Posts in category: Business Article

The Ministry of Cooperatives and Rural Development is set to invest K19 billion in the 2025-2026 financial year to construct 116 miles of production roads and 305 bridges across 115 villages, according to the Rural Development Department.

Despite the enormous demand for infrastructure, an official pointed out that projects need to be in line with the yearly budget and goals.They will be implemented in all regions and states, except Kachin, Kayah, Chin, Rakhine, and northern Shan. Tenders for the construction works are currently being invited. In the previous financial year, 203 miles and five furlongs of roads and bridges were constructed with K21.36 billion in funding.

Additionally, the Mandalay earthquake recently damaged five production and village roads and six bridges across three regions and states. As part of the government’s continuing infrastructure improvement initiatives, full repairs are anticipated to be finished within the current fiscal year. Source: The Global New Light of Myanmar

Economy

Gold price records hike up to K.4.8 million per tical

Domestic gold price persistently surged to K 4.8 million per tical (0.578 ounce or 0.016 kilogramme). Discussions are underway by Monitoring and Steering Committee on Gold and Currency Market to establish quality criteria and base prices for gold to ensure systematic trading in the gold market. The Committee comprises authorities from The Central Bank of Myanmar (CBM), Yangon City Development Committee, the Department of General Administration and law enforcement agencies.

Banking and finance

Kyat depreciates to K 3,900 against US dollar and CBM interventions

 Kyat weakened to K 3,900 against US dollar at end March at the over the counter market.  The Central Bank of Myanmar (CBM) sold a total of 14 million baht to the export and import businesses via an online trading platform on 27 April. Likewise, the CBM has also sold US$3 million, 2 million yuan and 40 million baht to the export and import businesses on 3 April. CBM revoked the licences of seven money changers and suspended those of 19 money changers for six months in April as they failed to comply with the rules, guidelines and directives.

Trade

Myanmar foreign trade at US$30 billion in FY 2023-2024, $4 billion less than last year

Myanmar total foreign trade in 2023-2024 (April- March) was $30 billion in which $ 14.6 billion for export and $ 15.4 billion import. The trade was $ 4 billion less than $ 34 billion in 2022-23. Share of overseas and border trade in 2023-24 stood 74:26 ratios. Myanmar exported $ 8.8 billion manufacturing goods and $ 3.8 billion agricultural products. Myanmar bagged US$1.48 billion from over 1.76 million tonnes of pulse exports in year 2023-2024. Myanmar’s seaborne trade registered over 1.6 million tonnes of pulse exports worth $1.34 billion, whereas over 157,409 tonnes of pulses worth $141.38 million were sent to the neighbouring countries through border trade. Myanmar shipped fishery products worth US$714.89 million to foreign trade partners in 2023-2024, although it was shrank from $765.94 million registered in the FY 2022-2023. Myanmar exports fishery products to Japan, European countries, China and Thailand through maritime trade channels and also delivers fish, shrimp, prawns, crab and other seafood to neighbouring countries via border posts.

Trade Dept approves container shipping for Myanmar-Thailand border trade

The Trade Department under the Ministry of Commerce released a news bulletin 1/2024 on 11 April that it allows to container shipping to and from Yangon-Kawthoung-Ranong for Myanmar-Thailand border trade. Two jetties in Shwe Pyi Tha Township in Yangon are allowed to provide temporarily for international cargo port services in order to ensure a fast and smooth trade flow.

Investment

Almost US$ 661 million of FDI with 71 projects entered to Myanmar in FY 2023-24 in which power sector shared the top position at $ 375 million with 3 projects followed by manufacturing sector at $ 151 million with 60 projects.

According to PTTEP’s announcement, Chevron, a US company officially withdrew from Yadana Gas project in early April. Chevron share was moved to PTTEP (63% share) and MOGE. Axiata, a Malaysian telecom company sold its shares to  EDOTCO Myanmar with $ 150 million and left from Myanmar. EDOTCO Myanmar is a major business which implements over 3,000 telecommunication towers in Myanmar.

Manufacturing

11 factories produce 8 million tonnes of cement annually

Eleven cement factories produce over eight million tonnes of cement annually. The private sector operates 16 cement factories, while the State sector occupied three. If all factories are operational in full capacity, they can collectively produce over 16 million tonnes of cement a year. Annual local consumption stands at approximately 10-11 million tonnes so that local production can meet two-thirds of the local demand.

Downturn in production eases across Myanmar, but outlook worsens according to PMI

According to Myanmar Purchasing Manager Index (PMI) , the first quarter of 2024 ended with a further deterioration in operating conditions across Myanmar’s manufacturing sector.  However, the downturn across the sector moderated further, as the latest rates of contraction for output and new orders continued to weaken since last December.   As a result, while buying activity remained in retrenchment mode, the downturn here also moderated. AlthoughPMI index in March was 48.3, the highest in last 5 month period, the manufacturing sector is a weaker deterioration due to weak output and falling employment. It is worsen in April due to electricity shortage especially in industrial zones in Yangon where electricity is available only 4 hours a day. Manufacturing firms face high operation cost with generator and are difficult to run the business.

COVID

• In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of May 2024.

Economy

National Planning Law and Union Tax Law released

At the end of March, National Planning Law and Union Tax Law were released by the Government. The FY 2024-2025 National Planning Law promulgated on 29^th March 2024, the country achieved GDP growth by 3.5% in 2024-24 FY and the growth target will be at 3.8% in FY 2024-25. GDP by composition, the service sector has been the highest composition with 43.5%, and followed Industry Sector by 33.4% and Agriculture Sector by 23.1%. It is targeted to grow 5% in Service Sector, 3.5% in Industry Sector and 1.9% in Agriculture in FY 2024-25.  Tax rates on Special Goods Tax, Commercial Tax and Income Tax are merely as same as last year.

Gold price records hike up to K.4.4 million per tical

With spot gold price climbing over US$ 2,190 per ounce and kyat depreciation to over K 3,900 against the US dollar at end of March, domestic gold price persistently surged to K 4.4 million per tical (0.578 ounce or 0.016 kilogramme).

Banking and finance

Kyat depreciates to K 3,900 against US dollar and CBM interventions

 Kyat weakened to  K 3,900 against US dollar at end March at the over the counter market although The Central Bank of Myanmar (CBM) intervened in the currency market by selling dollar. CBM pumped US$ 18 million, 12 million yuan and 312 million Thai bahts in March. CBM reference exchange rate is still set K 2,100 to a UD dollar. CBM revoked the licenses of six money changers and suspended four money changers to six months as they failed to comply with rules, regulations and directives.

The Central Bank of Myanmar sells foreign currencies to importers via an Online Trading Platform. It allows private banks to sell foreign currencies for petty cash at their exchange counters for people who go abroad to undergo medical treatment, study, and work, aiming at stabilizing currency exchange rates and preventing price manipulation. The dollar transaction was K3,375 per dollar at the Online Trading Platform between the banks and importers/exporters, and the three private banks under the guidance of CBM are selling between US$300 and $500 at K3,100 per dollar as a special plan. CBM warned that some Facebook pages, groups, Apps and websites intentionally spread misinformation and false news and conduct Forex trading without possessing any work licences and action will be taken.

Trade

Implementation of MACCS for Cargo Clearance Processes at Tachilek Border on 22 March 2024

The Customs Department has extended the Myanmar Automated Cargo Clearance System (MACCS) to the Tachilek (Myanmar -Thai border) area on 22 March 2024. This system is currently operational in Yangon and the Myawady border trade. Although MACCS system was practiced in Muse and Chinshwehaw (Myanmar -China border) areas, all border trade activities are suspended in those areas.

Energy

Installation of 14MW solar power system planned for Thilawa SEZ

The Ministry of Electric Power (MoEP) has announced plans to install a solar power system with a capacity of up to 14 megawatts in the Thilawa Special Economic Zone (SEZ) in Thanlyin Township, Yangon Region. Currently, three plants within the Thilawa SEZ have already installed solar systems, generating approximately two megawatts of power. Covering an area of 667.275 hectares (approximately 1650 acres), Thilawa SEZ has attracted investment from 114 companies across 21 countries.

Workshop on Improved Cook Stove Distribution Monitoring held

“Project Monitoring and Evaluation Workshop” under “The Project of CCC Program of Activities for Distribution of Improved Cook Stoves in Developing South and Southeast Asian Countries (Myanmar)” co-organized by the Dry Zone Greening Department of the Ministry of Natural Resources and Environmental Conservation of Myanmar and the Climate Change Centre (CCC) of the Republic of Korea, at Thingaha Hotel in Nay Pyi Taw. During the six year project period in Sagaing, Mandalay and Magwe Regions, it is estimated to distribute 500,000 improved cook stoves, which can save 40 per cent of fuel wood, to 218,678 households in 1,109 villages in six districts. It has already distributed over 438,000 stoves to date and could help reduce over 485,000 tonnes of carbon emission.

COVID

• In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of April 2024.

Economy

People’s Military Service Law to come into force on 10 February

The SAC activated the People’s Military Service Law on February 10, 2024. Although the law was enacted in 2010, it had not been activated until now. Under this mandate, all men aged between 18 and 35, and women between 18 and 27 have to enter compulsory military service for at least two years, up to five in times of emergency. Skilled professionals, such as doctors, engineers, technicians, etc., may be recruited up to 45 years of age. The Ministry of Defense is currently in the process of drafting the necessary bylaws, procedures, announcements orders, notifications, and instructions.

Internal displaced persons reached nearly 2.7 million

The UNOCHA reports that nearly 2.7 million people are internally displaced in Myanmar, since the events of February 2021. Much of the displacement has occurred due to the rising levels of conflict in regions including Northern Shan and Rakhine State.

The UNOCHA acknowledges the critical issue and direct consequences of underfunding affecting its performance and requesting US$ 994 million in funding to aid 5.3 million people in Myanmar including 1.8 million in most severely restricted areas in need of humanitarian assistance, prioritizing food security, shelter, and protection.

 11,000 Myanmar workers will be sent to Korea under EPS in 2024

As of February, A total of 10,611 Myanmar workers have been selected to work in Korea under the EPS system, an increase of about 1,500 additional workers from last month. They will be working in several fields including manufacturing, construction, agriculture and livestock, and construction. Workers with specialized skills, such as welders, have also received employment opportunities.

Banking and finance

The CBM pumped US$77 million and 850 million Thai Baht into the financial market

The Central Bank continues to prop up the Kyat by selling more and more of its foreign reserves. In February, it has sold off US$ 77 million and 850 million Thai Baht.

Currently, the over-the-counter rate for the US$ dollar hovers around Ks. 3610, an increase of about Ks. 200 over the past few months. The Baht stands at Ks.101, and the RMB stands at Ks.500. The official reference remains unchanged since August 2022.

Trade

Supervision committee enforced on fighting illicit trade

On February 20, a meeting of the Illegal Trade Eradication Steering Committee was held in Naypyidaw, chaired by Vice Chairman Vice-Senior General Soe Win. The meeting addressed the issue of illegal trade and emphasized its adverse impacts on business, economy, security, and the environment. The nature of the situation was in a serious position and called for need strict actions against illegal traders.  Regarding the illicit trade in Myanmar, smuggling shared 60%, under invoice 30% and parallel trade 10%.

83 companies have been commissioned to carry out EV related activities

The national committee on electric vehicles reported that there were a total of 83 businesses that were permitted and licensed to carry out businesses related to electric vehicles. Two companies are permitted to operate charging stations across the country and two well-known bus companies will operate electric buses. Since November 2022, when the government announced its pilot phase for EVs, several EV brands, mostly from China, have made an appearance in Myanmar, including BYD, Wuling, MG, and BAIC.

EV import licences to be granted for car showrooms

Initially, EVs in Myanmar could only be sold by authorized companies, who had to operate their own car showrooms that were wholly dedicated to electric vehicles. On February 1, 2024, the rules have been relaxed, as independent showroom operators can now receive a license to import EVs, provided they meet set requirements and guidelines.

Investment

Cancellation of investment of the Shwe Byai Phyu Group from AOTM shares

Shwe Byai Phyu (SBP) Group announced on February 9^th 2024 that it had fully divested its shares from Investcom Pte Ltd, the holding company that owns telecommunications company ATOM Myanmar. Its shares would be taken over by Myancom Holdings.

SBP was targeted in the latest series of sanctions by the United States. ATOM, previously known as Telenor, have said that it maintains no links with any sanctioned individual or organization, and will continue to follow all rules and regulations.

Petrochemical refinery will be built at Dawei SEZ

The Myanmar Special Economic Zone Central Committee announced that a petrochemical factory will be built in the Dawei SEZ, as well as various manufacturing plants and oil refinery.

Manufacturing

Construction begins on bran oil, cooking oil production plant

Myanmar is building its first factory of rice bran oil and cooking oil, as announced by the Myanmar Rice Federation. Myanmar Rice Bran Oil Co. Ltd (MRBO) will begin construction on the refinery within the Myanmar Agribusiness Public Corporation (MAPCO) compound in Pyinmana, Naypyidaw. This will alleviate the pressures caused by imported oil and ensure self-sustenance.

Energy

Electricity demand is increasing by 15% a year

In a meeting held by the National Renewable Energy Committee (NREC), the Union Minster of the Ministry of Electric Power reported that Myanmar’s electricity demands were increasing by 15% annually. Furthermore, he elaborated that the country’s energy needs were currently met by hydropower, solar, and thermal (coal, natural gas, and LNG), at 47.1%, 1.7%, and 50.7% respectively.

Supervision Committee on Fuel Oil Importation, Storage and Distribution

Throughout January and continuing into February this year, fuel prices has been steadily increasing. The Supervisory Committee on Fuel Oil Importation, Storage and Distribution releases daily reference prices to contain and regulate the market. The prices dropped slightly in mid February. However, prices increased to Ks.2,770 for Octane 92 and Ks. 2,875 for Octane 95, Ks.2,595 for diesel and Ks. 2,640 for premium diesel on 16 February.

Transportation

Myanmar Korea Friendship Bridge Project (Dala) will become land mark of Yangon City

Construction is underway for the Myanmar-Korea Friendship Bridge, which will connect the township of Dala proper with the city Yangon. The project began when Korean GS Engineering Group won a tender and become the main contractor and developer of the project. Financed by the Economic Development Cooperation Fund, construction began in 2019, although it was temporarily suspended during the COVID-19 pandemic. The project resumed once events were clear, and it is expected to be complete in 2024.

Construction of Thanlyin Bridge No (3) completed by 97%

ThanLyin Bridge (3) is 97% complete, according to the Ministry of Construction. In November last year, the central section was completed and currently, work is underway to finalize the project, which is due to be open this year. The bridge, built with financial and technical assistance from Japan, will connect Yangon and Thanlyin, as well as improve transportation between the city and Thilawa SEZ.

COVID

In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of March 2024.

Economy

Extension of SAC for another six months

According to National Defence and Security meeting on 31 December 2023, SAC cited the unusual circumstances of the country at the moment which interfered with their ability to carry out elections and restore peace and order and the council decided to extend for further six months.

Four Union Ministers for SAC Chairman Office

The SAC appointed Admiral Moe Aung, formerly commander-in-chief of the Navy as National Security Advisor. Additionally, he was appointed as Union Minster for Ministry (4) at the Office of Chairman of the State Administration Council. U Ko Ko Hlaing, previously Union Minister for International Cooperation, was appointed Union Minister of Ministry (1). U Aung Naing Oo, who held notable positions in investment, commerce and was Union Minister of Ministry (2). U Aung Kyaw Hoe is appointed as Union Minister of Ministry (3).

9,000 Myanmar workers went Korea under EPS in 2023

More than 9,200 Myanmar workers received employment in Korea under its Employment Permit System (EPS) in 2023. Overseas employment agencies in Myanmar can only send workers under this system. Most migrant workers are currently headed for the agricultural and livestock sectors, as well as construction. A few skilled tradesmen, including welders, were also recruited under E-7-3 visas to work in shipbuilding. In recent times, South Korea has been increasing its overseas recruitment to fuel its economic growth.

Banking and finance

CBM injected USD and Thai baht to FE market

In January 2024, the CBM sold US$ 68.4 million to boost liquidity in the FX market and import of essential commodities.  In addition to US$ dollars, the CBM also injected 335 million Thai Baht (US$ 12 million) and 4.2 million RMB into the market. These events represent a trend in government intervention in the FX market, which it has not done since 2021. In December last year, the government injected US$22 million to fuel oil importers to avoid impending shortages.

CBM intensified actions on illegal hundi business and twenty players arrested

As part of its focus on boosting official remittance rates, the CBM has employed stricter measures on illegal Hundi (informal money transfer) services. It has been collaborating with several law enforcement agencies to investigate instances of Hundi operations.

Police have taken action against twenty individuals accused of running Hundi schemes. A further twenty are facing lawsuits in their respective townships.

The CBM has authorized 14 companies to conduct remittance services as of 14 December 2023. The need for official remittance channels has increased since the government has announced that Myanmar expatriates must remit a percentage of their income as well as a 2% income tax.

Kyat depreciation at OTC market

The OTC exchange rate for the dollar, as of January 31, stood at over Ks.3500. Previously, it had maintained a steady position around Ks.3450.

Trade

Export highlights of key sectors

As of 5 January 2024, Myanmar has earned a total of US$ 10.9 billion in exports. The Ministry of commerce has revealed that the largest source of export earnings was from garment exports, at US$ 3.3 billion, followed by natural gas exports at US$2.5 billion. Collectively they represent over half of all export earnings.

The agriculture also contributes a significant number of export earnings. The country exported agricultural products including rice and broken rice, beans and pulses, maize, rubber, and many others. The total valuation of these products is over US$2 billion.

The top ten trading partners this fiscal year, according to the MoC, are Thailand, China, Japan, India, the United States, Germany, Poland, Spain, South Korea, and Italy.

Myanmar auto market saw increase in sales

According to the Myanmar Automobile Manufacturers and Distributors Association, the domestic vehicle market is currently seeing a spike in sales. Specifically, cars within the price range of Ks. 30 million and Ks. 200 million are performing better in sales in the current market. The auto market has been operating quietly with no major fluctuations; however, demand for smaller vehicles have picked up compared to December last year. While there were sales reported for more expensive vehicles, they were infrequent, according to the secretary of the association.

Myanmar imported 6,900 vehicles in 9 months

The Ministry of Transportation and Communications has revealed that in the current fiscal year, 6,906 vehicles were imported into the country, including 1,780 passenger cars and 50 busses. In addition, trucks, construction vehicles, and miscellaneous accessories were also brought in. The total value of the imports was reported to be US$235.02 million, which was more than double that in last fiscal year.

EV cars import and discussion for assembling plants

The latest batch of Yutong branded EV chargers, rated for 80KW, arrived at Yangon Port on January 23^rd, according to the Ministry of Information. The Chinese manufactured equipments were imported by Yar Zar Min Industry, with permission from the leading committee responsible for the promotion of EVs in the country.

There has been a regular stream of EV imports in the country after EVs were exempted from commercial tax and special goods tax, beginning from October 2022. A number of local automobile companies have imported EVs from brands such as BYD, Toyota, MG, and Karry. A total of 1,888 EV Passenger cars and light trucks have been imported and registered at RTAD.

Manufacturing

Investment for EVs assembling plant

It is learnt that overseas EV companies are discussing with officials of Myotha Industrial Park City (MIPC) near Mandalay to find out opportunity to invest in EVs assembling plants in MIPC.

Loans for MSMEs at low interest rates

Micro, Small, and Medium enterprises will soon be able to apply for loans at competitive interest rates. Depending on the size of the company, they will be able to borrow starting from Ks. 10 million up to Ks.100 million. Interest rates are set between 3%-5% per year depending on whether the loan is used for fixed capital or working capital; the loan period is up to 18 months.

MSMEs in the following groups will be prioritized: manufacturer of high value products; exporters; producers utilizing local raw materials; producers of  import substitution products; job creators; waste and hazard management; and healthcare companies.

Energy

Solar panels sales surged over generators

Electronic companies are reporting surging sales of solar panels and other photovoltaic equipment.. Solar equipment sales have edged out the traditional generator. Store owners have noticed that most purchases are ordered from other region and states than the capital Yangon.

Fuel prices hike at end of January

According to reference prices revealed by the Fuel Oil Supervisory Committee on January 26, fuel prices have increased across the board. Octane-92 increased by Ks. 100 to Ks. 2705 per liter; octane-95 at Ks. 2845 per liter; diesel at Ks. 2450 per liter; and premium diesel at Ks. 2515 per liter. Despite rising costs, there were no reported instances of long queues at fuel stations as has happened in the past during fuel shortages.

Transportation

Air KBZ renamed to Mingalar Airlines

Air KBZ Airlines, a subsidiary of KBZ group, has rebranded to Mingalar Aviation Services on January 6th, according to its official Facebook page. The airline with continue to operate its 13 domestic flights under the name Mingalar Airlines. Mingalar Aviation is one of the few privately operated airlines in Myanmar, alongside Myanmar Airways International.

Air KBZ Airlines was established on June 2010, and began operating domestic flights a year later with a fleet of 12 commercial aircraft. In 2015, it began expanding its range of destinations both domestically and internationally, and began code-sharing international flights with MAI.

Direct shipment of goods from Inland Logistic Port to Thilawa Port

Goods are now shipping directly from the Mandalay region to Thilawa port by train. RGL Dry Port, located in the town of Myitnge, officially commenced operation on January 1^{st ,} 2024. The connection will help facilitate the transfer of Mandalay-produced goods such as rice, pulses and beans, and gems and minerals, at very affordable rates, as it will be utilizing the already established national rail network. Moreover, it is located near key manufacturing zones. Its first successful shipment was 20 containers (490 tons) of maize headed for export to the Philippines.

Tourism

Over one million international tourists and 8.8 million domestic tourists in 2023

The Ministry of Hotels and Tourism is expected a growth in tourist numbers after a favorable increase in 2023. In 2023, there were 1.24 million international tourists and 8.85 million domestic travelers ; a massive increase over the previous three years. Most international arrivals are from Thailand and China.

The Ministry continued to highlight the importance of public-private cooperation to develop the tourism sector. The government has sought to promote tourism overseas and has begun trialing Visa-on-Arrival for Indian and Chinese tourists. There are talks to adopt the Russian payment system Mir to better accommodate Russian visitors.

COVID

In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of February 2024.

Economy

Martial law orders in 8 townships in Northern Shan State

              Two weeks after the attack by ethnic armed groups called Northern Alliance, the SAC imposed martial law in eight townships in the Northen Shan State, where fighting was the most intense. The affected townships are: Kunlong, Kutkai, Namhkan, Muse, Lashio, Theinni, Laukkaing and Konkyan. Under martial law, executive and judicial powers in these regions have been transferred to the corresponding North-East Military Command and Laukkai Regional Command.     

Terrorists attacked with drop bombs near Myanmar China border that destroyed 120 loaded cargo trucks

              The fighting has escalated to new heights when on November 23^rd, the SAC reported that ethnic armed organizations (EAOs) had launched a drone strike in Muse, destroying 120 cargo trucks out of 258. The trucks were carrying household goods, consumer goods, clothes, and building materials which were lost as a result of the subsequent fire. The attack was centered near a trade terminal, and has caused the most property damage since the operation began.

Since the fighting began, Myanmar-China bilateral trade has been heavily disrupted as vital transportation routes have been marred by conflict. Muse, which normally facilitates US$60 million in trade monthly, has not overseen any passage of goods. Similarly, Chin Shwe Haw, located near China’s Yunan province, has halted all trade movement. Essential items, particularly rice, have seen price increases, putting pressure on local residents.

Banking and finance

CBM announcements on rumour of bank deposit

              The CBM has moved to quell rumors of cash withdrawals being restricted at certain banks, and that there is, in fact, no limits of any kinds being imposed on any kind of cash withdrawal. It has reassured the populace that the banking industry has been performing excellently and that there is no need to panic. The rumors were suggested to be the result of needless fearmongering on social media intended spur to public into a state of uncertainty. The CBM has been cooperating with the relevant organizations to take action.

CBM assures fully guaranteed on public loss of bank deposits

              In the interim, the CBM has assured that mechanisms are in place to assure all customer’s deposits accounts are guaranteed. In the case of bank branch failure or closure, customers can withdraw their money at other branches. Arrangements have been made to reimburse customers if they have lost their deposits due to unforeseen circumstances, provided that evidence is provided. Mobile banking services and digital financing services remain functional to ensure customers can access to their accounts at all times.

              However, at the same time, the CBM has cautioned against excessive withdrawals, citing the dangers of inflation. Irregular amounts of money in outside circulation encourages speculation in property, gold, and FX, leading to higher inflation rates. The CBM has warned that individuals who withdraw abnormal amounts of cash may be monitored for suspicious activity.

KBZ announced old deposit accounts can be used as before

              KBZ has removed all restrictions on its deposits accounts as of November 15. All deposits accounts, including savings, call, current, and fixed deposits accounts are no longer subject to any restrictions on deposits, withdrawals, or transfers. Currently, KBZ is the first major bank in Myanmar to do so.

              This has been the first instance since 2021 that there have been no transaction limits imposed on customer’s accounts. During the bank run in 2021, KBZ was one of many banks that were forced to limit the amount of money that customers could withdraw from their accounts through various channels. The limit was Ks.400,000 per card. When long lines began to form at ATMs, they were soon disabled and withdrawal services shifted to appointments only. As the crisis subdued, KBZ gradually resumed normal operations, setting a new limit of Ks.10 million per week.

Equity market in downward spiral

              The Yangon Stock Exchange (YSX) has reported its lowest valuation in terms of total trade value in October. After a shaky performance in the first half of 2023, the YSX hit a record high of Ks. 2 billion in total trade value in July alone, nearly matching the total values from January to June put together. Part of the reason for this massive upswing is due to the addition of a new listed company, Myanmar Agro Exchange Public Co.Ltd (MAEX). However, from that point onwards, total valuation and total trade volume have seen a steady decline. In August, it almost halved to Ks.1.3 billion with 509,827 traded shares; in September, Ks.1.4 billion with 302,164 shares; by October, it has dropped to Ks. 772 million with 305,102 shares.

              The YSX was first established in late 2015 and began operations in earnest around 2016 with three listed companies. Today, there are a total of eight companies listed on the exchange, spanning a wide range of industries, from banking, investment, to hospitality and wholesale.

Discussion of direct payment in Taka and Kyat in Myanmar Bangladesh Trade

              On November 10, the CBM Governor Daw Than Than Swe met Bangladeshi Ambassador Dr.Md. Monwar Hussein in Naypyidaw and discussed the possibility of using direct Kyat/Taka payments to facilitate banking and trade between the two countries. The Bangladeshi currency joins the Indian Rupee as part of the Myanmar government’s plans to expand its foreign reserve portfolio and reduce the economy’s reliance on the US Dollar. The Chinese Yuan and Thai Baht have already been implemented to facilitate trade payments earlier this year, and there have been talks to include the Russian Ruble as well.

Trade

Companies to face legal actions of failing to deposit export earnings

Starting from November 17, 2023, the Trade Department is enforcing strict measures against companies that do not deposit their export earnings into designated bank accounts, as outlined in the existing law since November 6. Exporters must deposit earnings in foreign currency within 45 days for Asian countries and 90 days for countries outside Asia. Failure to comply results in legal action under the Foreign Exchange Management Law, as per the CBM’s notification 27/2022. The Trade Department reiterated the deposit requirement on November 6 and warned of legal consequences. Exporters failing to comply face suspension of registration for two weeks, with subsequent legal action if non-compliance persists. The process involves notifying the Ministry of Commerce, AD banks, and the Union of Myanmar Federation of Chambers of Commerce and Industry. Export/import registration is restored only upon confirmation from the CBM that earnings have been settled.

Traders allows to shift licenses from Muse/Chin Shwe Haw route to other posts

              As a result of the conflict that disrupted trade in Northern Shan State and the ensuing closure of the Mandalay-Muse Highway, the Ministry of Commerce has permitted exporters to repurpose their licenses from Muse and Chin Shwe Haw to other posts along the Myanmar-China and Myanmar-Thai borders. Moreover, trade over sea will also be permitted on a case-by-case basis. According to observers, traders will most likely shift over to Lweje, located in Kachin state, and Mong La in eastern Shan State. The alternative routes are not without issues, however, in the form of additional overhead and logistics costs. For one, cargo trucks cannot directly enter China through Mong La, and would have to instead transfer their goods using Chinese short-haul truck services there. While entry into China is possible in Lweje, there is no direct trade route that links Lweje with major cities, requiring traders to make an additional stop at the city of Bhamo. Transport costs and duty fees have also increased. Muse’s infrastructure is able to handle large volumes of trade as one of the main trade hubs in Myanmar, which cannot be said for Lweje and Mong La. Traders have added that sea routes are also unfeasible due to the time constraints and distance.

Muse traders trying to export fruits to other borders- Loije and Mong La

              These challenges disproportionally affect Myanmar traders over Chinese traders. Chinese exporters primarily transport non-perishables, such as building materials, over to Myanmar. The value of their goods is not as affected as much by the change in the logistics situation. In contrast, Myanmar exports agricultural products, the quality of which can easily decline due to damage from longer transport times. Currently, traders are only transporting fruit, in lieu of rice, peas, and other agricultural products. Particularly, watermelon traders have reported that damages can devalue their cargo to the point of not covering transport costs by the time it arrives in China. The demand for watermelons has also settled down, leaving the Myanmar watermelon industry in a difficult situation.

Rubber prices drop in Mon State due to trade route blocked

              The closure of major trade routes has also affected the price of rubber in Mon State. Rubber prices for the RSS-1 variety were around Ks.1700-1800 per pound in October, and has since fallen to Ks.1450 in November. According to one farmer, normally, prices would normally be around Ks.2000 per pound this time of year. Other rubber varieties, including Local-3, has similarly fallen. The closure of the roads has not only prevented the export of rubber, but has also prevented the arrival of local traders and buyers, further exacerbating the situation. Farmers have added that if the current prices continue, their business may soon become unsustainable, notwithstanding the numerous security concerns.

              The majority of Myanmar’s rubber production is exported to China. It is also shipped to neighboring ASEAN countries, including Thailand, Vietnam, and Malaysia, as well as South Korea and Japan. There are over 1.6 million acres of rubber plantations total, with Mon state accounting for over 30%. 360,000 tons of rubber were produced last year, of which 200,000 tons were exported. In 2021, the rubber trade accounted for more thanUS$449 million.

Mandalay to host International Trade Fair & Investment Forum in December 2023

              The Mandalay Region Chamber of Commerce and Industry (MRCCI) has announced that the city will host the Mandalay International Trade Fair and Investment Forum for the second time in December 2023. The event will feature 262 booths from various countries, including China, India, Bangladesh, among others, showcasing a wide range of products such as foods, cosmetics, medicines, and machinery. The event will boost investment, create new opportunities, and promote business between the countries, according to MRCCI President U Win Htay.

Investment

Re-constitution of Kyauk Phyu SEZ Management Committee

The Kyauk Phyu SEZ Management Committee has underwent a change in constitution, as of November 20, 2023, as per Directive 3/2023 from the Myanmar SEZ Central Committee . Most notably, Ministry of Commerce Officer on Special Duty U Kyaw Shwe Tun replaces U Myint Thein as Chairman of the committee. U San Shwe Maung from the Rakhine State Government has stepped down from one of the Vice-Chairman seats and has assumed the role of a member, leaving retired Department of Urban and Housing Department Deputy Director-General U Win Myint as sole Vice Chairman. The committee serves an overseeing role and assumes the duties and responsibilities as laid out in the Myanmar SEZ Law.

Extension of Call for EOI on formation of public company in Kyaw Phyu SEZ

Kyauk Phyu SEZ in Rakhine State is one of three SEZs in development in Myanmar, the others being Dawei SEZ in the Tanintharyi Region and Thilawa SEZ in Yangon. In order to bolster further investment, the SEZ central committee will call for an Expression of Interest (EOI) for the establishment of the Myanmar Government Designated Entity Consortium to collaborate in the deep-sea port project in Kyauk Phyu SEZ. To join the consortium, Myanmar-owned companies must be domestically owned private or public companies and must be legitimately registered under the Myanmar Companies Law 2017. They should have continuous operations, possess the relevant documentation issued by the Directorate of Investment and Company Registration (DICA), and not be suspended on its online platform.

Moreover, eligible companies must have a minimum of 10 years of incorporation or five years of experience in successful infrastructure development. A company must have a minimum turnover of US$20 million or an equivalent amount in foreign or local currency over the past three years. Entities seeking inclusion in the consortium must not be blacklisted or disqualified by the ministry, Naypyitaw Council, or regional and state governments.

Energy

Formation of a leading committee for the purchase of fuel from Russia

The SAC as announced the formation of a committee to oversee the purchase of fuel from Russia. The committee will be responsible for: the proper storage of fuel; reviewing prices and costs; ensuring proper quality control; drafting standard procedures and regulation and assuring compliance; coordinating between relevant public and public organizations; reporting monthly foreign currency; tracking logistics; and among other tasks as deemed relevant to the country’s policy goals. The committee will be chaired by Lt.Gen Nyo Saw, along with membership by various ministries, including the Ministry of Transportation and Communications, Ministry of Electric Power, and the Ministry of Commerce. In addition, individuals from the private sector also constitute membership, including STAR HIGH, Yetagon Energy Trading, and SWAN Energy.

The Myanmar government continues to forge stronger relations with Russia, with collaborative projects in energy, finance, and tourism. There have been discussions between the two countries to facilitate direct Kyat-Ruble payments for fuel, as well as adopting the Russian card payment system Mir in Myanmar. Furthermore, Russia has expressed interest in developing Myanmar’s renewable energy goals, with projects such as nuclear power plants and wind plants currently in progress.

Myanmar, China signed agreement to purchase electricity from three solar projects

Myanmar’s renewable energy efforts continue to show progress, as the Myanmar government has signed an agreement for purchasing electricity from three solar projects, Kyeeon Kyeewa, Kinda and Sedoktaya in the Magway and Mandalay regions. The total capacity from the three projects will be 90MW, which while modest, nonetheless signals further development in the developing renewable energy sector of Myanmar, especially solar energy. Currently, there are 14 power projects in development, and six in operation providing 180MW of power to the country. China continues to invest in Myanmar’s development as part of its Belt and Road Initiative, which will further improve relations and cooperation between the two countries.

Transportation

Security forces clear and restore Pyin Oo Lwin to Kyauk Me road

The conflict has affected many key transportation routes along Myanmar’s northern region. Not only was the Mandalay-Muse highway affected, the highway that connects Pyin oo Lwin to Lashio was disrupted at thirteen separate locations. Regional transport between villages along these points were reportedly blocked by deep ditches, earth mounds, and felled trees. The relevant authorities have managed to clear twelve of the blockades since 19 November and are actively attempting the clear the rest. In the interim, they have assured travelers that much of the highway has returned to normal conditions and they have guaranteed safety by conducting security patrols around the region.

Authority temporarily closure of Land routes and waterway in Rakhine State

The fighting has also escalated in Rakhine State as well. The Yangon-Sittwe Road has been closed by the authorities; there have been reports that EAOs have also been conducting their own stop-and-search operations along some sections of the road. Waterways have also been blocked. The authorities have begun increasing their security efforts in order to restore normalcy for residents in the region, as they are the most likely to be affected by the disruptions. 

COVID

In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of December 2023.

Economy

It is estimated to 56.2 Million People living in Myanmar as of October 2023 based on 2014 Census by Department of Population. By States and Regions, Yangon Region has highest population of 9 Million people and followed by Shan State and Mandalay Region with 6.8 Million respectively. Among the States, Kayah and Chin are lowest populate states with 0.4-0.5 Million population while Tanintharyi Region has been lowest populate region with 1.6 Million people among any other regions. Compared to 2019 Inter-census population, 2.2 Million people has been increased within 4 years. Populations by States and Regions are as seen in the following Figure: 2023 Estimated Population of Myanmar by States and Regions

Figure: 2023 Estimated Population of Myanmar by States and Regions

Source – Department of Population

The Copy Rights Law of Myanmar came into force on 31st October 2023 with the issuance Notification No.218/2023 by the State Administration Council as the effective date of the Copyright Law 2019 (CRL) of Myanmar. The law protects the literary and artistic works of not only the Myanmar Citizens but also the Foreigners residing in Myanmar who first publish their works in Myanmar or first publish their works outside Myanmar but re-publish them in Myanmar within 30 days of the first publication date.

Likewise CRL, the Industrial Design Law of Myanmar also came into force on 31st October 2023 with the issuance Notification No.217/2023 by the State Administration Council as the effective date of the Copyright Law 2019 (CRL) of Myanmar. Since 31st October 2023, creators of Industrial Designs can file applications for registration of their Designs with the Intellectual Property Department (IPD).

Central Committee on Ensuring Smooth Flow of Trade and Goods Chairman State Administration Council Member Deputy Prime Minister General Mya Tun Oo has highlighted the importance of reviewing the work processes at all the trade camps of Myanmar to revitalize the trade sector. Traders need to ensure that imports of basic necessities should be met while maintaining the capacity to export as well. The 13 member committee will try to facilitate export goods by minimizing interruptions in production, and work towards ensuring the smooth flow of official currency.  

The Supervisory Committee on Fuel Oil Import, Storage and Distribution was reorganized on 13^th October 2023 in order to effectively steer the oil import, storage and distribution sector and ensure standard quality for the imported fuel oil and stable prices for energy consumers, incorporating the stakeholders from the public and private sectors into the committee. The Committee is chaired by the Deputy Minister for Energy, Permanent Secretary as secretary for the committee, Director General of the Petroleum Products as Joint Secretary and followed by members such as DGs of Trade Department, Petroleum Products Regulatory Department, DDG of the Foreign Currency Management Department. The committee is majorly responsible for supervisory measures on stabilizing fuel prices, import license issuances, managing and distribution of imported fuel oils and so on.

Trade

There are 505 Garment factories, 48 footwear factories, 8 wig manufacturers and 177 factories associated in manufacturing of bags, sports units, sports shoes, and socks in Myanmar and the majority of them are residing in Yangon and operating under Cut-Make-Pack (CMP) System. CMP Garment system has been one of top FDI Sectors of Myanmar and China has been major FDI Investor in Myanmar and followed by Chinese Taipei, Thailand, South Korea and Japan. Finished products are majorly exported to ROK, Japan and EU countries and as of presence, 37.5 % of orders are by Japan and other 25.3 % by ROK.

For the first six-month of FY 2023-24, Garments exports has reached USD 4.3 Billion. 

Ministry of Commerce issued the notification of the measures to be taken against companies whose export earnings will not be allowed to take into the country with the Notification No.27/2022 issued on 6th October, 2023. According to the Notification, export earnings of goods to the Asian countries shall be deposited within 45 days, and those to other countries deposited within 90 days and if non-compliance is found, action will be taken in accord with the Section 42-A of the Foreign Exchange Management Law.

In order to be more getting involved in legitimate exports and bolstering exports, the Ministry of Commerce has been paving ways by granting special privileges to exporters who are earning Foreign Currencies for the country. Besides, The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) also planned to give another special privilege to the exporters on top of that.

The Ministry of Commerce has revealed three priority sectors for imported goods. Traders are encouraged to spend foreign currency to make these goods available. The first promoted sector are goods essential for everyday use and the benefit of the population: pharmaceuticals, medical devices, fertilizers, pesticides, seed, diesel, petrol, edible oil, raw materials used in livestock businesses, veterinary drugs, industrial raw materials, PET chips, food materials, plastic raw materials, medicine and herbal raw materials, packing materials, lubricants, engine oil, other industrial oil, tar and LPG gas.

The second sector covers raw materials and other inputs required for manufacturing: iron and steel, paper and stationery, equipment for electricity generation, transmission and distribution, construction material, machine and spare parts, transmission and distribution, tires and rubber products.

Finally, the third sector promotes various electronic electrical goods, telephones and telecommunication devices, as well as foodstuff, consumer products, vehicles for commercial purposes and machinery.

To incentivize Myanmar expatriates working abroad to remit a portion of their income, the Ministry of Commerce has announced that expatriates would be eligible for an EV import license for an EV worth 5% of their remitted income. Under this program, those who transfer $200,000 would be able to import an EV worth $10,000, and remittances below that threshold and above $50,000 would be able to import an EV worth $2500.

              The announcement is part of a series of moves to shore up the administration’s foreign reserves. However, it is unlikely to have any substantial impact. Firstly, few Myanmar expatriates are actually able to earn enough income to be able to remit $50,000 annually, let alone $200,000. Secondly, even among those that meet the requirement, few would feel that an EV import license would be an attractive enough offer. Thirdly, with current EV import restrictions, there would be difficult to find vehicles on the market that hit the $10,000 price-point. Realistically, the license to import an electric motorcycle, which fits the $2500 criteria, would be the only tangible benefit from this scheme.

Regarding food product imports, FOOD and Drug Administration under the Ministry of Health notified food importing companies to seek import recommendations (IR). They can seek IR through the FDA website http://fda. gov.mm.

Investment

The Myanmar Investment Commission (MIC) has approved six new investment projects in various sectors, including power, manufacturing, hotels, and tourism. These projects will bring a total investment of approximately Ks.314.73 billion ($72.98 million), as well as creating over 2,600 job opportunities for locals. Additionally, eight existing businesses were granted permission to expand their capital.

As of the end of August 2023, out of 52 foreign countries, Singapore, China, and Thailand were the leading nations in terms of foreign direct investments (FDI) in Myanmar. The power sector attracted the most FDI, accounting for 28.45% of total investments, followed by the oil and natural gas sector (24.46%) and manufacturing sector (14.38%). In addition to these sectors, the agriculture sector attracted $2.578 million from three enterprises, while the transport and communication sector saw capital expansion of $77.82 million. The livestock and fisheries sector also received over $23 million in increased capital.

Myanmar received a total of $484.155 million in foreign direct investments in the past five months, which included capital expansion by existing enterprises. During this period, the power sector remained the top choice for FDI.

Singaporean asset management corporation Keppel has completed the sale of the 5-star rated Sedona hotel to Springfield Blossom Ventures, another Singaporean registered company. The luxury hotel was sold for US$ 57.4 million, higher than its managing company Straits Greenfield’s net asset value of US$43.9 million, as of February. The sale was first announced earlier this year in March and according to Keppel, is “in line with asset monetization plans to unlock value that can be invested to pursue new opportunities.”

              Sedona Hotel Yangon is one of Myanmar’s oldest international hotels, being in business since 1996. In 2016, it expanded by adding an all-new 30-storey building, increasing its capacity by 430-beds. Sedona, like many other hotels during the COVID-19 epidemic, operated in a reduced capacity, not accepting any new bookings.

Energy

The 500kV Phayargyi Substation is on track to be completed by December of this year. The substation would be able to transfer electricity from power stations located in the northern areas of Myanmar into the south with greater transmission capacity, efficiency and reliability. The substation, located near milestone 40 on the Yangon-Mandalay highway was part of the National Power Transmission Network Development Project along with Hlaingtharyar Substation and began implementation in 2018.

              The Tha-Htay hydropower project in Rakhine State is 77.5% complete as of July 2023, and would be completed during the 2025-2026 fiscal year. Situated on the Tha-Htay River in Rakhine state, the project has a total planned capacity of 111MW and would be able to provide clean renewable energy to over a million people. The dam is being developed with assistance from Japanese engineering consulting group “The Kansai” to ensure compliance with modern standards.

On October 11, Russian Energy Minister Nikolay Shulginov and Myanmar’s Energy Minister U Ko Ko Lwin met in Moscow to discuss bilateral energy cooperation. If Myanmar were to cooperate with Russian energy company INTER RAO, they would provide assistance with the petrochemical sector, focusing on the development of oil, coal, and natural gas resources. Myanmar would focus on pursuing renewable energy sources, such as solar and wind, while greatly appreciating the help of its allies. Both countries agreed to discuss further discussions in the future.

On the same day, U Ko Ko Lwin and Science and Technology Minister Dr. Myo Thein Kyaw participated in the Sixth Russian Energy Week International Forum. They discussed the issue of worrying carbon dioxide emissions and the potential of nuclear technology as a potential solution for clean power. The Myanmar government has been eyeing nuclear power as a way to solve its own energy issues; the Ministry of Energy has signed a memorandum of understanding with Rosatom Chairman Alexey Likhachev to develop nuclear infrastructure.

COVID-19

In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of November 2023.

Economy

The State Administration Council was reformed again on 25^th September 2023 with 18 Members. Two new members are General Maung Maung Aye and Lt. General Nyo Saw.

With reform of SAC, the government has reshuffled the cabinet with the following reassignment: Lt-Gen Soe Htut, Union Minister for Union Government Office (1) to the original military duties, U Aung Naing Oo, Commerce Minister to Union Minister for Union Government Office (1), U Tun Ohn, Deputy Minister of the Ministry of National Resources and Environmental Conservation to Union Minister for Commerce.,

According to the amending the Union Taxation Law 2023 on 12^th September, 10 % of income tax shall be levied over the total foreign exchange income obtained aboard except the salaries of the citizens living in the foreign countries and will be effective from 1^st October to 31^st March 2023.   Without subtracting the amount of exemption, 2% tax shall be levied over the incomes. Moreover, the taxpayer shall have the right to subtract the amount paid as tax abroad from the calculated amount of tax under this law.

In Myanmar, 90% of Fuel Oil is imported by neighboring countries and only 10% locally produced. Due to Foreign Exchange rate fluctuation and high global oil prices, regular diesel and octane 92 prices increased by 47 per cent and 27 per cent respectively during May to mid- September. The Supervisory Committee on Oil Import, Storage and Distribution of Fuel Oil is steering the fuel oil storage and distribution sector effectively so as not to have a shortage of oil in the domestic market and to ensure price stability for energy consumers. The Petroleum Products Regulatory Department regulates daily reference oil for oil with a reasonable price and also inspects the fuel stations whether overcharging or not. Fuel prices have decreased to 2 to 5%, MMK 11 to 130 per liter on average towards the end of September. As of 21^st September 2023, prices were MMK 2,330 for Octane 92, MMK 2,435 for Octane 95, MMK 2,530 for diesel and MMK 2,610 for premium diesel.

Banking and Finance

Central Bank of Myanmar has provoked 166 Money Changer Licenses alongside March 2023 to September 2023 as its fail to comply with the rules and directives by CBM in which 123 Money changer companies were provoked on 19^th September, 13 Forex Exchange License on 12^th July, 10 Forex Money Chargers and 20 Money chargers on 12^th July.

Even though the Central Bank of Myanmar CBM has set MMK 2,100 as a reference rate for USD transactions, the Unofficial Grey Market rate is 1.5 to 2 times much more than the reference rate. In September 2023, the Market rate was 25% lower than that in August 2023 with the highest exchange rate up to about MMK 4,000.

Compared to two and half-years ago, prior to 2021, the banking sector of Myanmar has been in dire straits such as poor banking operations and Foreign Currencies have always been run out. However, since 2021, the Competency of the Central Bank of Myanmar and Ministry of Finance has been carried out strictly in order to address the banking crisis and financial service sector and economy on those issues: the bank structure/size (1/6 size of Singapore bank); banking loan issues; building trust between Savers and banks; and restriction on withdrawals. Banking sector operates smoothly even in difficulties.  

The 8th Eastern Economic Forum (EEF) took place in the Russian city of Vladivostok from 10th-13th September, 2023 and Myanmar has done bilateral agreements with Russia in different sectors, especially Tourism and Energy Sector. As it is direct payment transacted with MMK to Yuan in procuring Russian Petroleum, the Union Minister of Ministry of Investment and Foreign Economic Relations has prepared and developed mutual agreement between Rubles to MMK (Direct Transaction between Myanmar (Kyat) and Russian (Rubles) in procuring Russian Petroleum at Eastern Economic Forum. Besides, the Russian payment “MIR” system will be available in Myanmar in October.

Trade

Myanmar normally produces 2.5-3 Million tons of Corns per year and Corns are majorly cultivated in Shan, Kachin, Kayah and Kayin States and Mandalay, Sagaing and Magwe Regions. It is planned to export 60,000 tons of corn from Shan State to China in October, 2023 and expect 2 Million tons in 2023 as same amount as the 2022 Corn Season. Corns are normally delivered through China, Thailand border points and also exported to India, the Philippines and Singapore. Thailand is the major export country and the rest to those countries.  In terms of tax, Thailand exempted Zero Percent on Myanmar Corn exports from 1^st February to 31^st August 2023. Current FOB prices on corn are between USD 270 and 290 and MMK 1,150-1170 per viss in the domestic market (YRCCI).

Online Sales or Online Shopping businesses can be registered at eComReg System of Department of Trade under the Ministry of Commerce coming 2^nd October 2023 and registration period is from 2^nd October to 31^st December when registration fees will be exempted. For those Online Businesses which haven’t done registration, will be faced action coming 1^st January 2024. The applicants need to submit their business names, logos and recommendation letters of respective wards, police stations and have to pay MMK 4,000 for online application form. The Online Businesses are granted only for Official businesses.

Investment

In the Mandalay Region Trade, Investment and Tourism Promotion Conference held in Nanning, China on September 16, 2023, Union Minister for Commerce pointed out that Mandalay and the surrounding region was a strategic location for cooperation with China, which includes the China-Myanmar Economic Corridor, and the China-Myanmar railway project. The increased ease of doing business should encourage Chinese businesses to invest in rising industries such as food production, garments, jewelry, renewable energy, and logistics. Additional projects such as Mandalay Myotha Industrial Zone project, Amarapura Tourism project, Mingala Mandalay project, Yetagun¬taung City project, and fruits and vegetables market were also discussed at the conference, and five agreements regarding economic cooperation, agreements, and honey trading were signed.

Manufacturing

Myanmar’s manufacturing sector attract FDI surpassing US$63.5 million in April-August

In the first five months of the 2023-2024 financial year, Myanmar’s manufacturing sector attracted over $63.5 million in investments from 26 enterprises, including expansion by existing companies. Chinese firms were the primary investors in this sector. The Myanmar Investment Commission approved 31 foreign projects from seven countries during this period, totaling $484.155 million in foreign direct investment (FDI). Most importantly, the power sector received the most FDI, amounting to $317.178 million from two enterprises.

Other sectors also received investment, with agriculture drawing $2.5 million from three enterprises, transport and communication seeing a capital expansion of $77.82 million, and the livestock and fisheries sector receiving an additional $23 million in capital. The focus in the manufacturing sector is on enterprises that require significant labor to create job opportunities for the local community. In particular, the garment and textiles industries play a vital role in the country’s GDP.

In response to H&M Group’s decision to phase out outsourcing from Myanmar, the Myanmar Garment Manufacturers Association (MGMA) is committed to improving the garment sector in collaboration with international brands and partners. The MGMA has implemented a Voluntary Labor Compliance Assessment (VLCA) since February 2020 to assess factories’ compliance with national labor laws and international standards. An online version of the assessment was launched in November 2022, with over 220 factories completing it and more than 100 still undergoing assessment.

Tourism

The government has been eager to revitalize Myanmar’s tourism industry. Since January, more than 750,000 tourists from China, Thailand, Japan, South Korea, and India have visited Myanmar through various channels. Sixty percent of all visitors arrived through the China-Myanmar border and the Thai-Myanmar border; and a further 190,000 by international flights. The Ministry of Hotels and Tourism aims to attract more Russian, Chinese, and Indian tourists in the next few years.

To further improve relations, visa-on-arrival services will be provided for Chinese and Indian tourists for a one-year trial period, and only valid for tourist visas. Visitors will be required to fill out VOA applications, readily available at all airports, and provide two recent photographs as well pay a VOA fee.

The Ministry of Hotels and Tourism has also revealed in a recent announcement a list of Myanmar’s fourteen most important destinations for local and international tourists alike. On the list are some of Myanmar’s already well known locations, including the culturally-rich sites of Bagan, Inle Lake, and Taunggyi and  Ngapali, Chaungtha, and Ngwe Saung beaches make up the country’s coastal attractions. Kyauk Phyu and Manaung of Rakhine State stands out as a particularly hidden gem with much untapped potential: Manaung Island offers stunning beaches with plentiful opportunities to dive and snorkel in pristine waters full of marine life. The island appears poised to receive much investment and development in the coming years.

Previously, crossing the Myanmar-China border required special documents known as the one year Border Pass (BP) and the seven days Temporary Border Pass (TBP). Now, there are plans to streamline this process by allowing Myanmar and Chinese citizens to enter and exit the country using only valid passports instead. Officials say that this will improve security and coordination efforts between the two countries, as well as improving the efficiency of border checkpoint inspections. It will serve to attract more tourists, but more crucially, it will improve trade. The Myanmar-China border checkpoints are important junctions for bilateral trade, and it is important to facilitate the underlying processes as much as possible.

Transportation

The city of Sittwe in Rakhine State is establishing direct trade ties with Kolkata, India, using a cargo ship via the Sittwe Jetty, part of the Kaladan Multi-Modal Transit Transport Project. Previously, goods from all across Myanmar were exported to Bangladesh, but now a new route from Sittwe to Paletwa via maritime routes is enabling goods from Rakhine to India. This project includes dedicated jetties in Sittwe and Paletwa and a completed road connecting Mizoram, India, to Chin State, Myanmar. The Sittwe Jetty was inaugurated on May 9, 2023, as part of the India-Myanmar Friendship Programme, involving a $484 million investment from India.

Despite sharing an extensive land border and close cultural and historical ties, India is only Myanmar’s fourth largest trading partner, behind China, Thailand, and Singapore. India is a crucial source of pharmaceutical goods, and India’s strategic importance has only grown in 2023 as Myanmar seeks to bolster relations with its closest neighbors when relations with the West become strained. Myanmar, likewise, is part of India’s ambitious “Act East” policy, a counterpart to China’ Belt and Road Initiative (BRI); both policies strive to establish strategic economic relations in the Southeast Asian region.  The expansion of trade routes is the latest in a series of moves to facilitate bilateral trade between the two nations.

COVID-19

While COVID-19 cases in Myanmar have been lowered due to the arrival of vaccines and other preventative measures, there is still a need to remain vigilant. The Central Committee on Prevention, Control and Treatment of Coronavirus Disease has extended COVID-19 restrictions until 31^th October 2023. The restrictions include social distancing requirements and a ban on public gatherings.

A ceremony to welcome the Boeing 737-400 cargo aircraft from the state-owned Myanmar National Airlines, was held at Yangon International Airport yesterday. The cargo plane (Aircraft No 9M-POS and Flight No 3G087) departed from Kuala Lumpur, Malaysia, and arrived at Yangon International Airport at 2 pm.
The plane will be able to carry up to 18 tonnes in tonnage, and it will also be able to transport cautious goods that cannot be carried on a regular flight.
Based in Yangon, it has planned to run trips to cities in the People’s Republic of China, Kuala Lumpur of Malaysia, Singapore, Hong Kong and India.
As a commemoration of the 75th Diamond Jubilee of Myanmar National Airlines, Boeing 737-400 (Aircraft No 9M-POS and Flight No 3G087) cargo aircraft has been brought to Yangon, and with this aircraft, Myanmar National Airlines will be able to expand its cargo flights. 

Source: The Global New Light of Myanmar