Myanmar Business Today - Vol 2, Issue 18

May 8-14, 2014
Myanmar Business Today
mmbiztoday.com
mmbiztoday.com May 8-14, 2014| Vol 2, Issue 18MYANMAR’S FIRST BILINGUAL BUSINESS JOURNAL
Myanmar Summary
Myanmar Summary
Contd. P 12... Contd. P 12...
Inside MBT
Yangon’s Traders Hotel Becomes
Sule Shangri-La P-23
Seven in 10 Asian Firms Eyeing Myanmar
Entry in The Next 12 Months: Survey
S
eventy percent of
Asian business lead-
ers said they plan
to expand into Myan-
mar within the next 12
the Southeast Asian coun-
try remains a key invest-
ment hotspot for compa-
nies looking for regional
growth opportunities, a
survey revealed.
The survey, conducted
among key decision mak-
ers of Asian companies
with an annual turnover
of S$50 million or more,
found that the two most
compelling reasons be-
hind their focus on My-
anmar were the opportu-
nity to provide goods and
services to the country’s
growing middle class (46
cant business opportuni-
ties present as a result of
the country’s rapid trans-
formation (41 percent),
the survey results show.
Singapore-based United
Overseas Bank Ltd (UOB)
conducted the survey with
more than 100 of its cor-
porate banking and com-
Phyu Thit Lwin
mercial banking customers
when they attended an in-
vestment seminar in Yan-
gon in late February.
Ivan Chu, business op-
erations manager, Soon
Hong Seng Pvt Ltd, a
hardware tools and safety
equipment supplier, said:
“Myanmar’s fast-growing
economy and its need for
infrastructural develop-
ment mean that there is
a ready market for our
hardware tools and safety
products.
“This, combined with
competitive labour costs
and young and vibrant
workforce, makes Myan-
mar an attractive expan-
sion destination for our
manufacturing business.”
However, as with any
emerging economy going
through a rapid transfor-
mation, Myanmar faces
the challenges of chang-
ing local laws and invest-
ment regulations.
Sam Cheong, execu-
tive director and head of
group FDI Advisory Unit,
UOB Group, said, “The
business opportunities
in Myanmar are real and
so are the risks and chal-
lenges.
UOB
United Overseas Bank
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Thilawa SEZ Construction
Work on Track
Project set to go into partial operation in mid-2015
Htun Htun Min
M
yanmar will see
Thilawa Special
Economic Zone (SEZ) go
into partial operation in
involved with the project
said.
“The earthwork for the
Class A Project has been
completed and construc-
tion of water and power
facilities are underway,”
U Win Aung, chairman
of Myanmar Thilawa
SEZ Holdings Public Ltd
(MTSH), which holds 41
percent share in the pro-
ject, said.
The Thilawa project is
expected to help create
about 40,000 jobs for lo-
cal residents, he added.
The Class A project cov-
ers 396 hectares out of
the 2,342-hectare Thila-
wa SEZ, located 25 kilo-
metres from Yangon.
MTSH has received
many letters of intents
from companies around
the world, especially from
Japan, Hong Kong and
Europe, to invest in the
project, he added.
Thilawa SEZ Holdings to Return
over K18-b Oversubscribed
Shares P-5
The Bonds That Will Tie The Na-
tion (Part I) P-7
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May 8-14, 2014
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2LOCAL BIZ
MYANMAR’S FIRST BILINGUAL BUSINESS JOURNAL
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Business News in Brief
Military-owned enterprises to lose privileges
in mining sector
Myanma Economic Holding Ltd (MEHL) and Myan-
ma Economic Corp (MEC), owned by the Ministry of
Defence, will not have any special privileges in the min-
ing sector including the lucrative jade and ruby indus-
try, local media reported, citing director general Win
Htein of the Ministry of Mining. “They won’t have any
privileges any more. They will have to take part in the
competitive bidding against others when their current
mining licenses expire soon,” he was quoted as saying.
Local airline to launch Myeik-Bangkok Flight
ing Myanmar’s southeastern archipelago of Myeik with
Thai capital Bangkok this month, according to a local
media report. Union Express Charter Airline, a joint
venture between Myanmar Union Express Aviation
using a 168-seater Boeing737 to link Bangkok and the
coastal city in Tanintharyi division, which was recently
opened up for tourism. Flights will run every Tuesday
and Friday, costing $140 for a return ticket, the report
to Bangkok via Yangon.
Japan to give ¥4b to streamline taxation sec-
tor
Japan has pledged to spend almost ¥4 billion to
streamline Myanmar’s tax sector, according to the Cus-
toms Department under the Ministry of Finance. The
Japanese government will provide ¥3.9 billion for the
Single Window Project which aims to modernise the
taxation system by using auto-clearing for commodi-
ties. An agreement regarding this between the two gov-
ernments was signed last month.
Thilawa SEZ Holdings to pick independent di-
rector
The government has asked the Thilawa SEZ Holdings
Co Ltd to appoint independent directors who won’t
hold any shares in the company. The Myanmar govern-
ment owns ten percent of the company while 41 percent
nies investing over K39 million ($40,206) in the shares.
The remaining 49 percent is owned by Japan. “We will
hold a shareholder meeting and appoint the directors,”
U Set Aung, chairman for Thilawa SEZ Administration
Committee, said.
Myanmar relaxes journo visa rules for ASEAN
Summit
eign journalists seeking to cover the upcoming ASEAN
Summit in the country later this month, the informa-
tion ministry said. Under the new scheme, the one-
month multiple entry visa rule for foreign reporters has
ists were advised to re-apply for a new visa after three
months at the Myanmar embassies which issued their
will be allowed to extend their visa in every six months,
according to the new plan.
Yatanarpon Teleport seeks foreign partners
State-owned telecommunications services provider
Yatanarpon Teleport is in discussion with four foreign
companies to establish a public-private partnership, lo-
cal media reported. True Move from Thailand and Ax-
iata from Malaysia are reported to be favourites. The
joint venture will be 51 percent owned by Yatanarpon
tanarpon Teleport currently provides mobile services
and internet provision.
MOGE calls rigs upgrade tender
State-owned Myanma Oil and Gas Enterprise (MOGE)
under the Ministry of Energy is now planning to up-
grade its own drilling rigs with a range of capacity for
shallow, medium and deep wells, and aims to cooperate
with local and foreign partners to participate in future
drilling activities. MOGE said all interested local and
foreign companies are “warmly invited to come and dis-
at Complex 44 in Nay Pyi Taw.
Myanmar Summary
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&SdaMumif;od&onf/

May 8-14, 2014
mmbiztoday.com
3LOCAL BIZ
Myanmar Summary
6,000 Tonnes of Rice to Be Shipped to Japan This Month
Rice export falls in 2013-2014 FY
Phyu Thit Lwin
M
yanmar will export
6,000 tonnes of rice to
Japan this month, ac-
cording to Myanmar Rice Fed-
eration (MRF).
This is the second time My-
anmar is going to export rice to
Japan after Japan agreed to im-
port rice from Myanmar for the
In 2013, Myanmar won the
tender to export 5,000 tonnes
of rice to Japan.
This year, Myanmar Agribusi-
ness Public Corp (MAPCO) and
Japan’s Mitsui Corp collabo-
rated to bid for a tender and
won an export order of 6,000
tonnes.
The companies will export
Sinthwe Latt and Hmawbi II
type (5 percent broken) rice to
Japan.
“Besides the 6,000 tonnes of
rice export, we also signed MoU
with some African countries to
export 40,000 tonnes of rice,”
Dr Soe Tun, chairman of MRF
said.
“For the rice exporters, there
between the local and foreign
markets. So there is not much
rent export order, they will get
about $450 to $500 per tonne,
which is a much better price,”
said Dr. Soe Tun from Myan-
mar Rice Federation.
Half of Myanmar’s rice ex-
ports go to China via border
year, over 800,000 tonnes of
rice were exported to China.
According to the Myanmar
Rice Federation’s data, Myan-
mar’s rice export fell in 2013-14
Myanmar exported about 1.5
million tonnes of rice in 2012-
13 but could only manage to ex-
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DarioPignatelli/Bloomberg

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 4
Malaysia’s Yinson Eyes
Myanmar O&G Opportunities
Aye Myat
M
alaysia-based Yinson
Holdings Bhd (YHB),
support services for the up-
stream oil and gas sector, said
it is looking into the prospect
of venturing into the oil and gas
sector in Myanmar.
The company is eyeing Myan-
mar because of its rich oil and
gas reserves, Yinson chairman
and managing director Lim
Han Weng said, adding that the
Nigeria and Angola in West Af-
rica, and Vietnam and Malaysia
in Southeast Asia for its next
ventures, Malaysian media re-
ported.
Experts suggest that in ad-
dition to Myanmar’s current
20 trillion cubic feet (tcf) of
reserves, which is worth $106
billion, there could be another
80tcf of undiscovered natural
gas worth about $424 billion.
Most of Myanmar’s reserves
are still in place as the country
has only exported its gas for the
past 15 years. Since the 1970s ex-
plorers have only drilled a total
making the country an almost
completely unexplored zone.
“Myanmar has a good oppor-
tunity in the sector, which is
developing well in the past few
years. However, we need to un-
derstand the legal structure of
our next move,” Lim was quot-
ed as saying.
In the last 12 months, Myan-
mar gave concessions for pro-
duction and exploration of its
gas blocks to global energy gi-
ants like Royal Dutch Shell,
ConocoPhilips, BP, Chevron
and Woodside, among others.
Myanmar Summary
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cJhonf/
Gov’t to Carry Out Maintenance
Work on Two Major Rivers
Phyu Thit Lwin
M
yanmar government
will carry out main-
tenance work on two
major rivers – Ayeyarwaddy
and Chindwin – in the coun-
try, in a bid to improve the riv-
ers’ navigation, the Ministry of
Transport said.
The government will spend
K12 billion ($12.5 million) on
removing sandbank and main-
tenance of riverbeds and wa-
terways of the two rivers with
preventive measures against
erosion of the rivers, according
to the ministry.
Of the total budget, K127
million will be allocated to the
maintenance of Twante canal,
which is vital for transportation
by waterways to and from Yan-
gon and the Ayeyarwaddy delta
region in the southwest.
According to the ministry’s
Directorate of Water Resources
and Improvement of River Sys-
tem, the Ayeyarwaddy river is
eroding at many places along
the river and the directorate
is currently repairing places
where erosion is most serious.
The directorate said it has
completed the assessment on
the possibility for building four
low-head dams on the Ayeyar-
waddy river in central Myan-
mar recently.
The water level of the Ayeyar-
waddy river last year reached
above its danger level of 1,260cm
in the rainy season but fell to
720cm in summer in Mandalay.
Flowing from north to south,
the Ayeyawaddy river has been
the key water transport route of
Myanmar since ancient times.
It also poses a great barrier to
the social and economic rela-
tions between the eastern and
western parts of the country.
a total of 11 Ayeyawaddy river-
crossing bridges had been con-
structed over the past two dec-
A bridge on Ayearwaddy river that connects Magwe and Mandalay divisions.
SherpaHossainy
ades and three more bridges are
under construction.
There are also bridges across
Chindwin, Thanlwin and Sit-
toung rivers.
Myanmar Summary
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&mwGif tokH;jyKoGm;rnfjzpfonf/
Yinson

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 5
Myanmar Summary
Thilawa SEZ Holdings to Return over
K18-b Oversubscribed Shares
Htun Htun Min
M
yanmar Thilawa
SEZ Holdings
(MTSH) Public
Ltd announced that the
company will return over
K18 billion ($18.7 million)
worth of oversubscribed
shares to the public.
Shares of Thilawa Spe-
cial Economic Zone (SEZ)
went on sale in March
in absence of a stock ex-
change – in a bid to raise
K21.45 billion ($22.3 mil-
lion) through selling 2.145
million shares (K10,000
phase of construction of
the SEZ 25 kilometres
south of the country’s
commercial hub Yangon.
However, the proposed
subscription has reached
over K40 billion ($41.6
the company said.
A total of over 17,000
proposals to buy more
than 4 million shares
were received and among
them, about 90 percent
wanted to subscribe 500
shares or less and the rest
proposed to subscribe
over 500 shares.
Currently, MTSH is ne-
gotiating with the banks
to return the oversub-
scribed shares to the pub-
lic and MTSH will pay for
the banks’ service cost,
said U Tun Tun, treasurer
of MTSH.
The shares were avail-
able at Kanbawza Bank,
Ayeyawady Bank, Myan-
mar Apex Bank, Coopera-
tive Bank and Yoma Bank.
While selling shares
MTSH gave priority to
the buyers who were sub-
scribing to 500 shares
(valued K5 million) or
less. The company in-
tends to allocate 56 per-
cent of the shares to buy-
ers who belong to this
category and 44 percent
to those subscribing over
500 shares, chairman of
MTSH U Win Aung said.
“The government gave
us instructions to make
shareholders with less
subscription to become
majority in the public
company,” said U Set
Aung, chairman of the
SEZ management depart-
ment and also the vice
chairman of the Central
Bank of Myanmar.
The subscribers of over
500 shares may not be
able to buy shares accord-
ing to their proposals and
can only subscribe to the
number of shares set by
MTSH, U Win Aung said.
“We sold shares to the
public to make us a prop-
er public company. These
shares are only a part of
the overall project. We
will sell more shares de-
pending on our require-
ment.
“Not only Myanmar
and Japan but also other
international companies
the project,” he said.
However, MTSH didn’t
explain its investment
procedures prior to the
share sales and share buy-
ers said they would like to
know details of the com-
pany’s plans if they are
buying its shares.
An applicant from Yan-
gon’s Sanchaung town-
ship who submitted share
subscription proposal
told Myanmar Business
Today that he wants to
buy the shares of MTSH
because Thilawa is My-
Economic Zone, but he
doesn’t know the detail
of the company’s invest-
plans.
“The company should
hold meeting with the
shareholders to explain
their plans in detail,” he
said requesting anonym-
ity.
The Thilawa project is
a joint venture undertak-
en by the Myanmar and
Japanese governments
along with a consortium
of Japanese companies,
where the Myanmar side
owns 51 percent and the
Japanese side the rest.
In the joint venture com-
pany, Myanmar Japan
Thilawa Development Ltd
(MJTD), Myanmar gov-
ernment’s Thilawa Spe-
cial Economic Zone Man-
agement Committee owns
10 percent and the rest is
owned by MTSH, which is
a consortium of nine My-
anmar companies.
The Myanmar com-
panies are: FMI Co Ltd,
Golden Land East Asia
Development Ltd, Myan-
mar Agribusiness Public
Corp Ltd, Myanmar Ag-
ricultural & General De-
velopment Ltd, Myanmar
Edible Oil Industrial Pub-
lic Corp Ltd, Myanmar
Sugar Development Plc,
Myanmar Technologies
and Investment Corp De-
velopment Ltd, National
Development Co Group
Ltd and New City Devel-
opment Plc.
On the Japanese side, 39
percent is owned by MMS
Development Co Ltd, led
Sumitomo Corp, Mitsubi-
shi Corp and Marubeni
Corp, and 10 percent is
owned by the Japan In-
ternational Cooperation
Agency (JICA).
Thilawa SEZ, which
is expected to be opera-
tional by 2015, includes
a large industrial zone, a
deep sea port, factories
and housing projects.
Myanmar Thilawa SEZ
Holdings Public Limited
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UAung/Xinhua

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 6
Myanmar Summary
Myanmar Summary
Myanmar, Japan to Cooperate on
Tourism Development in Bagan
Aye Myat
T
he Ministry of Hotels and
Tourism and Japan In-
ternational Cooperation
Agency (JICA) will conduct a
feasibility study for a project to
establish a pilot model for tour-
ism development in Bagan, an
ancient city in Mandalay region.
The study includes a tech-
nical cooperation project for
improvement of tourist infra-
structure, human resources de-
velopment and heritage and en-
vironmental conservation, the
ministry said.
Bagan, Myanmar’s top her-
itage destination, is home to
thousands of ancient pagodas
and is shortlisted to join UN-
ESCO’s World Heritage list.
On April 10, the ministry and
JICA signed a record of discus-
sion for the project that aims
to further develop the tourist
industry in Myanmar through
technical cooperation between
the two countries.
Recently, the Ministry of Ho-
tels and Tourism drew the My-
anmar Tourism Master Plan
(2013-2020) with the assistance
of international organisations.
conserve Bagan and control
tourist developments. Zoning
laws have been approved that
exclude all hotel development
near or on the pagoda sites.
However, there are genuine
concerns that commercial de-
velopment will cause irrepa-
rable damage to the historical
park and the JICA team is com-
missioned with the task of iden-
tifying measures that will pre-
vent damage or overcrowding.
Since the current quasi-ci-
in 2011, tourist arrival in My-
anmar reached 1.06 million in
2012 and 2.04 million in 2013,
UAung/Xinhua
Gov’t to Launch MyanTrade
to Boost Exports
Pann Nu
M
yanmar is planning
to establish an export
promotion organisa-
tion in a bid to boost the coun-
try’s exports, the Ministry of
Commerce said.
The new agency, MyanTrade,
will prioritise enhancing trade
and also study other regional
countries to adopt successful
policies.
A national export strategy
aimed at improving both quan-
tity and quality of the exported
goods is being drafted, the min-
istry said. A law governing val-
ue-added export goods as well
as an anti-dumping law and a
safeguard law are also being
drawn up.
Myanmar mostly exports
natural gas, agricultural pro-
duce, gems, marine and forest
products, and imports consum-
ers products, raw materials and
heavy machineries.
that ended in March at $2.65
billion because of surge in im-
ports following the opening up
of the country, the commerce
ministry statistics showed.
The total trade volume rose
from $18 billion to $25 billion
to the data.
Myanmar’s total exports in
2013-14 amounted to $11.1 bil-
lion while the total imports
stood at $13.75 billion. Exports
in 2012-13 were $8.97 billion
while imports were $9.06 bil-
lion.[dkw,fESifhc&D;oGm;vma&;0efBuD;Xme
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enf;ynmyl;aygif;aqmif&GufrIrsm;vkyf
aqmif&ef aqG;aEG;vufrSwfa&;xdk;cJh
aMumif; od&onf/
Ital-Thai Eyes Projects Worth $2b in Dawei
Kyaw Min
T
he Italian-Thai De-
velopment (ITD)
Co aims to bid for
projects worth $2 billion
Dawei Special Economic
Zone project in Myanmar
this year.
The company trans-
ferred responsibility for
the project to the Thai and
Myanmar governments
earlier this year citing dif-
President and chief ex-
Kannasutra Premchai
Kannasut told a share-
holders meeting that the
company would enter a
joint venture with Rojana
Industrial Estate to bid
for development of an in-
dustrial estate in Dawei,
Thai media reported.
Italian-Thai is also in-
terested in bidding on
the second and the third
phases of the project next
year, the reports said.
The company will now
focus on three businesses:
construction, infrastruc-
ture projects and mining,
it said.
Myanmar Summary
Reuters
Italian-Thai Development
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Mum;xm;onf/

May 8-14, 2014
mmbiztoday.com
7LOCAL BIZ
Myanmar Summary
The Bonds That Will Tie The Nation (Part I)The first part of this article discusses the urgent need for capital to sustain the development process in Myanmar and the financing mechanisms the gov-
ernment can adopt to achieve that. The second part, which will be published next week, will discuss infrastructure investment and financing.
Kyaw Myo Htoon
TYangon, drink-
ing water shortage
across Myanmar, high
unemployment rate in
the country and sustain-
ing peace with ethnic
groups – viable solutions
for all these challenges
and problems come down
to one critical component
that will dramatically re-
shape the future of this
nation: “capital.”
The development and
growth of both public and
private sectors demand
large sums of capital in
emerging economies like
cient capital it will merely
be a distant dream to be-
come a thriving modern
nation.
It is obvious that rais-
ing revenue for the de-
velopment of the country
is the utmost priority for
current as well as future
governments of Myan-
“
It is no longer true that a
government must absorb
loss in order to serve its
own people, a perception
widely rooted among Myanmar
public.”
mar no matter who wins
in 2015 election. On the
other hand, spending and
investing those revenues
are even more critical
because it will also play
an important role in sus-
taining peace with ethnic
groups after peace agree-
ment deal is attained at
nationwide levels. With-
out proper economic
development plan, or a
budget, in those ethnic
provinces it will be very
challenging for the gov-
ernment to keep the peace
going.
loss business entity the
government and the pub-
lic need to understand
and monitor where the
money comes from and
where the money goes,
especially in times of
sis, which happened in
Greece, Ireland and Por-
tugal. It is no longer true
that a government must
absorb loss in order to
serve its own people, a
perception widely rooted
among Myanmar public.
Therefore, it is a matter
of national emergency to
come up with a plan that
will deploy the country’s
sources.
The main source of rev-
enue or capital for most
governments like My-
anmar is tax. Myanmar
government’s tax revenue
is about 4 percent of the
GDP – ridiculously low
compared to other peer
emerging countries like
Vietnam (25 percent),
Cambodia (15 percent)
and Bangladesh (10 per-
cent).
Vietnam launched a se-
ries of tax reforms from
1996 to 2010 to reach a
23 percent tax revenue to
GDP ratio. The tax rev-
enue collection grew at a
rate of 19.6 percent annu-
ally during the reform pe-
riod. Now Myanmar gov-
ernment has launched its
own tax reform but even if
it grows 20 percent annu-
to achieve double the cur-
to GDP ratio. At this pre-
sent moment or years to
come, tax revenue will not
be a reliable source of the
Myanmar government’s
revenue. To persuade and
educate individuals and
business organisations to
pay tax is a time consum-
ing and complicated pro-
cess.
The international best-
selling author Michael
Lewis points out in his
bestselling book “Boo-
merang” that the main
crisis of Greece was the
government having failed
to punish tax evaders.
Myanmar’s narrow tax
base and overreliance on
resource-based revenues
is laying the foundation
reforms are not urgently
undertaken, the govern-
ment may not be able to
provide basic services and
may risk becoming seri-
ously indebted. The gov-
dwell on the problem of
narrow tax base and focus
on solutions available for
economic development
other than tax.
International Organiza-
tion for Migration (IOM)
estimated that 10 percent
of Myanmar’s popula-
tion, then estimated to
be 50 million to 55 mil-
lion people, was living
abroad. Although some
5 million Myanmar are
working abroad for their
livelihood, only $566
million (or 1.1 percent
of GDP) worth of remit-
tances went through the
Central Bank of Myanmar
last year. In neighbouring
Bangladesh, monetary
authorities managed to
get their hands on nearly
$14 billion (or 12 percent
of GDP) in remittances,
channelled through their
formal banking system.
According to a recent re-
port sponsored by the In-
ternational Fund for Ag-
ricultural Development
(IFAD) and the World
Bank, a migrant worker
in Asia sends home nearly
an average $4,000 annu-
ally. Even when average
amount is cut into half,
5 million Myanmar over-
seas workers will send
home $10 billion annu-
ally, which is equal to 20
percent of GDP and more
than the value of Myan-
mar’s annual gas exports
to Thailand, the Econo-
mist reported. Over the
recent years, the positive
impact of overseas remit-
tances on emerging econ-
omies has been a subject
of considerable debate.
Again, these remittances
are often referred to as
the ‘third pillar’ of devel-
opment alongside foreign
direct investment and
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wdkif;&if;om;e,fajrrsm;wGif

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 8
“
Myanmar’s narrow tax
base and over-reliance on
resource-based revenues
is laying the foundation
for a future fiscal crisis.”
overseas development
assistance, and the value
has outweighed that of
sistance.
Remittances have now
become the second largest
inbound resource for the
developing countries after
foreign direct investment
development assistance
(ODA) and private debt
and equity. In 2008, re-
mittances received in 20
countries were at least as
large as 11 percent of their
GDP. Tajikistan received
remittances as much as
50 percent of GDP, which
is quite a portion. It is
also found that 10 percent
increase in per capita of-
tances will lead to a 3.5
percent decline in the
share of people living in
poverty.
While governments can-
not tell migrants and their
families how to spend
their own money, policy-
makers can put in place
mechanisms for migrants
and their families to in-
vest remittances in capi-
tal-accumulation projects
involving both human
and physical development
whole country.
Another way to tap into
Myanmar migrants’ pop-
ulation is selling diaspora
bonds to Myanmar living
and working aboard. The
idea of diaspora bond is
nothing new. Israel was
diaspora bonds, issuing
1951 and boasts having
sold $33 billion worth of
bonds worldwide since
the program’s incep-
tion. The Indian govern-
ment raised over $11 bil-
lion from diaspora bonds
it issued in 1991, 1998 and
2000.
These bonds were issued
to support balance of pay-
ing during times when
ing international capital
markets. Since 2001, the
government of Sri Lan-
ka has raised well over
$580 million through the
Sri Lanka Development
Bond. This scheme en-
courages citizens in the
diaspora to invest in their
home countries by pro-
viding the much-needed
revenue at lower than
market interest rates, a
patriotic discount.
Unlike remittances,
which often go towards
domestic consumption,
tions an avenue to couple
revenue towards infra-
structure and other devel-
opment projects. Money
generated from diaspora
bond sales can be used for
as health care or educa-
tion or building roads and
bridges. However, the
government will need to
lay down a tangible plan
to establish an independ-
ent authority or a depart-
ment to manage the fund
that is generated from di-
aspora bond to build trust
with potential bond buy-
ers.
cial infrastructure in My-
anmar such as banks,
stockmarket and other
critical for both private
and public sector. Less
known function of a stock
exchange is that govern-
ment can also raise bond
(debt capital) through
Myanmar stock exchange
operations and projects.
Bond is a debt instru-
ment through which gov-
ernment borrows money
from public. But sover-
eign bond is another kind
of bond that is issued to
international investors
through international
capital markets and the
total amount of bonds
sold can be $500 million
to $1 billion. On the other
hand diaspora bonds can
rake in $100 million to
$200 million.
Encouraging news
is that in 2013, a lot of
emerging economies
from Africa issued foreign
currency bonds in inter-
national stock markets:
Ghana issued $1 billion,
Rwanda $400 million,
Tanzania $500 million
and Zambia $750 million.
Most of their bonds were
oversubscribed, meaning
there were more buyers
in the market than the
amount of bonds issued.
Tapping capital from
stock market for both
government and private
institutions has never
been easy as it takes time
to prepare or restructure
requirements. Before one
government can issue
sovereign bonds, it needs
to obtain credit rating
from international credit
rating agencies and it is
a daunting process, but
Myanmar government
must prepare today so
that they can start issuing
bonds in the next two to
three years time.
“The rating process, as
well as the rating itself,
can operate as a power-
ful force for good gov-
ernance, sound market-
oriented growth, and the
enforcement of the rule
of law. From a business
perspective, sovereign
credit ratings serve as a
baseline for evaluating
the economic environ-
ment surrounding invest-
ment possibilities and as
a benchmark for inves-
tors to distinguish among
markets, which provides
valuable information and
a basis for evaluating
risk,” said the US State
Department stressing the
importance of sovereign
credit rating for countries
of sub-Saharan Africa in
2006.
“The beauty with bonds
is that their very existence
lends further credibil-
ity to the country seeking
funds, thereby encour-
aging a broader range of
high quality investment.
More credibility equals
more money, equals more
credibility, equals more
money and so on,” Damb-
isa Moyo, author of “Dead
Aid” encourages African
countries to sell bonds for
their countries’ develop-
ment.
Poor countries obtain
credit ratings not only
for sovereign borrowings
but also for sub-sovereign
entities’ access to inter-
national debt and equity
capital. This means that
least developed minor-
ity provinces and regions
in Myanmar like Chin
or Kachin states can is-
sue their own municipal
bonds or sub-sovereign
bonds to international in-
vestors to borrow money
for their regional devel-
opment projects.
Credit rating from in-
ternational credit rating
agencies will also en-
country. Vietnam issued
international bonds in
foreign currency in 2005
worth $750 million and
Vietnam’s FDI to GDP
rate also picked up from
around 3 percent before
2005 to over 8 percent
in 2007, and remained
above 5 percent until
2013.
But issuing interna-
tional bonds and getting
credit rating are not the
only solutions to increase
FDI. Investment in in-
frastructure is still key to
attracting FDI. Although
Indonesia issued interna-
tional bond, FDI to GDP
rate remains at the rate
of 1 percent to 2 percent.
Even if Myanmar govern-
ment can issue $1 billion
worth of sovereign bonds
in the next two years this
would still be short of the
annual infrastructure in-
vestment requirement of
$4 billion.
Kyaw Myo Htoon
(John) is a bestselling
book “Understanding Eq-
business book in Myan-
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rSm rrSefawmhacs/

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 9
Myanmar Summary
SDVEntersMyanmarMarket
Kyaw Min
F
rench logistics com-
pany SDV, wholly
owned by French
investment and industrial
holding group Bolloré,
said it has set up a new of-
its investment and expan-
sion strategy in Southeast
Asia.
operation on May 1.
“As the country moves
toward democratic and
economic reforms, many
of our customers are ex-
ploring this region and
some of them already
took the plunge on invest-
ing massively in Myan-
mar,” said Julien Loiret,
general manager, sales
and development of SDV
Myanmar.
Anticipating a strong
growth in demand for
transport and logistics
and to accompany its
customers in Myanmar’s
booming market, SDV
will provide its services
and solutions especially
in the oil and gas, tel-
ecom, healthcare, fashion
and retail industries, the
company said.
“The opportunities
abound, in raw materi-
als such as oil and gas
but also in catering the
need, from healthcare to
telecommunication, of a
population of 62 million,”
added Elizabeth Shwe,
who will be joining SDV
Myanmar as a director.
SDV said its “experi-
SDV Myanmar to face the
challenges ahead” in the
emerging market.
SDV, which spans
across 24 countries in
ing supply chain man-
among the world’s top 10
in transport and logistics
with a network of 600
sites in 102 countries. It
international transport,
customs brokerage, ware-
housing and distribution,
and supply chain man-
agement.
The company runs a
global network of 600
agencies and employs
35,700 professionals
worldwide in 99 coun-
tries. Its revenue in 2013
stood at €5.473 million.
is located at Kyaik Wine
Pagoda road, Mayangone
township, Yangon.
WMC
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a'o&Sd EdkifiHaygif; 24 EdkifiHwGif
vkyfudkifvsuf&SdNyD; EdkifiHaygif;
102 EdkifiH&Sd vkyfuGufaygif; 600
wGif vrf;yef;qufoG,fa&;ESifh
logisitic vkyfief;rsm;vkyfudkifae
onfh urÇmhxdyfwef; 10 ck pm&if;
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EdkifiHrS ynm&Sifaygif; 35ç700
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&efukefNrdKUwGifzGifhvSpfrnfjzpfonf/

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 10
Myanmar Summary
Myanmar Summary
Myanmar Summary
Myanmar Summary
Gas Sector Top Revenue Earner
Phyu Thit Lwin
M
yanmar’s gas sector
emerged as the top
revenue earning ex-
port sector in the recently con-
data from the Ministry of Com-
merce showed.
Revenue from exporting gas
according to the ministry.
Myanmar’s export sector is
farm products, marine prod-
-
ucts (including exportation of
natural gas), animal products,
forest products and mineral
products.
Export earnings from rice,
beans and pulses, corn, rubber,
castor oil, cashew nut, mango,
water melon, onion, garlic, tur-
meric and ginger amounted to
over $2 billion in the same pe-
riod.
Oil and gas sector is also the
biggest source of foreign direct
investment into Myanmar, ac-
counting for over 31 percent
of the country’s total FDI with
over $14 billion in injected capi-
tal as of March.
During 2013-14, Myanmar’s
foreign trade totalled $24.87
billion, with exports taking up
$11.1 billion and imports repre-
senting $13.76 billion.
Land Disputes to be Solved
“According to Law”: Speaker
Kyaw Min
M
yanmar’s Parliament
and Lower House
Speaker U Shwe Mann
has called for solving land dis-
pute in accordance with law,
saying that the government and
the parliament are now discuss-
ing ways to resolve the issue.
Addressing local people in
Pathein in southwestern Ay-
eyawaddy delta region, U Shwe
Mann admitted that the govern-
ment is facing protests against
land grabbing cases in many
areas, especially in Ayearwaddy
region.
He pointed out that there was
much unoccupied land in the
area in the past and investors
were invited to make use of it
when local people did not have
enough capital to do so.
which cultivated at least 5,000
acres (2,025 hectares), were al-
lowed to export 50 percent of
their produce.
However, he added that some
companies had to return the
land to the government as they
-
ably, not only in the farming but
U Shwe Mann has earlier
protect the rights of farmers,
saying that the law shall be fair
and practical to ensure rule of
law.
to enable farmers, who make up
70 percent of the population, to
have access to adequate agricul-
tural loan at lower interest rate
stressing the need for reform to
Myanmar Railways Calls Fibre
Optic Cable Maintenance Tender
Wai Linn Kyaw
S
tate-run Myanma Rail-
ways (MR) under the
Ministry of Rail Transpor-
tation has invited tenders for
the maintenance of its optical
Yangon and Mandalay, an an-
nouncement said.
“Myanma Railways now in-
vites tenders from reputable
local, foreign or joint venture
companies to undertake works
for maintenance and ensuring
connectivity of the OFC be-
tween Yangon and Mandalay,”
a notice from the managing di-
rector of MR said.
-
G-652 from Yangon to Manda-
lay.
Tender documents and back-
ground information could be
obtained from the department’s
be made at +95 9 8300073 and
+95 67 77070.
The tender in original and
duplicate copies should be sub-
mitted to the Deputy General
Manager, Supply Department,
Myanma Railways, Corner of
Theinbyu and Merchant street,
Botahtaung township, Yangon
by 2pm, Tuesday, May 27.
The applicant must also sub-
mit an electronic copy of the
tender in a CD Rom. No sub-
mission via email will be enter-
tained, the announcement said.
The government-run depart-
ment in its announcement said:
“In line with the National De-
velopment Plan, the govern-
ment of Myanmar has been
identifying the economic poten-
tials to contribute to the coun-
try’s economic development. As
our endeavours for national de-
velopment, Myanma Railways
(MR) is committed to establish
potential rail concerned busi-
nesses.”
Timber Exports Hit
Almost $1b in 2013-14 FY
Pann Nu
T
he export of teak, hard-
wood and other timbers
reached $947 million in
-
ing to the Ministry of Com-
merce statistics.
The trade value of teak, hard-
wood, plywood and other wood
products exported overseas
amounted $916 million while
the value of timber exported
overland stood at $31 million,
according to government statis-
tics.
Teak logs were the largest ex-
port with a value of $638 mil-
lion while nearly 34,328 tonnes
of teak lumber was exported
with a net worth of $31.55 mil-
lion.
Over 590,000 tonnes of hard-
wood logs, worth $222 million,
and hardwood lumber weigh-
ing over 9,000 tonnes as well as
18,000 tonnes of plywood was
shipped abroad.
From 2001 to 2013, illegal
timber exports amounted to
16.5 million cubic metres with
a net worth of $5.7 billion, ac-
cording to a report from the
Environmental Investigation
Agency (EIA).
A plot of land on the bank of Ayeyarwaddy river.
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a':vm 31 'or 55 oef; &&SdcJhaMumif;
od&onf/

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 11
Myanmar Summary
Myanmar’sEducationSystemGearedforGrowth
T
he education system in
Myanmar is attracting at-
tention, as both the state
and private sector look to in-
vest in upgrading schools and
universities. The re-opening of
Yangon University to under-
graduates last December is seen
as a key development. Once
considered a leading institu-
tion in the region and home to
60,000 students, the university
saw its undergraduate teaching
suspended in the late 1990s.
Under the military dictator-
ship, the role of higher-level
education diminished. Today in
Yangon, universities have low
budgets and are spread across a
wide area making management
-
gish.
As Myanmar looks to rebuild
its university system, coopera-
tion with international institu-
tions may be one way to secure
the necessary funds and other
resources. In October, the Ja-
pan International Cooperation
Agency (JICA) announced it
was funding a $13.5-million
initiative to improve engineer-
ing education in Myanmar, in
association with seven Japa-
nese universities. Among the
goals of the programme will be
to update syllabuses in several
subjects (such as civil engineer-
ing and electronic engineering),
while Japanese professors will
travel to Myanmar to conduct
guest lectures and lessons.
Interest in the Myanmar edu-
cation market extends far be-
yond Asia, to include both Eu-
rope and the US. In February
2013, a group of 10 American
universities, organised by the
International Institute of Edu-
cation, a New York-based non-
to explore partnerships.
According to Jacques Fre-
mont, director of the interna-
tional higher-education pro-
gramme at the Open Society
-
isation, Myanmar will need to
links with foreign institutions.
“Will the Burmese say yes to
everyone and then lose control
of the reform agenda? Or will
they be in a position to plan and
say, ‘Here is what we need?’ The
pressure is huge right now,” he
told the New York Times last
year.
International schools
opening branches
Foreign investors are already
moving into the primary and
secondary school segments,
looking to serve wealthy lo-
cal families and the expatriate
community. The British Inter-
national School plans to open a
$20,000-per-year institution in
August, which will look to sat-
isfy some of the demand fuelled
by local wealthy families and
expatriates.
UK-based Harrow Interna-
tional Management Services
and Dulwich College Interna-
tional are taking a more indi-
rect route, partnering with Sin-
gapore-listed Yoma Strategic
Holdings, which is chaired by
Serge Pun, a local businessman,
to enter the market.
The bulk of funding for the
Harrow “early years centre” and
the Dulwich College school, nei-
ther of which will be branded
with the UK names, will come
from Yoma.
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Investment in public facili-
ties
The government appears
committed to spending money
to upgrade and expand its edu-
cation system. Under the mili-
tary junta, education received
little funding, on average ac-
counting for 1.3 percent of the
national budget. In the latest
education accounted for 11 per-
cent of the government’s $7.13
billion spending.
way to go in catching up with in-
ternational and regional stand-
ards. Much of the 70 percent
rural population has limited or
no access to internet, textbooks
or laboratory equipment, and,
in many cases, teachers lack the
relevant experience to deal with
overcrowded classrooms and a
weak curriculum.
“Overcrowding leads to a high
rate of absenteeism,” Shirley
Nang Hom Leik, Program Coor-
dinator at Nexus Myanmar, an
English training centre started
in 2010, told OBG. She added
that classroom practices do not
foster creative thought and re-
strict expression. “The current
education system does not en-
courage creativity by teachers,”
she said.
Moving forward
Whilst decades of neglect
have left the education sector in
restore the standard of learning
that was in place before military
rule. Support is coming from far
and wide to bolster an underde-
-
mented system. With greater at-
tention directed to the practices
and applications of foreign aid
and loans on the alleviation of
the country’s debt burden, My-
anmar will be in a more capable
position to develop its educa-
tion sector and ensure that fu-
ture generations are trained in
of the economy. OBG
“
As Myanmar looks to rebuild its
university system, cooperation with
international institutions may be one
way to secure the necessary funds
and other resources.”
UAung/Xinhua
A student practises writing at a local school in Yangon.
UAung/Xinhua

May 8-14, 2014
mmbiztoday.com
LOCAL BIZ 12
Myanmar Summary
“As Myanmar’s pace
of economic and social
transformation has accel-
erated over the last two
years, UOB too has looked
to strengthen its support
for businesses expanding
into this market.” Last
year, UOB established
an FDI Advisory Unit in
Myanmar to help existing
and potential clients to in-
vest in the country.
Business leaders in the
survey cited their top con-
cerns when expanding into
Myanmar as limited bank
KingPowerSecures
GoldenMyanmar
DutyFreeDeals
Phyu Thit Lwin
H
ong Kong-based King
Power Traveler (KPT)
has strengthened its
portfolio after gaining four new
contracts including with Gold-
en Myanmar Airlines.
The company also struck
wholesale supply service deals
with VietJet Air, Air Vanuatu
and Solomon Air.
The services will be launched
in May and June.
Golden Myanmar Airlines op-
with plans to add a new aircraft
will be adding A330 aircrafts
a week to Singapore, Bangkok
and Kuala Lumpur with rapid
expansions to Tokyo and Hong
Kong, with Mandalay Interna-
tional Airport being its primary
base.
KPT President Rakhita Jaya-
wardena said: “We have devel-
oped a good quality long-term
business with all our partners
very interesting opportunities
with quality-focused airlines.”
Central Bank Hosts the First Financial
Sector Technical Assistance Conference
Pann Nu
T
he Central Bank of Myan-
mar (CBM) recently host-
the Financial Sector Technical
Assistance Coordination Group
for Myanmar in Nay Pyi Taw.
Participants included mul-
tilateral agencies – Asian De-
velopment Bank, International
Finance Corporation, Interna-
tional Monetary Fund (IMF),
Livelihoods and Food Security
Trust Fund (LIFT), the Toronto
Centre: Global Leadership in
Financial Supervision, and the
World Bank – as well as bilater-
al development partners – Bank
Negara Malaysia, Bank of Thai-
land, Deutsche Gesellschaft fur
Internationale Zusammenar-
beit, Financial Services Agency
of Japan, Japan International
Cooperation Agency, and the
United Kingdom Department
for International Development.
Participants expressed their
commitment to coordinating
their delivery of technical assis-
Myanmar, and agreed to meet
every six months.
The meeting also agreed to
establish a number of sub-sec-
toral groups to carry forward
their work plans and develop
milestones for monitoring per-
formance. Development part-
ners agreed to share their plans,
programs, and advice in order
to avoid technical assistance
duplication, and promote se-
quenced, coordinated and com-
-
nancial sector in Myanmar.
The conference follows an in-
formal donor meeting held at
the IMF in Washington, DC at
the 2013 IMF-World Bank An-
nual Meetings where the gov-
ernor of the CBM discussed the
need for increased communica-
sector development partners in
Myanmar.
Aye Myat
Aservice would soon be
started between Bang-
kok and Imphal via Mandalay
after Manipur’s Tulihal Airport
was upgraded to an interna-
tional airport with the landing
Myanmar in November last
year.
According to a highly placed
starting the trilateral interna-
-
ward by the Thai Government
in view of enhancing trade and
tourism in the regions.
The Myanmar government
has given its nod to the pro-
posal, Hueiyen News Service
reported. However, the Indian
Government is yet to give a con-
DirkLaureyssens
crete response in this regard.
As per the proposal of the Thai
would be operated by ATR-72
aircrafts manufactured by the
French-Italian aircraft manu-
facturer Avions de Transport
Regional (ATR).
The ATR aircraft has a capac-
ity of about 80 people.
Thai Airways and Golden
Myanmar have expressed their
service between Bangkok and
Imphal via Mandalay. How-
ever, none of the Indian airline
companies including the na-
tional carrier Air India has ex-
pressed intention for operating
Mandalay and Imphal is about
an hour.
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Myanmar Summary
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vkyfief;qdkif&menf;ynmulnDyl;aygif;
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aqmif&Gufa&;?tjynfjynfqdkif&maiG
aMu;&efykHaiG(IMF), Livelihoods and
Food Security Trust Fund(LIFT),
the Toronto Centre: Global Leader-
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World Bantp&SdonfhurÇmhtzGJUt
pnf;rsm;tjyifzGHUNzdK;a&;ESpfzuftusKd;wl
vkyfudkifbufrsm;jzpfonfh Bank Negara
Malaysia,Bank of Thailand,
Deutsche Gesellschaft f u r
Internationale Zusammenarbeit,
Financial Services Agency of Japan,
Japan International Cooperation
A g e n c y E S i f h t h e U n i t e d
Kingdom Department for Inter
national Development wdkYvnf;
wufa&mufcJhMuonf/
Myanmar Summary
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-
cent) and the lack of clar-
ity around local laws and
regulations (53 percent).
-
UAung/Xinhua

May 8-14, 2014
mmbiztoday.com
REGIONAL BIZ 13
Myanmar Summary
Myanmar Summary
Myanmar Summary
Indebted Steelmaking Giant POSCO Drafts
Restructuring Plan to Bolster Finances
Hyunjoo Jin
S
outh Korean steelmaking
giant POSCO, hit by ris-
ing debts and three years
is drafting a restructuring plan
standing.
Chief Executive Kwon Oh-
joon, who took the helm at the
in March, said at the time that
he will restructure the compa-
ny’s non-steel businesses, after
a wave of investments and ac-
quisitions left POSCO with al-
most $40 billion of debts.
A prolonged industry down-
turn worsened by China’s de-
celerating economy has also
deepened steel oversupply.
POSCO, backed by billionaire
its sales forecast for this year af-
ter posting an 11 percent slide in
last week.
According to media reports
earlier, POSCO was consider-
ing selling a stake in its trading
and resources arm Daewoo In-
ternational Corp, which it had
bought in 2010, for 3.37 trillion
won ($3.26 billion).
A POSCO spokesman declined
to comment on the potential
stake sale in Daewoo Interna-
tional.
“POSCO’s restructuring move
shows that the steel market will
remain tough for the time be-
ing,” said Lee Won-jae, a steel
analyst at SK Securities. “Dae-
woo International is a giant
Daewoo International, which
16 percent last year, compared
with 2010.
Indonesia’s2014RiceOutputSeenat73MillionTonnes
Yayat Supriatna
I
ndonesia is forecast to pro-
duce 73 million tonnes of
unmilled rice in 2014, gov-
ernment ministers said, slightly
lower than a previous estimate
at 76 million tonnes due to the
scarcity of land for expansion.
Indonesia’s state food pro-
curement body Bulog has built
up rice stocks of 1.7 million
tonnes, Indonesia’s chief eco-
nomic minister Hatta Rajasa
told reporters, adding that the
agency is likely to buy from do-
mestic suppliers this year.
Bulog usually maintains rice
stocks at between 1.5 million
to 2 million tonnes to guard
Indonesia’s unmilled rice pro-
duction was estimated at 71.29
million tonnes in 2013. Reuters
Bloomberg
DimasArdian/Bloomberg
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Thai CP All Sees Lower Sales
This Year Due to Unrest
Saranya Suksomkij
T
hailand’s largest conveni-
ence store chain, CP All
Pcl, said it expected sales
to grow 10 percent this year,
below the recent average of 12
percent, due to prolonged po-
litical unrest.
Sales for 2014 would be driven
by 600 new stores planned for
the year, Tasattavorakul, vice
chairman, told reporters.
Months of unrest have hurt
CP All is controlled by Thai-
land’s wealthiest man, Dha-
nin Chearavanont, and oper-
ates stores under the 7-Eleven
brand. Reuters
-
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onf/

May 8-14, 2014
mmbiztoday.com
REGIONAL BIZ 14
Myanmar Summary
Myanmar Summary
Jane Chung and
Meeyoung Cho
Slook the best placed to
meet extra demand in Asia
created by a series of plant clo-
sures in Australia, given they
are building up capacity and
produce the high-quality gaso-
line and diesel Australia uses.
Other major suppliers in the
region of these cleaner-burning
fuels include Singapore and Ja-
pan, but industry sources say
been the most aggressive tar-
geting Australia after doubling
exports in the past two years.
The extra Australian demand
when Asia’s fuel demand has
weakened due to a slowdown in
the economies of top fuel con-
sumers China and India.
Singapore is the top fuel sup-
plier to Australia, meeting
about half of its imports, while
South Korea accounts for nearly
-
cent.
“But as the Australian import
requirement rises, that leaves
-
ers to come in,” said Alex Yap,
energy consultant at FGE Sin-
gapore, adding that Korean
capacity.
Australia has seen a series of
cases facilities are being con-
verted into fuel terminals.
BP was the latest example af-
ter it said on April 2 it would
shut its 102,000 barrel-per-day
(bpd) plant in Brisbane by 2015,
blaming competition from new
Royal Dutch Shell, Chevron
Corp’s Caltex Australia and
Exxon Mobil Corp have also
the last few years.
The closures mean by 2015
Australia will have only four
-
pacity of 448,500 bpd and is ex-
pected to become the largest net
importer of diesel and second-
largest net importer of gasoline
in Asia, importing more than
half of its fuel needs.
Energy, GS Caltex, S-Oil Corp
and Hyundai Oilbank have been
investing to boost output of fu-
els such as gasoline and diesel.
advantage on shipping costs to
Australia compared to regions
such as Europe.
Singapore, South Korea and
Japan jointly supplied 84 per-
cent of Australia’s 517,969 bpd
year, up from 78 percent a year
earlier, Australian data showed.
South Korea saw by far the
biggest rise as its exports to Aus-
tralia rose 60 percent to 94,816
bpd, moving ahead of Japan’s
63,173 bpd although still well
below Singapore’s 274,770 bpd.
Reuters
Taiwan Economy Grows At Solid Pace, Signals
Improving Global Demand
Faith Hung and Jeanny Kao
T
aiwan’s export-depend-
ent economy grew at its
quickest pace in over a
showed, suggesting rising mo-
mentum in developed econo-
mies and an improving outlook
for the global tech sector.
The preliminary growth rate
of 3.04 percent in the three-
months to March 31 also indi-
cated that the island’s economy
may be able to weather a slow-
down in China, its biggest mar-
ket, as exports to the United
States and Europe showed a
heartening pick up.
Taiwan’s economy, home to
the world’s biggest contract
chipmaker and a crucial sup-
ply chain for major electron-
ics brands, is often viewed as
a bellwether for global growth
and tech demand.
“What’s eye catching was the
strong contribution of net ex-
ports, which added 1.57 per-
centage points to the overall
growth rate,” said analyst of
Raymond Yang with ANZ in
Hong Kong.
the strongest since the last quar-
ter of 2012, according to the
Directorate General of Budget,
Accounting and statistics, driv-
en by a low-base of comparison,
solid private consumption and
a steady pick up in exports.
The signs for the rest of the
year were positive, and backed
the International Monetary
Fund’s view that an increase
in output in richer nations will
spur the global recovery.
March exports to the United
States, Taiwan’s no.2 market,
rose 10.3 percent on-year, with
shipments to Europe up 10 per-
cent – in both cases it was the
strongest growth rate in a year.
The increase up in shipments
provide a shot in the arm to Tai-
wan’s economy, which is facing
some uncertainty as growth in
China continues to slow down
this year..
The recent eye-catching re-
sults from Apple Inc, which
sources many components from
Taiwan and contracts out much
of its production of iPhones and
Precision Industry Co Ltd, also
bodes well for the island’s ex-
ports.
“I still view the export picture
as good overall. Despite the rel-
ative weakness in some sectors
products such as semiconduc-
tors and chips, we’re still doing
quite well,” said Rick Lo, senior
economist of Fubon Financial
Holdings. Reuters
JeromeFavre/Bloomberg
Reuters
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aMumif;vnf; od&onf/

May 8-14, 2014
mmbiztoday.com
REGIONAL BIZ 15
Myanmar Summary
Myanmar Summary
Unfazed by Weak Yields, Airasia X Bets on Scale to Win
Yantoultra Ngui
A
irAsia X Bhd, the long-
haul arm of Malaysian
budget carrier AirAsia
Bhd, is betting its dual strategy
of scale and multi-country hubs
will make it the region’s domi-
nant airline and help it survive
the short-term impact of declin-
ing yields.
“We are deliberate in our
strategy of expanding aggres-
sively, especially in 2014. This is
the business where, basically to
succeed, you’ve really got to be
number one in your segment,”
said AirAsia X Chief Executive
Azran Osman Rani Azran.
“If you’re number three or
number four, it is going to
be very hard ... that’s proven
around the region, in America
and Europe and how AirAsia
continues to survive in South-
east Asia by being more than
double the size” of other low-
cost carriers, Azran told Reu-
ters in an interview.
Steep price cuts by rival Ma-
laysian Airlines on medium and
long-haul routes last year hit
passenger yields at AirAsia X,
forcing it to discount fares to
maintain load factors.
“Naturally there is short-term
pressure on yields because typi-
cally every new capacity that we
add in takes at least 12 months
to break even,” Azran said. “And
build long-haul bases on the
back of AirAsia’s extensive
-
ates in the region, focusing on a
corridor of demand from North
Asia to Australia via Southeast
Asia.
It expanded capacity by 49
percent in the fourth quarter
and plans a 40 percent increase
for 2014, up from 19 percent
overall in 2013, before scaling
back later on, said Azran.
In December, AirAsia X placed
a $6 billion order for 25 Airbus
A330-300 aircraft to challenge
network carriers. It expects to
and operates 21 planes now.
The landscape is getting
crowded though. Scoot, the
medium and long-haul budget
airline ownedby deep-pocketed
Singapore Airlines, is taking de-
-
ing 787 Dreamliner jets this
year as it expands services.
AirAsia X also faces compe-
tition from Qantas Airways’
budget subsidiary, Jetstar, and
Air.
“New entrants are com-
ing into the space. We have to
make sure we are really ahead
of them in terms of size, scale
and branding,” said Azran, who
was handpicked by AirAsia’s
co-founder, Tony Fernandes, to
run the long-haul carrier.
so our portfolio is roughly about
two-thirds above matured and
business is still new,” he said.
Big ambitions
Seven-year-old AirAsia X,
to Saudi Arabia and 18 destina-
including points in Japan, Chi-
na and Australia, has been the
most ambitious of long-haul
budget carriers in expanding its
It plans to open a Bangkok-
in June, followed by an Indone-
The airline’s strategy is to
with 25 aircraft we will to be
more than double the size of
the next biggest competitor. We
would have launched two hubs
in Thailand and Indonesia and
with a three-hub model that I
think is far superior than all the
other competition.” Reuters
South Korea to Lend Out Part of
$354 Billion Foreign Reserves
Yantoultra Ngui
S
outh Korea unveiled last
to lend up to $10 billion
of its $350 billion-plus foreign
currency reserves to eligible
local companies to import pro-
overseas projects.
The plan will provide South
Korean companies with for-
eign currency funds at below
commercial rates to invest in
domestic production facilities,
overseas buildings and plant,
statement.
domestic banks and 12 branch-
es of foreign banks operating in
the country would begin lend-
ing foreign-currency funds to
eligible companies from next
month for a maturity of up to 10
years at favourable terms.
The lenders would receive the
foreign currency funds from the
government at lower interest
rates than they would otherwise
have to pay when borrowing
from the markets.
one year.
South Korea’s foreign-curren-
cy reserves stood at a record
$354.54 billion at the end of
March. As of the end of Feb-
ruary, South Korea had the
world’s seventh-largest foreign
reserves.
Emerging-market economies
including South Korea have
boosted foreign-currency re-
serves as a defence against cap-
stress, but the growing costs of
keeping the reserves have often
been criticised as wasting tax-
payers’ money.
Bloomberg
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May 8-14, 2014
mmbiztoday.com
INTERNATIONAL BIZ 16
Australia’sHorizonOilAndRocOilAgreetoMerge
Maggie Lu Yueyang
A
ustralian oil and
gas producers Ho-
rizon Oil Ltd and
Roc Oil Company Ltd have
agreed to merge to form a
single, Asia-focused ener-
gy company worth A$800
million ($740 million),
the two companies said.
The merged group –
which will have assets in
China, Papua New Guin-
ea, Malaysia, Myanmar,
Australia and New Zea-
land – will be better po-
sitioned for growth than
either company on a stan-
dalone basis, the compa-
nies said in a statement.
“This transaction repre-
sents a unique and com-
pelling opportunity to
bring together two com-
panies with highly com-
plementary assets to cre-
ate a new Asian-focused
mid cap E&P (exploration
and production) cham-
pion,” said Roc chairman
Mike Harding, who will
be the chairman of the
merged group.
Under the agreement,
Horizon shareholders will
receive 0.724 Roc shares
for each Horizon share
they hold and will own
about 58 percent of the
merged group after the
merger is complete. Roc
shareholders will own the
other 42 percent.
Horizon generated 66
percent of its 2013 rev-
enue from New Zealand
developments and 34 per-
cent from China, while
Roc earns 76 percent of
its revenue from China, 11
percent from Asia and 7
percent from the UK, ac-
cording to Thomson Reu-
ters data. Reuters
Myanmar Summary
MopaMw;vsa&eHESifhobm0"mwf
aiGUxkwfvkyfonfh ukrÜPDESpfckjzpf
onfh Horizon Oil Ltd ESifh
Roc Oil Company Ltd wdkY
onf MopaMw;vsa':vm oef;
800 (tar&duefa':vm 740)
wefukrÜPDwpfcktjzpfodkY yl;aygif;
vkyfudkif&ef oabmwlnDNyD;jzpf
aMumif; tqdkygukrÜPDrsm;rS xkwf
azmfajymMum;vdkufonf/tqdkyg
yl;aygif;aqmif&GufrIudk tm&Swdkuf
wGif t"duxm;í jyKvkyf&ef &nf
&G,faMumif; od&onf/
tqdkygukrÜPDtaejzifh w½kwf?
ygyl0ge,l;*DeD? rav;&Sm;? jrefrm?
MopaMw;vsESifh e,l;ZDvefEdkifiH
rsm;wGif vkyfudkifrnfjzpfaMumif;
tqdkygukrÜPDrsm; xkwfjyefcsuf
t& od&onf/
tqdkygoabmwlnDcsuft&
Horizon &S,f,m&Sifrsm;taejzifh
&S,f,mwpfpkvQif Roc &S,f,m
okn'or 724 &&SdrnfjzpfNyD;
yl;aygif;rINyD;ajrmufoGm;csdefwGif
&S,f,m 58 &mcdkifEIef;tm;&&Sd
rnfjzpfum Roc &S,f,m&Sifrsm;
taejzifh &S,f,m 42 &mcdkif
EIef;tm; &&Sdrnfjzpfonf/
World’s Costliest Cities: Sydney and Melbourne Ranked in Top 10
S
ydney and Mel-
bourne rank among
the top six most ex-
pensive cities in the world
to live, according to the
Economist’s latest World-
wide Cost of Living Sur-
vey.
The bi-annual survey,
carried out by the busi-
ness magazine’s intelli-
gence unit, ranked Sydney
-
sive city in the world, with
Melbourne one spot be-
hind in equal sixth.
Singapore took the du-
bious honour of top spot,
followed by Paris, Oslo
and Zurich.
Perth and Brisbane
shared 21st spot while Ad-
elaide came in at 37th.
The survey of 131 cities
assessed costs by compar-
ing more than 400 indi-
vidual prices across 160
products and services.
These included food,
drink, clothing, house-
hold supplies, rents,
transport, utility bills and
recreational costs.
and rising prices can have
a big impact on results.
A 40 per cent rise in the
Singapore dollar over the
past decade, for instance,
saw the city sweep to the
top of the rankings.
“As well as Singapore,
there have been sustained
increases in the cost of
living for Australian cities
driven by the long-term
appreciation of the Aus-
tralian dollar,” the survey
notes.
Despite a slow decline in
the value of the Austral-
ian dollar in the past year,
Sydney and Melbourne
continue to maintain
their lofty positions in the
global rankings due to on-
going price hikes.
By comparison, New
York clocks in at the rela-
tively modest position of
26th most expensive.
At the other end of the
scale, the least expensive
cities include Kathman-
du, Jeddah and Riyadh.
Mumbai in India is the
world’s least expensive
city.
Bucharest in Romania
is Europe’s one member
in the bottom 10, and
Panama City the lowest-
ranking member from the
Americas.
“Within Asia the best
value for money is in the
Indian subcontinent,” the
report says.
However, it comments
drily that “outside India,
bargain hunters may be
-
curity risk in many of the
countries in which the
world’s cheapest cities are
found”.
“Pakistan, Nepal, Syria
and Algeria all feature in
the bottom 10, but have
had well documented se-
curity issues or domestic
unrest.”
However, one exam-
ple that points to a de-
gree of uncertainty in the
methodology of how the
Economist draws its con-
clusions is the case of Ca-
racas.
By current calculations
the Venezuelan capital is
joint sixth most expensive
with Melbourne, Geneva
and Tokyo.
However, this is en-
tirely based on using the
beleaguered Venezuelan
-
change rate for its cur-
rency, the bolivar.
valuation of the bolivar,
at 6.29 to the US dollar,
is undermined by black-
market rates valuing the
currency at less than one-
tenth of this amount,” the
report says.
“As a result, adopting
any parallel rate for the
bolivar would immedi-
ately place Caracas as
the world’s cheapest city
rather than the current
deceptive position it has
as the joint sixth most ex-
pensive.”
Myanmar Summary
Reuters
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p&dwf avhvmcsuft& od&onf/
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avhvmrIonf Economist pD;yGm;
a&;r*¾Zif;rSjyKvkyfjcif;jzpfNyD;Sydney
NrdKUonf eHygwfig;ae&mESifhrJvfbkef;
NrdKUonf eHygwfajcmufae&mwdkYjzifh
toD;oD;&yfwnfvsuf&Sdonf/
pifumyltaejzifh ESpfESpfquf
wdkuf yxrae&mwGif &yfwnfae
NyD; yJ&pf? atmfpvdkESifh Zl;&pfNrdKU
rsm;taejzifh 'kwd,? wwd,ESifh
pwkw¬ae&mrsm;twGiftoD;oD;&yf
wnfvsuf&Sdonf/ygwfhESifhb&pfbdef;
NrdKUawmfrsm;taejzifh tqifh 21
wGif &yfwnfaeNyD; Adelaide
rSm tqifh 37 wGif&Sdaeonf/
NrdKUBuD; 131 NrdKU vlaerI
pm;&dwfrsm;tm;ukefypönf;aygif;
160 ESifh 0efaqmifrIwdkYrS aps;EIef;
aygif; 400 wdkYtay:wGif wGuf
csufxm;jcif;jzpfonf/

May 8-14, 2014
mmbiztoday.com
INTERNATIONAL BIZ 17
Myanmar Summary
ChinaPoisedtoPassUSAsWorld’sLeadingEconomicPower
Chris Giles
T
heUSisonthebrink
of losing its status
as the world’s larg-
est economy, and is likely
to slip behind China this
year, sooner than widely
anticipated, according to
the world’s leading statis-
tical agencies.
The US has been the
global leader since over-
taking the UK in 1872.
Most economists pre-
viously thought China
would pull ahead in 2019.
by the International Com-
parison Program hosted
by the World Bank, are
the most authoritative
estimates of what money
-
tries and are used by most
public and private sector
organisations, such as the
International Monetary
they have been updated
since 2005.
After extensive research
on the prices of goods
and services, the ICP con-
cluded that money goes
further in poorer coun-
tries than it previously
thought, prompting it to
increase the relative size
of emerging market econ-
omies.
The estimates of the real
cost of living, known as
purchasing power parity
or PPPs, are recognised
as the best way to com-
pare the size of econo-
mies rather than using
volatile exchange rates,
true cost of goods and ser-
vices: on this measure the
IMF put US GDP in 2012
at $16.2tn, and China’s at
$8.2tn.
In2005,theICPthought
China’s economy was less
than half the size of the
US, accounting for only
43 per cent of America’s
total. Because of the new
methodology – and the
fact that China’s economy
has grown much more
quickly – the research
placed China’s GDP at 87
per cent of the US in 2011.
For 2011, the report
says: “The US remained
the world’s largest econ-
omy, but it was closely
followed by China when
measured using PPPs”.
With the IMF expect-
ing China’s economy to
have grown 24 per cent
between 2011 and 2014
while the US is expected
to expand only 7.6 per
cent, China is likely to
overtake the US this year.
-
tionise the picture of the
world’s economic land-
scape, boosting the im-
portance of large middle-
income countries. India
becomes the third-largest
economy having previ-
ously been in tenth place.
The size of its economy
almost doubled from 19
percent of the US in 2005
to 37 per cent in 2011.
Russia, Brazil, Indone-
sia and Mexico make the
top 12 in the global table.
In contrast, high costs
and lower growth push
the UK and Japan further
behind the US than in the
2005 tables while Germa-
ny improved its relative
position a little and Italy
remained the same.
-
sify arguments about con-
trol over global interna-
tional organisations such
as the World Bank and
IMF, which are increas-
ingly out of line with the
balance of global econom-
ic power.
When looking at the
actual consumption per
head, the report found the
new methodology as well
as faster growth in poor
countries have “greatly
reduced” the gap between
rich and poor, “suggesting
that the world has become
more equal”.
The world’s rich coun-
tries still account for 50
percent of global GDP
while containing only 17
per cent of the world’s
population.
Having compared the
actual cost of living in
report also found that
the four most expensive
countries to live in are
Switzerland, Norway,
Bermuda and Australia,
with the cheapest being
Egypt, Pakistan, Myan-
mar and Ethiopia.
RussiaSeesNoImmediateImpactonHi-TechFirmsfromSanctions
Lidia Kelly
Rminister Anton Si-
luanov said he sees
no immediate impact on
Russia’s high tech com-
panies from US sanctions
imposed last week.
“I cannot see at the mo-
ment that any companies
journalists at the Federa-
tion Council.
US President Barack
Obama said on Monday
that Washington would
target some high tech ex-
ports to Russia as part of
new sanctions over the
crisis in Ukraine, where
the West says Russia is
fomenting separatist un-
rest.
Reuters
Bloomberg
Russia’s President
Vladimir Putin said last
week that Russia will be
able to replace any de-
fence industry imports
lost due to the Ukraine
crisis with its own prod-
ucts. Reuters
Myanmar Summary
&S&Sm;b@ma&;0efBuD; Anton
Siluanov u ,ciftywftwGif;
tar&duefEdkifiHrS&S&Sm;EdkifiH
enf;ynmukrÜPDBuD;rsm;odkYpD;yGm;
a&;ydwfqdkYvdkufjcif;tay:
xda&mufrI&Sdvdrfhrnf[krjrifrd
aMumif;ajymMum;cJh onf/
zuf'a&;&Sif;aumifpDwGifowif;
axmufrsm;ESifhawGUqkHpOfu]]uRef
awmfawmh'DtcsdefrSmb,fukrÜPDrS
epfemrIcHpm;&wmrawGUygbl;}}[k
4if;uajymMum;cJhonf/
tar&duefEkdifiHtaejzifh ,ck
ESpftwGif; urÇmhpD;yGm;a&;tiftm;
tBuD;qkH;EdkifiHae&mtm; w½kwf
EdkifiHodkY vufvTJ&zG,f&SdaMumif;
urÇmhpm&if;Z,m;jyKpka&;at;*sifh
pm&if;rsm;t& od&onf/
tar&duefEdkifiHtaejzifh 1872
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jzwfNyD;csdefrSpwifumurÇmhtiftm;
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jcif;jzpfonf/
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International Comparison
Program tqdkygpm&if;Z,m;
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rwlnDonfhEdkifiHrsm;wGif okH;pGJEdkif
jcif;tm;tjynfjynfqdkif&maiGaMu;
&efykHaiGtzGJUtpnf; (IMF) uJhodkY
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jcif;jzpfonf/ tqdkygavhvmrI
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jzpfonf/
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pD;yGm;a&;tm; 24 &mcdkifEIef;
jrifhwufvmrnf[k cefYrSef;xm;NyD;
tar&duefEdkifiHrSmrl 7 'or 6
&mcdkifEIef;omjrifhwufvmEdkifaMumif;
cefYrSef;xm;onf/

May 8-14, 2014
mmbiztoday.com
INVESTMENT & FINANCE 18
Myanmar Summary
EightReasonsDeloitteThinksSoutheastAsiaIsPoisedtoGrow
C
haly Mah Chee Kheong
is CEO of Deloitte South-
east Asia and Regional
Managing Director of Deloitte
pan-Asia insights at the 2014
Milken Institute Global Confer-
ence. He believes ASEAN mem-
ber nations are well positioned,
China has moderate rational
Partnership remains an inter-
esting yet incomplete idea and
the ASEAN Economic Commu-
nity could be regionally game
changing.
1) China reforming
Mah believes China’s outlook
is “short term pain, long term
gain.” President Xi Jinping has
made clear he is looking for
more sustainable growth and
more inclusive growth and this
-
uring. For example, geographic
-
in the country means pushing
more industry west where la-
bour costs may be cheaper but
logistical costs of transporting
goods will be higher (than in
coastal cities). Also, President
Xi Jinping has said he wants
to restructure China’s state-
owned enterprises (SOEs) but
Mah says “they’re not ready to
compete” to global standards
and this will be a lengthy pro-
cess. Mah points out that dur-
2008, the Chinese government
told the banks to put money
into the system which wound
up largely in the hands of SOEs
and real estate investments,
both now areas requiring re-
forms alongside the non-per-
forming loans (NPLs) situa-
tion. This all said, while China
will have some lumpiness that
will be felt through the region,
China’s long-term outlook will
be better if President Xi Jinping
succeeds with his agenda.
2) Japanese companies
geographic expansion
-
pan political tensions combined
with the Chinese slow-down is
-
sifying away from China as op-
portunities present themselves.
Japanese business that would
have previously opened another
factory in China are now mov-
ing to Vietnam, Thailand, Indo-
nesia and more recently Myan-
mar. Mah just set up a Deloitte
rapidly recognised they need-
ed one Japanese speaker on
enough and now has two.
3) Manufacturing rotation
With manufacturing costs
moving higher in China, a num-
ber of countries with cheaper
Indonesia, Cambodia, Vietnam,
Bangladesh and Myanmar. All
of these countries have large
populations with young work-
ing populations. For skilled
labour, this is migrating to In-
donesia and then some to the
cheaper Vietnam. Bangladesh
has predominantly become
a garment centre. Myanmar,
which is only recently opening
up, promises to provide a new
centre of cheap labour.
-
ship
-
ship (TPP) began as a free trade
agreement between Brunei,
Chile, New Zealand and Sin-
gapore. Subsequently, it has
broadened with Australia, Can-
ada, Japan, Malaysia, Mexico,
Peru, Vietnam and the United
States joining at the negotiat-
ing table. With at least another
eight countries expressing in-
terest, the TPP has the potential
to become a broad free trade
agreement between many coun-
tries. However the question re-
mains how long it will take to
complete. While much has been
made of China not being a party
to TPP negotiations, Mah thinks
(a) China already has trade
agreements with ASEAN coun-
tries that will give it a backdoor
into the TPP trade arena and (b)
that if the TPP is in fact estab-
will push for and gain inclusion.
5) ASEAN Economic Com-
munity
The ASEAN Economic Com-
munity (AEC) aims to emulate
the successes of the European
Union’s aspects of free trade
and closer relationships while
avoiding the pitfalls of the Eu-
ropean Union such as a com-
mon currency. The AEC will
include the ten ASEAN coun-
tries of Brunei, Cambodia, In-
donesia, Laos, Malaysia, My-
anmar, Philippines, Singapore,
Thailand and Vietnam. The
target date to launch this com-
munity is December 31, 2015.
While Mah thinks they may not
get everything in place by then
they had hoped, there should
be at least one or two pieces
of the economic community
plan in place by then to launch.
This will create a community
of about 600 million people,
about 100 million people larger
than the EU or approximately
half of the population of either
China or India. Mah foresees
this becoming a “very power-
ful economic area” that should
6) Corporate and public
debt
Concerns were expressed ear-
lier in the day at Milken Insti-
tute Global Conference that the
low rate environment in global
credit markets has covered up
the need for economic reforms
in emerging economies. Mah
JustinMott/Bloomberg
GunawanKartapranata
“
The ASEAN Economic Community
(AEC) aims to emulate the success-
es of the European Union’s aspects
of free trade and closer relationships
while avoiding the pitfalls of the European
Union such as a common currency.”
Deloitte ta&SUawmiftm&S trI
aqmift&m&SdcsKyfESifh Deloitte tm&S-
ypdzda'oqdkif&mOD;aqmifñTefMum;a&;
rSL; Chaly Mah Chee Kheong tae
jzifh 2014 ckESpf Milken Institute
Global Conference wGif tm&Sa'o
Mum;cJhonf/
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tjrifrSm a&wdkwGifem? a&&SnfwGifom
(Short term pain, Long term gain)
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vdktyfonfh jyifqifrIrsm;jyKvkyf&ef&Sif;vif;
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jzifh w½kwfEdkifiH tpdk;&ydkifvkyfief;rsm;
tm; jyefvnfjyifqifvdkonf/ odkYaomf
,SOfNydKifEdkif&eftqifhoifhrjzpfao;aMumif;
Mah rS xifjrifcsufay;xm;onf/
w½kwfESifh *syefwdkY EdkifiHa&;wif;rmrI
ESifh w½kwfEdkifiH pD;yGm;a&;usqif;vmrI
onf *syefvkyfief;rsm;tm; w½kwfonf
[k ,lqvmaponf/*syefvkyfief;rsm;
taejzifh ,cifu w½kwfEdkifiHwGif puf½kH
rsm;zGifhvSpfcJhaomfvnf; ,ckktcg AD,uf
erf? xdkif;? tif'dkeD;&Sm;ESifh jrefrmEdkifiH
wdkYqDodkY a&TUajymif;vmMuNyDjzpfonf/
w½kwfEdkifiHwGif xkwfvkyfrIp&dwfjrifhwuf
vmonfESifhtrQ vkyftm;coufomonfh
tif'dkeD;&Sm;? uarÇm'D;,m;? AD,uferf?
b*Fvm;a'h&SfESifh jrefrmwdkYonf a&G;cs,f
p&mrsm; jzpfvmonf/ xdkEdkifiHrsm;onf
vlOD;a&rsm;jym;onfhEdkifiHrsm;jzpfNyD; vli,f
vkyfom;trsm;tjym;&SdonfhEdkifiHrsm;jzpf
onf/
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*syef? rav;&Sm;? ruúpDudk? yD½l;? AD,uferf
ESifh tar&duefwdkYrS aqG;aEG;rIwGif yg0if

Myanmar Business Today - Vol 2, Issue 18

Myanmar Business Today - Vol 2, Issue 18

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