Khine Khine Nwe_WHEF 2013 Bangkok for DKKN

7/27/2019 Khine Khine Nwe_WHEF 2013 Bangkok for DKKN

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Investment Opportunitiesin Myanmar(WHEF 2013, Bangkok)

Khine Khine NweJoint Secretary GeneralUMFCCIAugust 10, 2013


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Kunming

Strategic Location

ChennaiYangon


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GDP - composition by sector :agriculture: 43%industry: 20.5%

services: 36.6% (2011 est.)Labor force :

37.35 million (2011 est.)country comparison to the world: 19

Employment - by occupation :agriculture: 65%industry: 12%services: 23% (2011 est.)

Total land boundaries 5,867 km

- China 2,185 km- Lao 235 km

- Thailand 1,800 km

- Bangladesh 193 km

- India 1,463 km
https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/rankorder/2095rank.html?countryName=Burma&countryCode=bm&regionCode=eas&rank=19https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/rankorder/2095rank.html?countryName=Burma&countryCode=bm&regionCode=eas&rank=19https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.htmlhttps://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html


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Myanmar is well situated on the

Northern Corridor, North-South

Economic Corridor and East-WestEconomic Corridor and, Southern

and Western Corridors.

Although East-West Economic

Corridor known as EWEC connects

eastern ASEAN countries, Western

Corridor and Southern Economic

Corridor are the key base toestablish Mekong-India Economic

Corridor (MIEC) by extending the

link to Dawei of Myanmar.

ECONOMIC CORRIDORS


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What s new in Myanmar, what s news about Myanmar

New GovernmentThe first democratically elected government New Political Landscape

Measures to achieve positive changes in political,economic and social spheres are put in place, in line withthe market conditions and international circumstances.June 2013 : World Economic Forum

2013 : SEA Games2014 : Asean Chairmanship


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New Economic LandscapeMyanmar is in the process of instituting a series of policy and strategic reforms with the aims of achieving national development and catching up withthe economic success of neighboring countries.

New Development Ideology to reduce poverty and to increase wealth to lift the country out of the least developed

country status to ensure job opportunities and health and social

security benefits for its people


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New National Economic Policy

Sustainable development of agriculture sector

towards industrialization Equitable and proportionate development among

Regions and States Inclusive development of entire people Develop the Quality of statistics and statistical

system


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Goals of the Fifth Five-Year Plan (2011-12 to 2015-16)

To achieve an average annual GDP growth rate of 7.7% To increase industrial share of GDP from 26% to 32%together with an increase in the service sector, reducing thecurrently high share of agriculture. To increase Per capita GDP growth between 30-40% fromthe base year of 2010, which will help attain the first goal of

MDG in reducing the poverty incidence by half over theperiod 2000-2015.

Source: MNPED


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Finance and Banking Unification of exchange rates in April 2012 Adopted a managed floating rates

Foreign currency reserve US$7 billion inSeptember 2011 and expected to US$ 9billion by end of the year 2013.

Central Bank Law (approved July 13, 2013by Parliament)

New Reforms and Laws


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Myanmar s Foreign Investment Law

FIL is revised with more exemptions and relief and approvedby the Parliament in November 2012.

Ministry of National Planning and Economic Development issuedthe Foreign Investment Law Regulations, passed on 31 January2013.

Myanmar Investment Commission announced - List of Prohibited Economic Activities List of Economic Activities allowed in the form of Joint Venture

with Myanmar citizens and List of Economic Activities which shall be allowed under the

specific circumstances


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Aims of the New FIL

to produce products using abundant resources of the country, for the people

to enjoy sufficiently and to enable the surplus to export

to open up more employment opportunities for the people, as business

develop and expand

to develop human resources

to develop infrastructures , both hard and soft to develop respective area of studies in communication networks, transport

business such as rail, ship, aircraft, throughout the entire country, to meet

the international standard

To promote nationwide development and to encourage citizens to work inrelevance with other countries

To promote the building up of the economic enterprises and investment

business in accord with the international norms.


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Special Economic Zone Law : Existing lawenacted in February 2011, being revised to be

one of the most investor friendly laws in theregion. Taxation Law : Revised with effect from 1st April,

2012, reduction of tax rates to induce foreign and

local investment. Intellectual Property Law : 11 th draft in process,

based on minimum standard and maximumflexibility, expected end 2013 or early 2014.

New York Convention : Submitted instrument of accession to the Convention on the Recognitionand Enforcement of Foreign Arbitral Award(1957) in Aoril 2013.


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Changes in Trade and InvestmentEnvironment

Commercial tax and Income tax for export - 10% to 0 % (exceptfor 18 special commodities)

Income tax- 10% to 0% (CMP including garment exports) Reduce Cargo inspection stations at Border Checkpoints Liberalization in documentation process for trade procedure Liberalized in car import- any citizen with foreign exchange

account is allowed to import car Online Licensing system will be introduced soon. Myanmar Investment Commission reorganized. One Stop Service for Investors in Yangon (DICA) started on

April 10


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Top 10 Exports & Imports (2011-2012)

No Items Value ( US Dollar in Million)1 Natural Gas 3463.482

2 Bean and Pulses 1120.938

3 jade 780.340

4 Marine Products 705.866

5 Garment 498.608

6 Rice 324.622

7 Rubber 311.090

8 Teak log 283.923

9

Hardwood Log 272.883

10 Corn 216.789

Total 9097.000

No Items Value (US Dollar in Million)

1 Petroleum Products 2079.765

2 Vehicles & Spare Parts 1178.761

3 Iron & Steel Constructionmaterials

603.768

4 Iron and Steel Materials

512.460

5 Machinery and Spare Parts 511.518

6 Palm Oil 388.291

7 Plastic Raw Materials 314.129

8 Ships, Boats and Spare Parts 311.383

9 Pharmaceuticals 226.06110 Fertilizers 174.590

Total 9053.780


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Export Import Total (mil USD)

China 2166.40 2748.20 4914.60

Thailand 3752.16 789.50 4541.66

Singapore 282.89 2500.02 2782.91

Top 3 Trade Partners of Myanmar (2012-2013)

Source: MOC


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Source: DICA 2013

FOREIGN INVESTMENT OF PERMITTED ENTERPRISES AS OF (30/6/2013)(BY SECTOR)

(US $ in million)

Sr.

Particulars

Permitted EnterprisesNo

No.Approved

%Amount1 Power 6 19237.92 44.82

2 Oil and Gas 115 14372.27 33.483 Mining 67 2829.694 6.59

4 Manufacturing 255 2730.883 6.365 Hotel and Tourism 47 1585.811 3.69

6 Real Estate 19 1056.453 2.46

7 Livestock & Fisheries 26 347.124 0.81

8

Transport &

Communication 16 313.906 0.739 Industrial Estate 3 193.113 0.45

10 Agriculture 10 185.351 0.43

11 Construction 2 37.767 0.09

12 Other Services 11 38.752 0.09Total 577 42929 100


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Source: DICA 2013

FOREIGN INVESTMENT OF PERMITTED ENTERPRISES AS OF (30/6/2013)(BY COUNTRY)

( US $ in million )Sr.

ParticularsPermitted Enterprises

NoNo.

Approved%Amount

1 China 47 14185.529 33.042 Thailand 66 9979.443 23.253 Hong Kong 49 6393.334 14.894 Republic of Korea* 78 3013.705 7.025 U.K* 60 3045.434 7.096 Singapore 90 2358.946 5.497 Malaysia 44 1034.785 2.418 France 2 469 1.099 Viet Nam*** 6 511.186 1.19

10 India 9 283.1 0.6611 Japan 35 270.283 0.6312 The Netherlands 7 249.136 0.5813 U.S.A 15 243.565 0.5714 Indonesia 12 241.497 0.5615 Philippine 2 146.667 0.3416 Russia Federation 2 94 0.2217 Australia 14 99.246 0.2318 Austria 2 72.5 0.1719 Panama 2 55.101 0.1320 United Arab Emirates 1 41 0.121 Canada 16 41.883 0.122 Mauritius 2 30.575 0.0723 Germany 2 17.5 0.0424 Republic of Liberia** 2 14.6 0.0325 Denmark 1 13.37 0.0326 Cyprus 1 5.25 0.0127 Macau 2 4.4 0.0128 Switzerland 1 3.382 0.0129 Bangladesh 2 2.957 0.0130 Israel 1 2.4 0.0131 Brunei Darussalam 3 4.273 0.0132 Sri lanka 1 1 0

Total 577 42929.047 100


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Increase of FDI Since September 2012

Sr.

Particulars

Existing Enterprises(30/9/2012)

Existing Enterprises(30/6/2013)

No. No.ApprovedAmount % No.

ApprovedAmount %

1 Oil and Gas 62 13474.728 43.37 64 13665.028 42.33

2 Power 4 13037.498 41.96 5 13207.921 40.92

3 Mining 8 2289.162 7.37 9 2304.496 7.14

4 Hotel and Tourism 30 814.475 2.62 31 1254.475 3.89

5 Manufacturing 94 633.447 2.04 155 992.505 3.07

6 Real Estate 7 275 0.89 7 275.000 0.85

7 Industrial Estate 2 179.113 0.58 2 179.113 0.55

8 Agriculture 6 154.07 0.50 6 154.0700.48

9 Transport & Communication 7 137.676 0.44 7 137.676 0.43

10 Livestock & Fisheries 7 64.946 0.21 8 87.712 0.27

11 Other Services 5 8.067 0.03 8 21.827 0.07

Total 232 31068.182 100.00 302 32279.823 100.00


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SEZs

ThilawaSEZ

DaweiSEZ

KyaukphyuSEZ


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Source: Ministry of Industry


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Agriculture

agro-based countryPotential food basket for AsiaVast potential of landresources as well asdifferent networks of irrigation facilities for theexpansion of AgricultureSector both horizontally andvertically


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MINERAL SECTOREastern

Highlands

CentralBelt

WesternRanges

Lead,Zinc Copper Silver Tungsten

Antimony Iron

Porphyry Copper

Gold Coal Oil & Gas

Nickel ChromitePGM

Abundance of precious gem stone such as

ruby, sapphire, jade and diamond. Ruby

accounts for 90% of world supply and the

largest jade resource country in the world .

Jade is second largest export item

with the amount of USD 2.2 Billion.

2.8 Billion USD investment by 64

Enterprises.


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Foodstuff, Textile, Personal Goods, Household Goods,

Leather Products

INDUSTRY SECTOR

Transport Equipment, Building Materials, Pulp and Paper, Chemicals,

Pharmaceuticals, Iron and Steel, Machinery and Plant

Developing together with other sector such as agriculture,fishery, mining and oil and gas sectors ; plenty of opportunitiesto invest in manufacturing sector such as labour intensiveindustries, Small and Medium Enterprises (SMEs) and

production Network FDI projects.


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Garment Industries

9/30/2013

High Growth Potential for

Export to Japan, Korea, EU

and USA

Large Domestic Demand for

textile and clothing (about

USD 56 million, 75% of

which has been imported.)0

100

200

300

400

500

600

700

800

900

2001 2003 2005 2007 2008 2009 2010 2011

U S $ i n M i l l i o n

Myanmar Garment Export Trend(2001-11)


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Energy Sector

potentials for cooperation in the downstreamprojects in Energy Sector such as refineryplant and fertilizer plants.

Power

At least 37,000 megawatts can be generated

from hydro all over the country in theAyeyarwaddy, Sittaung, Thanlwin andChindwin river basins and only about 745megawatts has been developed so far.


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OIL & GAS SECTOR

Myanmar possesses significant naturalgas and oil reserves.

10th largest resource of natural gas inthe world, over 90 trillion cubic feet.


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FORESTRY

Expansive forest which covers

half of total area of thecountry, exports 80% of worldteak supplyMajor exporter of teak in

the world

many hardwood andsoftwood species that have beenneglected in the past

processing value-addedproducts commercially for

exports as wellPotentials for Value added

production of Minor ForestProducts: Bamboo, Cane, Rattan


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FISHERIES SECTOR

A long sea coastline of 2,832 kilometers associated

with 229,000 squarekilometers of continentalshelf and 486,000 squarekilometers of exclusiveeconomic zone

Fishery resources that are

currently being used is lessthan 60% of sustainableyield, potential of 1.05million MT of fish and

fishery product


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TOURISM SECTOR

Booming sector after reform16.95% increased in 2009-10, 4.88% increased in2010-11 and 30% increasedin 2011-12Very new white sandbeaches at Myeik

Archipelago comprising 800islandsYear round festivals withsimple and kind heartedpeople


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3. Supportive Industries SMEs & SMIs

PROMISING FUTURE BUSINESS

2. Export oriented agro-basedvalue added industries

Huge potential for agriculturalproduction

huge global demand abundant potential in food

supply

1. Labor intensive manufacturing

garment, footwear, toy, wigs etc

i l b O i i


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Resource

Agriculture

Fishery

Mining

Forestry

Oil & Gas

Food Processing

Mineral Processin g

Wood Processing

Petrochemical

Labor

GarmentElectronic Parts

Assembly

Others

Services

Hotel & Tourism

Logistics

Real Estate

Other

Potential Jobs Opportunities

Footwear Industry


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Market Potential

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CHINA1.35 Billion

LAO7 Million

THAILAND66 Million

INDIA1.21 Billion

BANGLADESH145 Million

60 Million

BAY OF BENGAL

Neighboring Markets TOTAL : 2.839 BILLION

40.6% OF WORLD POPULATION

ANDAMAN SEA

2 Giants EconomiesASEAN Pop 600 mil

EU, USA, Japan,Korea

60 million Population

International Markets

Domestic market


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STRENGTH

Abundant trainable labor force with basic education, hard-working, quick learning, sincere and obedient mindset of thepeople.Well connected to major Asian market, ASEAN, China andIndia.Strategic location : Geopolitical importance for regionalconnectivity as the tri-junction of East Asia, Southeast Asiaand South Asia.Benefit of late comer in development: can leapfrog.

Strong political and economic will of the leaders and strongwill of the people to advance forward under the goodleadership.

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Weakness

Poor infrastructure adds up in high production and transaction cost. Underdeveloped banking and financial system. ( Reforms in banking

system.)

Shortage of skill workers and middle level technicians. ( Skill Development

Law, schemes)

Job-hopping from one workplace to another. (Insecurity, Minimum Wage

Law, Social Security Scheme)

Lack of financial access, incentives, modern efficient machineries,

technology and management. ( Training Center )

Transshipment in Singapore. ( Corridors and Deep Sea Ports )


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THREAT

Regional inequality may cause socialinequality

Competitiveness International pressures amid reforms and

economic sanctions. (?) Genuine change! Reversible-irreviserble!

Capacity !


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OPPORTUNITIES

Regional hub for multimodal transportation and a potentialsupply route bypassing the Malacca Strait. Huge Domestic Demand for textile and clothing (about USD56 million, 75% of which has been imported.)GMS Cross Border Transport Agreement (CBTA) basedTransit Transport. Cutting off substantially transaction cost,both time and money.Sole land-bridge between two giant economies, China andIndia Bharat.High potential to be a

food basket

and

energy source

forAsia (Connectivity Hub ). Huge industrial potential for FDIfrom ASEAN and global supply chains.Lifting of economic sanctions and re-instatement of GSP/EBA by EU, by US?

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l


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Conclusion On the right track politically, economically and socially.

On the runway to take off which ensures the benefit forinvestors.

Amid abundant opportunities.

From blossoms to blooms.


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Khine Khine Nwe_WHEF 2013 Bangkok for DKKN

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