, collateral-free loans on the cards
The Central Bank of Myanmar (CBM) will releasefresh directives on the liberalisation of thecountry’s interest rates soon after a loan datacentre is established by the newly licensedMyanmar Credit Bureau Ltd, CBM deputygovernor U Soe Thein said yesterday.U Soe Thein was speaking to the media during thesigning of an agreement between Myanmar CreditBureau and Eauifax New Zealand Services andSolutions Ltd for the use of proprietary softwareto set up the country’s first loan data centre.A five-point directive is expected to be released inmid 2019, according to U Soe Thein. “We are nowdiscussing the necessary steps and procedureswith the banks,” he said.The CBM’s directive will include possibleguidelines on lowering local interest rates, makingit more affordable for firms to take loans inMyanmar. Currently, banks pay an 8 percentinterest rate on deposits and charge 13pc forloans. The Central Bank rate is 10pc.The directive may also include further guidelineson providing loans without collateral. “We arealso considering the possibility of providing loans
without the need for collateral,” U Soe Thein said.Currently, banks require collateral beforeproviding loans. With credit profiles and moreborrower information available, lenders will bebetter able to evaluate the creditworthiness ofpotential borrowers and improve risk assessmentprocedures. Ultimately, it will enable manyentrepreneurs and small and medium enterprisesto qualify for loans.The move comes after foreign banks were givenpermission to set their own interest rate for loansprovided in foreign currencies on December 4.Foreign banks with branches in the country havebeen allowed to provide wholesale bankingservices and other financial services, according tothe CBM’s latest directive issued last month.The CBM also announced that it will allow foreignbanks to open new branches and expand in 2019.
Source: Myanmar Timeshttps://www.mmtimes.com/news/lower-interest-rates-collateral-free-loans-cards.html
NewspapersMyanmar Times
11 Dec 2018
PwC | December 2018 12
Credit bureau to be up and running within next 12 months
Myanmar will start collecting and providing creditdata after a new credit bureau opens in the next 9-12 months, after which banks will be in a betterposition to offer loans to a larger volume ofbusinesses, said U Zaw Lin Aung, chair ofMyanmar Credit Bureau Ltd.Myanmar Credit Bureau yesterday signed anagreement with US-based Equifax New ZealandServices and Solutions Ltd to establish a creditbureau and to provide a loan data service.Under the agreement, the US company will installthe needed software for the credit bureau. “After12 months, both lenders and borrowers will beable to enjoy the benefits of the new creditbureau,” U Zaw Lin Aung said.Under the credit bureau system, banks will beable to make timely, better and right decisions onborrowers and reduce their risks.Similarly, borrowers with their accounts andpaperwork in order will be able to enjoy easieraccess to funds.Myanmar Credit Bureau was formed with a 60percent stake from MB Investment Limited,which was established by the local banks, while
the remaining 40pc is held by Singapore’s AsiaCredit Bureau Holding Company.In Myanmar, businesses typically face difficultiesgaining access to loans due to the lack of a creditbureau providing data and information onborrowers’ credit history.“Currently, there is only one from credit bureau inMyanmar. In Korea, there are 5 or 6. It will be likethis later in Myanmar. However, we want to focuson making our first one successful before weconsider others,” said U Soe Thein, deputygovernor of the Central Bank of Myanmar.
Source: Myanmar Timeshttps://www.mmtimes.com/news/credit-bureau-be-and-running-within-next-12-months.html
NewspapersMyanmar Times
12 Dec 2018
PwC | December 2018 13
Business confidence in Myanmar sinks as scepticism mounts
More European businesses say they have lostconfidence in Myanmar due to concerns about theNational League for Democracy-led government’smanagement of the economy compared to the lasttwo years, a new survey shows.According to the latest survey from the EuropeanChamber of Commerce in Myanmar (EuroCham)published yesterday, a majority of firms (81percent) are not happy with Myanmar’s businessenvironment, compared with 76pc in 2017 and67pc in 2016.Almost half of the firms surveyed (45pc) said thebusiness environment has worsened over the last12 months, a significant increase from 2017(30pc) and 2016 (18pc). Falling profitability mayhave dampened confidence as only 37pc of thecompanies reported profits from their businessesin the country. In 2017 and 2016, the numberstood at 41pc and 50pc, respectively.Protectionism very clearly stands in the way ofgrowth. The government, for example, has notdelivered on its promise made last year to openup the insurance market. Around half of therespondents (48pc) said Myanmar’s economic
nationalism - a business climate which isperceived as unfavourable to foreign investments- had a negative impact on their operations.EuroCham Deputy Director Marc de laFouchardiere explained that European investorssaw a rise in economic nationalism in sectorsrelated to pharmaceuticals and liquor, amongothers. The kyat’s depreciation was also cause foralarm for 42pc of those surveyed.Although 64pc of the survey’s respondentsexpected their market share to increase and 67pcexpected an increase in revenue over the nextthree years, companies with a presence in thecountry have become less inclined to invest more.With the exception of Yangon, Ayeyarwady andShan, all other states and regions have seen adrop in reinvestment interest. Regulatory issues,lack of qualified labour and legal uncertainty stillremain the biggest challenges for Europeancompanies the survey showed.Source: Myanmar Timeshttps://www.mmtimes.com/news/business-confidence-myanmar-sinks-scepticism-mounts.html
NewspapersMyanmar Times
12 Dec 2018
PwC | December 2018 14
Govt hurries to fix regulatory issues which are the main concern for European firms
The results of a business confidence surveyconducted by the European Chamber ofCommerce in Myanmar which involved 150European companies with investments in themanufacturing, power generation, transport,storage and construction sectors in Myanmar,were announced yesterday. Currently, the UK,Netherlands and France are the biggest Europeaninvestors in Myanmar.According to the survey, 81 percent of Europeancompanies said the Myanmar businessenvironment is poor or needs improvementcompared to 76pc in 2017 and 67pc in 2016.Regulatory concernsRegulatory issues remain the biggest challenge forEuropean companies in Myanmar, said FilipLauwerysen, executive director of Euro ChamMyanmar.The good news is that efforts are being taken tosolve those issues, said U Maung Maung Lay, vicechair of the Union of Myanmar Federation ofChamber of Commerce and Industry.The relevant ministries are drafting proceduresfor investing to solve the existing regulatory
issues and uncertainty in investment procedures,said U Aung Naing Oo, director general of theDirectorate of Investment and CompanyAdministration.In addition, the newly established Ministry ofInvestment and Foreign Economic Relations willtake responsibility for introducing easier methodsto invest in the various sectors of Myanmar, UAung Naing Oo said“The new ministry is working on solving theissues. Once the procedures for investing arecomplete in the coming year, it will be mucheasier to expand in the country,” he said.The new Ministry of Investment and ForeignEconomic Relations will also establish a single-window system, or a one-stop service centre, tocater to the needs and requirements of newinvestors, U Thaung Tun, its new minister, saidlast month.
Source: Myanmar Timeshttps://www.mmtimes.com/news/govt-hurries-fix-regulatory-issues-which-are-main-concern-european-firms.html
NewspapersMyanmar Times
13 Dec 2018
PwC | December 2018 15
Restoration project reopens ‘best view in Yangon’
Through a doorway where colonial shoppers onceflocked, up several flights of steps and a wrought-iron spiral staircase, there lies one of the mostsplendid sights in downtown Yangon, Myanmar’sbiggest city.Gazing to the left from a panoramic roof terrace,almost within touching distance, is the top of thegleaming Sule Pagoda. Slightly beyond that liesCity Hall, and in front of it, the green grass ofMaha Bandula Garden, with the twin spires ofImmanuel Baptist Church on the far side. Nextdoor stands the ocher bulk of the High Court, andoff to the right runs the river Yangon.“There is no other place in downtown Yangonwhere you can enjoy this kind of view of the city’scolonial heritage,” said Harry Wardill, Myanmarcountry director of Turquoise Mountain, a U.K.-based nongovernmental organization thatundertakes the restoration of historic buildingsand encourages traditional crafts.Wardill and his team are more than a year intorestoration of the colonial-era Tourist Burmabuilding. The elegant structure was erected in1905 by an Indian merchant, who called it the
Fytche Square Building, and transformed in 1918by Ba Nyunt, a local businessman, into Yangon’sfirst locally owned department store, the BurmeseFavourite Company. In 1920, Ba Nyunt’s son TinNew set up the Dagon Magazine Company on thepremises, which became a prestigious outlet forlocal writers.In 1947, the building was converted for use by thegovernment, initially housing civil servantsadministering a rations scheme, and eventuallypassed to the Ministry of Hotels and Tourism,which used the ground floor as a visitorinformation center called Tourist Burma — thename by which the building is now generallyknown. Since 2005 it has been empty and rottingfollowing the government’s shift from Yangon,formerly known as Rangoon, to Naypyidaw, thenew capital of Myanmar, formerly known asBurma.
Source: Consult Myanmarhttps://consult-myanmar.com/2018/12/13/restoration-project-reopens-best-view-in-yangon/
NewspapersConsult Myanmar
13 Dec 2018
PwC | December 2018 16
China-Myanmar Economic Corridor a 'Win-Win'
MANDALAY — In September Myanmar signed amemorandum of understanding (MoU) withChina to establish the China-Myanmar EconomicCorridor, part of Beijing’s sprawling Belt andRoad Initiative.The initiative will link China with some 65 othercountries that together account for more than 30percent of global GDP and 62 percent of theworld’s population.While the Chinese government calls the initiativea bid to enhance regional connectivity, critics seeit as a push for Chinese dominance in globalaffairs and for a China-centered trading network.Mandalay Region Finance and Planning MinisterU Myat Thu is a member of a joint committeeestablished to oversee the corridor’sdevelopment. The Irrawaddy’s Myat Pyae Phyospoke with him about what Myanmar was doingto manage the potential risks and rewards.What is the Myanmar government doingregarding China’s Belt and Road Initiative?The China-Myanmar Economic Corridor is part ofthe initiative. The Myanmar government hasformed a central committee as well as a joint
committee to establish the economic corridor.The committee consists of Union-level ministersas well as the planning and finance ministers ofthe five regions and states — Yangon, Mandalay,Shan, Rakhine and Irrawaddy — that the corridorwill pass through.The Union [planning and finance] minister lastweek discussed with us the proposed rail andmotor road projects of the economic corridorproject. He said China proposed implementingabout 40 projects, but finally the two sidestentatively agreed to implement about nineprojects as part of the economic corridor project.One of the important projects is the Muse-Mandalay railroad and motor road that will passthrough northern Shan State and Mandalay. Amemorandum of understanding has been signedfor it. It is likely to be implemented before 2020,after a feasibility study is conducted. Otherprojects still need detailed discussions.
Source: The Irrawaddyhttps://www.irrawaddy.com/factiva/china-myanmar-economic-corridor-win-win.html
NewspapersThe Irrawaddy
13 Dec 2018
PwC | December 2018 17
World Bank downgrades Myanmar’s GDP forecast, flags rising risks
Myanmar is forecast to grow at a slower pace of6.2 percent this year compared with 6.8pc in theprevious year, according to a report by the WorldBank released yesterday.While prospects for the economy are positive overthe longer term, the risks to growth for thecoming year have also risen. In that light, it iscrucial for the authorities to execute plannedreforms and sustain recent improvements madein luring new investments, the report says.U Wai Phyo, managing director of Yathar ChoIndustry, said the World Bank’s 6.2pc growthforecast “is not satisfactory for a market likeMyanmar. We are not seeing sufficient variety ofbusinesses to sustain further growth in theeconomy. The market is currently too small. Thegovernment needs to have a better grasp of themicro and macroeconomic situation to fostermore growth,” he said during a panel discussionduring the launch of the December 2018Myanmar Economic Monitor report.The humanitarian crisis in Rakhine remainsamong the top reasons for slower growth. Thetourism sector, in particular has borne the brunt
of the crisis, with growth in tourist arrivalsdropping to 0.7pc for the first nine of months ofthe year compared with 7.1pc last year. Touristsfrom non-Asian regions have fallen between 15pcand 25pc from January to September this year,more than offsetting arrivals from Asia, whichrose 10pc over the period.The numbers reflect reports of booking and tourcancellations by western tourists in late 2017,after news of violence in Rakhine was reported ona global scale, The World Bank said. Tourismaccounts for 2.7pc of the country’s GDPThe crisis in Rakhine has also prompted theEuropean Union to consider revoking tradebenefits awarded to Myanmar exporters underthe Generalised System of Preferences (GSP).Myanmar’s garment manufacturing industry willbe particularly hard hit if the GSP is withdrawn,given that close to 50pc of the country’s garmentexports are bound for Europe.Source: Myanmar Timeshttps://www.mmtimes.com/news/world-bank-downgrades-myanmars-gdp-forecast-flags-rising-risks.html
NewspapersMyanmar Times
14 Dec 2018
PwC | December 2018 18
Myanmar’s economy depends on Rakhines stability: trade body
Despite rich resources and good geographicallocation, Rakhine State has many challenges toovercome if it is to attract foreign investments,people in the business community say.“Foreign investments have slowed due to conflictin the state. The economy of Rakhine needs to bepromoted first and only when it is conducive, willproblems such as international pressure, inclusivedevelopment and conflict be reduced,” said U TunTun Naing, member of the Union of MyanmarFederation of Chambers of Commerce andIndustries (UMFCCI).“The turmoil in Rakhine can be partly attributedto low levels of education in the state, soeducation must be promoted. With no jobopportunities, there is no income .If livelihoodscould be improved, there would be less conflict,”he said.“As a whole, Myanmar’s economy rests on theresolution of problems in Rakhine. If Rakhine isstable, and peaceful, then other countries willinvest in other part of the country, so, we have tofocus more on Rakhine,” he said.Myanmar and Bangladesh are currently working
on efforts to repatriate some of the hundreds ofthousands of displaced people from Rakhineliving in refugee camps around Cox’s Bazar inBangladesh. “The issue is what they will do whenthey return. If there are no jobs or security,problems will persist. After repatriation, many jobopportunities must be created. Peace must berestored,” U Tun Tun Naing said. Rakhineofficials and the business community say that ifeconomic conditions improve, conflicts can beprevented from occurring again, but investmentswill be needed if conditions are to improve. “If theeconomy improves to some extent, no one willwant to make troubles - it is human nature,” saidU Aung Myint Thein, chair of the MaungdawBorder Trade Association.While the state is host to large projects such asthe Kyaukphyu Special Economic Zone anddeepsea port, and the Kaladan Multi-ModalTransit Transport Project,Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmars-economy-depends-rakhines-stability-trade-body.html
NewspapersMyanmar Times
14 Dec 2018
PwC | December 2018 19
Myanmar plans to sell natural gas produced from PTTEP block mainly for local use
Myanmar is planning to sell natural gas producedfrom PTTEP offshore block (MD-7) mainly forlocal use, sources said.The PTTEP, cooperating with Myanmar Oil andGas Enterprise (MOGE), held a public talk todiscuss and explain about environmental impactassessment (EIA) test with locals from Myeik onDecember 13.They met with locals in Dawei, Kawthoung andMyeik which are the nearest towns with theoffshore block to conduct public poll about theproject.“It is the first public meeting to know about theirconcerns and the impacts on the environment.We will write down the issues on the report. Wewill explain about the EIA process at the secondmeeting. We will explain about the issues relatedwith socio-economy, natural resources,environment and sea creatures to locals. We madethe assessment instructed by the authorities. Theregional government and union ministry have anagreement with the national grip. It will beimplemented after 2019. The natural gasproduced in the future will be sold mainly for
domestic use and the remaining gas will export ifdomestic use is sufficient,” said Assistant DirectorSaw Thandar from Offshore Oil and Natural GasDepartment.PTTEP is an international petroleum explorationand production public company based in Thailandand it is planning to export oil and natural gas toThailand sustainably.“Although the projects to explore oil and naturalgas are carried out here, the locals have noentitlement. We are using the electricityexpansively. We don’t know whether thegovernment is asking our opinion or we arefollowing their orders,” said Kyaw Naing from 88Generations activist from Myeik district.The MD-7 is located about 640 kilometers fromYangon, 390 kilometers from Dawei, 300kilometers from Myeik and 230 kilometers fromKawthoung and it is located in the offshorefishing blocks.Source: Eleven Myanmarhttps://elevenmyanmar.com/news/myanmar-plans-to-sell-natural-gas-produced-from-pttep-block-mainly-for-local-use
NewspapersEleven Myanmar
14 Dec 2018
PwC | December 2018 20
43% of households in Myanmar gain access to national grip
Electrification is increased by nine per cent in2018 in compared with the number of householdswhich accessed to national grip in 2015-16 FY andreached to 43 per cent, according to anannouncement from Ministry of Electricity andEnergy.The announcement said the number of familyhouseholds accessible to national power grip isreached over 4.6 million by October 2018 and thenumber of family households accessible tonational power grip was just over 3.6 million in2015-16 FY.“The graph is showing the increase ofelectrification rate ratio in all regions and statesfrom 2016 to 2018. What I mean is we are doingto provide electricity supply for all regions andstates equally. We are trying to increase theelectrification rate ratio to 50 per cent by 2020-21FY,” said Deputy Permanent Secretary Soe Myintfrom the ministry.Myanmar has more than 10.8 million familyhouseholds and the ministry provided electricityto over 4.6 million family households (about 43per cent) in October 2018.
“The ministry can supply 24 hours electricity inremote area such as Manaung Island using solarpower and diesel generators,” he said.Kayah State is the highest in electrification rateratio with 87.4 per cent followed by YangonRegion with 85.1 per cent. Mandalay Region stoodthird with 56.3 per cent, it said.Taninthayi Region is the lowest in electrificationrate ratio with 14.7 per cent and AyeyawadyRegion is the second lowest with 17.77 per cent.Rakhine State is the third lowest with 20 per cent,it said.
Source: Eleven Myanmarhttps://elevenmyanmar.com/news/43-of-households-in-myanmar-gain-access-to-national-grip
NewspapersEleven Myanmar
14 Dec 2018
PwC | December 2018 21
More than 2.84 mln tourists visited Myanmar in first 10 months of 2018
More than 2.84 million tourists visited Myanmarduring the first 10 months of 2018, according toofficial statistics from the Ministry of Hotels andTourism.More than one million tourists visited Myanmarthrough airports and over 7,000 tourists came oncruise liners, while over 35,000 tourists enteredMyanmar through the nation’s border gates.Although most tourists came from Europe andNorth America in recent years, increasingnumbers of tourists from China, Thailand andsome Asian countries are visiting Myanmar.About 58,820 tourists came from North America,138,545 visitors from Western Europe, 13,160visitors from Eastern Europe, 3,509 visitors fromAfrica, 4,317 visitors from Middle-East countries,834,712 tourists from Asia and 24,259 visitorsfrom Oceania areas.Of Asian travelers, over 236,441 visitors camefrom Thailand, 227,048 tourists from China,82,327 tourists from Japan, and 53,693 touristsfrom South Korea. France topped the list ofwestern European travelers with 32,597, followedby travelers from the United Kingdom, Germany,
and Italy.With the increase in the number of tourist,authorities are conducting promotions, marketingand awareness campaigns in the tourismmarketing.
Source: Global New Light of Myanmarhttp://www.globalnewlightofmyanmar.com/more-than-2-84-mln-tourists-visited-myanmar-in-first-10-months-of-2018/
NewspapersGlobal New Light of Myanmar
16 Dec 2018
PwC | December 2018
2. Weekly Key Policy News
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PwC | December 2018
Weekly Key Policy NewsHeadlines
Lawmaker Urge Parliament to Include Jail Terms in Labour Law Amendment
Govt considering new cyber law, minister says
Parliament rejects €70m French loan for Yangon
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Foreign insurance firms may start operations by April 2019: regulator
‘Better trade ties will benefit both India and Myanmar’
PwC | December 2018 24
Lawmaker Urge Parliament to Include Jail Terms in Labour Law Amendment
In 2014, Myanmar enacted an amended LabourDispute Settlement Law. Three years later theMinistry of Labour, Migration and Populationsubmitted a second amendment bill to PyithuHluttaw (Lower House), which discussed andapproving the amendments. The bill was thensent to Amyothar Hluttaw (Upper House).Dr. Khin Ma Gyi, an Amyothar HluttawRepresentative, urged the parliament to includejail terms when the bill was discussed atAmyothar Hluttaw in late November.In settling labor disputes, strong punishmentsuch as jail terms in addition to fines can be ahelpful tool for settling labor dispute or protests,lawmakers said.“What we often see in labor disputes is thatemployers breach the settlement reached betweenthe two dispute parties facilitated by SettlementArbitration Council because the fine for breakingthe settlement is K1 million —especially in thecases of rehiring the workers. Taking advantage ofthe weaknesses in the law, they often try to scrapthe settlement by paying K1 million fine. The casein which employers abide the law regarding the
labor dispute settlement is very rare,’’Dr. Khin MaGyi said.The K1 million kyat fine is approximately $648USD according to the exchange rate from theCentral Bank on December 6, 2018.The fact that the highest penalties are finesaccording to Article 46 A, B, C, D, and E weakenthe enforcement. Dr. Khin Ma Gyi argued thatplacing jail terms or fines for both employers andworkers can bring fair protection for both parties.Thus she urged the parliament to add the penaltyof one month jail term in addition to K300,000 toK1 million fines.Moreover, she also suggested that an independentarbitration council should be formed by votingsystem comprising workers and employerrepresentatives.
Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/lawmaker-urge-parliament-include-jail-terms-labour-law-amendment
NewspapersMyanmar Business Today
11 Dec 2018
PwC | December 2018 25
Govt considering new cyber law, minister says
A Cyberlaw will be drafted to take action againstthose who insult the country and people andcommit crimes over any communicationsnetwork, said Deputy Minister of Transport andCommunications U Thar Oo.“We are speaking with local and foreign experts inlaw and technology about the shape of a law totake action against those who would destabilisethe state, make personal attacks, use foullanguage, or commit fraud on communicationsnetworks,” he told the Amyotha Hluttaw (UpperHouse) on Wednesday.“The use of foul language is common onFacebook, which is popular in Myanmar.Uncontrolled use of such language can affect thecountry’s image, so action should be taken againstthose who use it,” said U Pe Tin, Upper House MPfor Mon State Constituency 6. “Are there plans tocontrol the use of such language in Myanmar?” heasked.“Although Facebook has community standards inplace for users, they are just rules that don’t havethe strength of laws. It is hard to take actionwithout a specific law,” the deputy minister said,
“Two of the country’s laws can now be used incases of defamation or fraud via the internet – theTelecommunications Law and ElectronicTransactions Law. People can lodge complaintswith the police under those laws,” said U Thar Oo.“Myanmar is trying to enact a law in line withinternational standards to ensure the safe use ofsocial media, and the protection of data andnetworks,” he added.
Source: Myanmar Timeshttps://www.mmtimes.com/news/govt-considering-new-cyber-law-minister-says.html
NewspapersMyanmar Times
13 Dec 2018
PwC | December 2018 26
Parliament rejects €70m French loan for Yangon
The Pyidaungsu Hluttaw (bicameral legislature)has turned down a proposal by the Yangongovernment to secure a €70 million (K127billion/US$79.68 million) loan from the FrenchDevelopment Agency for river bank and urbancultural heritage development projects.Only 34 MPs voted for the proposal while anoverwhelming 497 voted no.“As parliament didn’t agree, it cannot becontinued. It was rejected,” said U Khin Cho, amember of the Public Accounts Committee.Although the loan is appropriate, MPs did notapprove of the projects to be financed by the loan.Other reasons for the rejection were lack ofaccuracy and transparency in the feasibility study,economic unviability, and no plan to relocate thesquatters that would be affected by the projects.Several senior Yangon regional officials madelast-ditch efforts last week to convince MPs toapprove the loan by going to Nay Pyi Taw toattend the committee discussions on the issue.
Source: Myanmar Timeshttps://www.mmtimes.com/news/parliament-rejects-eu70m-french-loan-yangon.html
NewspapersMyanmar Times
14 Dec 2018
PwC | December 2018 27
Foreign insurance firms may start operations by April 2019: regulator
Qualified foreign insurance providers will receivelicenses to operate in Myanmar by April next year.“I can assure it is happening within the next 16weeks,” U Thant Sin, Director of the FinancialRegulatory Department under the Ministry ofPlanning and Finance, said during the UK CapitalMarket and Insurance Conference in Yangon onDecember 12.“We will soon invite Expressions of Interest (EOI)so that foreign insurers can start operations inApril or no later than May,” he said.Foreign insurers from 14 countries haveestablished a total of 31 representative offices inMyanmar in anticipation of the governmentallowing full foreign investments in life insuranceand joint ventures in general insurance.“Foreign competition is needed in our business.We need more competition to be able to providebetter services. Because we lack human resourcesand skills, foreign insurance providers can help tofill this gap with technical know-how. This willhelp us produce better quality products anddistribution channels,” U Myo Min Thu,managing director of AYA Myanmar Insurance,
told The Myanmar Times in October.The government is also under pressure to open upthe insurance sector to foreigners to deepen thebond market and enable to raise debt forexpansion.“If we allow foreign players in the market, we willbe able to get the funds we need to develop thegovernment bond market. We will be asking for alarge amount of capital from insurance companiesto buy government bonds,” said U Thant Sin.“Foreign insurers will need to fork out US$14million for a license to provide general insurance.Once the insurance company is given the license,30pc of their required capital should be forbuying government bonds,” he added.
Source: Myanmar Timeshttps://www.mmtimes.com/news/foreign-insurance-firms-may-start-operations-april-2019-regulator.html
NewspapersMyanmar Times
14 Dec 2018
PwC | December 2018 28
‘Better trade ties will benefit both India and Myanmar’
Improved trade and investment will bring manybenefits to both countries says leaders andmembers of the business community in Myanmarand India.This was the view expressed by many peopleattending the three-day Fifth Enterprise India-Myanmar trade event which began yesterday at ahotel in Yangon, including India’s President RamNath Kovind.In his speech at the opening of the eventyesterday, Kovind said: “I am delighted to be hereto inaugurate the Fifth Enterprise India Show inYangon. My participation in this event and thepresence of a high-level business delegation fromIndia underlines the importance we attach to oureconomic relations with Myanmar. We haveleading Myanmar businesses and over 50 Indiancompanies, from globally reputed majors to SMEsengaged in cutting-edge manufacturing,participating in this event. I commend the effortsof the Confederation of Indian Industry and theUnion of Myanmar Federation of Chambers ofCommerce to host this show and to draw animpressive participation.
“Myanmar and India are close neighbours with anabiding friendship. Our trade and investmentpartnership, however, at present, is modest. Butwe both remain deeply committed to bring themup to steam. Opportunities before us are manyand multiple – to expand trade, forge jointventures and invest in each other’s growth anddevelopment.“As Myanmar is seeking to make an economictransition and India has established itself as thefastest growing major economy in the world, thetwo countries can do much to learn and leverageeach other’s competencies. I am happy that theEnterprise India Show has brought the best ofIndian products, services, innovation and know-how to business partners, start-ups, incubatorsand customers in Myanmar. And I hope bothsides will take advantage of the opportunities onoffer over the next few days.”
Source: Myanmar Timeshttps://www.mmtimes.com/news/better-trade-ties-will-benefit-both-india-and-myanmar.html
NewspapersMyanmar Times
14 Dec 2018
PwC | December 2018
3. Weekly Investment News
29
PwC | December 2018
Weekly Key Investment NewsHeadlines
Parami Energy to invest US$25m for LPG distribution
Mining applications flow in, but few are complete
Investment ministry plan generates mixed reaction
30
Revenue Group to enter Myanmar market early next year
Myanmar, S.Korean company launch solar power plant in Rakhine state
PwC | December 2018 31
Parami Energy to invest US$25m for LPG distribution
Parami Energy will accelerate the distribution ofliquefied petroleum gas (LPG) next year, CEO UPyi Wa Tun said yesterday.He said in a press conference that starting fromDecember 12, 150,000 Parami LPG cylinders willbe distributed in the market and before April2019, 50pc of the LPG cylinders will bedistributed in Yangon Region. After April nextyear, it will be distributed across the country.The capital involvement is currently K15 billionand another US$25 million will be invested overthe next three years to build more factories.Currently, LPG is being imported via Thailand’sborder. Myanmar does not have the infrastructureneeded to produce its own LPG.About 70,000 tonnes of LPG is imported yearlyfrom Thailand. Compared to 4 million tonnes peryear consumption in Thailand, LPG consumptionin Myanmar is still low, with less than 5pc ofhouseholds. U Pyi Wa Tun attributed this to thelack of mass distribution in the local market.Parami Energy plans to distribute it to about150,000 5 kg and 12 kg LPG cylinders in themarket this year. The company’s aim is to
distribute up to about 2 million households in2020, with LPG gas imported from the MiddleEast, Indonesia and Malaysia.U Pyi Wa Tun added that Parami Energy ispushing for the market to be liberalised to permitthe entry of foreign LPG players in the market tobenefit consumers via market competition.Parami Energy is one of the two firms permittedby the government to import and sell LPG in thecountry. It is currently importing LPG fromIndonesia and Malaysia. The company last yearwon a K6.5 billion government tender to lease ajetty and storage facility at the Thanlyin refineryin Yangon Region.Currently, much of the imported LPG is now usedfor commercial purposes, such as in hotels,restaurants, tea shops and factories. ParamiEnergy is aiming to bring LPG into Myanmarhouseholds to reduce the use of electricity forcooking.
Source: Myanmar Timeshttps://www.mmtimes.com/news/parami-energy-invest-us25m-lpg-distribution.html
NewspapersMyanmar Times
11 Dec 2018
PwC | December 2018 32
Mining applications flow in, but few are complete
Over 1000 applications have been received formining blocks since July, according to U Min MinOo, permanent secretary at the Ministry ofNatural Resources and EnvironmentalConservation (MONREC) at the 4th annualgeneral meeting of Myanmar Federation ofMining Association held last week.However, only 193 of all the applications receivedare complete, he said.Major discrepancies in the applications includeapplying for overlapping blocks, already-permitted blocks and a single block by more thanone person, U Min Min Oo said“Applications with complete data will besubmitted to the ministry. They can take one tosix months to process, depending on how quicklythe regions and states can respond,” he told themedia.The government started re-accepting miningapplications in July after a 2-year hiatus in July2016. On February 13, newly enacted mining rulesallowed foreign companies to invest in large-scalesites of more than 500,000 acres (202,000hectares) as well as medium scale sites of up to
247.1 acres.MONREC will also allow investments in small-scale mining sites for gold and other preciousmetals of up to 4 acres, sites of up to 10 acres forother minerals and sites for raw industrialmaterials and precious stones of up to 20 acres.The rules follow the new Mining Law released inDecember 2015 to replace 1994 legislation. “Theamended mining law was enacted in 2015 and therules were enacted in 2018. During the gap periodof three years, mining businesses faced problemsbut as the rules have been enforced now, theseproblems are expected to be solved in nearfuture,” said Myanmar Federation of MiningAssociation’s Patron U Myint Thein.The new rules are intended to promote foreignand domestic investments while enforcingenvironmental controls on mining companies.
Source: Myanmar Timeshttps://www.mmtimes.com/news/mining-applications-flow-few-are-complete.html
NewspapersMyanmar Times
12 Dec 2018
PwC | December 2018 33
Investment ministry plan generates mixed reaction
Critics of the government’s move to form aministry for attracting investment say it wasneeded years ago, but supporters say the negativecomments are premature.THE GOVERNMENT'S decision to create a newministry to attract foreign investment has drawncriticism from opposition politicians and politicalanalysts, but has been broadly welcomed by abusiness community affected by a flat economy.President U Win Myint announced on November19 that the National League for Democracygovernment would establish a Ministry ofInvestment and Foreign Economic Relations andthat it would be headed by Myanmar InvestmentCommission (MIC) chairperson U Thaung Tun.The ministry will take over the Directorate ofInvestment and Company Administration (DICA)and the Foreign Economic Relations Departmentfrom the Ministry of Planning and Finance.Opposition politicians accused the NLDgovernment of taking too long to address a multi-billion dollar slump in foreign investment andanalysts have called for a performance review ofthe ministries that play a role in attracting FDI.
The business community has broadly welcomedthe decision to form the new ministry in theexpectation it will boost foreign direct investment.Figures from DICA show contracted investmentfell US$900 million in 2017-18, from $6.65 billionto $5.72 billion, while just $1.82 billion wasapproved from April 1 to October 31. The actualinflow of FDI remains strong – most sourcesshow it has risen in recent years – but the relativelack of new investments being approved is apotential cause for concern.“The performance of this government oninvestment and the economy is obviously still inneed of improvement, but I don’t think it can befixed only by forming a new ministry,” saidpolitical analyst Dr Yan Myo Thein. He saidweaknesses in the performance of the MIC,Ministry of Planning and Finance and Ministry ofCommerce may have been obstacles to foreigninvestment. their ministers and permanentsecretaries.Source: Frontier Myanmarhttps://frontiermyanmar.net/en/investment-ministry-plan-generates-mixed-reaction
NewspapersFrontier Myanmar
13 Dec 2018
PwC | December 2018 34
Revenue Group to enter Myanmar market early next year
Its Group Chief Executive Officer, Eddie Ng CheeSiong said currently the group was awaitingapproval from the authorities before it could enterinto any partnership there.“We hope to collaborate with local companiesthere to strengthen out footprint,” he said afterthe company’s inaugural Annual General Meeting(AGM) here today.Revenue Group, which was listed on the ACEMarket in July, has partnered wih various banks,including Public Bank and Hong Leong Bank toboost cashless payment from various mediumsuch as credit card, debit card, as well as e-wallet.So far, we have sold 5,000 Electronic DataCapture to Hong Leong Bank and we hope we cansee a positive growth in the upcoming quarters,”he said.Ng said the group was optimistic of finalising adeal with Hong Leong Bank by year-end whichwould be similar to a contract it concluded withPublic Bank.“Malaysia is moving towards a cashless societyand we hope to strengthen our local marketbefore exploring other countries,” he said. For the
financial year (FY) 2018, Revenue Group’s netprofit increased to RM7.02 million from RM6.93million in FY17.Revenue was recorded at RM35.36 million fromRM26.52 million previously.“For FY18, our electronic transaction processingsegment was our largest contributor at RM16.72million which is 47.3 per cent of the group’s totalrevenue,” he said. He said the company aimed fora double digit growth in the coming quarters asmore merchants were embracing cashlesspayment.“We are optimistic on the outlook and we hopemore people would embrace cashless payment,”he said. – Bernama
Source: Consult Myanmarhttps://consult-myanmar.com/2018/12/13/revenue-group-to-enter-myanmar-market-early-next-year/
NewspapersConsult Myanmar
13 Dec 2018
PwC | December 2018 35
Myanmar, S.Korean company launch solar power plant in Rakhine state
A stake driving ceremony has been held inManaung township, Myanmar’s Rakhine stake tobuild a solar power plant which can supply 24-hour electricity to more than 1,000 households,Myanmar News Agency reported Sunday.The first-phase project was launched on Saturdayby the Ministry of Electricity and Energy, Rakhinestate government and the POSCO DaewooCorporation of South Korea with the attendanceof Rakhine State Chief Minister U Nyi Pu.The 2.5 million-U.S. dollar project, funded by theSouth Korean company under its corporate socialresponsibility scheme, is targeted to be completedby May 2019, Minister of Electricity and Energy UWin Khaing was quoted as saying.More loan is being sought to implement thesecond phase of the project, which is a diesel andenergy saving hybrid system to supply power to49,000 more households in 57 villages in thetownship.The third phase is to supply power to theremaining villages in Manaung township.
Source: Consult Myanmarhttps://consult-myanmar.com/2018/12/14/myanmar-s-korean-company-launch-solar-power-plant-in-rakhine-state/
NewspapersConsult Myanmar
14 Dec 2018
PwC | December 2018
3. Weekly New Tenders
36
PwC | December 2018
Tenders (Myanmar)List
Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .
37
No applicable Tenders announced for the week ending 14 December 2018
PwC | December 2018
Tenders (Multilateral organizations) List
Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org
38
ADB: SC 111972 MYA: Agriculture Strategy Roadmap for Myanmar, Closing Date: 20 December 2018 (Individual)
ADB: SC 111958 LAO: LAO: LRM Project Administration and Processing - International Social Development (Resettlement) Specialist, Closing Date: 21 December 2018 (Individual)
ADB: TA-9179 MYA: Power Network Development Project - Project Management Consultant (50020-001), Closing Date: 21 December 2018 (Individual)
ADB: TA-9647 REG: Strengthening Safeguards Management in Southeast Asia (52059-001), Closing Date: 22 December 2018 (Individual)
PwC | December 2018
4. MIC Permitted Projects
39
PwC | December 2018
MIC Permitted Projects (Meeting 20, 2018)
40
No. Name of Company Type of Investment Form of Investment
1 Myanmar Brilliance Auto Co., LtdAssembling, manufacturing and sales of motor vehicles
Myanmar CitizenInvestment
2 Ocean Wave Communication Co., LtdNetwork Facilities Services, Network Services and Application Services
Wholly Foreign Owned
Source: DICA
PwC | December 2018
5. Upcoming Events
41
PwC | December 2018
Upcoming Events (January 2019) List
Date Location Name of Event Sector Price Focus Points
17-18 Jan 2019 YangonElectric Power Exhibition & Conference
Power Free
“showcase your latest products andtechnologies in a high demand region. Withthis event you can raise your companyprofile and stay ahead of the competition.Network with the industry's most influentialplayers. Explore business opportunities andmeet new partners in dynamicsurroundings”
28 - 29 Jan2019
Naypyitaw Invest Myanmar Summit
Manufacturing, Garment,Power, Tourism, Education, Food Processing & Fishery, Healthcare, Infra & property
USD 500/person
“ to provide international and local investorsthe opportunity to discover businesspotential of Myanmar as well as a platform tomeet with the Central and RegionalGovernment officials”
42
Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .
PwC | December 2018
Upcoming Events (February 2019) List
Date Location Name of Event Sector Price Focus Points
26-27 Feb 2019 YangonMobile Money & Agent Banking Summit
Banking and Finance
TBC
“A Special Focus on Myanmar plus EmergingOpportunities from the regional DigitalTransformation”
43
Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .
© 2018 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
www.pwc.com/mm
PwC Myanmar Weekly Business Intelligence Publication
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