Frontier markets investor EMIA seeks to raise $120m third fund
Singapore-domiciled private equity firm Emerging Markets Investment Advisers (EMIA) is targeting to raise about $100-120 million for its third fund to invest in Southeast Asia’s frontier markets, according to a top executive of the firm.
– Deal Street Asia
Myanmar Takes US$250 M Loan from ADB for COVID-19 Relief
The Myanmar Parliament approved a US$250 million loan from the Asian Development Bank on Wednesday to support the budget for its COVID-19 Economic Relief Plan (CERP). The Ministry of Planning, Finance and Industry (MOPFI) said the loan will be used to provide social support for low-income households, to enhance the healthcare system and COVID-19 prevention, treatment and containment and to support small and medium-sized enterprises. The loan is part of the ADB’s COVID-19 Active Response and Expenditures Support (CARES) program. Launched by the Myanmar government in late April, the relief plan aims to help the country recover from the economic and social impacts of the pandemic. The CERP includes a number of strategies and responses, including steps to re-allocate 10 percent of the 2019-20 budget for all government entities to the COVID-19 response fund. According to international organizations, Myanmar needs to spend US$2-3 billion to implement its action plans.
– The Irrawaddy
Large hydropower projects to continue in Myanmar: Govt
Although electricity generated by natural gas is expected to rise, Myanmar is planning to continue implementing large hydropower projects such as the Myitsone Dam project to meet the country’s electricity needs, U Khin Maung Win, Deputy Minister of Electricity and Energy, told Pyidaungsu Hluttaw on July 27. “Myanmar is rich in hydro resources and the cost of production is low compared to other sources of power. When some of the large hydropower projects in Myanmar are complete, the country can reduce its reliance on gas and coal-fired power plants, which is more expensive. These plants can be used as reserves or respond to the country’s needs on demand,” he said. In fact, the ministry forecasts that hydropower will comprise just 37pc of the country’s energy mix in fiscal 2020-21 compared to 61pc in four years ago. In comparison, close to half the electricity generated in the country will be powered by natural gas in 2020-21, compared to 35pc four years ago.
– Myanmar Times
CPF bill to reform pension funding submitted in Myanmar
U Maung Maung Win, Deputy Minister of Planning, Finance and Industry submitted the Central Provident Fund Bill which will cover reforms of the Myanmar pension system to Pyithu Hluttaw on July 28. We aim for all new employees who are appointed after the law is effected to be covered by the country’s pension system. It is compulsory for all civil servants who have less than 10 years service and who haven’t been entitled to pension benefits. Civil servants who have more than 10 years of service will continue enjoying retirement gratuities in accordance with provisions of the Civil Service Law and rules of the older system,” he said. The bill aims to transform the old pension system, under which the government pays full pensions to civil servants, into a new system under whicn public servants are expected to contribute a small portion of their salaries into the CPF. The funds will be paid out as pensions after retirement. According to the bill, the fund will be managed by a board of directors which includes government representatives, employee representatives and outside experts. The board will set policies and investments strategies as well as ensure these are implemented.
– Myanmar Times
International flight suspension in Myanmar extended until August 31
An international commercial flight suspension to Myanmar has been extended to August 31, according to the Yangon International Airport, citing July 28 notices from the Department of Civil Aviation and National Central Committee for Prevention, Control, and Treatment. However, there are several “fast lanes” through which “essential businesses and officials” can enter Myanmar upon request, U Tin Latt, Deputy Minister of Hotels and Tourism, told the Myanmar Times on July 19. These arrangements have begun with China and Japan and will be extended gradually to other countries. Meanwhile, those who need to travel to Myanmar for urgent official or business assignments should contact the nearest Myanmar embassy.
– Myanmar Times
Myanmar approves ADB loan, outstanding debt hits K40.8 trillion in 2018-19
Myanmar’s outstanding local and foreign debt stood at K40.8 trillion at the end of September 2019, which is close to 40 percent of GDP, U Maung Maung Win, Deputy Minister of Planning, Finance and Industry, informed Parliament upon submitting the country’s 2018-19 annual debt report on July 24. Around 63pc of the country’s debt was incurred locally. Meanwhile, the largest share of the foreign loans were allocated to the Ministry of Construction and Ministry of Electricity and Energy. Debt levels are expected to rise further this year, with the government borrowing heavily from international institutions like the World Bank and IMF to fund national projects as well as its COVID-19 Economic Response Project. On July 27, Pyidaungsu Hluttaw approved borrowing $171.3 million from the Asian Development Bank to fund rural electrification projects in Kayin State as well as Ayeyarwady, Bago and Magwe regions. The government will invest $20.5 million in the project from its budget, taking total investments to $191.7 million. The project is expected to be complete by 2027.
– Myanmar Times
Govt considers reducing rent for hotels occupying state-owned land
The government is considering reducing the rent for tourism businesses such as hotels occupying state-owned land to alleviate the burden on the industry, Deputy Minister for Hotels and Tourism U Tin Latt said at a tourism meeting organised by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). In the COVID-19 Economic Relief Plan, factory and workshop rentals have already been exempted for 3-6 months. Rental waivers are expected to cost about K1 billion, said U Tin Latt. Currently, rental payments for 47 hotels, including state-owned hotels, have been postponed from April 1 to September 30. Of the 2000-plus hotels in Myanmar, some 1200 have reopened while other remain shut due to COVID-19. Hotel license fees have already been exempted from April 1 until March 31, 2021.
– Myanmar Times
Announcement of loan from COVID-19 Fund to businesses
The Ministry of Planning, Finance and Industry has released Announcement 2/2020 on 3 July 2020, saying that the Committee for Remedying Economic Effects of COVID-19 made a decision at meeting 6/2020 to put in an additional K100 billion into the COVID-19 Fund. This decision was made in order to continue providing financial assistance to businesses negatively affected by COVID-19. The fund will go to the businesses that manufacture agricultural, livestock and fisheries products, export commodities, import substituted products, supply chain of domestic products in the whole processes for export sector, food supplies, overseas employment agencies and vocational training schools. Businesses can submit loan appilcation forms starting from 29 July 2020. The applications will be accepted at UMFCCI offices from 9:30 am to 4:40 pm from 29 July to 10 August 2020.
– Global New Light of Myanmar
Myanmar Citizens Bank (MCB) and Ooredoo Myanmar Limited (OML), have just entered into a corporate banking relationship whereby MCB will provide various corporate banking services to OML including Foreign Exchange business, lines of credit, cash collection and other services.
– Myanmar Times
Myanmar National Airlines takes further steps to address mounting losses
State-run Myanmar National Airlines (MNA) has formed an independent board of directors and hired a consultant to help it map out its business plan and growth strategy amid COVID-19, Transport and Communications Minister U Thant Zin Maung said in Parliament on July 22. Earlier this month, the government had approved a plan to seek a strategic investor to take a stake in MNA in a bid to rescue the struggling airline. MNA last month reached out to the government for a loan of US$24 million to repay debts accumulated since the start of the year. With its planes grounded and people unable to travel due to COVID-19, the airline had been burning close $5 million a month to cover salaries, fuel and maintenance costs. MNA has not been able to operate all its international flights since late March, when the government issued an order to suspend all international commercial flights from landing in Myanmar to control the spread of COVID-19. Consequently, the airline has not been able to generate enough revenue to keep itself afloat.
– Myanmar Times
UMFCCI proposes delay in tax regulation changes to ease business conditions
A proposal to delay changes to the 2020 Union Tax Bill has been submitted to the government on behalf of local businesses, said U Aye Win, General Secretary of the Union of Myanmar Federation Chamber of Commerce and Industry (UMFCCI). The changes include repealing a tax amnesty for Myanmar citizens with unassessed sources of income. The government wants to reinstate a 30 percent tax rate on all unassessed sources of income, saying this could boost coffers by up to K280 billion to around K2.8 trillion in fiscal 2020-21. Businesses have also asked the authorities to reconsider higher taxes on special goods like cigarettes and alcohol in the new tax bill.
– Myanmar Times
Hong Kong SAR investments exceed $1.34 bln in Q3
Hong Kong SAR has emerged as the largest investor in Myanmar with 41 Hong Kong-based firms pumping in US$1.34 billion in real estate development, electricity, and garment businesses at the end of the third quarter of current financial year, according to the Directorate of Investment and Company Administration (DICA). Hong Kong SAR topped the list of investors in the past nine months, followed by Singapore, which invested an estimated $1 billion in 13 projects. Foreign direct investment (FDI) of $4.336 billion flowed into Myanmar during the October-June period, including an expansion of capital by existing enterprises, according to DICA.DICA intends to reach its FDI target of $5.8 billion in the 2019-2020 financial year.
– Global New Light of Myanmar
US dollar likely to remain low in local forex market
The US dollar has been sliding against the Kyat in the local currency market, with the exchange rate touching a low of K1,379 per dollar on 26 July, which slumped from K1,403 registered on 21 July, said money exchangers. At present, the global forex market sees the weak sentiment amid the coronavirus outbreak, with the US dollar index of around 94.35. People are reducing luxury import items and giving priority to food commodity due to the adversity of the coronavirus pandemic. The dollar exchange rate is expected to remain low due to the weak demand in the local forex market, said traders. The Central Bank of Myanmar (CBM) is reported to purchase over 160 million dollars from private banks in the past six months to govern the market.
– Global New Light of Myanmar
YANGON—Despite the Myanmar government’s efforts to ease the economic impact of COVID-19, the country’s economy has remained in a significant slowdown. This week, the Myanmar Trade Promotion Organization (Myantrade) said in its latest report that 76 percent of export companies have been effected by COVID-19 and nearly half of them are expected to face a significant decline in orders from aboard in coming months. The Myanmar Investment Commission (MIC) also said that around 10 enterprises notified the commission last week that they are closing or have already closed due to the effects of COVID-19. Additionally, trade data shows that Myanmar’s exports to China in the first 10 months of this fiscal year dropped by more than US$200 million compared to the same period from last year. Furthermore, the government also urged companies to pay taxes online to curb the further spread of COVID-19.
– The Irrawaddy
All Myanmar Index Report: Mid June to Mid July 2020
As Myanmar and the world’s economy slowly returns to normality, AMI’s performance was up 9.8% for this reporting period, outperforming many of the indices again. However, MyanPix was itself down -1.3% for the same period. AMI’s performance can be directly attributed to a 23.5% increase in SGX listed Yoma Strategic Holding; driven by the news of its acquisition of Wave Money from Telenor. The big surprise however came from the performance of Memories Group, part of the Yoma family and purely focused on the tourism sector, which went up by 74.1% (in MMK).
On the investment side, Ascent Capital Partners announced their first deal of a USD 26 million investment into Frontiir.
– All Myanmar Advisors
Myanmar regulatory body instructs micro lenders to relax loan collection
The Microfinance Businesses Supervisory Committee instructed microfinance institutions (MFI) in Myanmar to ease loan collections among those who are not able to repay during the pandemic, said U Set Aung, deputy minister of Planning, Finance and Industry. The committee [Microfinance Businesses Supervisory Committee] will inspect whether the MFIs follow the orders and take action if they fail to follow,” he said at Pyidaungsu Hluttaw, the legislature, on July 22. Myanmar authorities have instructed MFIs not to collect repayments and interest payments by force since early April. MFIs have also been encouraged to give out buffer loans, new loans and fix the payment term for those who are unable to repay on June 14. Lowering interest rates could reduce access to finance and hence the issue of interest rates should be approached carefully, said U Set Aung. The government was urged to negotiate with MP’s over payback conditions and reduce the interest rate, said Dr Maung Thin, a member of union solidarity and development party (USDP) and Pyithu Hluttaw representative from Meiktila constituency USDP MP at Hluttaw on July 21.
– Myanmar Times
Tourism, manufacturing in Myanmar hardest hit by COVID-19 pandemic, MTPO says
Tourism and manufacturing exports have been hit the hardest, according to a recent report by the Myanmar Trade Promotion Organisation (MTPO). The MTPO, under the Ministry of Commerce, recently published a survey about the COVID-19 impact on the country’s exports.
The study found that 30 percent of businesses are seriously hit while 46pc are moderately hit. Among the companies surveyed, 40pc say they are running into problems in exporting. It added that tourism is suffering from the most severe COVID-19 impact, followed by the garment industry. Rubber export sector is also seriously affected and small-scale rubber companies were slightly hurt. Factors include a fall in market demand abroad.
– Myanmar Times
Small businesses essential for Myanmar’s COVID-19 recovery: DaNa
Small businesses are essential for Myanmar’s economy to recover as economic growth is forecasted to slow to zero due to COVID-19, according to a recent report from UK-funded DaNa Facility. The report was made for the government by DaNa Facility in cooperation with the International Trade Centre and the United Nations to review the impacts COVID-19 had on Myanmars economic sectors and to suggest effective responses primarily on Micro, Small and Medium Enterprises (MSMEs). This [assessment] will improve implementation of the COVID-19 Economic Relief Plan, facilitate implementation of key measures to support access to finance and trade and investment activities, and produce a platform for building a post-COVID-19 recovery plan for Myanmar,” said Peter Brimble, senior technical adviser of the DaNa Facility.
– Myanmar Times
COVID-19 Impact: Myanmar to Reboot Export Promotion Strategies
The recent world banks’ economic monitor (June 2020) points out the importance of exports as a pillar for the country’s economic recovery. Rebound in growth would be anchoring on exports in the medium term. In the short run, the widening trade deficit, with continued disruption in supply chains is taking a toll on Myanmar’ economy. Macro parameters like current account deficit and pressure on foreign exchange reserves and Kyat exchange rate are some of the short term manifestations and for recovery, it would need sustained effort from the government and private sector, especially those key export sector players and trade facilitation agencies and industry associations. Currently, the government is in the process of finalization of national export strategy (2020-25) and it would be the right time to tweak the same to mitigate the impact of the pandemic in the short, medium and long term on export sectors.
– Mizzima
Japan wins deal for nearly $2bn LNG power plant in Myanmar
Trading houses Marubeni, Sumitomo Corp. and Mitsui & Co. will build a liquefied natural gas-fired power plant in Myanmar, one of the biggest investments by Japanese companies in the Southeast Asian country, people familiar with the matter say. That project will be equal to 20% of existing capacity.
– Nikkei Asia
EU disburses USD 43 million to support Myanmar’s education
The European Union (EU) announced this week that it will be disbursing EUR 37.625 million (USD 43 million, MMK 59.693 billion) to further support education reforms in Myanmar. It is the third payment from a total of EUR 221 million provided by the European Union to increase access to quality education for all in Myanmar. The support will come in the format of a grant and is paid earlier than planned to help the Government address the exceptional needs that arose due to COVID-19, ensure a safe return to school for all children, and improve the quality of education and vocational training throughout the country. The disbursement followed an Education Sector Reform Policy Dialogue meeting between the Government and the European Union, in particular on the plans for reopening schools as well as access to education in Rakhine State and public financial management.
– Thura Swiss
Myanmar rolls out plans to boost domestic tourism
Myanmar is taking efforts to avoid a second wave of COVID-19 in the country by extending measures such as a ban on international commercial flights and large social gatherings. But these restrictions have hit tourism hard, and the sector is now struggling to find viable options to survive the collapse in tourist arrivals. With flights suspended and regional tourism expected to open up only in the third quarter, the Ministry of Hotels and Tourism is going ahead with some immediate plans to boost domestic tourism in Myanmar, U Tin Latt, Deputy Ministry of Hotels and Tourism, told The Myanmar Times.
– Myanmar Times
Myanmar oil and gas revenue forecast to decrease in 2020-21
Revenue from the Myanmar oil and gas sector will decline in fiscal 2020-21 as a result of COVID-19, Deputy Minister for Planning and Finance U Maung Maung Win told the Pyidaungsu Hluttaw. This is because global oil prices have fallen, leading to a decline in gas prices and production at four of Myanmar’s offshore gas projects and numerous other fields onshore, he said. Income from the natural resources sector contributes to around 10.9 percent of Myanmar’s total income, making it a major source of revenue for the country. In 2019-20, income from the Myanmar oil and gas sector totalled K2 trillion. This however, was down from a high of K2.3 trillion in 2018-19 as a result of declining production levels.
– Myanmar Times
Companies in Myanmar urged to pay taxes online
Myanmar companies with a Taxpayer Identification Number (TIN) are urged to pay taxes using electronic payment systems made available online starting October 1, according to the Internal Revenue Department (IRD). Firms can now pay their taxes through digital services provided by local banks including CB Bank, Ayeyarwady Bank, uab Bank, KBZ Bank and Myanmar Apex Bank, via mobile money transfer and corporate debit cards by the Myanmar Payment Union. Arrangements will also be made for individual taxpayers to pay their income taxes online. Instead of issuing a tax record book, transactions will be recorded electronically on a mobile app.
– Myanmar Times
Traders warned to declare export income in Myanmar
The import/export licenses of 272 companies that failed to report their export income at local banks where they have accounts have been revoked temporarily, according to the Ministry of Commerce. Under the Foreign Currency Management Law, trading companies are obliged to declare their export income in foreign currency at their local banks within six months from a shipping date. The Central Bank of Myanmar has also made similar announcements for traders to report foreign currencies received as export income under the law.
– Myanmar Times
Domestic investments top K1,400 bln in 10 months
Investments by Myanmar citizens in the country exceeded K1,400 billion in the past ten months of the current financial year 2019-2020, an increase of over K200 billion compared to the corresponding period of the previous FY, according to the data released by the Directorate of Investment and Company Administration (DICA). During the ten months, the manufacturing sector pulled the largest domestic investments, followed by real estate development and other service sectors. The domestic investments also flow into hotels and tourism, agriculture, oil and gas, transportation and communication, construction, livestock and fisheries, industrial estate, mining and power sectors.
Myanmar govt proposes borrowing from ADB for key infrastructure
The government is proposing to ask Myanmar’s international development partners for funds to build key infrastructure in the country during fiscal 2020-21. U Kyaw Linn, Deputy Minister of Construction, proposed on July 17 during the sitting of the Pyidaungsu Hluttaw (Assembly of the Union) that Myanmar take a loan of US$483.8 million from the Asian Development Bank (ADM to build the Bago-Kyaikhto highway. The Bago-Kyaikhto highway will also form part of the Greater Mekong Sub-region East-West Economic Corridor, which links Vietnam through to Myanmar starting from Danang port, cutting across parts of Laos and ‘Thailand, and ending at Thilawa port in Yangon.
– Myanmar Times
Myanmar tax law for 2020-21 to include provisions supportive of SMEs
The Union Tax Law for fiscal 2020-21 will include provisions supportive of small and medium-size enterprises (SMEs) in Myanmar, including incentives aimed at reducing tax burdens as well as simplifying compliance procedures, Deputy Minister for Planning, Finance and Industry U Maung Maung Win said upon submission of the bill at the Pyidaungsu Flluttaw (Assembly of the Union) for discussion on July 17. Some of the provisions under the new tax bill include allowing SMEs to deduct certain expenses, such as depreciation, in full, granting income tax exemptions to businesses with earnings of up to K100 million for up to three years and stipulating a compulsory three-year period for book keeping.
– Myanmar Times
GACC grants rice export licences to 43 Myanmar companies
The authorized companies for rice export to China have increased from 11 to 43 this year, after inspecting 43 Myanmar rice companies and 79 rice mills in line with SPS Protocol (Sanitary and Phytosanitary Protocol). The General Administration of Customs of the People’s Republic of China (GACC) granted licences to 43 Myanmar companies on 10 July 2020 to export the rice to China through a legitimate trade channel. In order to have legal rice export channel to China, the Ministry of Agriculture, Livestock and Irrigation of Myanmar (MoALI) and the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ) signed an agreement on 24 September 2014 regarding SPS protocol. Only 11 companies were given green light for rice export then.
MoHT conducting tourism relief plans for post-coronavirus era
Myanmar’s tourism industry is implementing relief plans for recovery of the sector during the post-coronavirus era — new normal, said U Myint Sein, head of Magway Region Directorate of Hotels and Tourism. “The State allowed the hotel and motel businesses to apply for the loan in order to remedy those businesses hardly stricken by the pandemic impacts. Of 50 hotels and motels in the region, 17 applied for it and 11 were granted loans”, he stated. The Union of Myanmar Federations of Chamber of Commerce and Industry granted K35 to 60 million loans depending on the situations. The hotels and tourism industry braced a 40-per cent drop in March, 70 per cent in April, and a complete halt in May and June. Some hotels and motels were allowed for reopening in June-end.
YANGON—Though the Myanmar government is allowing businesses to operate under COVID-19 restrictions, most are still struggling to survive due to the economic impacts of the pandemic, particularly tourism, garment and small and medium-sized businesses. This week, the Myanmar Garment Manufacturers’ Association (MGMA) said clothing factories are struggling as large buyers in the European Union (EU) have suspended orders. Although the World Bank said Myanmar’s economic growth could drop from 6.8 to 0.5 percent this fiscal year, the government has now forecast that gross domestic product (GDP) will grow by 6 percent in the coming 2020-2021 fiscal year. In addition, China has approved rice export licenses for 43 Myanmar companies, allowing them to officially export rice and broken rice from Myanmar to China’s domestic market. The Myanmar government also announced that it will allow the commercial breeding of crocodiles.
– The Irrawaddy
Competition watchdog rejects protests over solar tender
Myanmar’s competition watchdog says it does not intend to challenge the government’s controversial solar plant tender despite protests by foreign governments and business associations that conditions imposed during the COVID-19 pandemic effectively excluded many outside bidders. Responding to questions from The Myanmar Times, the Competition Commission said the solar tender requirements set by the Ministry of Electricity and Energy (MOM were not designed to be anti-competitive and that the firms applying were not involved in anti-competitive practices. “The Competition Commission also concludes that this [tender] does not fall under the area of the Competition Law and is not in violation of said law,” it said.
– Myanmar Times
More paper shuffling than progress?
The Industrial Zone Law that was passed in May 2020 aims to address the myriad of issues faced by Myanmar’s industrial parks but sadly the legislation does little to tackle the core issues and could even be a significant step backwards for its industrialization. To compete for manufacturing investment in a post-COVID world and kickstart its industrialisation Myanmar needs higher-quality manufacturing zones that can encourage more than “Cut-Make-Pack” (CMP) garment factories, which represents a large percentage of Myanmar’s recent manufacturing investment. CMP manufacturing is the first step in industrialization and is relatively low investment and highly labour intensive, providing countless thousands of low wage jobs and lifting those workers – and their families – from poverty. But is also a trap because almost all the raw materials are imported and little value is added before export. It is also vulnerable to external shocks, as seen by the onset of the COVID crisis, which started as an input crisis -factories here could not get enough raw materials to meet their orders.
Myanmar needs to target greater Free-on-Board (FOB) manufacturing, which captures the lion’s share of the manufacturing process, allows for more control as well as greater economic benefits. An innovative industrial policy focused on developing higher-grade domestic textiles and garment accessories would go some way to moving the country up the value-added ladder and lessening dependence on outside suppliers.
– Myanmar Times
Myanmar trade volumes expected to grow despite pandemic
Myanmar trade is expected to hit US$34.7 billion in the new 2020-21 fiscal year despite the ongoing coronavirus pandemic, the Ministry of Commerce said. Exports are forecast to total $16.2 billion, while imports should come in at $18.5 billion, leading to a trade deficit of $2.3 billion. At those levels, trade in the new year fiscal year is expected to grow by $1.6 billion compared to the forecast $33 billion for the current fiscal year. Up to 85 percent of that volume has already been achieved, said assistant secretary U Khin Maung Lwin.
– Myanmar Times
Govt tax revenues for first half exceeds estimates in Myanmar
The country received more than K4trillion in tax revenue for the first six months of the fiscal year of 2019-20, exceeding the government’s own estimates, says Deputy Minister for Planning, Finance and Industry U Maung Maung Win. We originally expected K3.21 trillion, but actual receipts totalled K4.06 trillion,” U Maung Maung Win announced during the sitting of the Pyidaungsu Hluttaw (Assembly of the Union) yesterday.
– Myanmar Times
Expats eager to return, and biding their time
When it announced at the end of June that airports would remain closed through July, it added for the first time that foreigners who wished to travel to Myanmar on relief flights for “urgent official missions or compelling reasons” should contact the nearest Myanmar embassy “for possible exception with regard to certain visa restrictions”. The government has also relaxed its quarantine policy, introducing what’s being referred to as the “7+7+7” rule: seven days of home quarantine and a COVID-19 test before departing for Myanmar; seven days of facility or hotel quarantine upon arrival, including another COVID-19 test; and a further seven days of home quarantine.
– Frontier Myanmar
Strong growth to continue in Myanmar’s garment industry
Myanmar is expected to continue displaying high growth potential in garment manufacturing, according to London-based research agency Fitch Solutions. Fitch Solutions Country Risk and Industry Research on July 14 predicted that Asia, consisting mainly of Vietnam, Bangladesh, Cambodia and Myanmar, would remain the dominant players in textile manufacturing in the region. Myanmar boasts the lowest cost of labour in the apparel manufacturing sector, even when compared to regional players like Cambodia, Vietnam and Laos, according to research by the NYU Stern School of Business in 2018. Myanmar’s minimum textile monthly wage could be on par with, or lower than Bangladesh, one of the lowest in the world.
– Myanmar Times
Myanmar borrowing set to grow as fiscal deficit widens
Daw Aung San Suu Ky government says it expects the fiscal deficit to widen substantially because of increased spending and falling revenues. It will also require up to US$3 billion in extra borrowing by September 2021. “Due to the sudden COVID-19 pandemic, we are experiencing urgent balance of payments and fiscal financing needs over the next 18 months,” the government said in a letter to IMF Managing Director Kristalina Georgieva last month requesting IMF emergency financing of US$350 million.
– Myanmar Times
Myanmar’s Garment Sector Facing Implosion as Orders Slump with COVID-19
Yangon — Myanmar’s CMP (cut, make and pack) garment factories are struggling due to the lack of orders from the European Union, the major market. “After the last orders were delivered in August, there have been no new orders. [The factories] haven’t received new orders since COVID-19 broke out,” said the MGMA president U Myint Soe, who also owns a factory.
– The Irrawaddy
Steeper growth decline than expected in Myanmar this year: Govt
The Myanmar economy is likely to have expanded by just 4.3 percent during fiscal 2019-20 compared to the government’s initial forecast of 7pc as a result of COVID-19, said U Maung Maung Win, deputy minister of Planning, Finance and Industry, at the Pyidaungsu Hluttaw on July 13. The pandemic offset GDP growth of 6pc during the first six months of the fiscal year, resulting in total output of just K74.5 trillion between October 2019 and March 2020, which is around 63pc of the original forecast of K119 trillion for the period, said U Maung Maung Win.
– Myanmar Times
Govt expects kyat depreciation, higher exchange rate in Myanmar
The Myanmar kyat is expected to depreciate in value against the dollar in fiscal 2020-21, U Maung Maung Win, deputy minister of Planning, Finance and Industry told Pyidaungsu Hluttaw. The exchange rate should rise as a result of the reduction in interest rates, wider budget deficit and higher inflation, he said. Inflation is forecast to average 7.9 percent in fiscal 2020-21 compared to 6.7pc in fiscal 2019-20. On June 24, the central bank’s reference exchange rate was K1391.4 per dollar. However, the exchange rate has been fixed at K1520 per dollar for government departments and organisations for the coming year.
– Myanmar Times
Off-grid areas in Myanmar to enjoy solar power
A total of 450.000 people in rural Myanmar can expect to receive access to electricity following an agreement between the government and World Bank. The two parties have agreed to channel US$3.5 million in funds towards generating solar energy in off-grid Iareas of the country. “Getting electricity with solar technology in off-grid areas is important for improving the livelihoods and living standards of the rural people,” said Mariam Sherman, World Bank Country Director for Myanmar, Cambodia and Lao PDR.
– Myanmar Times
Myanmar to reinstate 30% tax rate on unassessed income
A tax amnesty for Myanmar citizens with unassessed sources of income introduced under the 2019 Union Tax Law will be repealed in fiscal 2020-21, which commences on October 1, U Maung Maung Win, deputy minister of Planning, Finance and Industry, said at the Pyidaungsu Hluttaw on July 13, upon submitting the Union Taxation Law Bill for the new fiscal year. A 30 percent tax rate on all unassessed sources of income will be reinstated during the new fiscal period, he said.
The existing 2019 Union Tax Law provides that tax rates will be as low as 3pc for unassessed income up to K100 million, 5pc for income between K100 million to K300 million, 10pc for income between K300 million to K1 billion, 15pc of income between K1 billion to K3 billion, and 30pc for income exceeding K3 billion. Prior to the introduction of the 2019 Union Tax Law, unassessed sources of income were taxed between 15pc and 30pc.
– Myanmar Times
Myanmar GDP to grow at 6% next year
The Myanmar economy is forecast to expand by 6 percent in fiscal 2020-21, which falls between October 1, 2020 and September 30, 2021, U Set Aung, deputy minister of the Ministry of Planning and Finance, said at the Pyidaungsu Hluttaw meeting on July 13.
– Myanmar Times
EU envoy pledges support for Myanmar economy amid COVID-19
The Elrs top envoy to Myanmar pledged to continue supporting the economy over the duration of the COVID-19 pandemic and beyond. In an exit interview with The Myanmar Times, EU Ambassador Kristian Schmidt said he is proud to have shown the country that the EU is a “reliable and steadfast partner in a moment of a global crisis” with wide-ranging aid programmes. He referred to K7.9 billion of emergency cash set up by the bloc for workers in the garment industry, many of whom lost their jobs as a result of the economic impact of the pandemic. Over K2 billion has been dispersed to 21,690 workers in early July.
– Myanmar Times
Myanmar Extends COVID-19 Restrictions Until July 31
The government’s Central Committee on Prevention, Control and Treatment on COVID-19 on Monday, issued an order on restrictions and bans on gatherings and a curfew between 12 am and 4 am was extended until July 31. The restrictions include gatherings, social distancing in public and limiting passengers on highway buses and numbers in restaurants. The temporary bans on all kinds of visa, except for urgent diplomatic and United Nations visits, were extended until the end of July. International flights, apart from cargo and relief flights, are also banned until the end of July as all of the new COVID-19 cases have been imported.
– The Irrawaddy
Online expos saves the real estate market during COVID-19
The real estate market didn’t collapse during the COVID-19 restrictions earlier this year, given that online sales and marketing took over from face-to-face sales. March and April did see a drop in market demand for property in Yangon, but special discounts and access to information online allowed the market to pick up again in the middle of May.
– Myanmar Times
Myanmar, China to Promote Cross-Border e-Commerce Systems
An online meeting was held on Thursday between the Mandalay Region government, the Myanmar Ministry of Commerce, the International Liaison Department of the Central Committee of the Communist Party of China (IDCPC) and the government of China’s Yunnan province. The meeting aimed to promote collaboration between Mandalay Region and Yunnan province in implementing bilateral agreements between the two countries, especially the promotion of digital economy and e-commerce.
– The Irrawaddy
Central bank releases basic regulations for NBFIs
The Central Bank of Myanmar (CBM) on July 9 issued a set of basic principles to help regulate the non-bank financial institution (NBFI) sector. Under the new rules, the loan agreements drawn up by NIFBIs must reveal the loan amount, interest rate per annum, repayment period and number of installments. The repayment schedule must show the capital and interest to be repaid and this must be attached to the loan contract. The interest rate shall be calculated based on the loan balance. Commissions and other fees as well as late payment interest or penalties in the event of a default must also be stated in the documents.
– Myanmar Times
SEA digest: SG’s Karana raises $1.7m; MyanCare raises funding led by SPARX
Singapore’s plant-based meat startup Karma has secured $1.7 million in seed funding from several investors across the region, while Myanmar-based healthtech startup MyanCare has raised $600,000 in funding led by Japan’s investment group SPARX.
– Deal Street Asia
Chinese business travellers allowed entry to Myanmar under new scheme
Ministry of Foreign Affairs Deputy Director General Aung Kyaw Zan told Mizzima that they had a plan to allow Chinese travellers who wished to enter Myanmar under a special scheme for urgent business matters. The travellers who want to visit Myanmar urgently to implement business works, projects, construction work and departmental work will be allowed to enter the country under a “Fast Track” scheme which will give them a special quarantine programme. Under this “Fast Track” scheme, these foreign travellers may come to Myanmar by relief flights, special flights and chartered flights. The “Fast Track” scheme will be expanded to other countries too.
– Mizzima
Eight foreign investments were approved for Yangon Region this week. The government has also announced it will create an additional 500 billion kyats (US$364 million) in funding to address business losses due to COVID-19. Five firms have also been shortlisted by the Ministry of Planning, Finance and Industry for the tender to run the Myingyan Steel Mill.
– The Irrawaddy
EU postpones monitoring mission, asks Myanmar to respond by September
Myanmar has until mid-September to update the European Commission on its progress in resolving the conflict in northern Rakhine and other rights abuses, a move essential for the Southeast Asian country to keep its trade preferences with the world’s largest trading bloc. Brussels has requested Daw Aung San Suu Kyrs government to submit a written response on the extent to which it is working towards improving human and labour rights standards, according to EU Ambassador Kristian Schmidt.
– Myanmar Times
Myanmar Issues COVID-19 Travel-Fit Certificates for Urgent Overseas Trips
Mandalay – The Ministry of Health and Sports’ National Health Laboratory (NHL) in Yangon has started COVID-19 tests to provide travel-fit certificates for urgent overseas travel. The memo said the travel-fit certificate for COVID-19 shall be issued after the test at a cost of 200,000 kyats (US$147). According to the NHL in Yangon, the test will take one day and require the presentation of an ID card, passport, flight ticket and the time of departure.
– The Irrawaddy
Almost three quarters of COVID-19 fund in Myanmar distributed to SMEs
Nearly 70 percent of the COVID-19 funds set aside to support the economy has been distributed to small and medium-sized enterprises (SMEs) in the garment manufacturing, hotels and tourism sectors since April. The government lent a total of K101 billion in seven tranches to 3393 businesses impacted by the pandemic, according to a statement issued by the government on July 8.
– Myanmar Times
Myanmar to invest CPF funds for pensioners
Money from a Central Provident Fund (CPF) can be invested in selected securities with the aim of generating returns and growing the size of the fund, according to a new bill. According to the Myanmar Central Provident Fund bill, funds can be used to buy securities, treasury bills and bonds and shares both domestically and internationally.
– Myanmar Times
Hotels, restaurants in Myanmar suffer as pandemic lingers
About 60 percent of hotels in the country have reopened but business remains sluggish as the COVID-19 pandemic lingers and restrictions continue on the entry of foreigners until the end of the month. The same is true for restaurants, which have all reopened since May. Their earnings have dropped as much as 50 percent from pre-pandemic levels, as people remain wary of visiting public places.
– Myanmar Times
Myanmar govt announces 5 short-listed firms for steel plant JV
The Ministry of Planning, Finance and Industry has shortlisted five companies to apply to form a joint venture with state-owned No MI steel plant Nyingyan1. The ministry intends to restart the steel plant with the help of the private sector. The companies selected to participate in the tender are: Sinosteel Equipment & Engineering Co Ltd, Go Excellent Myanmar Co Ltd, Millcon Thiha Co Ltd, Direct Investment Ltd and IMR Resources (AG) India Private Ltd.
– Myanmar Times
Mandalay to grant business licenses for small scale industries
The Mandalay Region government expects to grant a total of 400 licenses to small handicraft and cottage industry businesses this fiscal year, said U Aung Thin, regional head of the Small. Scale Industries Department. This is up from 360 permits in fiscal 2018-19 and 300 in fiscal 2017-18 despite COVID-19.
– Myanmar Times
Group urges stakeholders to stop Rakhine gas projects to end conflict
Arakan Oil Watch (AOW), an independent non-governmental community-based organisation based in Myanmar called on the government, the global oil industry and other corporations to stop plundering the rich natural wealth of Rakhine State,” saying this directly fuels conflict and driving the local population further into destitution.
– Myanmar Times
Wave Money could be Myanmar’s first tech unicorn, says Yoma Strategic CEO Pun
With the recent establishment of a new holding company to acquire the additional stake in Myanmar-based fintech company Wave Money, Singapore-listed Yoma Strategic Holdings aims to become central to the country’s financial system in the near future. In an interview with DealStreetAsia, Yoma Strategic Holdings CEO Melvyn Pun said Wave Money is targeting as many as 11 million monthly active users on its platform in the next four years. “If we achieve that, this will hopefully be the first tech unicorn in Myanmar,” he added.
– Deal Street Asia
Myanmar construction sector requests policy relief over cash
Construction businesses are calling for an easing of regulations and tax reductions over financial assistance to help them keep afloat in the wake of COVID-19. During a recent meeting between the construction sector and State Counsellor Daw Aung San Suu Kyi, U Shein Win, president of the Myanmar Construction Entrepreneurs Association (MCEA), said there are other ways besides cash that the government can use help to ease the burden on local contractors and developers.
– Myanmar Times
Magwe gas plant starts running, VPower says
VPower Group’s 23-megawatt gas plant in Kyun Chaung of Magwe Region began commercial operations on June 3 after a power purchase agreement was signed between the firm and the Ministry of Electricity and Energy’s Electric Power Generation Enterprise, VPower said in a statement.
The ministry has seven projects to produce electricity through natural gas and LNG, totalling 1166MW, deputy energy minister U Khin Maung Win said. These projects are located in Kyun Chaung, Ahlon, Kyaukphyu, Thanlyin, Thaketa, Magwe and Shwe Taung.
– Myanmar Times
Myanmar Strategic Interim Loss Narrows On Higher Revenue
Myanmar Strategic Holdings Ltd on Monday posted improved results for the first half of financial 2020, as it said the Covid-19 pandemic has accelerated its digital transformation and unlocked new revenue streams.
For the six months ended March 31, Myanmar Strategic posted revenue of USD2.8 million, up 8% from the comparative period a year prior. Its pretax loss narrowed to USD1.6 million from USD1.7 million. By business, Services contributed 70% of revenue, Education 28%, and Hospitality 2%.
– Alliance News
India’s ONGC raises investment in Shwe gas Project
India’s Prime Minister Shri Narendra Modi has confirmed that ONGC Videsh Ltd, the overseas arm of Indian national oil company Oil and Natural Gas Corporation Ltd will invest more than US$121 million to produce more gas off the coast of Rakhine State.
– Myanmar Times
AYA SOMPO Insurance rides on heightened demand for insurance for growth
The COVID-19 pandemic has raised awareness on the need for insurance among the Myanmar people and insurance providers in the country are innovating fast to capitalise on growing interest. “Most workers do not feel safe and worry about their health in the workplace as a result of COVID-19,” said U Zin Maung, an employee at a local communications agency.
– Myanmar Times
Manufacturing sector in Myanmar shows signs of recovery amid COVID-19 slump
Manufacturers in Myanmar are optimistic about a recovery in production over the next 12 months, with a number of firms reporting plans to expand capacity, according to the consultancy IHS Markit. The improving sentiment comes even as the majority of Myanmar firms said they were not doing well as a result of COVID-19.
– Myanmar Times
The Irrawaddy Business Roundup
This week, Myanmar has resumed rice exports after stockpiling enough for local demand. Six European Union states suspended Myanmar’s debt payments for the remainder of the year in order to allow the country to focus on economic recovery from the pandemic. Meanwhile, Myanmar allocated 14.6 billion kyats (US$10.6 million) in loans for 307 enterprises impacted by COVID-19. Myanmar also saw four new investments that are projected to create job opportunities for more than 3,000 people in Ayeyarwady region.
– The Irrawaddy
COVID-19-Impact: Chance to revisit Sustainable Development Goals
Myanmar has been able to manage the pandemic effectively, however its aftershocks on the economy and society have been enormous. The Covid-19 economic recovery plan and health safety protocols in place are aimed at rebooting the economy and society.
– Mizzima