Acumen Magazine January 2014

adv.pmd 12/19/2013, 9:38 PM11

adv.pmd 12/19/2013, 9:18 PM12

adv.pmd 12/19/2013, 9:19 PM13

adv.pmd 12/19/2013, 9:20 PM12

adv.pmd 12/19/2013, 9:20 PM13

adv.pmd 12/21/2013, 3:26 PM11

adv.pmd 12/19/2013, 9:18 PM11

adv.pmd 12/23/2013, 3:33 PM11

adv.pmd 12/21/2013, 2:33 PM11

adv.pmd 12/19/2013, 9:32 PM12

adv.pmd 12/19/2013, 9:32 PM13

CEO / Chief EditorDr. Htet Zan Linn

DirectorDr. Hein Thu Aung, Tin Tun Kyaw

Executive EditorPhyo Wai

EditorsHein Zaw, Khin Win, Khaing Minn Nyo

ContributorsHein Zaw, Myitmakha, Dr.Tin Maung Kyi,

Naing Thit, Jacob Andrew Clere,Anura Widana, Khaing Minn Nyo

CoverHatt Kawt

DesignersAung Aung (AN Computer), Thaw Tar Oo

Computer OperatorZin Wai Wai Shein

Marketing DepartmentJanuary Khine Mon, Naw Keziah,

Yadanar, Nan Mo

PhotographersAung Kyaw Moe (New Image),

Hein Thu Aung, Hein Zaw, Khaing Minn Nyo,Myitmakha, Shady Ramadan

Publisher and CopyrightDr. Htet Zan Linn

Printer

Editorial BoardACUMEN

[email protected]

[email protected], [email protected],

[email protected], [email protected],

OfficeNo. 24/26, 4B-C, Race Course Condo, South Race Course Street, Tamwe Township, Yangon.

Tel : (+959) 420033355 ~ 66 ~ 77 (Hot Line), (+959) 73045140, 49317457, 73143313, (+951) 8603886, 8603887

Editors Note

Happy New Year to all our readers and customers!

We have come to the end of 2013 and now we are in a new year that will

be busier for Myanmar as it takes hold of the ASEAN chairmanship and alsoprepares for the following year's national election. 2015 will be even more

exiting as Myanmar will most probably be witnessing dramatic changes. It will

hold a highly-anticipated national election and prepares to enter the ASEANEconomic Community as well. Many of us wish for Myanmar to move forward

fast in the right direction with the ultimate sincerity of all stakeholders in the

political arena. We hope the meeting of the president, the Hluttaw, the military

and the opposition parties will take place soon and produce positive results.

Here the sincerity of each person becomes crucially important for the fate of 60

million people, the majority of them still living in poverty. One message we

would like to convey is that we should not be overly optimistic at the cost of

neglecting the reality. Everyone needs to be realistic and careful in making

assessments of the current political situation in Myanmar. Due to its importance

and urgency, we have chosen a piece on the ASEAN chairmanship as our leadstory for this edition in which the editor has also made some analysis. We have

included a very valuable question and answer session with the current Danish

ambassador to Thailand who has frankly and realistically assessed the political

situation here. He said many people in rural areas have felt no tangible im-

provements from the ongoing reforms. The impact foreigners like myself can

observe is mainly based on the changing image of Yangon, where we see office

buildings, new car galleries and shopping centers. And we tend to believe so

much is happening. We should be very careful not to assess the overall situa-

tion in the country on the basis of the development of the commercial center.

Another story worth reading is about SMEs (small and medium enterprises)

which constitute more than 90 per cent of the Myanmar economy. SMEs must

be the engines of growth and job creation in Myanmar, said Professor Dr. Aung

Tun Thet, economic advisor of president U Thein Sein. With a variety of catego-

ries, we hope this edition will be an enjoyable read for all our readers.

Thank you! A

AdvisorsAdvisorsAdvisorsAdvisorsAdvisorsProf. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet Prof. Dr. Aung Tun Thet (President's Economic Advisor)

Prof. Maw ThanProf. Maw ThanProf. Maw ThanProf. Maw ThanProf. Maw Than (Rector (Ret), Yangon Institute of Economics Yangon)

Soe Tint AungSoe Tint AungSoe Tint AungSoe Tint AungSoe Tint Aung (Special Consultant for Advocacy, PSI Myanmar)

Dr. Tun LwinDr. Tun LwinDr. Tun LwinDr. Tun LwinDr. Tun Lwin (Consultant, Myanmar Climate Change Watch,Tun Lwin Foundation)

Than LwinThan LwinThan LwinThan LwinThan Lwin (Deputy Governor (Ret), Central Bank of Myanmar)

Tin Zan Kyaw Tin Zan Kyaw Tin Zan Kyaw Tin Zan Kyaw Tin Zan Kyaw (Principal, Device Business Management Academy)

Grace Swe Zin HtaikGrace Swe Zin HtaikGrace Swe Zin HtaikGrace Swe Zin HtaikGrace Swe Zin Htaik (Media Advocacy Advisor, PSI Myanmar)

Masthead.pmd 12/19/2013, 7:18 PM1

ACUMEN 11

oicesVPresident is entitled to

enjoy the salaryapproved by law.

Anyone cannot bypassand reject the law.

The legislature has thepower to modify and

reforms the law.

U Khin Aung Myint

Speaker of the Amyotha Hluttaw

Despite being permitted therig ht to set u p lab ou rorganizations, they have noauthority to carry out theduties of other unions.

U Htay Oo

Labour Activist

A country can beruled by power andorder only for acertain period oftime. It cannot beruled for long. Acountry can be ruledonly by law. People'srepresentatives shallapprove this lawwith the consent ofthe 60 million peoplein Myanmar.

Thura U Shwe Mann

Speaker of the Pyithu Hluttaw

U Yan Naing Htway

Labour Activist

Working overtime is very complicatedissue to handle rather than to solve it.Employees' income will not be enoughwithout overtime fees. They have towork overtime.

U Aung Thein Linn

Member of parliament at

Pyithu Hluttaw

The way of thinking byauthority to solve theland confiscation issueis important.The authorities have tofind out ways to helpthe victims of landconfiscation withsympathy and empathy.

The authoritieshave to have diplomaticapproach instead ofblaming and scoldingthem. It is necessary tosolve the issues withsympathy and empathyof the authority.The way of thinkingand solving basicallyshould be for themajority of people.

Voices.pmd 12/21/2013, 2:31 PM11

Photo Feature

adv.pmd 12/19/2013, 7:47 PM12

adv.pmd 12/19/2013, 7:47 PM13

News in Brief

14 ACUMEN w w w. my a n m a r b 2 b m a g a z i n e. c o m January 2014

Prominent photographers from Bel-

gium, France, India, Indonesia, Malay-

sia, Singapore, Sri Lanka, Thailand, the

United Kingdom and Myanmar all num-

bering 30, travelled across Myanmar

under a program titled 7 days in

Myanmar.

The aim was to create a book with

the images of best places in order to

promote Myanmar.

The program is organised by

Illegal timber export toChina reaches $ 200 m Illegal loggings of the timber have

been happening in Kachin and Shan

states near China-Myanmar border and

Karen, Kayah and Shan State near Thai-

Myanmar border.

Most illegal loggings are from pro-

hibited forest in Kachin State, U Bar Bar

Cho said.

Myanmar becomes one of fastest de-

forestation country, according to a report

of UNEP (United Nations Environment

Programme). The reason of deforesta-

tion includes illegal logging, illegal move-

able cultivation, and usage of firewood.

Myanmar is trying to export its timber

to international market such as EU, US,

and Japan and it needs some improve-

ment and recommendation for export.

At the same time, Myanmar is trying to

obtain Forest Law Enforcement, Gover-

nance and Trade (FLEGT) Certificate

which recommend long term sustainable

development. A

7 Days in Myanmar by 30 prominent photographers

Singapore-based publisher Editions

Didiler Millet in cooperation with Ignite

Media, a local media organization.

Editions Didiler Millet has finished

similar projects in ASEAN countries. The

press conference for 7 days Myanmar

was held in Chatrium Hotel on 2 De-

cember.

A Myanmar photographer who par-

ticipated in the program said they were

very pleased to create this book because

Indian companies eyeof business to business

relationship inMyanmar

Illegal timber export to China alone has

increased to US$ 200 million this year,

according to joint general secretary of

Myanmar Timber Merchants Association,

U Bar Bar Cho.

Mostly timber has been exported to

China and the amount is $200 million,

said U Bar Bar Cho.

Indian companies are interested to in-

vest business to business in Myanmar in

the areas including legal, finance, bank-

ing, pharmaceuticals, education, shipping,

aviation, construction, real estate, agricul-

ture, textiles, manufacturing, engineering,

mines and minerals sectors.

On 30 November ,forty Indian com-

panies held a conference with its

Myanmar counterparts and discussed in

detail about the business opportunities at

Chatrium Hotel on November 25.

India companies are very keen to

invest in Myanmar. They have technol-

ogy. For example, Thailand gem market

get growth depending on raw gemstone.

They decorate it with their new technol-

ogy to get better price. So, Myanmar needs

it has never done before in Myanmar.

We went to interesting places in

Myanmar, and we are proud of bring-

ing all happiness and beauty of Myanmar

as photos, said the photographer.

We have learnt many things from

senior professional photographers in 7

days. This would be a historic record in

Myanmar, said the photographer

Previously, we tried very hard for a

program like this but was not able to do

it because there is no media freedom in

Myanmar. But now we see some and

we are so pleased on it. It is welcomed.

Those are very good conditions for us,

said a senior journalist, Mr. Denis Gray.

In 7 Days in Myanmar book, de-

scription of each photos and brief pro-

files would be interesting for readers and

it was targeted to international market

to be better known about Myanmar, ac-

cording to its media release.

Local and international companies

provide some support to accomplish the

projects and copyright by Editions Didier

Millet Pte Ltd. A

News in Brief.pmd 12/19/2013, 7:19 PM14

ACUMEN 15

The first visa service, Thai steps in Myanmar

Thailand Privilege Card Company

Limited (TPC), has entered

Myanmar market to extend its

business. The company launching

ceremony was held at Traders

Hotel on November 26. Thailand

Elite Card is Thai governments

project aimed to attract top-tier

foreigners from around the world

to invest, conduct business and

travel in Thailand with facilitative

services and privileges as well as

high-end recreation services for members.

The Card cost 2 million bath and 20 years

visa to Thailand several times.

After Myanmar practices democracy

and open-door economy, Myanmar busi-

ness investors are looking for interna-

tional business opportunities. And Thai-

land becomes one of their interesting

countries. The privileges of Thailand Elite

Card networking with Myanmar busi-

ness colleagues will help save their time,

energy and other resources, and to en-

sure that their successful business opera-

tion will also be a pleasant mission. said

Mr. Pisanu Suvanajata, Thai ambassador

to Myanmar.

TPC President, Mr. Apisit Chuenchom-

poo said Myanmar is the first country

that Thailand Elite Card holds our road

show because of a large number of po-

tential businessmen and investors and the

Myanmar governments support with the

aim to foster economic growth and to leap-

frog in the countrys development pro-

cess. We offer advisory service, tourism,

and five-star recreation for our members

convenience and satisfaction as the guests

of Thailand. The Thailand Elite Card

members will be facilitated and will re-

ceive various privileges from the Thai

government, particularly the right to re-

side in Thailand as its citizens. That is

throughout a 20-year membership term,

they can stay for one year per visit with-

out any transit to other country. That would

be great benefit for the members.

Currently, there are 1,540 foreign

members. 150 Myanmar businessmen are

cordially invited for card membership.

Thailand is one of the countries interested

in ASEAN Economic Community (AEC)

2015. A

new technology. They come here for B2B

relationship. Especially, the government

needs to improve their policy for foreign

investors. They might be worry. In the

previous example, the previous govern-

ments nationationalized some Indian com-

panies. So, they worried about it. In this

conference, some companies have com-

pletely finished B2B relationship. If the

government improves the policy for for-

eign investors, more India companies

would come and invest in Myanmar, U

Maung Shwe, Mangaing Director said of

Bandoola Group of companies and the

organizer of the conference.

Myanmar is now in transition to de-mocracy. We would like to participate in

the transition. To cooperate in sectors, es-

pecially in banking, agriculture, mines,

shipping sector, they are now in discus-

sion. We have technology and we will

bring it here for benefits of both sides.

Kalandan Project, India-Myanmar-Thai

trilateral high way would greatly benefit

the countries. To have more foreign in-

vestments in Myanmar, I think Myanmar

needs to learn the policy practiced by

foreign countries, said Shaileshy Vaidya,

President of Indian Chambers of Com-

merce and Industry. A

Japanese investment inMyanmar depends on

implementation inThilawa SEZ

Although the trading between Japan and

Myanmar is getting higher, the chal-

lenges remain bigger in investment and

procedure. Japanese investment de-

pends on the impact of implementation

in Thilawa Special Economic Zone in

2015, according to Yoshihiko Isozaki,

Japans Vice Minister for Economy,

Trade and Industry, during the event of

commencement ceremony of first phase.

In this year, Japanese leaders mostly

came to Myanmar. Japanese investors

are very interested to extend the busi-

ness together. Myanmar Foreign Invest-

ment Law is one of their interesting

things. But, they are in the middle way


News in Brief


Malaysia Petronas Company hopes large

investment in energy sector in Myanmar

as the largest foreign investor.

We are the largest foreign investors

in Canada and Uzbekistan and also hope

in Myanmar. We have plan to employ

many Myanmar local employees. Ahmad

Lutpi Haron, General Manager of Petro-

nas.

The company is in rank of number 6

of best profit and income in the world

and earned US$94 billion last year, ac-

cording to the General Manager.

The company has been investing in

Myanmar since 1997 and currently op-

erating Yetagun Project in Moattama Off-

shore in cooperation with other foreign

companies.

They have also plan to extend the

investment in oil distribution in Myanmar

and currently distributing 41.6 percent

of oil to Malaysia market.

The company has won 2 onshore

blocks on October 10. For next tenders,

their company will apply for tender com-

petition to be large energy investment in

Myanmar, according to the General Man-

ager of the company. A

Petronas aims tobecome largest investor

in energy sector

Japans largestcorporation prepares to

invest in animalhusbandry sector

Japans Marubeni Corporation has been

preparing to invest in animal husbandry

sector, according to Myamar merchants

of animal husbandry sector.

As the largest trade delegation from

Japan, Keidanren Federation led by Mr.

Katsumata Nobuo led 60 Japanese in-

vestors which visited Myanmar on No-

vember 19.

The visit showed the interest of Japa-

nese investors to invest in Myanmar

animal husbandry sector.

The federation competed in 43 ten-

ders of animal husbandry sector includ-

ing farms and factory under the admin-

istration of Ministry of Livestock and

Fisheries and plan to invest, according

to Daw Hla Hla Thein, chairman of the

Broiler Association.Just today, we talked with Japanese

delegation. They are interested in high

price product, said Daw Hla Hla Thein.

Marubeni Corporation is in the top posi-

tion of Japanese livestock sector. It also

involves in trades and develops busi-

nesses in the fields of chicken farms,

animal food, high price products, ready-

made food stuff as chicken ball and fried

chicken and also raw ingredients for

food, food distribution, food products busi-

ness in developing countries, beverages,

and marine products.

Thailand based company, CP is cur-

rently taking place in the market of

to go or backward. The procedure would

reduce their worry. Impact of Thilawa

Special Economic Zone is the most im-

portant determinant for more investment

from Japan. Japanese government will

help the development of infrastructure

in the project, said the vice minister of

Japan.

He added that Japan wants to imple-

ment the economic development of two

countries and will help for its develop-

ment.

The class A area is 400 hectares of

Thilawa SEZ. The project company will

be finished it in summer of 2015. The

SEZ is 20 kilometers from Yangon and

so it is a strength of manufacturing and

gain good economic impact. I have heard

that the two countries will implement

together for electricity, water and con-

struction, said Mr. Yoshihiko Isozaki.

The negotiation for the project started

in 2012 and implemented in 2013 and

the cooperation of two countries has

reached in high level, according to the

meeting.

The World Bank report named Do-

ing Business showed that Myanmar is

one of the most difficult countries for for-

eign investment and it takes place num-

ber 182 of 189 countries in the world. A

ready-made food such as chicken. After

stepping into Myanmar by Marubeni Cor-

poration, the competition between the

two companies: Thai based company and

Japan based company would be strong

in ready-made food market, according

to an appraisal of local investor from

animal husbandry sector. A


adv.pmd 12/19/2013, 9:21 PM11


Cover Story


Coverstory-The Question For 2014.pmd 12/19/2013, 7:50 PM18

ACUMEN 19ACUMEN 19



The First TimeMyanmar officially took over the po-

sition of 2014 ASEAN Chairman at the

23rd ASEAN Summit held in Brunei on

10 October 2013. The Chairman theme

was also declared to be Moving Forward

in Unity to a Peaceful and Prosperous

Community. Myanmar was internally and

internationally congratulated for the role

it assumed. UN Leader Ban Ki-moon, who

attended the 23rd ASEAN Summit com-

mented, that the ASEAN Chairmanship,

will be very important milestone for the

future of Myanmar.

For Myanmar, that has entered the

ASEAN organization in 1997, 2014 is re-

ally monumental. Though Myanmar had

the chance to be an alternate Chairman

in 2006, due to the economic and political

sanctions imposed by the Americans and

Europeans on the military regime,

Myanmar missed the chance and only

now for the first time is able to take that.

Myanmar became a member 17 years ago

and ASEAN was formed 47 years ago. It

is a momentous period of transformation

for the ASEAN Community. Thus

Myanmar as an alternate Chairman of

2014 has a huge responsibility to format

the pre-2015 year.

There may be the question, what is

the benefit of being a Chairman? In real-

ity, it can be said there will be more duty

than benefit. The Chairman has the du-

ties of holding ASEAN meetings formating

its progress solving the problems. Within

the year, more than 1,000 meetings, in-

cluding the two ASEAN summits have to

be held. Of those over 1,000 meetings, the

host government has an obligation for

holding about 300-400 meetings. Accord-

ing to a spokesperson of the ASEAN De-

partment of the Myanmar Ministry of

Foreign Affairs, Myanmar is to hold from

300 to 600 meetings. This is the number

of meetings, the government will spon-

sor, it does not include those that will be

sponsored by civilian organizations. If we

try hard to look for the benefits, as it is an

occasion where world leaders including

those from ASEAN countries will meet,

there is the opportunity to be in the inter-

national focus and present Myanmar to

the international leaders. In that aspect,

the ASEAN chairmanship can be said to

expect more challenges than opportuni-

ties.

Myanmar faces a lot of challenges to

be able to hold the meetings successfully

in 2014 and to be a perfect host to inter-

national leaders. Especially the current

question by most is if Myanmar could

present a good image. Within the two

years transformation period that the

world has accepted, weak points andgaps have been pointed out. Concerning

the role of Myanmar as the ASEAN Chair-

man, the US Foreign Secretary John Kerry

has commented that I think what is hap-

pening in Myanmar is very exciting but it

is incomplete. On Myanmar democrati-

zation he has also said, Our hope is that

the democracy will continue to evolve.

As an old country in the dark age for

half a century under the military reign

there are many weak points and there is

much doubt if Myanmar could success-

fully perform under its heavy burden asASEAN Chairman.The deprivations in

infrastructure such as transportation, elec-

tricity and internet are major challenges

for Myanmar in 2014. In a Foreign Policy

magazines article entitled As New

ASEAN Chair, Myanmar Braves for Year

of 1,000 meetings, author Catherine A,

Traywick, has questioned, concerning

Myanmars ASEAN Chairman role. But

can Myanmar, with its notoriously poor

infrastructure, handle the foot traffic? Even

after two years of transformation as the

2014 Chairman like all sectors, the infra-

structure sector is still har-um-scar-um.

The need of hotel rooms, frequent black-

outs, slow internet reception, Yangon traf-

fic jams are the problems Myanmar is still

facing. But the concerned administrations

would deal with those transparent mat-

ters, though there may be a little nuisance,

there are not likely to be a big problem to

the ASEAN and international leaders. For

Myanmar the most important matters it

Cover Story

Myanmar officially took over the position of 2014 ASEAN Chairman at the23rd ASEAN Summit held in Brunei on 10 October 2013.


ACUMEN 21

would have to deal carefully with are the

South China Sea affair and the Myanmar

internal conflicts in stalemate.

The Fence problemThe South China Sea affair that is an

off-shoot of various disputes is a matter to

be dealt with by the 2014 ASEAN Chair-

man. This, which is a mega problem

within Vietnam, the Philippines, Brunei,

Malaysia and China will be a dilemma,

some observers have noted, for Myanmar.

With the ASEAN family member nations

at one side and a long-term friendly

neighbouring country on the other side

Myanmar faces a very brittle condition

that needs considerate handling. Some

analysts presume that China with good

government transaction and economic

cooperation could pressure Myanmar.

These conclusions are not baseless. In

2012, when Cambodia acted as the

ASEAN Chairman such a situation did

occur. Because at the closing ceremony of

the 45th ASEAN foreign ministers meet-

ing, a joint statement on the South China

Sea dispute was not possible there were

accusations that there had been Chinese

pressure on Cambodia. The Philippines

strongly condemned the outcome of that

meeting, which was the first that had

ended without a joint statement in 45

years of ASEAN history. Relevant to the

non-joint statement, Benigno Aquino III

commented that Our position has always

been that a multilateral problem does not

lend itself to solution on bilateral basis

(The New York Times). He continued to

state that Multilateral problems shouldhave a multilateral solution.

It can be said that Cambodia is a close

ally of China and has had much invest-

ment and aid from it. In July 2013, Chi-

nese president Xi Jinping sent a felicita-

tion to Cambodias King Norodom

Sihamoni, commemorating the 55th an-

niversary of the two countries diplomatic

relation. Carlyle Thayar, a specialist on

ASEAN affairs at the university com-

mented on Chinas breach of conduct as

Myanmar faces a lotof challenges to be

able to hold themeetings success-

fully in 2014 and tobe a perfect host tointernational lead-ers. Especially the

current question bymost is if Myanmar

could present a goodimage.

An Experts talk show on ASEAN and Myanmar at UMFCCI.



What is this indicates is that China has

managed to break that insulation and in-

fluence one particular country. Thats go-

ing to affect any issues that begin to touch

on China.

But it cannot be definitely said that

there would not be a similar Chinese

approach to the 2014 Chairman. Quite a

lot are worried about that matter. That

has also been the main agenda in the

ASEAN talks held in Yangon. China,

which is in dispute is not just the South

China Sea but in matters relevant to ma-

rine boundary issues at the east of China

is a country hotest in sovereignty and

ownership issues. Due to the recently

proclaimed new East China Sea air de-

fense zone, Japan, America and South

Korea have issued a protest.

As for the South China Sea dispute,

China has agreed to a code of conduct

(COC) since mid September 2013, it can

be expected to follow that agreement in

2014 and for Thailand to act as liaison.

Currently though China is not popular

with the Myanmar citizens, the govern-

mental officials and most analysts are urg-

ing Myanmar to be fair between China

and ASEAN without taking sides. U Aung

Htoo, the deputy director general of the

Asean Affairs at the Ministry of Foreign

Affairs has said that, We cant go against

China. We will have to use active diplo-

macy. He continued to state that in deal-

ing with that matter. Myanmar will find a

solution by getting in touch with various

countries like Brunei. Currently tension

has lessened in the South China Sea front

and time will be needed for the COC for-

malization, things seem positive for the

2014 Chairman.

The Interior ProblemAnother challenge for the 2014

ASEAN Chairmanship is the internal con-

flicts. Up til now, the peace negotiation

with the ethnic armed organizations has

not been concluded and conflicts that have

a religious tint cannot be safely assumed

to have ended. If ethnic and religious con-

flicts continue in Myanmar, the ASEAN

have been no substantial results. During

U Thein Seins government, though there

were ceasefire agreements with 14 armed

organizations from 2011 there have been

reciprocal shootings and it is still at the

negotiating stage with the Kachin Inde-

pendence Army (KIA). Though much

hope was placed on the Liasa conference

that was held at the end of October, it

community will put the blame on

Myanmar and it will be internationally

dishonourable and condemnable thing for

Myanmar.

The conflict that started half a century

ago between the government and ethnic

forces is still at the negotiating stage.

Though there were peace initiatives dur-

ing the previous military regime there

Cover Story

Currentlythough China is

not popular withthe Myanmar

citizens, thegovernmental

officials and mostanalysts are

urging Myanmarto be fair

between Chinaand ASEAN

without takingsides.

U.S and Singapore Navy Shipstransit South China Sea information / Official U.S NavyPage / Flickr


ACUMEN 23

ended up with disagreements. On his

radio speech to the public on 17 Decem-

ber, U Thein Sein said that he had hopes

for the progress of peace talks to be held

at the Paan conference in December. At

the discussion held on 30 November at

the Yangon University Diamond Jubilee

hall under the title. The role of public

based organization in building a stable

nation in 2011 the president said, As

we are at the final stage where we

progress to the important step of formu-

lating rules and regulations for political

discussions and start negotiations. I be-

lieve we could achieve success in build-

ing internal peace step by step. As some

ethnic leaders (including General Goun

Maw, the KIA vice-chief of staff) recently

visited Yangon and leaders from 11 po-

litical parties and ethnic organizations met,

there are signs that trust has developed

and if things go on as so, though there

may not be total agreement at the Paan

Conference it may reach a satisfactory

stage in 2014. Some observers view the

2014 peace process positively. The Na-

tional Democratic Force (NDF) chairman



The conflicts in Rakhine also need to

be included in Myanmar internal prob-

lems. The conflict that assumed a religious

tint started in 2012 in June in

Kyauknimaw village of Rakhine State and

within a year spread to Meikhtila and

Kanbalu in central Myanmar. Riots

occured three times in the Rakhine State

and more than 200 people died while

about 150,000 were rendered homeless.

Due to that turmoil, distrust grew be-

tween two societies living together for

many years. That turmoil is a hindrance

in building democracy in Myanmar and

has set afoot accusation of breach of hu-

man rights, internationally.

Internationally, it is expected that

Myanmar can handle this matter prop-

erly. Phil Robertson, Deputy Asia Direc-

tor at New York-based Human Rights

Watch, has said, relevant to Myanmar

human right situation as, Sadly, respectfor human rights has never been an im-

portant qualification for being ASEAN

chair.

In Myanmar up to now religious at-

tacks are still being spread over the

facebook. One worrysome thing is that

there is criticism that there is instigating

from behind the scene and pre-plans in

this commotion. For example, coinciden-

tally a riot erupted while President U

Thein Sein was on a visit to Rakhine last

October. So, it is important that such an

incident does not occur again when

ASEAN leaders and international lead-

ers are on their visit. That is why admin-

istrators need to deal seriously with the

matter according to the law and people

need to be careful not to be misled by

false instigations.

Myanmar, which has become to beintimate with the world and is assuming

the honourable duty as the Chairman ofASEAN is in earnest to fulfill the ASEAN

and relevant duties that falls on its shoul-

der. The world is excited to see what kind

of image Myanmar will present this year

when international leaders will be com-

ing in and out of the country. Taking the

role of the ASEAN Chairman for the trans-

formation and in the period in advance

to the 2015 AEC, the challenge is great

for Myanmar which has little experience.

If Myanmar could perform its duty calmly

in 2014, the world would note Myanmars

achievement. And to be able to perform

its duty calmly and successfully as said

afore, Maynmar needs to be able to pro-

duce the correct answer to the set of ques-

tions-that is the South China Sea affair

and interior conflict. A

U Khin Maung Swe said, Neither the

arms organizations nor the government

have any intention of abandoning this

peace. I think we are at the stage of main-

taining it, building trust and carrying on

to discuss whatever we could. But in the

previous two years, though both sides had

declared a ceasefire, the battle continued

instigating condemnation. Up to now, some

are frustrated at the pace of peace process.

Up til now, the peace negotiation with the ethnic armed organizations hasnot been concluded

If ethnic and religious conflicts continue in Myanmar, the ASEAN Communitywill put the blame on Myanmar/Messenger

Cover Story


adv.pmd 12/19/2013, 9:24 PM11


Feature


Breaking Barriers-Jacob.pmd 12/19/2013, 6:45 PM26

ACUMEN 27ACUMEN 27


28 ACUMEN w w w. my a n m a r b 2 b m a g a z i n e. c o m December 2013

It is tempting to think of mobile phone

networks as being primarily about tele-

phoning, but this is like saying gasoline

only helps automobiles. A high-speed

mobile network in Myanmar will change

the business dynamic dramatically. Mo-

bile banking is one of the more obvious

uses, but consider, for instance, using a

smartphones GPS capabilities to improve

crop yields in Shan State. Crazy? No, not

really. Accurate GPS data combined with

topographical information can be used

quite effectively by a farmer who knows

a bit about hydrology. This is just one

example among hundreds of potentially

profitable new business avenues made

possible by high-speed mobile.

U Thaung Su Nyein said of his return

to Myanmar 13 years ago. When I tried

to start my first publication Internet Jour-

nal I had to use a different name be-

cause internet was still censored at that

time. More than just treading a fine line

in the former era of censorship and re-

strictions, his was a bold business move.

Thaung Su Nyein said, At that time,

Myanmar had only 11 registered internet

users. Yes, eleven. This intrepid business-

man anticipated the future of his indus-

try, rather than merely trying to copy the

success of another. A dozen years later,

Thaung Su Nyein has founded several

publications, among them his flagship

paper, 7 Day News.

was moderated by Erwin Sikma, Man-

aging Director of Asia Classifieds at Rocket

Internet.

The panel speakers explored an ar-

ray of topics, but ultimately the big issue

driving the days discussion was the im-

ing app Squar, estimates will begin hav-

ing a massive impact within half a year.

People need to be prepared for

Myanmar to have the same kinds of high-

speed mobile connections that were used

to seeing in Europe and North America.

From left to right: Thaung Su Nyein, Nay Aung and Rita Nguyen. Photo credit:Shady Ramadan

New Technologies For SMEs brought

together a media tycoon, an online pay-

ments pioneer, a social media guru and a

mobile banking expert. The discussion

pact Oredoo and Telenors mobile net-

works will have on businesses in

Myanmar. This is something Rita Nguyen,

the founder of Myanmar social network-

Rita Nguyen, founder of Squar, pointed out thetenacity of the young Myanmar internet generation.

From Left to right : Daw Win Win Tint, Daw Win Ei Khine,Prof.Tun Aung, U Zaw Myo Hlaing.

Feature


ACUMEN 29

Working towards a brighterWorking towards a brighterWorking towards a brighterWorking towards a brighterWorking towards a brighterfuturefuturefuturefuturefutureMyanmars labour force is amongMyanmars labour force is amongMyanmars labour force is amongMyanmars labour force is amongMyanmars labour force is among

the cheapest in the world, but doesthe cheapest in the world, but doesthe cheapest in the world, but doesthe cheapest in the world, but doesthe cheapest in the world, but does

that mean it lacks value?that mean it lacks value?that mean it lacks value?that mean it lacks value?that mean it lacks value?

The SME Forums final panel discus-

sion focused on skills development: Hu-

man Resources Management: From Lo-

cal Efficiency to International Expecta-

tions. Speakers discussed the critical

skills deficit faced by local companies who

struggle to retain highly skilled staff in

the face of formidable international com-

petitors who offer potentially more attrac-

same time that it generates new markets

for its products.

One discussion topic focused on re-

ducing supervisor/staff conflicts via more

open staff dialogue. This can be an effec-

tive approach in reducing staff turnover.

Panel speakers included Professor Tun

Aung from the Yangon Institute of Eco-

nomics; Daw Win Win Tint, Managing

Director of City Mart; U Zaw Myo Hlaing,

Country Director for Unilever; Daw Win

Ei Khine, Director of Maple Trading Co.;

and Swe Zin Thet, Human Resources Di-

rector with DKSH Myanmar.

tive career paths with compensation to

match.

This discussion was moderated by

Vicky Bowman, Director of the Myanmar

Centre For Responsible Business (MCRB).

MCRB has been at the forefront of advo-

cating for ethical business practices in

Myanmar. Advocating for responsible

business is not new, but doing it in an

intelligent manner that highlights the po-

tential to be both responsible and profit-

able is particularly interesting. Unilever,

for instance, has been promoting sanitary

behavior in association with its products,

encouraging healthier communities at the

The panel discussion Financing SME Competitiveness was fa-

cilitated by Thomas Foerch, the Project Manager for GIZs (the Ger-

man development agency) local financial systems development initia-

tive. This photo shows speakers Nicholas Lazos, Investment Director

of Insitor Management on the left and U Zaw Lin Aung, Deputy Direc-

tor of United Amara Bank on the right. Many of the avenues for

discussion were stymied due to a local regulatory environment which

precludes financial innovation. Foreign investors want to invest in

Myanmar and local banks want to be able to offer more financial

products and services, but the memory of the 2003 banking crisis has

made regulators wary to loosen tight banking restrictions.

Other speakers on this panel included U Ye Thu Aung, Managing

Director of Vivo Group; David Kleiman, IFC consultant; and Anne

Kroijer, finance consultant at Building Markets.

SME Development Center Director, Daw Aye AyeWin (bottom left photo) delivered the days openingremarks. Two discussions were in English withsimultaneous translation to Myanmar, asdemonstrated by the men with earphones in thephoto. Photos: Shady Ramadan and Suu MonAung

From left to right: Daw Win Win Tint, Daw Win Ei Khine, Prof. Tun Aung, U Zaw Myo Hlaing, Daw Swe Zin Thet, andVicky Bowman.From left to right: Daw Win Win Tint, Daw Win Ei Khine, Prof. Tun Aung, U Zaw Myo Hlaing, Daw Swe Zin Thet, andVicky Bowman.



Free trade is comingFree trade is comingFree trade is comingFree trade is comingFree trade is comingProfessor Aung Tun Thet, economic

adviser to President U Thein Sein, is a

surprisingly powerful speaker and a pro-

gressive dynamo. This man might be in

his 70s, but hes savvy with a smartphone,

current with his facts and incisive in his

viewpoints. He also deftly balances his

speeches between powerfully enunciated

statements and humorously light-hearted

commentary. His closing speech at the

SME Forum delighted the audience and

was an elegant finish to the day.

Engines of growthEngines of growthEngines of growthEngines of growthEngines of growthSMEs must be the engines of growth

and job creation in Myanmar. This was a

point one could not miss from the

professors speech. Sustainable growth

cannot happen without SMEs. Over 99

percent of registered companies in

Myanmar are SMEs. This is not an acci-

dent, it is a consequence. A consequence

of the restrictive economic policies of the

Ne Win era that shackled the creativity

and entrepreneurial ambitions of a na-

tion. However, a nation once stymied in

its growth is rising quickly and the de-

velopment and growth of Myanmars

SMEs is critical in terms of national in-

come, but equally as importantly, in terms

of the quality of growth. Creating a facili-

tating environment for SMEs means sup-

porting a more inclusive and equitable

form of growth.

Be preparedBe preparedBe preparedBe preparedBe preparedPerhaps the most important message

Prof. Aung Tun Thet impressed upon the

audience was to be prepared for the

ASEAN Economic Community in 2015.

Tariffs for many goods will drop to zero.

Free trade will be matched with fewer

restrictions on skilled labour and fewer

restrictions on capital. These are big

changes and Myanmars SMEs should be

prepared for new difficulties but also for

new business-to-business possibilities. As

an example, he cited the opportunity to

form regional clusters based on industry

sectors. Also, the opportunity to benefit from

technological skills spill-overs that are

certain to result from foreign competitors

moving in. Ultimately, the message of his

speech was not to protect ones business,

but to promote ones business. Do not be

pessimistic and do not focus on the chal-

lenges when the opportunities are so

many. AAAAA

SME FactsSME FactsSME FactsSME FactsSME FactsBuilding Markets is an

international NGO operating in

Myanmar since November 2012.

Since that time, an immensely

large database has been

compiled more than 1,000 face-

to-face interviews with locally

owned businesses in Yangon.

Here are some interestingHere are some interestingHere are some interestingHere are some interestingHere are some interesting

highlights from this trovehighlights from this trovehighlights from this trovehighlights from this trovehighlights from this trove

of data:of data:of data:of data:of data:

The 54 percent of local

SMEs indicate they would be

interested in formal loans to

expand their business, if loan

terms were more flexible/

favorable.

81 pc have a bank account

15 pc have received a formal

bank loan

73 pc access the internet daily

79 pc of companies report at least

one woman in a management

position

80 pc of businesses report ability

to speak conversational English

8 pc report the ability to speak

conversational Mandarin

Prof. Dr. Aung Tun Thet : Photo Shady Ramadan

Feature


adv.pmd 12/19/2013, 9:25 PM11


Feature


The cost of using Agro-Annua.pmd 12/19/2013, 7:22 PM32

ACUMEN 33ACUMEN 33


Decline in farming profitsDecline in farming profitsDecline in farming profitsDecline in farming profitsDecline in farming profitsThe cost of chemicals is an important

matter as it determines the profit for farm-

ing. A recent survey in the Delta region

conducted by the Livelihoods and Food

Security Trust Fund (LIFT) has reported

an increase in yield after inorganic fertil-

izer application but has substantially added

to the cost.

With the use of chemicals banned in

other countries (that are more toxic and

longer residual effect on soil and water),

it is inevitable that pests develop high-

level of resistance to the same chemical.

Under this scenario, the farmer is com-

pelled to use more stronger chemicals con-

tinuously and in high doses to kill pests

that have developed resistance to chemi-

cals. Such cases have already been re-

ported in several countries, where it is

inevitable that the production cost becomes

higher. At this point, it is worth to men-

tion about the Brazilian coffee farmers who

after using chemicals for sometimes have

found that the cost is prohibitive to sup-

port continued application of this input.

In fact, the profit margin to coffee cultiva-

tion is determined by the cost of chemi-

cals that many farmers, the poor ones in

particular, cannot afford due to the higher

prices. Farmers are not in a position to

curtail the use of chemicals either as the

natural control that existed before has

virtually been zero. This has been a re-

sult of continued use of chemicals for

longer periods that have caused an ex-

tinction of almost all predators and para-

sites feed on pests.

There are four reasons the continued

use of chemicals is likely to affect their

profit margins and sustainability of farm-

ing as a business. First, the over-use and

misuse of chemicals arising from their

inability to read instructions printed in

another language may cost the farmer

more. They may use higher doses, time

of spraying and methods of application

may be different from recommendations

that may not bring about effective control

of pests, diseases and weeds. In some

cases such as weedicides, farmer may


select an inappropriate chemical that may

not bring about any control at all but the

cost adds to farming expenditure. Sec-

ond, the use of more toxic chemicals may

kill all natural predators that force the

farmer to use high toxic (and more stron-

ger) chemicals which costs more. The

combined impact of the current practices

if continued for several years, will result

in a higher cost that might prove farming

to be less profitable. Similar experiences

have already been recorded in other

Asian countries such as Indonesia and Sri

Lanka.

the world over are more and more de-

manding organically produced items.

Studies indicate that the consumer is will-

ing to offer a premium price for organic

food items. The use of chemicals by

Myanmar farmers may harm the reputa-

tion of items they produce of being toxic.

Few countries in Asia have had their

products refused in consumers due to theheavy use of chemicals. One case in point

is Sri Lanka where several shipments of

gherkins have been discarded by over-

seas buyer due to the high pesticide con-

tent in the product. Eventually, growing

of gherkins had to be abandoned as there

was no overseas market for this crop pro-

duced by Sri Lanka farmers.

The fourth reason is that it is impor-

Third, there is now a world-wide

trend in the consumption of organic food

compared to commodities produced un-

der artificial fertilizer and chemicals. About

10-15 years ago, the demand for organic

food items was in more affluent countries.

However, this trend is now visible even

in developing countries. The consumers

Feature

Chemicals killpredators, paralyz-ing the capacity ofeco-system to oper-ate its own naturalsystem of control.As more chemicalsare used over a longtime, there is apoint at which thenatural balance iscompletely de-stroyed.


tant to remember that the chemicals kill

not only harmful insects and pathogens

but also the beneficial creatures in the eco-

system. The use of powerful chemicals

(banned in other countries due to phyto-

toxicity and residual effect) is a good ex-

ample that can do more damage to the

eco-system which also adds to farming

costs. Chemicals kill predators, paralyz-

ing the capacity of eco-system to operate

its own natural system of control. As more

chemicals are used over a long time, there

is a point at which the natural balance is

completely destroyed. At this point, it is

virtually not possible to continue cultiva-

tion without the use of chemicals, a fact

that escalates production costs. The

Myanmar farmers should be alert to this

ACUMEN 35

situation that is inevitable given the cur-

rent trend of farming practices.

Reduction in fish and aquaticReduction in fish and aquaticReduction in fish and aquaticReduction in fish and aquaticReduction in fish and aquaticcreaturescreaturescreaturescreaturescreatures

Myanmar has a rich-paddy culture

that provides a bumper harvest of fish

and aquatic creatures such as crabs,

prawns, snails and other edible insects,

both for home consumption as well as for

sale to generate much needed cash. Thou-

sands of people in regions such as

Ayeyarwady, Tanintharyi, etc. depend on

fish and aquatic catch for their livelihoods

as well as to generate revenue to the

country by way of exports. The LIFT

baseline survey indicates that 25 per cent

of all households in the Delta region de-

pend on fishing for their livelihoods. With

regard to the poorest households, as many

as 26 per cent depend entirely on the

sale of fish, prawns, crabs, etc. for their

livelihoods. It has been proved that many

agro-chemicals have a profound impact

on aquatic life.

The focus group discussions conducted

in the framework of the LIFT study re-

ferred to above have clearly shown a de-

cline in the catch by small fishers. The

small-fishermen interviewed recently bythe author in Ayeyarwady region corrobo-

rates the above findings where it was ob-

served a decline in the production of fish

and aquatic creatures (shells, snails, crabs,

prawns, etc.) due to the use of artificial

fertilizer and pesticides on large tracts of

25 per cent of all households in the Delta region depend on fishing for their livelihoods



paddy. Paddy farmers confirmed that the

use of agro-pesticides as a main reason

that has contributed to the decline in fish

and other creatures harvested from paddy

fields in Ayeyarwady region.

It is important to realise that one of

the main livelihood sources for people in

this region is the sale of fish, crabs, snails,

prawns, and other creatures. The LIFT

survey has revealed that 71 per cent of

households have not done farming in the

past 12 months whose main livelihood is

fishing and wage labour. The reduction

in catch inevitably affects the livelihoods

of landless people who work mainly as

hired labourers for paddy land owners.

The majority is landless labourers who

are about 70 per cent of the households

in districts such as Maubin and Pyapon

whose main income and nutrition source

is the sale of fish and creatures harvested

from paddy lands. The decline in the

catch therefore affects a larger popula-

tion than the little short-term benefits

chemicals may bring about to land own-

ers. Field studies reveal that an agricul-

tural worker (including women) can earn

about Ks 1,000 per day by selling fish and

crabs at present. This is earned after fin-

ishing days work. The catch is a good

source of family nutrition too. As seen in

the above photograph, many women are

engaged in fishing and catching crabs and

other creatures in paddy fields. The de-

cline in aquatic creatures is likely to im-

pact on women which is a huge concern.

It is therefore to be highlighted that a

decline in the harvest of fish and crea-

tures will have a severe impact on the

livelihoods of poor households, as this is

the group who are engaged in fishing.

Interviews with paddy farmers con-

ducted by the author in the Delta region

confirmed the decline in fish and other

aquatic catch over the years. The farmers

clearly associate the decline to the use of

agro-chemicals, especially pesticides, on

their paddy fields. The LIFT study has

shown that the paddy farmers in the Delta

region who are using agro-chemicals are

greater in the summer season compared

to the rainy season. The table below com-

pares the use of chemical inputs by sea-

son.

Table : Paddy Farmers in Delta Re-Table : Paddy Farmers in Delta Re-Table : Paddy Farmers in Delta Re-Table : Paddy Farmers in Delta Re-Table : Paddy Farmers in Delta Re-

gion Using Agro-chemicals by Sea-gion Using Agro-chemicals by Sea-gion Using Agro-chemicals by Sea-gion Using Agro-chemicals by Sea-gion Using Agro-chemicals by Sea-

son (Per cent Farmers Using)son (Per cent Farmers Using)son (Per cent Farmers Using)son (Per cent Farmers Using)son (Per cent Farmers Using)

Agro-Agro-Agro-Agro-Agro- TypeTypeTypeTypeType SummerSummerSummerSummerSummer

chemicalchemicalchemicalchemicalchemical Rain SeasonRain SeasonRain SeasonRain SeasonRain Season

InorganicInorganicInorganicInorganicInorganic 93 63

fert i l izerfert i l izerfert i l izerfert i l izerfert i l izer

InsecticidesInsecticidesInsecticidesInsecticidesInsecticides 64 31

FungicidesFungicidesFungicidesFungicidesFungicides 25 11

HerbicidesHerbicidesHerbicidesHerbicidesHerbicides 25 13Source: LIFT Baseline Report (June, 2012)

As revealed by above data, the ma-

jority of Delta farmers use agro-chemi-

cals. Although there is a possibility to wash

down summer chemicals in the subse-

quent rainy season, there is also possibil-

ity that some chemicals especially those

containing heavy metals remain in the soil

bound to clay particles. The bound chemi-

cals sink to the bottom of the paddy field

and thus not affected by the natural flush-

down. It is to be highlighted that there

are no studies in the context of Myanmar

to show the proportion of chemical fertil-

izer absorbed and the portion lost in the

flood, contribution of chemicals in overall

production cost and the type of aquatic

creatures that are more susceptible to

chemicals. It is only through results of stud-

ies that may prove whether or not the

practice of fertilizer application is profit-

able in the long-run. In any case, the flood-

ing brings in loads of nutrients that ques-

tion the need for continued application of

chemical fertilizer in paddy farming in

the Delta region.

Water pollutionWater pollutionWater pollutionWater pollutionWater pollutionAnother problem that may result from

the continued use of chemicals is the pol-

lution of fresh water especially in the dry

zone. The authorities and farmers in

Myanmar should alert to the possible risk

of fresh water becoming polluted as a re-

sult of continued use of chemicals, some

of which already banned in other coun-

tries. If the ground water is polluted due

to the leaching down of active ingredi-

ents in chemicals, it is impossible to flush

it away which is a serious issue reported

in drier parts of other Asian countries.

Impact on honey beesImpact on honey beesImpact on honey beesImpact on honey beesImpact on honey beesStudies have revealed that pesticides

are toxic to honey bees too. There is evi-

dence that honey bee population and the

production of honey itself are affected as

a result of continued use of chemicals. The

loss of honey bees can have a profound

impact on crop yield where this insect is

Feature


ACUMEN 37

the main agent of pollination. The decline

in the production of honey itself is yet

another direct consequence the export of

which brings in volumes of foreign ex-

change into the country at present.

Organic food stuffOrganic food stuffOrganic food stuffOrganic food stuffOrganic food stuffMyanmar has a future goal to export

rice. It is important to win overseas mar-

ket by being able to produce organic rice

for which there is a growing demand.

Given the current trend for organic agri-

cultural stuff, it is quite possible that over-

seas consumers may look for organic rice

and Myanmar farmers should be able to

capitalise from the future scenario by mini-

mizing, or with zero usage of agro-chemi-

cals in wet paddy production. Globally,

only a few countries are able to produce

organic food stuff including paddy, a situ-

ation that Myanmar should capitalise on.

Profitability of low-externalProfitability of low-externalProfitability of low-externalProfitability of low-externalProfitability of low-externalinput agricultureinput agricultureinput agricultureinput agricultureinput agriculture

There is now greater evidence base

on the long-term profitability of organic

farming compared to agriculture relied on

the use of high volume of purchased in-

puts such as agro-chemicals. Experiments

have revealed that sustained yield is quite

possible with organic farming methods.

The other benefits such as those outlined

above accrued to organic farming are divi-

dends. The healthy population and the

ability of the eco-system to support the

livelihoods of a larger segment of the

population are critical issues for consid-

eration in the context of Myanmars fu-

ture agriculture. In this connection, wher-

ever possible, Myanmar farmer should

utilize organic methods and materials

which are available almost freely. A

one of the main livelihood sources for people in this region is the sale of fish, crabs, snails, prawns,and other creatures.


38 ACUMEN w w w. my a n m a r b 2 b m a g a z i n e. c o m January 201438 ACUMEN w w w. my a n m a r b 2 b m a g a z i n e. c o m January 2014

Feature

Rough Lives Among.pmd 12/19/2013, 7:20 PM38

ACUMEN 39ACUMEN 39


A plump man who is brown as berries is

busy with his work among the machines

fixed round saws in a cutting workshop

in Mandalay.

The cutter called Ko Win Naing cuts

about 50 raw jade stones into rather large

pieces a day and most of the stones he

cuts daily come from Saitaung in Kachin

State.

It is said as value of a jade stone de-

pends on the man of cutting, cutting and

shaping of raw jade stones is an impor-

tant process in the jade industry and the

price of a jade stone is often high de-

pending on its cutter.

There are many cutting workshops

in Mandalay, which is the second largest

city, heart of jade business in Myanmar

and he works in one of those cutting

workshops there.

He earns K10,000 a day as a cutter

in the cutting workshop in which he work

that have ten labors like him and some-

times he gets about K5,000 of tip money

that some customers who come to their

workshop to make them cut raw jade

stones into pieces give.

When asked whether he has the

plan to run an own cutting workshop

because he has six years of cutting expe-

rience, he replied that he intends to just

go into dealing in jade stones as a broker

instead of competing against his owner

or benefactor for jade cutting business.

It is learnt that there is a jade trad-

ing center dotted with sellers and buyers

before dawn breaks in Chanayethazan

Township of Mandalay, heart of central

Myanmar and there are some 50,000

counting on this jade trading center.

Hundreds of people can be observed

haggling over prices and quality of jade

stones in this jade trading center and

there are around 1,000 tables put around

the center," said U Sein Win, chairman of

Gems and Jade Altruists Association

(GJAA) of Mandalay.

It is known that around the jade trad-

ing center, there are many cutting ma-

chines owned by companies established

by Chinese businessmen from Sino and

those who are cutting raw jade stones

with round saws are local resident.

Dream of local residents is to be a

laopan (the wealthy man), but to become

a successful man in the jade world de-

pends on not only destiny but also expe-

rience, says U Than Swe, a veteran who

has had more than thirty years of jade

cutting experience in Mandalay.

Ko Win Naing working in the cut-

ting workshop has the aim to go into jade

trading leaving his career as a cutter one

day and he therefore learns from the jade

trading center his outmost staying in thehouse of his uncle in Mandalay so that he

can acquire professional expertise in deal-

ing in gem.

Jade trading is divided into several

categories such as Khe Line (rather large

stones), Ahpwint Line (the shaped jade

pieces for silver or gold jewellery),

Chatpyar Line (slices), Ahtit Line (both

small and large stones with quality) and

Letkauk Line (rings) in the jade trading

center.

There are many people including

laopans and brokers haggling over qual-

ity and prices of jade stones in the jade

trading center where about 50,000 can

earn daily and different people may have

different dreams.

It is heard that dealing in jade

breaks at about ten o'clock in the morn-

ing and resumes in the evening.

The high-grade gem market being

constructed around Sinywa-Myinmhu vil-

lage in Amarapura township of Mandalay

Region will be completed by early 2014,

said the regional minister for forest and

mining.

The construction of the high-grade

gem market around Sinywa-Myinmhu vil-

lage will be complete by early 2014. It is

now being built in the huge compound with

30 acres. More than 2,000 rooms are to be

included in the new gem market. Dealers

who have to move here from Mahar Aung-

myay gem market will be given priority

when selling rooms," said U Than Soe

Myint, the regional minister for forest and

mining of Mandalay Region.


FeatureJade trading is divided into sev-eral categories such as Khe Line(rather large stones), Ahpwint Line(the shaped jade pieces for silveror gold jewellery), Chatpyar Line(slices), Ahtit Line (both small andlarge stones with quality) andLetkauk Line (rings) in the jadetrading center.


More than 1,000 rooms, each of

which is 10' Sq ft will be sold for the street

dealers in gem in two-year higher pur-

chase. We've decided to do so that

grassroots can make a living. Although

over 1,000 rooms have been earmarked

for selling to them, we have the plan to

extend rooms if needed," the minister ex-

plained.

So as to alleviate inconveniences of

the street dealers in gem, grassroots in

Mahar Aungmyay gem market in

Mandalay when they move to the new

gem market from the old one, the regional

government has scheduled for room sale

in installments, it is said.

It is also reported that a new bus

line will be launched after completion of

the high-grade gem market for workers

and dealers who will commute from

Mandalay to this market and rooms will

be sold to gem-vendors in two-year in-

stallment and besides, a security police

force will be also assigned there since

there are dealings in precious gems there.

Besides, it is known that a qualified

company with much experience of pro-

cessing jade from Taiwan has been in-

vited to run their business to enhance the

skills of Myanmar people active in jade

world because Myanmar is still weak in

processing jade to export jewels and the

Taiwan's company has also scheduled for

the free-of-charged training course for the

interested persons.

Myanmar is still weak in process-

ing jade to export jewels. That's why, our

regional government and the gem experts

from abroad have had a preliminary

agreement as to what they open the gem

course and we are waiting for the ap-

proval of the union government," the re-

gional minister said.

It is said that Myanmar's jade will

be scheduled for sale at home and abroad

as value added commodities after being

carved and turned into jade jewels with-

out selling raw materials any more when

the construction of the high-grade gem

market is complete.

It's too early to make a clear com-

ACUMEN 41



ment on rooms. I have the plan to buy

rooms and for the time being it is still

convenient for me to deal in gem in

Mahar Aungmyay gem market," said Ko

Kyaw from Mahar Aungmyay gem mar-

ket.

Most of the jade dealers are looking

forward to the completion of this new gem

market, said Ko Win U, a gem dealer of

Mandalay.

Jade is a source earning much for-

eign income for Myanmar and it is a gem

that sells like hot cakes in annual gem

emporium in Myanmar.

It is learnt that there are many jade

mines in Hpakhant, Lon Hkin, Kamine

and Putao, townships and the major jade

mines are roughly enclosed east and west

by the Uyu and Chindwin rivers and

moreover, a jade land has been found

along the Hukong Valley.

It is said that a jade land is called

Hmaw" and there are about seven jade

hmaws; Hpakhant hmaw, Tamakhan

hmaw, Hkamti hmaw, Mawhan hmaw,

Mawlu hmaw, Puta hmaw and Indawgyi

hmaw in Myanmar, which is noted for

its popular jade stones among the coun-

tries that have jade mines in the world.

Half of high-end raw jade stones in the

jade market of Myanmar are illegally sent

to China and accordingly Myanmar has

lost thousands of dollars in taxes that are

able to be used for rebuilding the country

under military rule nearly for half cen-

tury because of such jade smuggling across

the frontier.

The government's official figures have

confirmed loss of thousands of dollar in

taxes and as more than 43 kg million of

jade were produced during FY 2011-2012

in Myanmar, that amount would have

brought in US$4.3 billion if one kilogram

of jade sold for just US$100 at that time

but it is stated in the government's official

figures that foreign import exchange from

jade trading was only US$34 million dur-

ing that period.

It is found that the representatives of

the Chinese companies that own the larg-

est jade-mining companies among others

Feature

A jade land is called Hmaw" and there areabout seven jade hmaws in MyanmarA jade land is called Hmaw" and there areabout seven jade hmaws in Myanmar


ACUMEN 43

in Hpakhant in Kachin State run the jade-

mining activities although it is said that

foreign companies are not granted per-

mit to operate jade-mining in Myanmar.

It is also learnt that the other jade mines

chase many sorts of jade stones from

Myanmar to process them and sell them

to other buyers, he added.

It is learnt that the law concerning cut-

ting and shaping gem has been passed

by Mandalay Region Hluttaw on 8 No-

vember.

Jade dealers in Mandalay criticize

this law saying that there are many weak-

nesses in this law that can jeopardize

dreams of jade dealers in Myanmar.

U Sein Win, chairman of Gem Social

Work Association of Mandalay, said that

the gem law passed by the Mandalay

Region Government would push jade

dealers into going into smuggling as in

the former times.

This law does not become a legal

aid system that can support the interest

of all living by doing jade industry. I think

it pushes people in the jade world into

miseries. We don't protest against tax

system but it shouldn't be burden for those

who should not be forced to pay tax," he

said.

There are so many cutters who are

already poor around the jade trading cen-

ter and although this law can make those

poor cutters suffer deeply more hardships,

it can bring prosperity to the wealthy more

and more, say most of the jade dealers in

Mandalay.

Given that a cutter can be arrested

and charged with this law if he cannot

prove that he has paid tax the raw jade

stone he is cutting, this law can affect the

lives of cutters, jade dealers sources say.

What a nonsensical law! If a jade

stone is cut, there is no longer mark

curved on it left. How do they decide to

confirm whether tax has been paid for

such a stone? As if they made us deal in

jade stones in the black market as in the

days of Myanmar Socialist Program Party,"

said U Sein Win.

Many young people currently go into

jade industry in the hope of that jade

business can change their lives as some

people say that one is more likely to be

rich if one is devoted to jade industry

rather than hoping a lottery. A

are under the control of UME (Union of

Myanmar Economic Holding Limited) and

businessmen who have cooperated with

the military government in doing business.

Many raw jade stones, jade ornaments

and crystals have been sold by auction

this year in comparison with those the

previous years although jade ornaments

were banned to export through the fron-

tier last year, according to jade traders.

Myanmar's raw jade stones are pro-

cessed in Hong Kong and jade products

that are on sale in Hong Kong come from

Myanmar. They fetch good prices there,"

said a jade trader in Yangon.

In addition, the Chinese traders pur-

There are so manycutters who are al-ready poor aroundthe jade tradingcenter and althoughthis law can makethose poor cutterssuffer deeply morehardships, it canbring prosperity tothe wealthy moreand more



Feature


Long Preparation for Grasping.pmd 12/19/2013, 7:15 PM44

ACUMEN 45ACUMEN 45


Many businessmen in mid forties are busy

with export documents at the office of

UMFCCI (The Union of Myanmar Fed-

eration of Chambers of Commerce & In-

dustry) in Yangon last month.

About 300 to 500 business people are

alive with their daily activities on matters

related to associations, export and import

in each of 25 business groups of UMFCCI

from 9 am to 5 pm.

In the recent days, they have been

discussing with one another on how they

will be able to grasp the opportunity as

Myanmar exporters have not applied

Generalized System of Preferences (GSP)

the EU has relaxed for exports of com-

modity to the Western countries includ-

ing the EU not only in terms of the qual-

ity of goods but also for raw materials

and capital.

The US Generalized System of Pref-

erences (GSP) is a program designed to

46 ACUMEN w w w. my a n m a r b 2 b m a g a z i n e. c o m December 2013

promote economic growth in the devel-

oping world by providing preferential

duty-free entry for up to 5,000 products

when imported from one of 126 desig-

nated beneficiary countries and territo-

ries.

It is reported that GSP preferences

were withdrawn for Myanmar in 1997

on account of serious violations of the prin-

ciples of the International Labour Orga-

nization (ILO) Convention on forced labour

applying economic sanctions against

Myanmar.

Having realised the progress of re-

forms in Myanmar, the European Com-

mission proposed on 12 September 2012

a motion that European Community

should give Myanmar exemption from

paying import license fees [up to 0 per-

cent] on import into it and the EU parlia-

ment and the EU council have lifted them

except for arms and ammunition trading

on 12 June 2013.

Although the European Union has

given GSP status to Myanmar, we are not

able to take this opportunity up to now,

said U Moe Myint Kyaw, about over 40,

general secretary of UMFCCI and also the

one who is doing export and import.

He said that Myanmar should make

attempts to export garments, fisheries andfarm products stated in Myanmar Export-

ing Strategy (MES) as top priority to Eu-

ropean countries as fast as possible mak-

ing good use of GSP privilege.

Myanmar officials have been draw-

ing up Myanmar Exporting Strategy

(MES) with the assistance of experts from

International Trade Center (ITC) based

in Geneva of Switzerland taking five

years to complete this strategy and

Myanmar should launch exporting its

products as prioritized during the inter-

val, he said.

Feature


exporting Myanmars fishery products to foreign countries during FY 2011-2012, 53 percent of those products weresent to China, 27 percent of them were delivered to Arab countries such as Saudi Arabia and Kuwait and 11percent were freighted to Southeast Asia countries.


Myanmar can produce the major

products in no time so that they meet

quality standards set by the EU. Thats

why the government is to bolster produc-

tion sector such as relaxation of policy

and giving necessary assistance to gen-

erate factories to do so. The government

should amend or revoke rules and regu-

lations that retard the progress or speed

of production, said U Moe Myint Kyaw.

Garment industry in which foreign

businessmen invested in Myanmar has

earned US$915 million from exporting

clothes to overseas countries, $265 mil-

lion of which are more than foreign ex-

change import that fishery products have

earned, according to the export lists of

Myanmar Garment Entrepreneurs Asso-

ciation.

There are nearly 300 foreign-invest-

ment garment factories including 50 by

South Korea and all factories are ready

ACUMEN 47

for exporting.

In fishery products sector, prawn from

Thailand enters Myanmar because fish-

ery products cannot fulfill domestic con-

sumption for want of raw materials, ac-

cording to the announcement of Myanmar

Fishery Products Processor & Exporters

Association.

As there are 14 fishery product facto-

ries entitled to enjoy GSP privilege to

export fishery products in Myanmar, they

can purchase raw fishery materials from

some countries that are unable to turn them

into products because of labour shortage

to make products so as to deliver them to

the European countries, say the business-

men at every MES meeting in Yangon.

It is known that in exporting

Myanmars fishery products to foreign

countries during FY 2011-2012, 53 per-

cent of those products were sent to China,

27 percent of them were delivered to Arab

countries such as Saudi Arabia and Ku-

wait and 11 percent were freighted to

Southeast Asia countries.

Being the beneficiary of the new GSP,

Myanmar has the opportunity to extend

its exports into the European countries

although it used not to export its products

not only due to high tax but also due to

economic sanctions against it. However,there are still some restrictions. Besides,

quality standards also need to be taken

into consideration in advance, said U

Kyaw Soe Moe, an exporter of Yangon.

If Myanmar buys fishery raw materi-

als from other countries and change them

into products in some factories that have

had to close down for want of raw mate-

rials, it will make more 20 percent of prof-

its in exporting them to the European

countries thanks to GSP privilege, the

business sources say.

Some Southeast Asia countries that

ACUMEN 47



will renounce the GSP privilege soon are

interested to invest in Myanmar, which

benefits from the GSP to grasp this op-

portunity.

Myanmar is at the moment ahead of

the other countries thanks to the GSP

privilege granted by the EU. Some

neighbouring countries that have to give

up this privilege are keen to invest in

agro-industry to enjoy this opportunity,

said U Chit Khine, chairperson of

Myanmar Rice Federation.

U Chit Khine, a gentleman who talks

with a soft voice, advised that good paddy

seeds should be planted with the assis-

tance of modern techniques and milled

using sophisticated machines to be able

to upgrade agro-industry, one of the ma-

jor production sectors.

He advised that the government

should provide financial assistance for

those associated with agro-industry such

as farmers and rice mill owners by dis-

bursing long-term loans for them to bol-

ster agricultural sector.

Exporters need to take care of their

products to meet quality standards if they

want to export theirs to the US and the

EU markets. It wont be convenient for

them if they deliver the products with

quality they send to Africa to the US and

the UN, said U Aung Myint, a rice mer-

chant.

Myanmar merchants who are eager

to export their products to international

market need to study and follow inter-

national regularly processes covering glo-

bal standards and quality control in ex-

porting them, he said.

Myanmar exporters have been en-

titled to enjoying GSP privileges related

to exporting granted by the EU and to be

able to make good use of this opportunity

as to which countries and what kinds of

products are to be exported to, criteria

need to be included in Myanmar Export-

ing Strategy, said Vice President U Nyan

Tun at the first workshop on MES.

Myanmar is moreover preparing for

sending representatives to the

neighbouring countries and the Western

and the EU countries as business ambas-

sadors who have never been assigned

before so as to promote exports.

U Myint Lwin, deputy general man-

ager of International Trade Promoting

Branch of the Ministry of Commerce, said,

Although Myanmar merchants export

products to the European countries, there

is still a small amount of exports. And the

rich countries like the EU are very sensi-

tive about quality standards. We need to

follow the exporting process straight

Feature


ACUMEN 49

when the implementation of MES is

launched.

It is known that as Myanmar needs

financial assistance to implement

Myanmar Exporting Strategy, which is

still being drawn up, international orga-

nizations have the plan to provide finan-

cial aids for the government to support

this strategy.

To keep on developing the third

phase design for Myanmar Exportation

Strategy, experts from ITC (Information

and Technology Center), officials from the

ministries concerned and representatives

from UMFCCI have discussed with one

another in Yangon on 26 October 2013.

When Myanmar exporters sent some

kinds of fruits including mangoes to the

EU countries as test exportation in early

2013, it was found that those fruits still

needed to meet quality standards of the

EU community and there is no exporter

who wants to freight fruit vegetable prod-

ucts to them at the moment, according to

Myanmar Fruit Vegetable Producers and

Exporters Association (MFVPEA).

Freezers and freezer trucks are

needed to put fruit vegetable products in

a cold storage. There are not enough in-

frastructures here. We havent seen mem-

bers of MFVPEA are preparing for ex-

porting fruit vegetable products to the EU

countries, said U Soe Than Min Din, sec-

retary of MFVPEA.

Myanmar merchants are more keen

to export their products just to the

neighbouring countries rather than send-

ing them to the Western countries if there

is not a considerable gap of the profits

they can make between the Western and

the neighbours as they will have to over-

come difficulties such as quality standards,

high transportation charges and other

restrictions in exporting products to the

Western markets, said Daw Toe Nanda

Tin of Myanmar Fishery Products Pro-

cessor & Exporters Association.

More than $25.5 billion have been ap-

propriated for trade volume and there are

over $13 billion of trade volume from 1

April to end of October in Myanmar.

As during this period there are $5,980.233

million of exports and $7,147.921 million

of imports, there is a trade deficit of more

than US$1 billion.

Despite the EUs GSP privilege, the

GSP preferences were withdrawn for

Myanmar from the start of 1 July 1989 as

of today by the U S, which used to give

the GSP privilege to Myanmar in Janu-

ary 1976. A

Myanmar merchants are morekeen to export their products just

to the neighbouring countriesrather than sending them to the

Western countries


adv.pmd 12/24/2013, 12:23 PM11

adv.pmd 12/21/2013, 3:13 PM11


B2B Talk


How will SME Stand.pmd 12/19/2013, 7:08 PM52

ACUMEN 53

Professor Dr Aung Tun Thet: Its the most importantProfessor Dr Aung Tun Thet: Its the most importantProfessor Dr Aung Tun Thet: Its the most importantProfessor Dr Aung Tun Thet: Its the most importantProfessor Dr Aung Tun Thet: Its the most important

sector for the nation, for the region and for the wholesector for the nation, for the region and for the wholesector for the nation, for the region and for

Acumen Magazine January 2014

Documents

Transcript of Acumen Magazine January 2014