pwc myanmar weekly business …...should watch out for in year 2020: tourism to improve the industry...

PwC MyanmarWeekly Business Intelligence

Issue 19404 January 2020

www.pwc.com/mm

PwC | January 2020

Disclaimer

PricewaterhouseCoopers Myanmar Co., Ltd helps organisations and individuals create the value they’re looking for. We’re a member of the PwCnetwork of firms in 157 countries with more than 270,000 people who are committed to delivering quality in assurance, advisory and tax services.Tell us what matters to you and find out more by visiting us at www.pwc.com/mm.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

© 2020 PricewaterhouseCoopers Myanmar Co., Ltd, a company duly established and operating under the laws of Myanmar. All rights reserved.PwC refers to the Myanmar member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please seewww.pwc.com/structure for further details.

The information contained in this publication is for general guidance on matters of interest only and is not meant to be comprehensive. Theapplication and impact of laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advicespecific to your circumstances from your usual PricewaterhouseCoopers Myanmar Co., Ltd client service team or your other tax advisers.

2

PwC | January 2020

1. Weekly Key Financial & Business News

3

PwC | January 2020

Weekly Key Financial & Business NewsHeadlines

The top-10 events that shaped Myanmar’s economy in 2019

Solar mini-grid brings power to Yesagyo’s community

Five sectors in Myanmar to watch this year

Kyat closes year on a high against dollar

4

Controversy grows over secret nickel mine deal in Sagaing Region

PwC | January 2020

Weekly Key Financial & Business NewsHeadlines

YBS vehicles to be standardized, non-standard vehicles decommissioned

Myanmar-Taiwan relations and the ‘China factor’

First Airport in Western Myanmar’s Chin State to Open in June

5

Yangon to use part of its own budget to promote tourism: official

Japan to launch project to boost farm productivity in Myanmar

PwC | January 2020 6

Controversy grows over secret nickel mine deal in Sagaing Region

A sweet deal awarded to a Chinese companyduring the military dictatorship is focusing moreattention on production sharing contracts thatlack transparency.TRANSPARENCY is still lacking in contractsinvolving natural resources that were signed byforeign companies and the former military regimeand which remain in need of being reviewed.Civil society groups have been demandingtransparency over these contracts since thetransition to democracy began in 2011 and theirstand has been bolstered by information that hasrecently emerged about the Tagaung Taung nickelmine and smelter in Sagaing Region’s TigyaingTownship.The mine went into operation in 2009 under aproduction-sharing contract between the No. 3Mining Enterprise of the Ministry of Mines andstate-owned China Nonferrous Metal Mining Co.According to the CNMC website, the TagaungTaung nickel mine contains 700,000 tonnes ofnickel and the US$800 million project has anannual output of 85,000 tonnes of ferronickel.A bad deal?

The Myanmar Alliance of Transparency andAccountability says the contract is controversialbecause it provides for the Myanmar governmentto receive only one percent of revenue, and theChinese company 99 percent, when the price ofnickel falls below US$15,000 a tonne.MATA says the ratio is adjusted to 50 percenteach when the price of nickel is between $15,000and $20,000 a tonne, but market sources saysuch a rise is unlikely in the near term. Theaverage nickel price this year has been about$12,880 a tonne, according to Statista, a providerof market and consumer data based in Germany.At the London Metal Exchange on December 11,nickel was trading at about $13,530 a tonne.“Among the production-sharing contracts [inMyanmar], this one can be described as the mostcontroversial,” said U Thant Zin, an executivemember of MATA.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/controversy-grows-over-secret-nickel-mine-deal-in-sagaing-region

NewspapersFrontier Myanmar

27 Dec 2019


Solar mini-grid brings power to Yesagyo’scommunity

Parami Energy connected 1442 households to thenewly-launched mini-grid mid-December withplans to expand the coverage to more than 4000households Magway’s Yesagyo.The first phase of the solar mini-grid has a 288-kilowatt peak capacity and involves US$1.6million of investment in total. The renewable off-grid system received 60 percent of capital costfunding from the World Bank through theagriculture ministry’s Department of RuralDevelopment, while Parami funded 20pc with therest covered by the villagers.The next two phases will be commissioned nextyear. Altogether, the scheme will connect 4097households on the Yesagyo island to electricity forthe first time. The mini-grid employs solarphotovoltaic technology with diesel generator asback-up.“Parami Energy intends to be a key private sectorplayer in driving the implementation of renewablemini-grid solutions in support of thegovernment's ambitious goal of achievinguniversal electrification by 2030,” said AntonSafronov, chief commercial officer and the head of

electrification of Parami Energy.Parami Energy signed a tripartite agreement withthe agriculture ministry’s Department of RuralDevelopment and the Village ElectrificationCommittee to develop the project last August.French energy giant EDF originally signed anMOU with Parami and Magway regionalgovernment in 2016 to explore the project’sfeasibility but it subsequently pulled out.Less than 50pc of Myanmar’s population hasaccess to electricity and electrification is amongthe top priorities of Daw Aung San Suu Kyi’sgovernment. Her energy ministry has committedto achieving complete electrification by 2030.However, power generation continues to fallbehind as demand for electricity is growing at arate up to 17pc annually, with the energy ministryrushing through five emergency power tendersthis year. The World Bank has estimated the needof US$2 billion of investments each year by 2030to eliminate the deficit.Source: Myanmar Timeshttps://www.mmtimes.com/news/solar-mini-grid-brings-power-yesagyos-community.html

NewspapersMyanmar Times

30 Dec 2019


The top-10 events that shaped Myanmar’s economy in 2019

Myanmar witnessed an economic slowdown infiscal 2019, with GDP growth downgraded to 6.5percent from 6.8pc in 2018, and foreign directinvestments (FDI) hitting just 70pc of officialtargets. The economy also took a hit from slowingglobal growth and uncertainty arising from thetrade war between China and the US.But the Myanmar government also tookprogressive measures to boost the economy. It ledfurther liberalisation in various sectors of theeconomy and took steps to address the country’spower shortage. It also announced new taxreductions and reliefs aimed at boosting statecoffers and economic activity, garnering applausefrom the business community.During the year, the government took efforts toattract FDI in spite of the ongoing Rakhine crisisand lawsuit filed against Myanmar in theInternational Court of Justice by Gambia, whichtarnished the country’s image as an investmentdestination. Among them were a string ofinvestment forums held in the states and regions,which were aimed at drawing investors to ruralareas like Rakhine and Chin.

Here are the top ten events in business andinvestments that shaped the Myanmar economyin 2019:1. Insurance sector liberalisedFive insurance firms – British Prudential,Japanese Dai-ichi Life, Hong Kong AIA, USChubb and Canadian Manulife – finally receivedlicenses to operate in Myanmar in late Novemberafter a two-year delay.In addition, six insurance JVs of foreign and localfirms also received the green light. The three JVsfor non-life insurance are AYA Myanmar GeneralInsurance and Sompo Japan NipponkoaInsurance; Grand Guardian General Insuranceand Tokio Marine & Nichido Fire Insurance; andIKBZ Insurance and Mitsui Sumitomo Insurance.The other three life insurance JVs are Capital LifeInsurance and Taiyo Life Insurance; CitizenBusiness Insurance and Thai Life Insurance; andGrand Guardian Life Insurance and Nippon LifeInsurance.Source: Myanmar Timeshttps://www.mmtimes.com/news/top-10-events-shaped-myanmars-economy-2019.html


31 Dec 2019


Five sectors in Myanmar to watch this year

The Myanmar economy is expected to expand by7.1 percent in fiscal 2019-20, up from 6.8pc in theprevious fiscal year, buoyed by reformmomentum, improving business sentiments,strong growth in garment and othermanufacturing products, an expansion oftourism-related services and stronger fiscalspending, according to the ASEAN+3Macroeconomic Research Office.U Thant Sin Lwin, director general of theDirectorate of Investment and CompanyAdministration and secretary of the MyanmarInvestment Commission, is also expecting foreigndirect investments to pick up and align with thegovernment’s estimates for fiscal 2019-20. Thecountry fell short of its $5.8 billion FDI targetduring fiscal 2018-19, with investors channelingjust $4.1 billion into Myanmar.The downside is the ongoing Rakhine crisis andlawsuit filed against Myanmar in theInternational Court of Justice by Gambia, whichcould tarnish the country’s image as aninvestment destination, businesses andeconomists said.

Myanmar is also expected to hold generalelections in 2020, and many investors will waitand see how things unfold in the politicaleconomy before investing further in the countrythis year.Nevertheless, here are five pockets of theeconomy with growth potential that investorsshould watch out for in year 2020:Tourism to improveThe industry should pick up this year with newgovernment measures to lure tourists toMyanmar.This month, the Ministry of Hotels and Tourismwill introduce visas on arrival for tourists fromthe Czech Republic, Luxemburg, New Zealand,Hungary and Austria in a three-year trialprogramme.It also plans to allow direct flights between Bagan,which was recently listed as a UNESCO WorldHeritage Site, and Siem Reap, Cambodia.

Source: Myanmar Timeshttps://www.mmtimes.com/news/five-sectors-myanmar-watch-year.html


01 Jan 2020


Kyat closes year on a high against dollar

The value of the Myanmar kyat strengthened tounder K1500 versus the US dollar beforeChristmas and closed 2019 at K1479, its lowestlevel this year.On December 24, Parliament passed newregulations controlling import volumes. The law,which was enacted to protect local manufacturers,prescribes protective measures for industriesharmed by competition from imported goods.Tariffs and import limitations can be imposed aswell.Lower import volumes imply that there should beless demand by traders for foreign currencies likethe dollar.In fact, imports had already been declining thisyear and the country’s trade deficit for fiscal2018-19 narrowed to just $1.1 billion from $3billion the year before.“The Myanmar currency is more volatile recentlybecause investors have been limiting theirinvestments in the manufacturing sector due to alack of demand and the use of foreign currency inthe local economy has declined, said U MaungMaung Lay, economist and vice chair of the Union

of Myanmar Federation of Chambers ofCommerce and Industry.The dollar has also weakened in recent months asa result of impeachment charges against USPresident Donald Trump and trade tensionsbetween the US and China.The Central Bank has been taking steps tostabilise the kyat and boost foreign reserves.Between October 31 and December 6, it wiped upmore than $41 million in local auctions. Around36 percent of that, some $15 million, waspurchased between December 20 and 30.

Source: Myanmar Timeshttps://www.mmtimes.com/news/kyat-closes-year-high-against-dollar.html


01 Jan 2020


Japan to launch project to boost farm productivity in Myanmar

TOKYO — Japan will launch a 390 million yen($3.6 million) project in May in Myanmar toboost irrigation and agricultural management aspart of efforts to increase productivity anderadicate poverty in the Southeast Asian country.Development of the agriculture promotionsystem, the improvement of the rice value chain,among other things, will be conducted in sixtownships in the Shwebo District of the SagaingRegion, home to some of the largest irrigatedfarmland in Myanmar.The Japan International Cooperation Agency andthe Myanmar government signed an agreementfor the project in the Myanmar capital Nay PyiTaw last week.The two sides also aim to secure a stable watersource by establishing a water managementorganization for farmers and improve profitablyby obtaining a geographical indication tag forShwebo Pawsan, a high-end variety of local rice.The project, designed to improve the income andmanagement skills of farmers, runs from May2020 to November 2024, according to JICA.About 60 percent of the Myanmar people engage

in agriculture, with agriculture, forestry andfisheries accounting for about 30 percent of thecountry’s gross domestic product.However, the development and dissemination ofagricultural technologies are not that advanced inMyanmar, with its rice yields standing at 3.50tons per hectare, lower than the 5.54 tons perhectare in Vietnam, 5.15 tons per hectare inIndonesia and 4.34 tons per hectare inBangladesh, JICA said.Myanmar’s Ministry of Agriculture, Livestock andIrrigation’s Department of Agriculture will carryout activities related to agricultural promotion,while the ministry’s Irrigation and WaterUtilization Management Department will engagein participatory water management activities.Japan has already started repairing irrigationfacilities as well as bridges and roads in theShwebo district as part of another assistanceproject, according to JICA.Source: The Global New Light of Myanmarhttps://www.globalnewlightofmyanmar.com/japan-to-launch-project-to-boost-farm-productivity-in-myanmar/

NewspapersThe Global New Light of Myanmar

01 Jan 2020


Myanmar-Taiwan relations and the ‘China factor’

Might Myanmar-Taiwan relations get trickier dueto the current presidential race in Taiwan and theincumbent Tsai Ing-wen’s relationship withBeijing regarding the “One China Policy”?Both Taiwan and Myanmar have elections in2020 and for both countries, the outcome isimportant for different reasons and yet there is anunderlying theme of democracies in development.What could impinge on their bilateral relations intheir respective relations with China?The Myanmar government and its leader AungSan Suu Kyi are leaning towards China in part dueto the international fallout from the “bad news”over the Rakhine crisis and the treatment of theMuslim Rohingya which has seen the Westernembrace of Myanmar cool.Beijing has been receptive in part because of itsambitious Belt and Road Initiative that seesMyanmar a crucial player in terms ofcommunications, trade, and development, underthe rubric of the China Myanmar EconomicCorridor.Myanmar’s friendship with China directly affectshow Nay Pyi Taw deals with its relations with

Taiwan, a territory that Beijing views as its ownbut one that is currently governed by anadministration that seeks to distance itself fromthe Mainland.Looking back at Taiwan, the presidentialcampaign is fiercely competitive. Incumbent Tsai,who is from Democratic Progressive Party (DPP)has led her main opponent Han Kuo-yu, thepresidential candidate of Kuomingtang (KMT), bymore than 30 points according to the latest pollby Apple Daily.Having been elected as the first female presidentin 2016 election, President Tsai is known for herChina-sceptic position and her rejection of the1992 Consensus, which is a critical agreement onthe “One China” and “One Country, TwoSystems”. During Tsai’s tenure, the China-Taiwanrelationship has grown tense, with Beijingapplying “big stick diplomacy” to isolate theisland in many ways.

Source: Mizzimahttp://mizzima.com/article/myanmar-taiwan-relations-and-china-factor

NewspapersMizzima

01 Jan 2020


YBS vehicles to be standardized, non-standard vehicles decommissioned

Yangon Bus Service (YBS) vehicles being operatedin the Yangon Region will be standardized, andnon-standard vehicles will no longer be permittedto operate in the region, said U Phyo Min Thein,the Yangon Region Chief Minister.YBS, formerly All Private Bus Lines ControlCommittee, will celebrate its third anniversary on16 January.“We gave permits to YBS for three years and willreview the company on 16 January, based oncomplaints that some of its branches are runningold buses and earning unfair profits. We will notallow YBS to operate non-standard vehicles.Therefore, we need to establish a standard for thevehicles. If the vehicles meet this standard, theycan still be run in Yangon. If they do not meet thestandard, the vehicles will have to operate inother regions,” remarked U Phyo Min Thein.“Some of the YBS branches are not operatingwithin the approved system. We have to resolvethis issue ourselves as we have already given themthree years. If the YBS branches cannot providegood service to commuters, we must replacethem. So we are trying to adopt the best system. I

don’t want YBS branch owners to assume they cando whatever they want,” he added.The Yangon Region Transport Authority will issuemarking tables for YBS services on 16 January,identifying strengths and weaknesses at thecompany.“For the last two years, we praised the goodservices provided by YBS branches, but we didn’ttake action against the bad services. This year, wewill praise the good services and discuss the badones. However, we won’t take action against themuntil next year as we want to provide betterservices to passengers and hope to adopt a bettersystem,” he added.To improve transport facilities in Yangon, YBSwas launched on 16 January 2017, during the newgovernment’s term. To date, over 100 bus linesare in operation, with 4,500 buses taking some135 routes, in addition to the Airport Shuttle andcity transit routes.Source: The Global New Light of Myanmarhttps://www.globalnewlightofmyanmar.com/ybs-vehicles-to-be-standardized-non-standard-vehicles-decommissioned/

NewspapersThe Global New Light of Myanmar

02 Jan 2020


First Airport in Western Myanmar’s Chin State to Open in June

FALAM, Chin State—Surbung Airport, the firstairport in Chin State, western Myanmar, is slatedto begin operation in June, according to ChinState Chief Minister Salai Lian Luai. Chin State iscurrently only accessible by road.“Northern Chin State has started receiving morelocal and foreign travelers now but transportationis still poor and the airport will make the statemore accessible. We are trying to open it in June2020,” the chief minister told The Irrawaddy.The airport will also enable local residents totravel to other parts of the country more easily, hesaid. Construction of the airport is reportedly now75 percent complete.The airport is being built on a 522-hectare plot inFalam Township, around 13 km from the towncenter. It will have a 1,830-meter-long and 30-meter-wide runway designed to handle takeoffsand touchdowns of ART-72 airliners, according tothe Chin State government.“We have earmarked 37 billion kyats [US$25.2million] for the airport. But due to budgetconstraints in the country, we are reviewing inorder to cut expenses where possible,” said the

chief minister.The project was presented in 2013 andconstruction began in 2015. The airport issituated in the Surbung mountain range at analtitude of 1,830 m above sea level, according toChin State government.“In Chin State, the rainy season is longer and hotand cold seasons are shorter, so we need to becareful about clouds and fog in the rainy season.Similarly, we need to be careful about smoke fromslash-and-burn farming in the hot season, so wehave to purchase equipment to help the planessee through them. That’s why there are delays,”Salai Lian Luai said.The airport is located strategically in the center ofChin State, making it easy to travel to other partsof Chin State including popular tourist attractionslike Rih Lake, he added.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/first-airport-western-myanmars-chin-state-open-june.html

NewspapersThe Irrawaddy

03 Jan 2020


Yangon to use part of its own budget to promote tourism: official

The Yangon Region government is consideringplans to dip into the regional budget for the firsttime to fund growth of the tourism industry,Yangon Region Minister for Hotels and TourismDaw Naw Pan Thinzar Myo revealed.“In other regions and states, some K200million infunds from local budgets was spent on promotingtourism. Based on Yangon’s population, thespending will be around that amount,” said DawNaw Pan Thinzar Myo.The regional government will also take action toimprove the tourism sector by cracking down onunlicensed tour operators and tour guides, andzero-dollar tourism this year, she said, addingthat working committees made up of the relevantofficials have already been formed for the effort.In addition to exploring and developing newtourist destinations in Yangon Region, there areseveral plans to resolve littering problem in areasfrequented by tourists and ensure clean andadequate toilets. The overall cost to promote thetourism industry has is in the midst of beingcalculated, she said.“Using part of the regional budget is better than

leaving the funds unspent, but the money needsto be used effectively. Instead of spending onweekend markets, funds should also be used forinspecting unlicensed tour operators, andcleaning and sanitation in particular. Despiteforming committees, no work has been seen onthe ground, perhaps due to budget constraints,”said Ko Than Naing, executive committeemember of the Myanmar Tourist GuidesAssociation.Suggestions have been made to conduct surprisechecks on tourist buses leaving the airport to seeif they are observing rules and regulations andusing local guides as part of efforts to curb zero-dollar tourism in Yangon. The government canalso inspect hotels and tourist areas frequented byzero-dollar tours to ensure local guides are beingused, Ko Than Naing said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-use-part-its-own-budget-promote-tourism-official.html


03 Jan 2020

PwC | January 2020

2. Weekly Key Policy News

16

PwC | January 2020

Weekly Key Policy NewsHeadlines

Ministry Relaxes SME Lending Rules

China Quietly Pushing Myanmar to Back Its Development Plan for Irrawaddy River

Legislation seeks to control country’s imports

17

Japan offers $5m for refugee resettlement in Myanmar's Kachin

What’s in Store for Myanmar in 2020 and Beyond?


Ministry Relaxes SME Lending Rules

The Ministry of Planning, Finance and Industryhas relaxed SME lending rules to allow small andmedium enterprises with only one year’s trackrecord to apply for loans.Prior to this, only SMEs with two or more years oftrack record were eligible to apply for loans.“We are planning to provide loans to one-year-oldSMEs. Not to every one of them, but those withgreat potential for success,” said Daw Aye AyeWin, director general of the Department of Smalland Medium Enterprise Development.When applying for SME loans, small businessesusually have difficulty providing tax receipts asthey typically make under K10 million in annualprofits and are thus exempt from paying incometax.The department has lifted the tax documentrequirement for SMEs with annual profits of up toK10 million.“Currently, banks require borrowers to providetax receipts and SMEs request that the InternalRevenue Department issue them,” said Daw AyeAye Win.The department is in talks to increase CGI (credit

guarantee insurance) loans to SMEs to K100million from the current K20 million.The interest rate for SME loans is 13 percent perannum and the same rate applies to USAID CGIloans for agriculture-sector SMEs and ShopOwner loans as well.

Source: Myanmar Business Todayhttps://mmbiztoday.com/ministry-relaxes-sme-lending-rules/

NewspapersMyanmar Business Today

27 Dec 2019


China Quietly Pushing Myanmar to Back Its Development Plan for Irrawaddy River

KUNMING, China—Chinese think tanks based inYunnan have been traveling back and forthbetween Yangon and the Chinese province’scapital, Kunming, since early 2018. But at timestheir itinerary has taken them beyondMyanmar’seconomic hub.They have travelled hundreds of miles conductingfield investigations up and down the IrrawaddyRiver, from the north to the south of Myanmar,with high hopes of turning Myanmar’s lifeline intoa vital trade and logistics link with China.The strategic land and water transport route isexpected to start in Kunming and run throughLongchuan in Yunnan province to Bhamo inKachin State, then to Yangon and the IndianOcean. Developing the 2,161-km route fromKunming to Yangon could cost around 3.3 billionChinese renminbi (700 billion kyats).The Irrawaddy is the country’s most importantwaterway, flowing into the Andaman Sea throughthe Irrawaddy Delta.The plan involves the transport of cargo from theChinese border at Longchuan via theZhangfeng/Lio Je customs gate to the northern

trade hub at Bhamo by road or rail. From Bhamo,cargo and passengers could sail down theIrrawaddy to Mandalay, Yangon and the IndianOcean.The Chinese think tanks want to connectShanghai, the world’s busiest port, to Kunmingand then to divide into two routes: one to ShanState’s Muse via Ruili, and the other to Bhamo viaLongchuan.They have branded the project the “China-Myanmar Irrawaddy Economic Belt”, suggestingBeijing has recognized the area as a key projectfor the development of the China-MyanmarEconomic Corridor (CMEC), which itself is a partof Chinese President Xi Jinping’s ambitious Beltand Road Initiative (BRI). The BRI aims to build anetwork of roads, railways and ports linking atleast 70 countries from China to Africa andEurope.

Source: The Irrawaddyhttps://www.irrawaddy.com/factiva/china-quietly-pushing-myanmar-back-development-plan-irrawaddy-river.html


30 Dec 2019


Legislation seeks to control country’s imports

The Pyidaungsu Hluttaw (Assembly of the Union)announced the passing of the Law to Prevent anIncreased Quantity of Imports on December 24.Under to the new law, the Committee forPreventing an Increased Quantity of Imports willbe formed and led by the Union Minister ofMinistry of Commerce, the lead entity in theenforcement of the law.The government says the main of the new law isto enable the systematic investigation of “seriousinjury to domestic producers or serious threat todomestic producer due to the increase in quantityof any kind of imports into Myanmar, and tosupport the competitiveness of domesticmanufacturers during a certain period”.“Uncontrolled imports can damage domesticproduction. The passing of legislation to managethe quantity of imports is needed to help thecountry’s economic development. The new lawwill be especially helpful for small and mediumenterprises,” said U Aung Thein, chair of theMyanmar Industrial Association (MIA).The law defines an “increased quantity ofimports” as “a quantity of any kind of imports into

Myanmar significantly higher than the amount ofdomestically produced goods that are similar ordirectly competitive”.Remedies under the law include tariffs andrestrictions on import quantities.Before deciding remedies are required, aninvestigating team will work to determine the rateand amount of the increased import, the share ofincreased import in the domestic market, changeof sales situation, change of a productionsituation, change of the productivity and capacity,change of the profit and injury situation, andchange of the employment situation.“The law is an important for the country'sdevelopment and will help to curb unnecessaryimports into the domestic market. This will givedomestic producers the opportunity to fulfilmarket needs and help improve the country’strade balance,” said U Aung Thein.

Source: Myanmar Timeshttps://www.mmtimes.com/news/legislation-seeks-control-countrys-imports.html


01 Jan 2020


Japan offers $5m for refugee resettlement in Myanmar's Kachin

Strategic competition between Tokyo and Beijingmoves into a new realmYANGON -- The Japanese governmentannounced in late December that it will launch anaid program to help internally displaced people ina conflict zone in Myanmar's northern state ofKachin to return home.China has strong influence in northern Myanmar,including Kachin. Countrywide, Japan and Chinaare tussling for diplomatic sway by helping withvarious infrastructure projects. Their rivalry isnow spilling over into Myanmar's sensitiveinternal ethnic conflicts.The Japanese program aims to assist peopledisplaced by Kachin's decadeslong ethnic conflict,and is due to begin in the first half of 2020.The Japanese government, together with thenonprofit Nippon Foundation, will contribute $5million to help 3,000 people return to theirvillages who were forced to flee due to fightingbetween Myanmar troops and the rebel KachinIndependent Army.The aid will be used to build 500 houses, latrines,and to provide agricultural training to raise

farmers' incomes. The Japanese Embassy inYangon posted a statement on its Facebook pagesaying it "hopes that this assistance willcontribute to improving the humanitariansituation in Kachin State and reaching a cease-fireagreement as soon as possible.“Nippon Foundation Chairman Yohei Sasakawa isJapan's special envoy for national reconciliationin Myanmar. The Tokyo-based organization isfunded by revenue from gambling on boat races inJapan. Among other charitable work, it offersassistance to areas overseas affected by conflict.There has been ethnic strife in Kachin since thecountry then known as Burma gainedindependence from Britain in 1948. According tothe United Nations, about 100,000 people fromKachin live in camps for displaced people.

Source: Nikkei Asian Review https://asia.nikkei.com/Politics/International-relations/Japan-offers-5m-for-refugee-resettlement-in-Myanmar-s-Kachin

NewspapersNikkei Asian Review

01 Jan 2020


What’s in Store for Myanmar in 2020 and Beyond?

With Myanmar facing challenges at home andabroad, people around the country celebrated thestart of the new year. Many hope 2020 will bringpeace, prosperity and happiness to the country,but it is not easy to fathom what’s in store forMyanmar this year.The year 2020 should be an eventful one forMyanmar, as the country will hold a generalelection later this year. Myanmar’s last generalelection, held in November 2015, saw theNational League for Democracy swept into powerwith a landslide victory. The election date has notbeen announced yet but many assume it will takeplace in November. Whatever the case, this isgoing to be the second election in “democraticMyanmar” and many hope it will be free and fair,but what political bargaining and horse tradingwill it lead to? We can only speculate.The ruling party, the National League forDemocracy, has no formidable or credibleopposition—but political pundits say its mainenemy lies within.The government’s failure to advance the peaceprocess or revive the sluggish economy, as well as

incompetence in governance and bureaucraticreform are among the many key issues with whichthe opposition and critics have challenged thecurrent administration.Critics see the elected government as illiberal andauthoritarian in nature and several ethnic leadershave been dismayed by the lack of vision andimagination the government has displayed whenit comes to national reconciliation and tacklingthe country’s long-lasting ethnic conflicts.The ruling party has no doubt lost the ethnic allieswho in the past supported the NLD and its leader,State Counselor Daw Aung San Suu Kyi.Voters want 2020 to mark not the start of anothervicious cycle but a new beginning that will bringhope, excitement and a new future to the country.One must admit that ethnic unrest and theimpasse on reform have both worsened duringthe past year, and the government has beenpowerless to solve these issues.

Source: The Irrawaddyhttps://www.irrawaddy.com/opinion/editorial/whats-store-myanmar-2020-beyond.html


04 Jan 2020

PwC | January 2020

3. Weekly Investment News

23

PwC | January 2020

Weekly Key Investment NewsHeadlines

Ministry in talks with companies for solar power generation

LNG plant, terminal to be constructed in Thilawa

Work on US$230 million industrial park in Hlegu expected to start in March

24

YSX firms disclose mixed prospects ahead of foreign participation

Mee Laung Gyaing LNG project to commence construction soon


Ministry in talks with companies for solar power generation

The Ministry of Electricity and Energy has issueda press release saying that it discussed with twocompanies to generate electricity from solarenergy.The two companies are Victory Radiance TradingCo Ltd and Power China Company.Deputy Minister for Electricity and Energyreceived the delegation led by Taryar Myint Swe,managing director of Victory Radiance Trading CoLtd, and Wan Chunlai, director of Power ChinaCo.Both sides discussed measures for adoptingpolicies and technologies related to solar powergeneration, solar power generation in the futurepower supply sector, review of a solar powerstation project to be implemented in AunglanTownship, Magway Region, as proposed by thecompanies and technological experiences.The meeting was also attended by departmentalheads from the ministry and company officials.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/ministry-in-talks-with-companies-for-solar-power-generation

NewspapersEleven Myanmar

24 Dec 2019


LNG plant, terminal to be constructed in Thilawa

A consortium of Myanmar and Japanesecompanies will construct an electricity generationplant and liquefied natural gas (LNG) terminal atthe Thilawa Special Economic Zone, said U HanThaw Zay, Executive Director of MyanmarAgribusiness Public Corporation (MAPCO), one ofthe firms involved in the investment.The LNG-fuelled plant will have the capacity togenerate 1250 megawatts of electricity, while theLNG terminal is expected to facilitate theproduction of electricity on floating units. Theterminal will be built on space previouslyearmarked for warehouses and the trading ofcrops.The LNG used will be purchased and importedfrom Singapore, Malaysia and Indonesia.The Myanmar companies involved includeMAPCO, Eden Group, Myanmar Edible OilIndustrial Public Corporation Limited andMyanmar Agriculture and General DevelopmentPublic Limited. The firms will work withMarubeni, Sumitomo and Mitsui from the Japanside to jointly implement the $2 billion projects.U Han Thaw Zay said the projects will commence

after a Notice to Proceed is signed next year.Construction is expected begin in March 2020and take 30 months to complete.The projects will be implemented under a 25-yearBuild, Operate and Transfer system.

Source: Myanmar Timeshttps://www.mmtimes.com/news/lng-plant-terminal-be-constructed-thilawa.html


30 Dec 2019


Work on US$230 million industrial park in Hleguexpected to start in March

Work on the US$230 million (K338.7 billion)Singapore-Myanmar Hlegu Industrial Parkproject is set to begin in March 2020, one of theinvestors in the project has announced.The agreement for the project, set to cover some598 hectares in Hlegu township, Yangon, wassigned between Sembcrop CSSD Myanmar Co, thelocal arm of Singaporean conglomerateSembcorp, and local partners City Mart HoldingCo Ltd (CMHL), and Myanmar AgribusinessPublic Corp (MAPCO) in July this year.The project is now awaiting formal approval fromthe Myanmar Investment Commission, said UHan Thaw Zay, executive director of MAPCO.“We are waiting for the permit from MIC and wehope to receive it in January so that we can breakground for the project in March,” U Han ThawZay said.He added that Sembcorp will hold a 67 percentstake in the project while City Mart Holding andMAPCO will hold 18pc and 15pc, respectively.The Hlegu Industrial Park project will includegeneral factories, food factories, warehouses, andthe necessary infrastructure such as roads and

electricity, said U Han Thaw Zay.The project, which was approved by the YangonRegion Assembly, is being built on land providedby the regional government and will focus onfood-based industries.Once completed the industrial park will feature anaccess road to Thilawa Port via the Yangon-Mandalay Road so that goods from the park caneasily be exported and also reach parts of upperMyanmar.The creation of the industrial park city willcontribute to the development of Yangon Regionand create job opportunities for those living inHlegu township, said U Han Thaw Zay.

Source: Myanmar Timeshttps://www.mmtimes.com/news/work-us230-million-industrial-park-hlegu-expected-start-march.html


31 Dec 2019


YSX firms disclose mixed prospects ahead of foreign participation

Companies listed on the Yangon Stock Exchange(YSX) announced mixed prospects for 2020, theyear Myanmar is set to allow direct foreignownership of equities listed on the bourse. TheSecurities and Exchange Commission of Myanmarannounced last July that non-Myanmarindividuals and locally-registered entities wouldbe allowed to invest in listed shares of up to 35percent.Analysts expect the move to spark interest mostlyfrom Yangon-based retail investors, with this tobe followed by institutional investors when thebourse has more listings and a broader array ofsectors represented by its listed equities. Noofficial timeline was given but analysts expectsuch trading to begin in the first half of this year.Currently, there are six companies listed on theYSX with a combined market value over K620billion. Of the companies that releasedperformance announcements this week, FirstMyanmar Investment (FMI), which is controlledby tycoon Serge Pun, was the most bullish.For the year ended September 30, 2019, FMIannounced revenues totaling K168.4 billion, an

increase of 29 percent compared to the previoustransition period between April 1 and September30, 2018. However, higher costs resulted in a27pc dip in earnings to K7 billion for the period.The main revenue driver was financial services,led by higher interest income earned from digitalcredit, mortgages, microfinance and overdrafts.Though still representing a small portion of totalrevenue, Pun Hlaing Siloam Hospital grew themost during the year, with demand for hospitalservices and equipment rentals on the rise. Overthe next three years, FMI will construct a total often hospitals across the country.FMI said it will continue to invest in its corebusinesses, namely financial services, real estate,healthcare and tourism.

Source: Myanmar Timeshttps://www.mmtimes.com/news/ysx-firms-disclose-mixed-prospects-ahead-foreign-participation.html


02 Jan 2020


Mee Laung Gyaing LNG project to commence construction soon

Construction of a power generation project in MeeLaung Gyaing, Ayeyarwady Region will take placeafter a power purchase agreement is signedwithin the first three months of the year.Zhefu Holding Group of China and local firmSupreme Trading Co will invest US$2.57 billion tobuild the plant. It will be powered by liquefiednatural gas (LNG) and produce up to 1390megawatts of energy when it is complete.The project will include berths for gas carriers todock at the Mee Laung Gyaing area, which is 40miles to the north of Chaung Tha beach. It will betransferred back to the government under a 30-year build, operate and transfer system.Negotiations are concluding and the PPA isexpected to be signed during the first quarter of2020, said U Htoo Htoo Aung, deputy CEO ofSupreme Trading Co.Although the shareholding structure is not fixed,Zhefu Holding Group will be the mainshareholder. Supreme Trading Co will own one-fifth of the shares.Feasibility studies are currently taking place atMee Laung Gyaing, including the necessary

environment and social impact assessments,while soil and water conditions are being testednear the area where the jetty will be constructed.Local farmers have also been compensated lastOctober, U Htoo Htoo Aung said.The project is also among the biggest electricityprojects in the country and will be able to provideenough energy to power industrial zones, hotels,beaches and cities in Ayeyarwady as well as fulfillYangon’s power demand.Around 35 percent of the power produced at MeeLaung Gyaing is earmarked for distribution inAyeyarwady Region, while the remaining energygenerated will be transferred to Yangon via thenational grid. Supreme Trading Co will build thepower lines needed to distribute the energy.The entire project is expected to take four years tocomplete. It will be able to start producing 500MW by the end of 2022 and 900 MW a year ortwo later.Source: Myanmar Timeshttps://www.mmtimes.com/news/mee-laung-gyaing-lng-project-commence-construction-soon.html


03 Jan 2020

PwC | January 2020

3. Weekly New Tenders

30

PwC | January 2020

No applicable Tenders announced for the week ending 03 Jan 2020

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/ .

31

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 | January 2020

WB: Climate Smart Agriculture (CSA) Market Study Report, Closing date: 16 Jan 2020

Tenders (Multilateral organizations) List

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

32

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/

PwC | January 2020

4. MIC Permitted Projects

33

PwC | January 2020

MIC Permitted Projects (Meeting 20, 2019)

34

No. Name of Company Type of Investment Form of Investment

1Sun City Bago Industrial Land Development Ltd.

Construction and leasing service of factories and office buildings

Joint Venture

2 MCM Power Co., Ltd. (Permit) Generation of 40 MW electricity from gasengine, supply and sale of electricity on IPP(BOT) Basis

Joint Venture

Source: DICA

PwC | January 2020

5. Upcoming Events

35

PwC | January 2020

Upcoming Events (January 2020) List

Date Location Name of Event Sector Price Focus Points

13-17 Jan YangonMMIX & MMNOG Forum

IT andTechnology

TBC

“MMIX & MMNOG Forum will bringtogether internet business leaders, internetexperts and networking engineers,networking professionals, technicalcommunities, government representatives,network operators, content providers, andetc. This event will provide greatopportunities for peering, interconnectionand advanced technical knowledge, learnfrom workshops and tutorials, attendtechnical presentations, update each otheron their work, share news and updates, andetc.”

29-30 Jan Yangon

International Conference on Economics and Finance Research (ICEFR)

Banking & Finance

TBC

“International Conference on Economics andFinance Research is a prestigious eventorganized with a motivation to provide anexcellent international platform for theacademicians, researchers, engineers,industrial participants and budding studentsaround the world to share their researchfindings with the global experts.”

36

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 | January 2020

Upcoming Events (February 2020) List


18-19 Feb Yangon

Mobile Money & Financial Inclusion Summit

Banking & Finance

TBC

"A Special Focus on Myanmar plus EmergingOpportunities from the regional DigitalTransformation.Mobile Money & Financial Inclusion Summitis the cornerstone platform for allstakeholders in the evolving digital financemarketplace to address opportunities andfundamental challenges including:Government and Industry Collaborations,Inclusive Interoperability; EmergingInnovative Payment Platforms; Building aLiquid and Expansive Agent Network;Growth Markets; etc.”

37




PwC | January 2020

Upcoming Events (February 2020) List (cont’d)


26-28 Feb Yangon

International Conference on Future Computer and Communication

IT andTechnology

TBC

“Following the success of 2019, 2020 The12th International Conference on FutureComputer and Communication (ICFCC2020) is to be held conjunction with the 18thICCA 2020 once again in Yangon (Rangoon),Myanmar (Burma) during February 26-28,2020, which is organized by SCIence andEngineering Institute, USA, co-organized byUniversity of Computer Studies, Yangonunder Ministry of Education, Yangon(Rangoon), Myanmar (Burma), andtechnically supported by Nagoya Institute ofTechnology, Japan and OKAYAMAUniversity, Japan.”

27-28 Feb YangonInternational Conference on Computer Applications

IT and Technology

TBC

“International Conference on ComputerApplications will bring together leadingengineers and scientists in computer andinformation technology from around theworld. The conference offers an excellentopportunity to learn and share the latestdevelopments to interact with leadingexperts in the field.”

38




PwC | January 2020

Upcoming Events (February 2020) List (cont’d)


28-29 Feb Yangon

International Conference on Management, Economics & Social Science (ICMESS)

Education & Training

TBC

“International Conference on Management,Economics & Social Science will provide anexcellent international forum for sharingknowledge and a result in Management,Economics & Social Science. The aim of theConference is to provide a platform to theresearchers and practitioners from bothacademia as well as industry to meet theshare cutting-edge development in the field.”

39




© 2020 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]

40

pwc myanmar weekly business …...should watch out for in year 2020: tourism to improve the industry...

Documents