KBZ and Visa to issue Kyat denominated credit cards
The Myanmar Gold Entrepreneurs Association plans to open a gold exchange market in Yangon this year.
First Private Bank trades on YSX, opening at MMK 39,000
Thailand’s deputy Prime Minister Somkid to lead business delegation in February
CB Bank to double size of ATM network in 2017
NLD legal advisor U Ko Ni assassinated in parking area at Yangon International Airport
Precursor to Peace Talks - Aung San Suu Kyi and signatories of the Nationwide Ceasefire Agreement (NCA) met in Naypyidaw to discuss the second round of the Union Peace Conference, also known as the 21st Century Panglong peace conference. Discussions focused on strengthening the cooperation between the two sides to achieve better results at the conference, to be held at the end of February. “The meeting was mainly about how to cooperate for the success of the peace process and to ensure that the second round of 21st Panglong Conference yields the political results we desire,” Col Khun Okkar, of the Pa-O National Liberation Organization (PNLO), said after the meeting. The meetings were held following a request from NCA signatories to meet Aung San Suu Kyi and Myanmar Army Chief Snr-Gen Min Aung Hlaing. Those who signed the NCA in Oct. 2015 include the All Burma Students’ Democratic Front, Karen National Union (KNU), Chin National Front, PNLO, Democratic Karen Benevolent Army, KNU/KNLA Peace Council, the Restoration Council of Shan State/Shan State Army-South, and the Arakan Liberation Party. The delegation was led by Pado Saw Mutu Say Poe of the KNU. The PPST said they came to discuss cooperation, as Aung San Suu Kyi had said during her peace talks with youth in Naypyidaw on Jan. 1 that 2017 would be a “peace year.”
New National Security Advisor - Thaung Tun has been appointed as national security adviser by the National League for Democracy (NLD) government. The new position was created as the government faces ongoing clashes with ethnic armed groups in the country’s north and east while attacks by Muslim militants with international connections sparked a large security operation in western Myanmar’s Arakan State. The new security adviser previously served as Myanmar’s ambassador to the Philippines, Belgium, the Netherlands and the EU as well as director-general for political affairs within the Ministry of Foreign Affairs in the early 2000s. He will advise the president and the government on internal and external threats “by assessing situations from a strategic point of view,” and he will hold the same status as a Union minister, according to the President’s Office. He is the second person from the former military regime appointed to a high position in the civilian government. Last year Kyaw Tint Swe—a career diplomat and defender of Myanmar’s dire human rights record under military rule—was chosen to head the powerful new Ministry of the State Counselor’s Office under Aung San Suu Kyi.
U Ko Ni Assassination – The government said it is investigating the assassination of prominent Muslim lawyer and NLD legal advisor U Ko Ni. “According to the initial findings, the assassination is likely to destabilize the country. The government is carrying out the investigation to find the truth and necessary security measures are also tightening,” a statement from the President’s Office read. U Ko Ni was shot dead in the head at close range outside Yangon International Airport on Sunday afternoon by a gunman, identified as 53-year-old Kyi Lin, according to a police report. The assailant also shot a taxi driver who was attempting to catch him. It was reported that the detained gunman Kyi Lin was in prison in the 2000s for smuggling ancient Buddha stupas and released in a presidential amnesty in 2014. “We feel deeply sorry for the assassinated U Ko Ni and also U Nay Win who was killed while attempting to catch the shooter” the statement read. The motive remains unknown.
Economic Growth Down - Myanmar is expected to see economic growth of 6.9 percent in 2017, according to the World Bank’s Global Economic Prospects report released earlier this month, down from an earlier estimate. The report said that real-term growth in 2016 was estimated to be 6.5 percent, down 1.3 percentage points from an earlier estimate. Real-term growth in Myanmar declined for three straight years and fell below 7 percent in 2016 for the first time in five years, according to the World Bank. It attributed the falling growth rate to a slow real estate market, slower export expansion and reduced foreign investment. A delay in the start of operations of the reconstituted Myanmar Investment Commission after the new government came to power also contributed to a backlog in foreign investor applications last year.
FDI Target Unlikely To Be Met - Myanmar’s light manufacturing sector will lead the way in foreign direct investment in 2017 although investor concerns over the country’s infrastructure persist. Foreign investors visiting in the last year had questions over energy supply, transport and land issues and heavy industry manufacturers are hesitant to invest according to Dr. Maung Maung Lay, vice chairman of Union of Myanmar Federation of Chambers and Commerce Industry. Many international delegations discussed future investments but did not promise to invest due to weak infrastructure he said. “Power supply was a major issue for investors,” he added, “they told us they couldn’t produce products by candle light so they couldn’t promise investment.” Light manufacturing—particularly cut make pack (CMP) garment factories—requires only cheap labor and factories are available in industrial zones. Investors from the US and EU are also keen to take advantage of the Generalized System of Preferences (GSP) tariff system. Myanmar wants to reach US$6 billion of FDI in the fiscal year ending Mar. 31, 2017 despite FDI reaching just $3.65 billion through Dec.16, according to government body the Myanmar Investment Commission (MIC). Of the total FDI, the transportation and communication sector accounted for $1.9 billion, manufacturing $1 billion, and property $728 million. Local business leaders, however, were less confident that the $6 billion could be reached in the next three months. Dr. Soe Tun, vice chairman of the Myanmar Rice Federation, said, “The target cannot be met as I’ve seen no significant change in the market.” He pointed out that rules and regulations of the Myanmar Investment Law will not be released until April and investors are likely to defer until that time.
Oil Imports Growing - Myanmar’s oil imports are expanding to fuel a fast-growing economy and rebuild rotting infrastructure, creating a small but profitable route for ships from the regional hub of Singapore. Servicing growth that could top 8 percent this year is a fleet of small tankers ferrying gas oil and diesel from Singapore to Myanmar as the country’s sole port, in Yangon, can only handle small vessels. Shipping data shows that around 20 small tankers with a combined capacity of around 220,000 deadweight tons (DWT) are currently shipping refined products into Myanmar, virtually all from Singapore. That is about twice as many vessels as were on that route around a year ago, said one shipper. “Everyone is quite bullish about the Myanmar market,” said Lim Han, executive director and head of chartering at Singapore’s Hong Lam Marine. The firm, which started oil shipments to Myanmar from Singapore six months ago, is one of a handful of small, local shippers now plying the route. Yangon’s port is being expanded to handle ships up to a size of 50,000 DWT, compared with the current fleet of ships sized at 5,000-18,000 DWT. That would put Yangon ahead of ports such as Bangkok and Jakarta’s Tanjong Priok and on a par with Ho Chi Minh City in terms of ability to handle vessels.
Legal Action - Singapore Myanmar Investco (SMI), a company with retail, auto services, and logistics operations in Myanmar, said that it has been told of an intention to make a criminal complaint about the firm to the state courts of Singapore. The complaint is reportedly related to SMI’s divesting 97 percent of its stake in subsidiary telecoms tower firm the Myanmar Infrastructure Group, in a sale to Hong Kong-based Shining Star International Holdings. In a statement, SMI said that the complaint by German lawyers acting for Golden Infrastructure Group (GIG) was in regard to the alleged disregard of the rights of GIG under a joint venture agreement, and “failure to make timely disclosure” of allegations made by GIG. Singapore Myanmar Investco said it “intends to vigorously refute the complaint if GIG were to proceed with lodging the complaint.” Among other businesses, SMI operates a large amount of retail space at the new international terminal of Yangon International Airport.
Rice Exports Down - The rice export volume has declined this fiscal year due to flooding and a slowdown in demand from China, rice traders said. The rice export volume for the 2016-17 fiscal year is expected to reach 1 million tons, less than the 2015-16 export volume of 1.3 million tons. From April-Dec. 2016, 800,000 tons of rice were exported, primarily to China, the EU and West African countries, according to the federation. “We are now talking with the Sri Lankan government to send rice there, as they are facing a shortage due to weather problems,” said a trader. In Myanmar, “monsoon season paddies” are mainly planted between June and August, and harvested beginning in October. “Dry season paddies”—cultivated in smaller quantities due to the lack of irrigation in many areas—are planted largely between November and December and harvested beginning in April. The average price fetched from trading to China is US$376 per ton, while overseas it is about $300 per ton, according to a trader. Flooding last year—caused by torrential rain that peaked in late July and early August—inundated more than 1.3 million acres of rice paddies, out of 20 million acres being cultivated across the country.
New Power Plant - Singapore-based Sembcorp Industries announced a new agreement this week with the Ministry of Electricity and Energy for its 225MW gas-fired power plant in Mandalay, the Straits Times reported. Under the agreement, Sembcorp Myingyan Power Company will build and operate the power plant for 22 years. The plant will then be transferred to the government of Myanmar. The US$300 million project is set to become one of Myanmar’s largest gas-fired power plants.
Trouble For Kyaukphyu - About 300 people from 25 villages in southern Arakan State’s Kyaukphyu Township have called for a suspension of the controversial Kyaukphyu Special Economic Zone (SEZ) until the government could unveil a compensation scheme for land grabbing, a resettlement plan and SEZ by-laws. The meeting was organized by the Kyaukphyu Rural Development Association’s (KRDA) coordinator Tun Kyi. KRDA released a statement expressing local concerns. Concerns included compensation for land confiscation; environmental impact; effects on farmers and agriculture; job uncertainty; lack of information regarding a relocation plan; social impacts on woman; unclear by-laws; and a general sense that the project would not benefit the Arakanese people. This demand marks ongoing protests regarding the Kyaukphyu SEZ. “Even we [activists] have no idea what is happening with the SEZ now,” said Tun Kyi. The new government said it would begin the project in July but has not yet explained how farmers will be compensated, Tun Kyi added. The previous government and local investors had allotted 3.8 million kyats per acre in Thaing Chaung village to build a water reservoir. Locals stated that the current market value is 30 million kyats per acre. Farmers have repeatedly questioned the government’s transparency, saying that they are trying to avoid similar conflicts in the future. Further negotiations between investors and the newly-elected NLD government will continue.
Culture and Tourism
No More Temple Climbing? - A possible ban on temple climbing in Myanmar’s ancient capital Bagan is rumored as Aung San Suu Kyi denounced the controversial activity during her visit this week, suggesting that alternative viewing platforms be built. She called for the ban to protect cultural heritage in Bagan on a visit to the area. “Viewing sunset and sunrise from the temples can cause damage to the cultural heritage,” the State Counselor commented on Tuesday while visiting the earthquake-affected ancient temples in Bagan. “[It] is not suitable in the long run and should be banned in the future,” she added. Bagan houses stupas, temples and other Buddhist religious buildings constructed from the 9th to 11th centuries—a period in which some 50 Buddhist kings ruled the Bagan Dynasty. There are more than 3,000 stupas and temples in the area. Of these, 120 temples have stucco paintings and 460 have mural paintings that are found to be in need of preservation. Temple climbing is regularly cited as a “must-do” for tourists and local visitors to be able to enjoy the ancient capital’s famed sunrises and sunsets. An attempt by the Ministry of Religious Affairs and Culture last year to prohibit visitors from climbing the steps of stupas and temples in Bagan was met with criticism by the tourism industry, after which temple climbing was allowed at five famous temples— Pyathatgyi, Shwesandaw, South Guni, North Guni and Thitsar Wadi. Myanmar plans to nominate the Bagan Archaeological Zone for UNESCO’s list of culturally significant sites this year for reconsideration in 2018. Bagan’s first attempt came in 1996, but it was rejected due to poor conservation management plans and legal framework.