Meanwhile traffic on the roads of Yangon gets better and worse; better because the number of new cars in visibly increasing each day, worse because the overall numbers are also increasing by the day leading to traffic jams at certain intersections throughout the day and in particular during morning and evening rush hours. All evidence of a city expanding and calling out for investment capital.
Pardon for political prisoners - President Thein Sein pardoned 73 political prisoners including 29 Shan ethnic rebels and 26 Kachin prisoners of conscience. The prisoners were released as part of an amnesty by the president as part of his promise to international leaders to release all political prisoners by the end of the year. Most of the released prisoners belonged to armed groups or were accused of belonging to an unlawful group. The Unlawful Associations Act law is widely used by the government to detain civilians and combatants in various ethnic conflicts within Myanmar with an estimated 92 political prisoners still remaining under detention.
Trade with EU - Following visits by President U Thein Sein to a number of European countries, Myanmar signed a preferential trade agreement with the European Union on July 19. Myanmar will gain duty-free and quota-free access to European markets under the terms of an ‘everything but arms’ trade agreement starting today. The Generalised Scheme of Preferences (GSP) has allowed developing countries to pay lower import tariffs on some or all of their exports to the EU. The EU suspended trade preferences for Myanmar in 1997 due to the country’s violations of core international conventions on forced labour.
Progress with the World Bank - The Myanmar parliament has agreed for Myanmar to join a World Bank programme, the Multilateral Investment Guarantee Agency (MIGA), that will help guarantee and assist international investment providing better opportunities for foreign investment and support for economic development. The country needs so much foreign investment, especially in the infrastructure and technology sectors and such investments will become more attractive if Myanmar cooperates with MIGA and is seen as a positive move as Myanmar emerges from five decades of military rule.
EFTA deal - The European Free Trade Association (EFTA) has signed a Joint Declaration on Cooperation with Myanmar at a meeting in Norway attended by Myanmar's Deputy Minister of Commerce, Dr. Pwint Hsan. The Agreement will enhance economic relations between EFTA member states and Myanmar and promote private sector investment. Myanmar has agreed to cooperate with EFTA in boosting trade and investment by easing restrictions on trade and by investing in small and medium enterprises. Total EFTA-Myanmar trade (imports plus exports) for 2012 was worth USD$ 10.4 million. Myanmar primarily imports pharmaceutical products, mechanical machinery and paint from EFTA states, while exporting mainly garments, precious stones and metals.
Ethnic issues - Opposition leader Aung San Suu Kyi and members of the National League for Democracy met with various ethnic political parties urging them to find a solution to the problems they jointly confront. Opposition parties and ethnic representatives talked about unity and the importance of mutual understanding and trust to achieve equal rights for ethnic groups. Suu Kyi said “People can join hands only when they have common faith. It is very important to have the common faith. This will encourage genuine unity. It is required to sow a culture that people find solutions to the problems through negotiation based on trust and mutual understanding. Now we have the chance to do so. If we miss such kind of rare chance, we will be held irresponsible by our country. Opportunity does not come twice. We have to grab it when it's there.”
Rohingya issues - Malaysia has asked Myanmar to take stronger action to prevent persecution of Muslims and bring the guilty to justice. Thousands of ethnic Rohingya Muslims have fled Myanmar to escape the violence, many of them going by boat or overland to Malaysia. Anti-Muslim violence in Buddhist-dominated Myanmar erupted in western Arakan State last year and has spread sporadically into the central heartlands and to a lesser extent to areas near Yangon. Myanmar Buddhists and Rohingya have clashed in violent incidents in Malaysia and Indonesia in recent weeks, adding to concerns that the violence could spill over elsewhere.
More transparency - Myanmar’s Parliament has rejected a proposal by President Thein Sein to delete a clause that requires members of a new anti-corruption commission to declare their assets. The President had argued that the clause requiring members of the anti-corruption commission to submit a list of their personal property and wealth should be deleted as it went against the 2008 Constitution. Parliament rejected the presidential remark amid public criticism that the cabinet members are accumulating more wealth and possessions compared with their salaries.
Deals to be renegotiated – The Asia Society has revealed that the Myanmar government plans to renegotiate billions of dollars of natural resource deals as it imposes tougher environmental standards and moves against corruption. Myanmar has huge reserves of resources which have become magnets for corruption and crony capitalism. Deals with a value in the billions of dollars would need to be renegotiated. Myanmar is a candidate to join the Extractive Industries Transparency Initiative, which seeks to set international standards in countries with major resource revenues. Despite the change of government to a nominally civilian administration, large military companies still control the lion's share of the country's resources and, along with a handful of crony businessmen, dominate the economy. The report which set out 10 key obstacles faced by President Thein Sein's reforming administration, also said that rooting out corruption would be essential. The creation of a state anti-corruption committee was an important first step but it would take time to end the corruption and crony capitalism.
Booming border trade - Border trade is blossoming with exports exceeding imports. Total exports amounted to US$385 million with imports at US$373 million by mid July. Myanmar exports mainly agricultural and animal products, fishery products, minerals, timber and electronics whilst it imports industrial machinery, raw materials and consumer goods through a number of busy trading centres on its borders. Muse, a town on the Myanmar/China border, is easily the busiest trading centre with total trade amount valued at US$500 million with Myawady, on the Myanmar/Thai border, second largest with trade estimated at US$70 million.
Jade and gems - The 50th annual Myanmar Gems Emporium recorded sales of US$ 2.4 billion, with record sale of gems and jade. The two-week Myanmar Gems Emporium Golden Jubilee was held at Maniyadana Jade Hall and Myanma Gems Museum in Naypyitaw. Nearly 4,000 foreign dealers and more than 4,000 locals participated. Latest official figures show that in 2011-12, Myanmar extracted 43,185 tons of jade and 13.398 million carats of gems.
The New Yangon Airport - Myanmar will start implementation of a new international airport project in September in a bid to cope with the expected flood of tourists as the country embarks on its path to reform. The so-called Hantharwaddy International Airport will be built in Myanmar's central Bago region on a site covering 9,690 acres and is scheduled to complete in December 2017 at an estimated cost of US$ 1 billion. Seven pre-qualified firms have been selected out of 30 companies according to the Department of Civil Aviation (DCA). The airport will be designed to accommodate Airbus A-380 and cargo planes and initially handle 12 million passengers per year, with further capacity to handle up to 35 million passengers per year. While Hantharwaddy International Airport is under construction, Yangon International Airport will be upgraded to handle 6 million passengers per year, up from the 2.7 million passengers per year currently.
Oil Facilities - Puma Energy, a Singapore based subsidiary of Trafigura Beheer BV, a Dutch commodity trading company has been selected to construct oil tanks and some parts of Thilawa Harbour in Myanmar. The Ministry of Transport has approved Puma Energy (Myanmar) Ltd as the successful tender to import and distribute petroleum related products, and to construct oil storage tanks and build a part of Thilawa Harbour. The firm will start the project work at Thilawa Special Economic Zone (SEZ) as soon as it completes the formalities at the Myanmar Investment Commission. Thilawa SEZ is a multi-million joint project between Myanmar and Japan including a harbour construction in Thanhlyn township in Yangon. Other companies to develop land plots in Thilawa SEZ will be the military-owned Union of Myanmar Economic Holding Ltd. and Myanmar Economic Corporation, Shwe Taung Co., Max Myanmar Co., International Group of Entrepreneur Service Co., Diamond Star Co., Myat Myittarmon Co., and Myanma Port Authority.
Mobile Telecoms - Thailand’s Jay Mart, a mobile handset retailer, is tapping the undeveloped telecom market in Myanmar with a plan to open 20 shops there this year. The move comes after the government awarded telecom licences to Norway's Telenor and Qatar's Ooredoo to provide mobile services. Jay Mart has already set up three shops in Yangon this year ready for the opening of Myanmar's telecom market. Through J&P Myanmar, Jay Mart will run the handset retail business in the country. Jay Mart has enjoyed a long partnership with Telenor and its Thai offshoot Total Access Communication (DTAC).
Carlsberg arrives - Denmark based Carlsberg and its partner Myanmar Golden Star (MGS) will begin operating their first factory by the end of 2014, according to MGS. They plan to brew a Myanmar beer as well as the Carlsberg brand. The company hopes to export a million cans of the Myanmar beer per month to Europe. Carlsberg owns 51 per cent of Myanmar Carlsberg Co., Ltd. with MGS owning 49 per cent. The initial investment is believed to be between US$35 million and US$50 million. The factory is under construction right now and expected to finish in 2014. The MGS Group of Companies is privately owned by U Thein Tun. He and his family also own the Tun Foundation Bank.
Currency movements - Myanmar’s currency continues its slide and has now dropped almost 18 percent in value since the government floated the kyat in early April last year. Currency speculation and falling global gold prices are contributing to the slump of the kyat, local bankers and traders said. The currency has dropped 17.8 percent compared to 818 kyat per dollar on April 2, 2012, when the government floated the currency. Since its float, the kyat experienced a gradual decline to 890 kyat per dollar until May 8, 2013, when it suddenly fell to 946 kyat per dollar in just one day. The slump of the kyat has coincided with an increase in imports, driven in part by a construction boom in Yangon and a sharp rise in car sales in Myanmar in the past year. Some international economists have said that the kyat was overvalued when it was floated last year and needed to fall in order to bolster Myanmar’s exports. The President Office’s Minister Soe Thein has said on several occasions that the government would prefer a lower-valued kyat as it could attract foreign investment and boost exports.
B.A.T. is Back - British American Tobacco is to return to Myanmar after a ten-year absence. BAT said that around USD 50 million will be invested in the next five years to establish a world-class manufacturing facility that will produce London, an ‘iconic brand of international prestige and quality’. The joint venture company, between British American Tobacco Myanmar Ltd, and I.M.U Enterprise Ltd (IMU), will manufacture, distribute and market BAT’s brands for the domestic market. IMU is part of a leading local conglomerate, Sein Wut Hmon Group, which has an extensive fast-moving consumer goods distribution network throughout the country. Historically, British American Tobacco had a market leading position in Myanmar which they are aiming to rebuild with IMU. BAT also said that they will employ approximately 400 people and to collaborate with local farmers to improve the yield and quality of local tobacco.
GM too – but only a showroom - General Motors has announced plans to open a Chevrolet showroom in the fourth quarter of 2013. General Motors Southeast Asia Operations recently signed a letter of intent with Pacific Alpine Pte.Ltd., for the distribution, sale and service of Chevrolet vehicles in Myanmar. Chevrolet models will be sourced from GM manufacturing facilities around the world. Chevrolet's partners, Pacific Alpine Pte. Ltd., and Pacific-AA Motor Ltd., are a strategic alliance that was established by Alpine Group Singapore and AA Medical (Pacific-AA Group) Myanmar. Alpine Motors (part of Alpine Group) is Chevrolet and Opel’s current exclusive dealer in Singapore, while AA Medical (Pacific-AA Group) is one of the largest distributors of pharmaceutical products and petrochemical lubricants in Myanmar. It was also announced that Chevrolet and Pacific Alpine plan to launch a three-tier corporate social responsibility (CSR) program in Myanmar starting next month. In cooperation with One World Futbol Project, they will distribute ultra-durable footballs throughout Myanmar. They will make available Find New Roads – Chevy Cares vehicles to eight charitable organizations. They will also donate engines and technical parts to mechanical training colleges in Myanmar
More from the USA? – Another American business delegation came to Myanmar and met with key leaders including President Thein Sein, Speaker of the Lower House of Parliament Thura U Shwe Mann, and opposition leader and chairperson of the National League for Democracy, Aung San Suu Kyi. Companies including The Coca-Cola Company, GE, GM, Ford, Deloitte, ACE, KPMG, Cisco, and others have either made investments or opened distributorships and representative offices with the potential for much greater investment and engagement but although Myanmar offers opportunities and possibilities, US companies are still reluctant to make large investments due to the country’s poor infrastructure and outdated commercial and financial laws. According to the data of the Office of the United States Trade Representative, bilateral trade between the two countries amounted to only US$90 million for the first three months of 2013.
Chinese locomotion - China and Myanmar have signed a US$100 million agreement to jointly build railway rolling stock. Ninety percent of the money will come from loans from Chinese state banks to finance construction of at least two factories to build diesel locomotives and passenger carriages. Technical expertise will be provided by the China National Machinery Import and Export Corporation (CMC), the Chinese partner in a deal with Myanmar’s Ministry of Rail Transportation. Myanmar’s railways and rolling stock are dilapidated from years of neglect. This agreement comes just a few weeks after Japan financed and carried out a feasibility study on modernizing the more than 600 kilometres railway route between Yangon and Mandalay. At the time Myanmar’s deputy minister of railways, Thura Thaung Lwin, said Japanese companies would be awarded the modernization contract.
And the French – The Myanmar Investment Commission (MIC) has recently granted a license to a joint venture, Shwe Zabar Co. Ltd., formed between the French company, Societe Industrielle Agricole Et Commercial D’Outre Mer (SIACOM), and private company XY Trading Company, to run agricultural businesses including a rice factory in the delta region of the Ayeyarwady River. France has not made any business investment for over 20 years since 1988 but reentered in 2011 when Myanmar enacted the Foreign Direct Investment Law (FDI) and has since invested some US$469 million in the country.
Social networking - Squar, the first exclusively Myanmar language social media website, was launched this month following a successful four week trial on mobile devices, http://www.squar.asia/. The social media platform has been active in a prototype form for mobile devices since June 15, and has already attracted users in the thousands. “Our goal has always been to get about 1 million people in a year. Given the reception we've gotten in first couple of weeks, I imagine that we’ll blow past that number very quickly.” says Rita Nguyen, co-founder and CEO. Myanmar currently has an internet penetration rate of about 1.5 percent of its estimated population of 60 million, according to World Bank figures. That number is expected to sky rocket over the next couple of years following the decision to invite two foreign telecoms partners, Ooredoo and Telenor, into Myanmar. Myanmar has a proven appetite for social media, with estimates that 80 percent of the country’s internet users have a Facebook account. Squar, like many other internet start-ups in Myanmar, base their development in neighboring countries. The high speed connectivity and abundance of developers abroad means that the site will be operated largely from their base in Vietnam.
For Beachcombers - Ngapali Beach is a 10-kilometer stretch of shimmering white sand on the shores of the Bay of Bengal in southern Arakan State, is without argument Myanmar’s most well-known premier beachside holiday destination. During the dry season, Ngapali Beach transforms into a playground of resorts, from simple bungalow accommodation to luxurious health spas, offering a number of activities such as sailing, scuba diving, beach volleyball and visits to local attractions. In the monsoon season, it is a quiet, peaceful place. Few visitors venture here and flights from Yangon are reduced from several times daily to just twice a week. However whatever the time of year, fresh seafood is the plat du jour with numerous restaurants offering delicious crab, prawn, squid and fish such as snapper and barracuda as regular menu items.
Honouring An Ancient Siamese King - More than US$3 million has been given to renovate the historic tomb of a former Siamese king and build a Thai cultural village near the Mandalay. A Thai restoration team is expected to spend more than 100 million baht ($3.23 million) on the project. Since February this year, Thai experts have visited Amarapura Township, Mandalay Division, to excavate a stupa and verify whether it was the historic tomb of former Siamese King Uthumphon. According to historical records and the team’s findings, it has been confirmed that the tomb belongs to Uthumphon. An excavation team found an urn containing human bones, some pieces of yellow robes from a Buddhist monk, and a third artifact that belonged to a royal descendent. The tomb resembles a small pagoda and is larger than surrounding grave markers at Linzin Hill graveyard on the edge of Taungthaman Lake. According to historical records, King Hsinbyushin (1736-76), the third king of Myanmar’s Konbaung Dynasty, invaded the ancient Thai capital of Ayutthaya in 1767 and brought many of its subjects, including Uthumphon, back to his own capital, Ava. It is believed that Uthumphon had taken monk’s robes when he was brought to Ava as a prisoner of war, and that after dying in captivity, his body was buried at Linzin Hill. It is believed that Uthumphon died during the reign of King Bodawpaya (1745-1819), the sixth Myanmar king of the same dynasty. Uthumphon—who is known as King Dok Madua, or “fig flower,” in Siamese history—was the youngest son of King Borommakot and a minor queen, Phiphit Montri. He was appointed a crown prince by his father.
US Cultural Aid - The US government has said that it is funding a two-year project that will help preserve Mandalay’s Shwe Nan Daw Kyaung Monastery, one of the city’s most historic buildings. The US Ambassadors Fund for the Cultural Preservation will team up with Myanmar’s Ministry of Culture to preserve the 19th century, traditional teak wooden building, known as the Golden Palace, which was constructed during the reign of King Mindon. US Ambassador Derek Mitchell said the World Monument Fund based in Washington would implement the US$500,000 project, adding that the project would also include training in preservation techniques for officials and craftsmen. Myanmar traditional craftsmen would to work together with the US team to preserve the monastery. The Shwe Nan Daw Kyaung Monastery was originally covered with gold leaf and glass mosaics, and it is known for its intricate wood carvings on the walls and roofs that show Buddhist myths. It was built as a royal chamber for King Mindon and located within the Mandalay Palace complex. Under his son, King Thibaw, the building was moved to a site outside of the Mandalay Palace moat and it was turned into a monastery. During World War II, aerial bombing destroyed most of the historic buildings inside the Mandalay Palace complex, leaving the Shwe Nan Daw Kyaung Monastery as the only remaining original structure from the 19th century palace.