PwC Myanmar Weekly Business Intelligence...Myanmar (BCIM) Economic Corridor connecting Yunnan and...

PwC MyanmarWeekly Business Intelligence

Issue 18823 November 2019

www.pwc.com/mm

PwC | November 2019

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PwC | November 2019

1. Weekly Key Financial & Business News

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PwC | November 2019

Weekly Key Financial & Business NewsHeadlines

Potential Environmental and Social Impacts of Chinese Mega-Projects in Myanmar Raise Concerns

IFC study highlights potential for solar to help power businesses in Myanmar

Digitalisation will boost savings culture in Myanmar: expert

Myanmar to commence 10-year bond auctions ‘soon’

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Project to bring changes to Sittwe’s waterfront by next year

PwC | November 2019

Weekly Key Financial & Business NewsHeadlines

Looking at the future of Yangon Stock Exchange

Construction Ministry continues implementing low-cost, staff rental housing projects

Yangon officials see high public interest in land sale

Sojitz, NTT, NEC, NESIC to Upgrade Communications Infrastructure in Myanmar

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Better bank services, enforcement needed for remittance licences to work

PwC | November 2019 6

IFC study highlights potential for solar to help power businesses in Myanmar

A new IFC study shows there is significantpotential for distributed solar solutions in thecommercial and industrial sectors in Myanmar,presenting businesses an opportunity to bringdown their power costs, as well as their climateimpacts, according to a press release.The Myanmar Distributed Generation ScopingStudy estimates there are more than 700megawatts worth of potential commercial andindustrial solar projects in the country, equivalentto around 10 percent of the existing electric powergenerating capacity in the country. And it sayssolar is now cost competitive with other sourcesof electricity for many commercial and industrialbusinesses, providing a viable addition to helpdiversify Myanmar’s sustainable energy mix.Myanmar needs to provide electricity to morethan half of its population who are not connectedto the national electricity grid and lack reliableelectricity. Power outages are still common.Access to reliable electricity is a key challenge forbusinesses which are forced to rely on expensivecostly, polluting backup diesel generators. Thestudy found that businesses were getting an

average of around 10 percent of their power fromdiesel due to frequent power cuts.“Clearly with Myanmar’s crucial energy needs, thecountry’s commercial and industrial businessesare looking for near-term solutions to theirelectricity challenges,” says Isabel Chatterton,IFC’s Asia Pacific Regional Industry Director forInfrastructure and Natural Resources.“ It is clearfrom our study that there is a big opportunity forbusinesses to look to solar to help providesustainable power to meet their needs. Severalcommercial and industrial businesses are in agood position to take advantage of the fast-growing distributed solar generation sectorthrough private-sector led solutions andfinancing. “Based on a survey of more than 50 factories,shopping centers and other sites throughoutMyanmar, the study shows almost all consumersexperienced grid interruptions, on average one tothree times a day.Source: Mizzima Newshttp://mizzima.com/article/ifc-study-highlights-potential-solar-help-power-businesses-myanmar

NewspapersMizzima News

15 Nov 2019


Potential Environmental and Social Impacts of Chinese Mega-Projects in Myanmar Raise Concerns

YANGON—With more and more Chineseinvestment flowing into the country, many keygovernment officials are speaking out in supportof the projects, which range from a high-speedrailway line to special economic zones to seaports.At several local investment forums, they havevoiced the view that China’s grand infrastructureprojects will bring economic development toMyanmar and economic benefits to local people,while boosting the country’s strategic importancein the region.But what they have so far failed to mention is thepossible environmental and social impacts of theprojects on host communities. They rarely talkabout how the projects threaten biodiversity,protected forests and natural water resources.Faced with this official silence, experts andactivists worry aloud about land confiscations,influxes of migrants, loss of livelihoods and air,water and noise pollution in the project areas.Massive project-related activities are now beingimplemented under the Belt and Road Initiative(BRI) framework in Myanmar, following thesigning last year of a memorandum of

understanding (MoU) with China to establish theChina-Myanmar Economic Corridor (CMEC).The estimated 1,700-kilometer-long, Y-shapedcorridor will connect Kunming, the capital ofChina’s Yunnan province, to Myanmar’s majoreconomic centers—first to Mandalay in centralMyanmar, and then south to Yangon and west tothe Kyaukphyu Special Economic Zone (SEZ) inRakhine State. In fact, the CMEC is the initialphase of the BRI’s Bangladesh-China-India-Myanmar (BCIM) Economic Corridor connectingYunnan and the Bay of Bengal.According to Chinese academic reports, two roadinfrastructure projects within the BCIM EconomicCorridor have been proposed for Myanmar: Aneast-west corridor connecting China with Indiaand Bangladesh via Mandalay and centralMyanmar; and a north-south corridor connectingthe east-west corridor with the Indian Ocean viaYangon.Source: The Irrawaddyhttps://www.irrawaddy.com/opinion/potential-environmental-social-impacts-chinese-mega-projects-myanmar-raise-concerns.html

NewspapersThe Irrawaddy

19 Nov 2019


Digitalisation will boost savings culture in Myanmar: expert

The prevalence of cash transactions and smartphone ownership in Myanmar provides anattractive opportunity for the spread of digitalsavings services to underserved or unservedhouseholds, a UN expert says.UN Capital Development Fund (UNCDF) CountryCoordinator for Myanmar Paul Luchtenburg saidthis during a talk last Saturday at a forum held inconjunction with World Savings Day.World Savings Day was established on October31, 1924, during the 1st International SavingsBank Congress (World Society of Savings Banks)in Milan, Italy.The Annual World Savings Day Forum, being heldin Myanmar for the second time, took place onNovember 16 in Yangon with the support of theMinistry of Planning and Finance and YangonUniversity of Economics, UNCDF, Germandevelopment agency GIZ, and Japan InternationalCooperation Agency.Although savings rates have improved inMyanmar in recent years, many still option tokeep cash in safe boxes, chests or lockers at homeinstead of saving with a bank. This puts their

savings at risk of misplacement, theft, and loss ofvalue from inflation, as it is unable to earninterest. World Savings Day reinforces thenational importance for the financial servicesindustry to increase awareness of this and drivefinancial literacy efforts.Deputy Minister Planning and Finance U MaungMaung Win highlighted the critical importance ofsavings to the national economy and householdfinancial management in his speech for the forum.“Myanmar experiences high informal savings inphysical assets, cash, and structures outside of theregulated financial system. So, technology andinnovation are needed to encourage the public totransition from informal to formal savingsinstruments,” U Maung Maung Win said.Luchtenburg noted that Myanmar’s highprevalence of cash transactions and smart phoneownership provides an attractive opportunity forthe spread of digital savings services tounderserved or unserved households..Source: Myanmar Timeshttps://www.mmtimes.com/news/digitalisation-will-boost-savings-culture-myanmar-expert.html

NewspapersMyanmar Times

19 Nov 2019


Myanmar to commence 10-year bond auctions ‘soon’

Myanmar will start auctioning 10-year sovereignbonds to meet demand for long term debt fromthe newly minted insurance industry, said Daw SiSi Pyone, Director General of the TreasuryDepartment under the Ministry of Planning andFinance (MoPF).“We are planning to launch auctions for 10-yeargovernment treasury bonds soon as demand,mainly from the insurance companies, is rising,”she said at a conference on Monday, but did notprovide a fixed schedule for the auction or furtherdetails on coupon rates.It is common for insurance firms to invest theirpremiums in long term sovereign debt, which isless risky than funds and equities, to grow profitsand in some instances lower subsequent premiumamounts to make their policies more attractive.“We have already prepared funds to invest ingovernment bonds,” said U Thaung Han,managing director of CB Insurance.The insurance sector’s participation has beenkeenly anticipated as it will help to deepenMyanmar’s nascent bond market and help raisecapital to plug the fiscal deficit. It also aligns with

a wider goal to reduce Myanmar’s reliance on theCentral Bank to plug its fiscal deficit. Within thenext two years, the aim is to wean the country offCentral Bank financing completely.Special Economic Consultant to the StateCounsellor Sean Turnell lauded the government’smove to widen its bond financing options, sayingthis was better than borrowing from foreigncountries.Myanmar first introduced sovereign bonds in2015, when it commenced auctions for 3-monthTreasury bills. In 2016, it launched 6-month and12-month bills as well as 2-year and 5-yearTreasury bonds.Over the past four years, Myanmar has managedto raise over K600 billion in sovereign debt, DawSi Si Pyone said.Meanwhile, the MoPF is also working on a bondmarket master plan with support from the AsianDevelopment Bank (ADB).

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-commence-10-year-bond-auctions-soon.html


20 Nov 2019


Project to bring changes to Sittwe’s waterfront by next year

A mixed development waterfront project on alongthe Kaladan River in Sittwe, Rakhine is now 90percent done and is expected to be complete bythe middle of next year, Steve Park, CEO ofKorean developer BXT International Co, toldMyanmar Times.The remaining work involves the completion ofroads, drains and power grids at the project site,said U Aung Kyaw Zan, Rakhine State minister forElectricity, Industry and Transportation.“All the necessary environmental and socialimpact assessments have been prepared,” headded.The Sittwe Waterfront project, which willcomprise government offices, an industrial zone,hotels and shop houses, is being developed inthree phases on 36 hectares of land near theSittwe Myoma Market and port.The industrial zone will comprise can factories,cold storages facilities and logistics andtransportation companies. There is no restrictionon building designs as well.Phase 3 of the project will involve thedevelopment of shop house units in cooperation

with a US firm. Once official approval is receivedfrom the Myanmar Investment Commission(MIC), a total of 70 will be built, Mr Park said.“We are making arrangements to start in thebeginning of 2020. We will apply for approvalfrom MIC in coming days as well,” he said, addingthat many investors are interested in the shophouses, which will be complete within one year.The shop houses will come with three-storeys,with shops permitted to open on the ground floorwhile the two higher levels are for residentialpurposes.As Rakhine State is one of the least developedstates in the country, the government hasprovided seven years of tax exemption on thedevelopment of the project.Despite its remoteness and poverty, “Sittwe isvery safe. Although there are problems in RakhineState, this place is very beautiful and deservesinvestments,” Mr Park said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/project-bring-changes-sittwes-waterfront-next-year.html


20 Nov 2019


Construction Ministry continues implementing low-cost, staff rental housing projects

The Ministry of Construction will continueimplementing low-cost housing projects nearThilawa Industrial Zone in Thanlyin Township,Hlinethaya Township (Kyansitmin) and DagonSeikkan Township (Yoma) and staff rentalhousing projects in Nay Pyi Taw within thecurrent fiscal year (2019-2020).Nearly 7,300 housing units for civil servants werebuilt in Nay Pyi Taw, Yangon and Mandalay inthree years from 2016-2017 FY to 2018-2019 FY,and most of them were in Mandalay.The Urban and Housing DevelopmentDepartment under the Ministry of Construction isimplementing staff rental housing projects in NayPyi Taw, Yangon and Mandalay with Union funds.It is also implementing staff rental housingprojects in regions and states with their ownfunds, according to the findings of the JointPublic Accounts Committee.In three years, 520 staff housing units were builtin Kachin State, 318 in Kayah State, 150 in KayinState, 162 in Chin State, 1,262 in Sagaing Region,252 in Taninthayi Region, 672 in Bago Region,552 in Magway Region, 1,530 in Mandalay

Region, 252 in Mon State, 666 in Rakhine State,732 in Shan State and 224 in Ayeyawady Region.The department sold 8,416 units to servicepersonnel and low-income people in large citiesincluding Yangon, Mandalay and Nay Pyi Tawfrom 2017 to 2019. Installment plans with lowinterest rate are also available.Union Minister for Construction Han Zaw saidhousing loans are being provided for buyers whomet JICA and ODA loan criteria.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/construction-ministry-continues-implementing-low-cost-staff-rental-housing-projects

NewspapersEleven Myanmar

20 Nov 2019


Looking at the future of Yangon Stock Exchange

A discussion was held at Yangon Stock Exchange(YSX) during the last week of October on thepresent and future of YSE. Daiwa ResearchCompany’s Chief Consultant and ManagingDirector Mr Ryota Sugishita and YSX SeniorExecutive Manager U Thet Tun Oo participated inthe discussion.To establish a financial market like other Asiancountries the government founded YSX on March2016. But progress less than expected. In theearlier part of its existence the YSX index wasbetween 1300 and 1400 but it gradually declined.The lowest point was in April when it dipped to366. Although it had climbed back from thetrough, it is yet to reach the desired level.On this, Mr Ryota Sugishita said, “Stock marketsare always dipping and rising. Normally it’ll riseafter falling.”At the moment YSX officials were preparing tocreate a good prospect for it. It would beinteresting to see how this will make its indexrise.The preparation was to open up the stockexchange market to foreign investment. At the

moment, participation of foreigners in YSX wasnot permitted. Even the planned market openingwouldn’t be a total opening up of the YSX toforeign investors and investment as there still willbe some limitations.In the first stage, foreigners residing in Myanmarwould be allowed to invest in YSX. There wereinstances of stock exchange index rising whenforeign investments were allowed. South EastAsian country Viet Nam establishes Ho Chi MinhStock Exchange in year 2000. When it wasestablished, only 20 per cent of foreigninvestment was permitted.In 2003, it was increased from 20 to 30 per cent.By 2005, it was further increased to 49 per cent.As foreign investment and participation wasincreased, stock exchange index also increasesgradually.It was the same in other ASEAN countries likeThailand and Indonesia.

Source: The Global New Light of Myanmarhttps://www.globalnewlightofmyanmar.com/looking-at-the-future-of-yangon-stock-exchange/

NewspapersThe Global New Light of Myanmar

20 Nov 2019


Yangon officials see high public interest in land sale

The Yangon Region government has received overthe 12,000 applications for request of proposals(ROPs) for land sold by the government, a Yangonofficial said.There were over 15,000 application forms issuedby the government when it first announced theland sale.The regional government started selling the ROPforms for K10000 (US$6.60) each on October 7.The public had until November 8 to submit theforms, after which there was to be a committeebuying process.U Than, joint secretary of the Yangon CityDevelopment Committee (YCDC), said they willreview the requests before announcing how manyplots will be designated for commercial,residential or industrial use.“Over 3000 forms have yet to be submitted. Ourcommittee is classifying them,” he said.The land for sale is in Hlaing Tharyar, Shwe PyiThar, the four new Dagon townships, and MyaungDagar industrial zone in Hmawbi township.The land will be sold at a price fixed by theYangon Land Price Valuation Board.

Buyers have to start a business on the land withinsix months, and cannot sell it for at least threeyears.The land lacks infrastructure, such as electricityand water supply, and buyers have to payinfrastructure fees, according to the YCDC.“There is a lot of interest among business people,but it is not clear whether the selling process willbe competitive, so we are waiting to see how thegovernment manages it,’’ said one businessman inShwe Lin Ban industrial zone.Yangon Mayor U Maung Maung Soe told themedia that land sold by the government isguaranteed, and these plots of land are for peoplewho really need them.

Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-officials-see-high-public-interest-land-sale.html


21 Nov 2019


Sojitz, NTT, NEC, NESIC to Upgrade Communications Infrastructure in Myanmar

Sojitz Corporation, NTT CommunicationsCorporation (NTT Com), NEC Corporation andNEC Networks & System Integration Corporation(NESIC) will carry out an infrastructure upgradein Myanmar.The plans come under official instruction fromMyanma Posts and Telecommunications, thecountry’s incumbent telecoms operator and oncecompleted, will connect the cities of Nay Pyi Taw,Yangon, Mandalay and Thilawa Special EconomicZone (SEZ).Due to rapid economic growth in Myanmar, thepenetration of mobile phone now exceeds 90%but a lack in capacity as well as IP addresses, thecountry now urgently requires this upgrade inorder to maximise these opportunities.NTT Com and NEC already has communicationinfrastructure in use in Myanmar, such as LTEbase stations, international internet connectionfacilities and a core communication networkconnecting Nay Pyi Taw, Yangon and Mandalay.In addition, Sojitz has long been engaged ininfrastructure and energy projects in the country,having opened an office in Yangon in 1918.

Under the terms of the project, Sojitz will act asthe principal contractor of the project responsiblefor the overall management of the upgradeleveraging its global expertise in similar projects.For its part NTT Com will use its technologicalcapabilities in upgrading international internetconnection facilities to a maximum capacity of800Gbps.It will also resolve the lack of IP addresswith the introduction of IPv6 technologies.NEC will provide the optical communicationequipment for the core communication networkto expand transmission capacity to 1Tbps. Itsoptical communication equipment will multiplexmultiple signals of different wavelengths andtransmit them via optical fibre.Lastly NESIC, in collaboration with its subsidiaryNESIC Thailand, will install DWDM (equipmentsupplied by NEC and carry out design, civilwork…Source: Consult Myanmarhttps://consult-myanmar.com/2019/11/21/sojitz-ntt-nec-nesic-to-upgrade-communications-infrastructure-in-myanmar//

NewspapersConsult Myanmar

21 Nov 2019


Better bank services, enforcement needed for remittance licences to work

In an attempt to shrink the volume of illegalmoney transfers between Myanmar and itsneighbours, the Central Bank of Myanmar (CBM)last week announced the availability of officialremittance licences.The move, which commenced on November 15, isaimed at facilitating the legal movement of moneyby traders and migrant workers based overseasinto Myanmar and encourage official remittancebusinesses to emerge, the CBM said.But banking experts questions its effectiveness inchecking widespread illegal Hundi operations,which tap a vast network of traders stationedacross borders to bring the money into thecountry.For the first six months of the year, a total of556,148 Myanmar migrant workers remittedUS$526.7 million to their families in Myanmar,according to the Department of Labour.Official remittances last year were just shy ofUS$1 billion, compared to just US$101.8 millionin 2014.The official figures represent just a fraction of thetotal amount of money being moved across

Myanmar’s borders. Hundi operations areparticularly rampant at the China and Thaiborders, where the majority of Myanmar’s cross-border trading takes place.It is also common for illegal migrant workersbased overseas to remit money home through theHundis, even though they charge higher fees andoffer lower exchange rates compared to the banks.There are also no guarantees that the moneytransferred will be handled safely.“It is difficult to say for sure how much moneygets transferred into the country illegally. Theillegal remittance market is too large. By issuingan official licence, it will encourage illegaloperators to switch to legal avenues and allow thegovernment to better predict the cash inflows,”said U Aung Ko Ko, a local economist.Other experts point out though, that the banksmust cooperate for the move to be effective.

Source: Myanmar Timeshttps://www.mmtimes.com/news/better-bank-services-enforcement-needed-remittance-licences-work.html


22 Nov 2019

PwC | November 2019

2. Weekly Key Policy News

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PwC | November 2019

Electricity Reform to Light Up Myanmar’s Economy

Weekly Key Policy NewsHeadlines

Parking Fees to Be Reintroduced in Myanmar’s Biggest City, Yangon

Myanmar hopes to be the next Asian winner of US-China trade war as Vietnam nears capacity

Daw Aung San Suu Kyi to Contest Rohingya Genocide Case at World Court

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Loss-making factories should be privatised, officials say


Parking Fees to Be Reintroduced in Myanmar’s Biggest City, Yangon

YANGON—The Yangon municipal administrationplans to reintroduce parking fees in six downtowntownships of the country’s commercial capitalafter installing “smart” car parks.The Yangon City Development Committee(YCDC) announced at a regular press conferenceon Nov. 18 that it is currently evaluating six bidssubmitted by companies in response to a requestfor tenders to build smart car parks in thetownships.”Now, we are analyzing the tenders [submittedby] the companies. One of them will selected toinstall the smart car parks,” said U Lin Khaing,secretary of the YCDC’s bridge subcommittee.When asked by the media for the identities of thecompanies, details of the tender process andtechnical details of the parking facilities, theYCDC officials said they didn’t have that preciseinformation available.They said parking fees at the facilities would beset at 200, 300 and 500 kyats per hour,depending on the type of car park.The YCDC gave the tendering companiesflexibility in terms of the proposed designs of the

smart car parks, and will award the contract tothe company that makes the most convincingpresentation, committee member Daw May MayThwe said.Parking fees and the renting of parking spacesdowntown were prohibited by the YCDC underthe previous government in 2014.It suspended plans to reintroduce parking fees ontwo earlier occasions, in 2017 and 2018, due toproblems with the implementation, and publicobjections.In many areas of downtown, however, vehiclesowners are forced to pay illegal fees tounauthorized vendors.Asked why the YCDC is moving to reintroduceparking fees, committee member Daw May MayThwe told The Irrawaddy the municipal bodywants to tackle traffic congestion in the city, whilealso looking for ways to increase its revenue.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/parking-fees-reintroduced-myanmars-biggest-city-yangon.html


19 Nov 2019


Myanmar hopes to be the next Asian winner of US-China trade war as Vietnam nears capacity

Vietnam pulled ahead in the race to lureproducers, but other neighbours includingThailand and Indonesia are stepping up efforts toattract them.One advantage for Myanmar – where about one-third of the population lives in poverty – is thatEurope and the US offer preferential export termsMyanmar expects to attract more investment asmanufacturers seeking to relocate productionfrom China to skirt US tariffs encounter capacityconstraints in Vietnam.The Southeast Asian nation aims to woo a total ofUS$5.8 billion in foreign direct investment thisyear and cut back the red tape that deters somecompanies, according to a senior governmentofficial.“When it comes to relocation, Vietnam might bepreferable but it’s already congested,” said AungNaing Oo, permanent secretary at the Ministry ofInvestment and Foreign Economic Relations. “So,investors are now eyeing Indonesia andMyanmar.”The spoils of trade war: Asia’s winners and losersin US-China clash

One advantage for Myanmar – where about one-third of the population lives in poverty – is thatEurope and the US offer preferential export termsto boost growth, according to Aung Naing Oo. Atthe same time, the US$71 billion economycontinues to face traditional obstacles such asinsufficient supplies of electricity and industrialland.Recent evidence suggests Vietnam has pulledahead in the race to lure producers butneighbours including Thailand and Indonesia arestepping up efforts to attract them.Clogged infrastructure is one of the risks forVietnam, where shipping container capacity willneed to grow at almost twice its 10-12 per centpace of the past decade to keep up with newdemand, Bloomberg Intelligence research shows.

Source: Consult Myanmarhttps://consult-myanmar.com/2019/11/20/myanmar-hopes-to-be-the-next-asian-winner-of-us-china-trade-war-as-vietnam-nears-capacity/

NewspapersConsult Myanmar

20 Nov 2019


Daw Aung San Suu Kyi to Contest Rohingya Genocide Case at World Court

YANGON—Myanmar State Counselor Daw AungSan Suu Kyi will appear before the InternationalCourt of Justice (ICJ) to contest a case filed byGambia accusing Myanmar of genocide against itsRohingya Muslim minority, her government saidon Wednesday.More than 730,000 Rohingya Muslims have fledto neighbouring Bangladesh since a 2017crackdown by Myanmar’s military, which U.N.investigators say was carried out with “genocidalintent”. Buddhist majority Myanmar deniesaccusations of genocide.Gambia, a tiny, mainly Muslim West Africanstate, lodged its lawsuit after winning the supportof the 57-nation Organisation for IslamicCooperation (OIC). Only a state can file a caseagainst another state at the ICJ.“Myanmar has retained prominent internationallawyers to contest the case submitted by Gambia,”the ministry for state counselor Suu Kyi’s officesaid in a Facebook post.“The State Counselor, in her capacity as UnionMinister for Foreign Affairs, will lead a team tothe Hague, Netherlands, to defend the national

interest of Myanmar at the ICJ,” it said, giving nofurther details.Military spokesman Brigadier General Zaw MinTun told Reuters the decision was made after thearmy consulted with the government. “We, themilitary, will fully cooperate with the governmentand we will follow the instruction of thegovernment,” he said.A spokesman for Suu Kyi’s party, the NationalLeague for Democracy, said she had decided totake on the case herself.“They accused Daw Aung San Suu Kyi of failing tospeak out about human rights violations,”spokesman Myo Nyunt said. “She decided to facethe lawsuit by herself.”Both Gambia and Myanmar are signatories to the1948 Genocide Convention, which not onlyprohibits states from committing genocide butalso compels all signatory states to prevent andpunish the crime of genocide.Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/daw-aung-san-suu-kyi-contest-rohingya-genocide-case-world-court.html


21 Nov 2019


Loss-making factories should be privatised, officials say

Government officials have raised the need torestructure most of Myanmar’s state-ownedfactories, as just four out of the 57 factoriescontrolled by the Ministry of Industry (MOI) arenow making money.Around one third of these factories need to beclosed down with the MOI losing about K300billion-K400 billion each year, said U Aung KyawKyaw Oo, secretary of the Pyithu Hluttaw’sInvestment and Industrial DevelopmentCommittee.For the remaining factories that are stilloperating, upgrades and overhauls of existingmachinery and equipment are urgently required.The solution, officials said, is full or partialprivatisation.“We’ll go for a management system that focuseson profitability and reduce the number of state-owned enterprises. Many factories and the landwhich they are built on are not being utilised togenerate returns. We want to privatise theseassets in a systematic way to reduce the burden aswell,” said U Aung Kyaw Kyaw Oo.He added that the authorities would explore

various business models to raise cash, includingselling stakes to local and foreign investors, jointventures and Public Private Partnerships (PPP).“Under these arrangements, the MOI will justtake on a supervisory role,” he said.A total of 55 state-owned factories have alreadybeen restructured under various PPPs with theprivate sector between 2012 and 2015, accordingto government data.“It’s important to privatise the factories andpromote production that is in line with marketdemand. In doing so, it would be effective if theministry can cooperate in managing shares,assets, PPP bonds and take necessary action toprevent further financial losses,” deputy ministerof Planning and Finance U Set Aung told thePyidaungsu Hluttaw recently.Economist U Aung Ko Ko said it is important forthe privatization process to be free fromcorruption if it is to be effective and sustainable.

Source: Myanmar Timeshttps://www.mmtimes.com/news/loss-making-factories-should-be-privatised-officials-say.html


21 Nov 2019


Electricity Reform to Light Up Myanmar’s Economy

Businesses and the general public in Myanmar aredivided on the recent bold policy move to hikeelectricity tariffs. But the big question is: how canthe electricity reform contribute to the country’sdevelopment?On one hand, the business community seems tobe accepting of higher tariff rates as that couldlead to a more stable power supply with lesspower outages. This in turn could bring downmaintenance and other production costs withlower use of other costly sources of energy such asdiesel-powered generators during power outages.On the other hand, many households may find thetariff increases too steep given the country’s lowper capita income. The higher power tariffs meanthat consumers will not only have to pay more fortheir personal electricity consumption at home,but also for other goods and services that requireelectricity as inputs.A push for efficient energy consumptionSince Myanmar embarked on economic reformand market-opening process in 2012, it haswitnessed rapid economic growth averagingalmost 7 percent in the past seven years along

with a sharp increase in electricity consumption.According to AMRO’s 2019 Annual ConsultationReport on Myanmar, electricity consumption inthe country increased by an average of 15 percentannually from 2012 to 2018.Until the recent tariff increase, households inMyanmar enjoyed the lowest electricity tariffs inthe region of around 2-3 USD cents per kilowatt-hour, compared to 6-12 USD cents per kilowatt-hour in other low-income countries in the region,which resulted in high electricity consumption byhouseholds. The low rates also contributed tounder-investment in energy infrastructure as thegovernment has limited funds while the privatesector has little incentive to invest in risky andlow-yield projects. Demand outgrew limitedelectrical supply in Myanmar, giving rise tofrequent power outages and hamperingmanufacturing activities.

Source: Mizzima Newshttp://www.mizzima.com/article/electricity-reform-light-myanmars-economy

NewspapersMizzima News

23 Nov 2019

PwC | November 2019

3. Weekly Investment News

23

PwC | November 2019

Weekly Key Investment NewsHeadlines

Daiwa PI Partners kicks off microfinance JV in Myanmar

Korea’s Posco and U.S. Firm McDermott Sign Deal for Gas Project

Approval of investment limits can be raised, official says

24

Singapore businesses see Myanmar as ‘potential gold mine’

Tourism key to Kachin growth, but transport infrastructure is lacking


Daiwa PI Partners kicks off microfinance JV in Myanmar

Daiwa PI Partners, a subsidiary of Japan’s DaiwaSecurities Group, on Friday launched itsmicrofinance business in Myanmar through ajoint venture with electronics retailer OKMyanmar Limited (OKM).The joint venture, DO Microfinance, obtained thelicence for its Myanmar operations in July 2019and provides loans to low-income people andSMEs in the country.OKM, which started its microfinance business in2014, completed the transfer of its operations toDO Microfinance last month.The microfinance JV will expand into other citiesin addition to Yangon, and offer new products inorder to serve the local needs and drive financialinclusion in Myanmar. The company currentlyonly provides credit products but looks to addsavings, micro-insurance, remittance and digitalfinancial services as well as financial education inthe future.DO Microfinance plans to cover 100 towns across10 states and regions, with 36 branches servingaround 130,000 customers and lending as muchas 150 billion kyats ($99 million) within the next

five years. The firm currently has about 8,000customers with a loan portfolio of 1.7 billionkyats.The joint venture is 55 per cent owned by DaiwaPI Partners, which will have three board seats inthe company.“Daiwa Securities Group will continue tocontribute to the achievement of the socialdevelopment goals through microfinance andother activities,” the Japanese investor said in astatement.“Impact is embedded in our business strategy andthe way we design our products. There are greatopportunities in Myanmar for us to bring socialimpact to the customers,” Savoeung Chann, CEOof DO Microfinance, told DealStreetAsia.Adults with access to financial products inMyanmar increased from 30 per cent in 2013 to48 per cent in 2018, leaving space formicrofinance institutions to tap the remaining 52per cent…Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/daiwa-microfinance-myanmar-162848/

NewspapersDeal Street Asia

15 Nov 2019


Korea’s Posco and U.S. Firm McDermott Sign Deal for Gas Project

South Korea’s Posco International Corp. recentlysigned a front-end engineering design (FEED)contract with U.S. energy firm McDermott for thethird-stage project of the Shwe gas fielddevelopment.The agreement covers increasing production atShwe and Shwe Phyu gas fields in A-1 block andMya field in the offshore A-3 block as well asdesigns connecting these projects.McDermott has collaborated with Hyundai HeavyIndustries to develop an offshore gas platformand designs to connect the existing Shwe project.Posco, formerly known as Daewoo International,started gas exploration and production off theshore of Rakhine State in 2013. The Shwe projectis expected to start commercial operation in 2021,with the Shwe Phyu project to follow in 2022.Posco will then start producing, liquefying anddelivering gas.In May 2018, Posco announced an additionalinvestment of $500 million for gas explorationand production in Myanmar.At present, Australia’s Woodside, Korea’s Posco,Thailand’s PTTEP and companies from China are

conducting gas exploration and extraction off theshore of Myanmar.In the 2019 fiscal year, Myanmar earned over $3billion from gas exports, a $100 million increasefrom the previous year, according to Ministry ofCommerce data.

Source: Myanmar Business Todayhttps://mmbiztoday.com/koreas-posco-and-u-s-firm-mcdermott-sign-deal-for-gas-project/

NewspapersMyanmar Business Today

20 Nov 2019


Approval of investment limits can be raised, official says

The investment commissions of regions andstates can apply to raise the maximuminvestments they can approve if required, says asenior official.Permanent Secretary of the Ministry ofInvestment and Foreign Economic Relations UAung Naing Oo said, if the investments are fordevelopment, the regional and state investmentcommissions can ask to have the limit raised.At present, regional and state investmentcommissions have the authority to approveinvestments of up to US$5 million and K6 billion.Larger sums will require the approval of theMyanmar Investment Commission (MIC).“Limitations on the approval of investment fundsare not inflexible. Business investments of up toUS$5 million or K6 billion can be approved locallyat the region and state level. If the investmentsare higher, it needs MIC approval. However, MICis willing to raise those amounts if theinvestments are intended for development,” UAung Naing Oo said at the Kachin InvestmentForum last week.Infra structure development such as roads and

telecoms projects are costly and require largesums of funding, he added.“When we invite project for things such as roads,bridges and telecoms, the amount of money isvery large. Communication, roads and bridges arecrucial for the development. On the other hand,approval for the sums needed have to besubmitted to MIC if it exceeds more than$5million. So, there are difficulties including theexpenses and time. If it can be carried out at thestate level, it saves a lot for a business andstreamlined the development sector,” said UMaung Ring La, executive chair of MyanmarTelecom Gateway Co Ltd.According to the policy of the Directorate ofInvestment and Company Administration, statesand regions are authorised to form investmentcommissions to oversee & streamline investmentprocesses while also submitting the relevantinformation about the investments to MIC.Source: Myanmar Timeshttps://www.mmtimes.com/news/approval-investment-limits-can-be-raised-official-says.html


21 Nov 2019


Singapore businesses see Myanmar as ‘potential gold mine’

Myanmar is a “potential gold mine” and the “lastfrontier for” investors despite its low ranking inease of doing business, said a Singaporeaninvestor at a business to business matchmakingevent in early November.MyanmarBizConnect Group, a local businessmatchmaking group, the Singapore’s Associationof Small and Medium Enterprises (ASME) andMalaysia’s RHB Bank held the ASME MyanmarMission Investor Insights event at a hotel inYangon on November 7.The event was attended by local and foreignbusinesspeople and officials including formereconomic adviser to the President U Aung TunThet, Deputy Director General of the Directorateof Investment and Company Administration DawTin Aye Han, and President of the SingaporeAssociation of Myanmar Leong Lee Seng.“This is the second time we have held thismatchmaking event. The first was in Lotte Hotelwhich saw 42 delegates from 20 sectors. Thisyear, we have businesses from 13 fields.The delegates who come here differ each year,said Diana Win, founder and chair of

MyanmarBizConnect Group and managingdirector of Royal Queen Consulting in Singapore.“And, I’m overjoyed by the fact, that one way oranother, the delegates gained connections andopportunities from our B2B matching event,” sheadded.After the Myanmar government opened up itseconomy in 2012, the country became a hotspotfor foreign investors. Singapore has the largestFDI in Myanmar for 2019 overtaking China, datefrom the Ministry of Investment and ForeignEconomic Relations showed.“There’s no doubt that Myanmar is a futureinvestment destination. The potential is great. Infact, I do agree with the first speaker, U Aung TunThet that we need to have faith in this market. It’sa potential goldmine and last frontier,” said Peterfrom A&B films, a window film installer andapplicator based in Singapore.

Source: Myanmar Timeshttps://www.mmtimes.com/news/singapore-businesses-see-myanmar-potential-gold-mine.html


22 Nov 2019


Tourism key to Kachin growth, but transport infrastructure is lacking

At the very first investment seminar held inKachin State last week, the government and localethnic businesses agreed to focus on developingtourism and other sectors of the Kachin economyto reduce its reliance on mining.Kachin’s economy contributes just 1.9 percent toMyanmar’s GDP, most of which comes from themining sector.“Kachin State has many tourist attractions such asthe Hkakabo Razi, which are the only snow-capped mountains to be found in Southeast Asia.Building up the tourism sector will provide jobopportunities and increase the incomes of thelocal Kachin people,” said Vice President HenryVan Thio.“Kachin will surely become a peaceful state andthe main driving force of its economy then will betourism,” said U Aung Naing Oo, the permanentsecretary of the Ministry of Investment andForeign Economic Relations.To get a clearer picture of the Kachin tourismsector and its potential, The Myanmar Timescaught up with U Seng Hkun, founder ofMyitkyina-based Green Xingra Eco-Tour &

Travel, which organises activities for tourists toKachin. U Seng Hkun also heads the KachinTourism Promotion and is a member of theKachin Ethnic Entrepreneurs Association. Here isan excerpt of our interview:What needs to be done for Kachin tourism to takeoff?We need to get the young people vested in thesector for the long haul. Now they are mostlyinterested in short term gains from the miningsector. Few are keen on sustainable tourism andthe need to preserve and protect our mountains,rivers and landscapes. Few are knowledgeableabout Kachin’s attractions or have skills likemanufacturing souvenirs or holding cookingclasses that will add value to tourism.Government policies are vital for the developmentof tourism sector. Right now in Kachin, there aremany must-go places in Kachin which are open totourists but restricted to businesses.Source: Myanmar Timeshttps://www.mmtimes.com/news/tourism-key-kachin-growth-transport-infrastructure-lacking.html


22 Nov 2019

PwC | November 2019

3. Weekly New Tenders

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PwC | November 2019

No applicable Tenders announced for the week ending 22 Nov 2019.

Tenders (Myanmar)List

Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .

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http://www.mmtimes.com/

https://tender.yangon.gove.mm/

http://consult-myanmar.com/

http://www.myanmar-opportunities.org/mm/tenders

http://www.buildersguide.com.mm/en/

PwC | November 2019

Tenders (Multilateral organizations) List

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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ADB: LOAN 47152-002 MYA: Irrigated Agriculture Inclusive Development Project (National Finance Manager - 1 Person), Closing date: 03 Dec 2019

ADB: TA-9098 REG: Strengthening Project Preparation Capacity in Asia and the Pacific - Support for Capacity Development, Knowledge and Networking (Subproject 1) - National PPP Project Development Expert, Closing date: 28 Nov 2019

ADB: LOAN-3747 MYA: Greater Mekong Subregion Highway Modernization Project - CS-2 CS-2 : Consulting Services for Detailed Technical Preparation for new Bago-Kyaikto expressway (47087-003), Closing date: 20 Dec 2019

ADB: LOAN 47152-002 MYA: Irrigated Agriculture Inclusive Development Project (National Procurement Officer - 1 Person), Closing date: 03 Dec 2019

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/

PwC | November 2019

Tenders (Multilateral organizations) List (cont’d)

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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WB: National Electrification Project: 11kV line and transformer accessories, Closing date: 02 Jan 2019

WB: eConsult: Marketing and Communication Consultant - FIG: Marketing and Communication Consultant - FIG, Closing date: 05 Dec 2019

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/

PwC | November 2019

4. MIC Permitted Projects

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PwC | November 2019

MIC Permitted Projects (Meeting 18, 2019)

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No. Name of Company Type of Investment Form of Investment

1 Myanmar C.P. Livestock Co., Ltd. Layer farm Wholly Foreign-owned

2 Myanmar C.P. Livestock Co., Ltd. Pig farm and sales of pig Wholly Foreign-owned

3 Range Veterinary Co., Ltd.Manufacturing and marketing of various kinds of veterinary drug andpharmaceutical for animals

Wholly Foreign-owned

4 Than Daung Oo Co., Ltd.Production and sales ofSugar

Wholly Myanmar-owned

5 Myanmar Wan Li Garment Ltd.Manufacturing of various kinds of knitted wear on CMP basis

Wholly Foreign-owned

6 Green Urban Ventures Co., Ltd. Real estate development Joint Venture

7 Shwe Gabar Hlwan Co., Ltd. Crushing and sales of crushed stone Joint Venture

Source: DICA

PwC | November 2019

5. Upcoming Events

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PwC | November 2019

Upcoming Events (November 2019) List

Date Location Name of Event Sector Price Focus Points

28-30 Nov Yangon MyanbuildBuilding and Construction

TBC

“Myanbuild is an international building andconstruction industry exhibition andconference which showcases a wide range ofindustry-related products and services fromvarious international brands. The event alsoprovides the attendees with a comprehensiveplatform to showcase construction brands inthe Myanmar market.”

28-30 Nov Yangon MyanwaterWater &Wastewater

TBC

“Myanwater event is an international waterand wastewater technology show whichdiscusses various technologies relating towater and wastewater management. “

28 -30 Nov Yangon

GREENPOWER MYANMAR -International Solar and Renewable Energy Industry Exhibition

Power andEnergy

TBC

“In the business of building up Myanmar’sElectrical and Power sector, GREENPOWERExpo aims to meet the increasing demand byintroducing a greater variety of products andservices that will help boost the industrythrough new and promising businesspartnerships and enterprises.”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

https://www.go-myanmar.com/events-and-conferences

https://10times.com/myanmar

PwC | November 2019

Upcoming Events (November 2019) List (cont’d)


28-30 Nov Yangon MyanenergyPower and Energy

TBC

“Myanenergy event is an international powerand electrical engineering show whichprovides the attendees with the mostcomprehensive platform to showcase theirbusiness to the Myanmar market.”

29 Nov- 01 Dec YangonElectricity & Energy Expo

Power andEnergy

TBC

“Electricity & Energy is the largest andlongest running regional electricity & energyconference and exhibition in South EastAsia, making it a well-known and trustedbrand. The event boasts both a strategicconference and a large trade exhibition.”

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PwC | November 2019

Upcoming Events (December 2019) List


02-03 Dec Yangon

Asia IoT Business Platform (AIBP Myanmar)

IT andTechnology

1,200 USD

“The Asia IoT Business Platform Myanmaraims to address key issues facing theadoption of Internet of Things technology inASEAN. It focuses on localtelecommunication companies, governmentbodies, and verticals. Please Register toattend via the official event site.”

05-07 Dec Yangon Agrilivestock MyanmarAgriculture and Forestry

TBC

“Agrilivestock Myanmar serve as Myanmar’spremier international B2B platform forshowcasing a variety of the latest productsand solutions for the improving the locallivestock sector. It is also a great opportunityfor overseas companies to meet, network andform mutually beneficial relationships withlocal industry professionals and keydecision-makers.”

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© 2019 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

www.pwc.com/mm

PwC Myanmar Weekly Business Intelligence Publication

For further information please contact:

Mark RathbonePwC Capital Projects and Infrastructure Leader, Asia+65 6236 [email protected]

Jennifer TayPartnerCapital Projects & Infrastructure, PwC Singapore +65 8876 [email protected]

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