Category Archives: Finance

Report Details Controversial Purchases of Myanmar’s Military

Myanmar Army personnel receive a Thai delegation to the capital Naypyidaw in October 2010.

Some of the army’s purchases could well be in violation of a European arms embargo.

Myanmar’s military continues to attempt to acquire European-made equipment in apparent violation of European Union sanctions and embargoes, according to a new report.

An investigation by the Organized Crime and Corruption Reporting Project (OCCRP), published on December 8, reveals that the Tatmadaw, as the country’s military is known, has recently sought to procure equipment made by European companies, as well as Airbus planes from Jordan’s air force.

The report by Jared Ferrie and Timothy McLaughlin, based on leaked military budget documents obtained by Justice For Myanmar, a local activist group, notes that many of these attempted purchases have come since the military’s began to escalate its attacks on the Muslim Rohingya in Rakhine State in 2016. The following August, the army launched a massive “clearance operation” in which it torched villages, shot civilians, and drove more than 700,000 people over the border into Bangladesh.

These violent attacks led the European Union to extend a long-standing arms embargo against Myanmar in 2018. The embargo also prohibits the sale of “dual use” products, which have both civilian and military applications, and restricts the export of any equipment for “monitoring communications.”

The OCCPR report cites arms data from EU reports showing that British companies exported equipment to Myanmar in 2017, while Spanish firms did so in 2015. The purchases are described in such broad terms that it is unclear whether or not they violate EU sanctions, but the leaked budget documents reveal further intended purchases that would likely do so.

Separate documents obtained by Justice For Myanmar show that a Myanmar company, run by a British passport-holder and former airline executive, is facilitating the Tatmadaw’s purchase of two Airbus CASA C295 military transport planes from the Jordanian Air Force. Under the terms of the proposed $38.6 million deal, which is set to be closed this year, the Myanmar company – Aero Sofi Co. Ltd. – will also offers training for pilots at an Airbus facility in Spain.

While mostly used for transport, the CASA C295 aircraft can also be outfitted to deploy paratroopers or serve as a gunships. In a statement released to coincide with the OCCPR’s report, Justice Myanmar claimed that the deal “could cause immense harm to ethnic communities and inflame the brutal civil war raging in Arakan, Kachin, and Shan States.”

While Jordan does not have sanctions against Myanmar, the alleged deal offers an interesting insight into how the Tatmadaw veils its military purchases via the use of intermediaries. It also jars with the publicly stated views of Jordon’s Queen Rania, who has publicly denounced the Myanmar military’s “unimaginable acts of violence” in Rakhine State. “Children have been orphaned, women brutalized, family members butchered, villages burned to the ground,” she said during a visit to a refugee camp in Cox’s Bazar, Bangladesh. “This is something that is unacceptable.”ADVERTISEMENT

In addition to these reported acquisitions, OCCPR details a list of miscellaneous Tatmadaw purchases – everything from ammunition and sewing machines to German-made communications software – that may violate the EU’s ban on the export of “dual use” items. The budget documents cite products made by companies in other parts of the world, including radio equipment from Australia, television broadcast equipment from Canada, and bulldozers from the United States.

The report provides further evidence of the military’s continuing centrality to Myanmar’s political economy, nearly a decade after it relinquished its formal hold on power. During the previous half-century of direct military rule, the Tatmadaw succeeded in insinuating itself into the every sector of the country’s economy, from beer to mining.

A recent United Nations investigation into the Tatmadaw’s two large military-owned conglomerates – Myanmar Economic Holdings Limited (MEHL) and the Myanmar Economic Corporation – found that they had 120 subsidiaries – and that was just what the authors of the report could confirm.

The military also retains a privileged perch in Myanmar’s political system, care of the constitution that it forced through a bogus referendum in 2008. This ropes off a quarter of the seats in parliament for military-appointed candidates, giving the Tatmadaw a de facto veto over any constitutional amendments, as well as control of three crucial national security-related ministries. As a result, the government led by State Counselor Aung San Suu Kyi and the National League for Democracy, which won a thundering re-election in polls last month, has been unable to exercise civilian control over the army.

The military’s economic predominance has given it myriad ways of acquiring weapons and other goods through a complex network of intermediaries, which are beholden neither to Myanmar’s civilian government nor the nations that maintain arms embargoes against the country. Another example cited by OCCPR is the case of a helicopter drone acquired from the Austrian firm Schiebel, which the company claims to have sold to an unnamed buyer for the purposes of “monitoring and mapping in mining and road construction.” In 2018, the device later surfaced in videos produced by Myanmar’s navy.

As the authors write, “The Tatmadaw’s broad economic influence, and the difficulty of navigating Myanmar’s bureaucracy, means foreign firms can find themselves dealing with military-linked companies even after conducting due diligence checks.” The report shows how imposing sanctions is easy enough, but enforcing them requires constant vigilance.


Mitsubishi Corp. wins $663m train car contract in Myanmar

Japanese trading house Mitsubishi Corp. will deliver new train cars that will shorten journeys on the Yangon Circular Railway and between Yangon and Mandalay. (Photo courtesy of the company)

Japan firm to deliver 246 cars for Yangon Circular and Mandalay routes

Mitsubishi Corp. has signed two contracts with Myanmar’s state-run railway, Myanma Railways, to deliver new rolling stock, the Japanese trading house said Tuesday.

The total cost of the two projects is approximately 69 billion yen ($663 million), which will be covered by an international yen loan agreement between the governments of Japan and Myanmar. The projects are part of the Japanese government’s railway infrastructure export drive.

Mitsubishi will deliver 66 cars for the Yangon Circular Railway, which runs in a loop in Myanmar’s largest city, and 180 cars for the Yangon-Mandalay Railway, which connects Yangon, Naypyitaw and Mandalay.

The new cars will shorten travel time on the 46-km Yangon Circular Railway from about 170 minutes to 110 minutes, and on the 620-km Yangon-Mandalay Railway from about 15 hours to around eight hours.

Construcciones y Auxiliar de Ferrocarriles, Spain’s leading rail car manufacturer, better known as CAF, will manufacture the train cars using Japanese equipment for part of its electrical systems and deliver the cars from 2023 to 2025.

Myanmar has been overhauling its national rail system, neglected during decades of military rule, starting with two major arteries pivotal to economic revitalization.

Work started in February 2018 to upgrade the Yangon Circular Railway. In addition to cutting travel time, the overhaul aims to boost service frequency by 40%.

The project has fueled development along the line in anticipation of a jump in commuters.

The redevelopment will extend to government-owned tracts surrounding Yangon Central Railway Station, the main stop on the loop. Along with a new domed transport hub next to the existing station, the site will house high-rise office buildings and shopping spaces. 

The country also envisions establishing urban subcenters along the Yangon Circular Railway. 

Meanwhile the improvement of the 60-year-old line between Yangon and Mandalay, the country’s second-largest city, would be a boon to the northern Mandalay region, home to the country’s main producers of agricultural products and natural resources. The line also runs through Myanmar’s capital, Naypyitaw.


Japan: Cancel Financial Grant to Myanmar Police

Myanmar border guard police officers walk along a path in Tin May village in northern Rakhine State, Myanmar, July 14, 2017. © 2017 AP Photo

End Assistance to All Military-Controlled Entities

(Tokyo) – The Japanese government should immediately cancel plans to donate money to purchase vehicles and communications equipment for the Myanmar police force, Human Rights Watch said today. The police force, which operates under the auspices of the military, outside the control of the civilian government, has a well-documented record of serious human rights violations.

On July 2, 2020, Japan’s Foreign Ministry announced a grant of 100 million yen (US$930,000) to the Myanmar police for the purpose of purchasing vehicles and wireless equipment for “protecting dignitaries.” The Foreign Ministry claimed the donations would “strengthen the Myanmar police’s ability to carry out public security measures,” create “social stability,” and contribute to Myanmar’s “socio-economic development.”

“It’s inexplicable that the Japanese government would try to curry favor with Myanmar’s abusive security apparatus by providing financial assistance to the police,” said Brad Adams, Asia director. “Instead of supporting Myanmar’s police, Japan should be helping the victims of rights abuses and ethnic cleansing by working with other donor governments to hold the security forces accountable.”

Myanmar’s police acted as a pillar of repression during Myanmar’s 50 years of military rule, arbitrarily arresting dissidents and student activists, engaging in widespread torture, and creating a climate of fear in the country, Human Rights Watch said. The police remain abusive and unconstrained, in large part because the military-drafted constitution maintains military control of the police. The police operate under the authority of the Home Ministry, which is led by a minister who the constitution mandates must be a serving military officer, and operates under the de facto control of the military.

In recent years, the police have engaged in joint operations with the military, carrying out atrocities, including crimes against humanity, against ethnic Rohingya in Rakhine State in 2012, 2016, and 2017. The Myanmar police force, Border Guard Police, and security police battalions accompanied the military in so-called clearance operations that resulted in mass killings, rape, and arson. Police involvement was documented during the deadliest incidents in August and September 2017, including the massacres at Tula Toli and Gu Dar Pyin, where hundreds of Rohingya were killed.

Police took part in widespread rape, including gang rape, of Rohingya women and girls, as well as killing children while their mothers were being attacked. A woman from Zay Di Pyin, Rathedaung Township told the United Nations-backed Fact-Finding Mission on Myanmar: “I don’t know how many policemen raped me, it was not my priority. The only thing I can remember is that they were trying to take my children. They dragged my son from under the bed. I was screaming to protect my children. I have not seen my son again.” In several villages, security forces abducted women and girls and took them to police and military compounds where they were gang raped.

In Rakhine State, the Myanmar police operate the majority of checkpoints, which play a central role in the severe violation of Rohingya freedom of movement in the state. Police enforce an extensive system of extortion, as well as physical harassment at checkpoints, that sustains the Rohingya’s arbitrary confinement to villages and detention camps. Human Rights Watch and other groups have documented torture by police, including the Border Guard Police, against Rohingya who have been arbitrarily detained.

Myanmar police have responded to criticism and protests with arbitrary arrests and excessive and unnecessary force. In 2017, a Reuters investigation into the massacre of 10 Rohingya in Inn Din village prompted Myanmar police to entrap and arrest 2 of the news agency’s reporters. Security police officers told Reuters they took part in raids in the village on orders from the military.

In January 2018, police shot and killed seven ethnic Rakhine protesters among a crowd that had converged at a local government building in Mrauk U after authorities shut down an event.

The police have also been implicated in excessive use of force elsewhere in the country. In April 2020, a video showed police beating a man in Mandalay for violating curfew orders during the Covid-19 pandemic. In February 2019, police fired rubber bullets and a water cannon at ethnic Karenni youth protesting the installation of a statue honoring Myanmar’s independence leader, General Aung San. At least 20 protesters were injured as they attempted to move beyond police barricades.

In response to Human Rights Watch’s inquiry of whether the Japanese government has conducted human rights due diligence to make sure that the aid won’t be used for further human rights violations, the Japanese Foreign Ministry said it has “confirmed with the Myanmar government that this aid be used and maintained for said purposes in an appropriate, effective, and exclusionary manner.” The Foreign Ministry also stated Japan’s embassy in Myanmar will monitor whether the equipment is being used appropriately.

The Japanese government should suspend all aid to the Myanmar police until systematic reforms are carried out and the police are put under civilian control. Japan should also halt aid to all military-controlled entities and ministries, including the Home Ministry.

“The Japanese government should realize that giving shiny new equipment to Myanmar’s police won’t make them less abusive,” Adams said. “By conferring undeserved legitimacy on the Myanmar police, they are signaling to Myanmar’s people that their suffering is of little concern.”


Afghanistan and Myanmar drown in China’s loans; Afghanistan rejects loan

China’s embarrassment Photograph:( AFP )

Coronavirus may not have been the only virus that China is responsible for. Carried through its Belt and Road Initiative (BRI), China has successfully spread the virus of debt too.

Touted as the greatest plan in modern history to revive global trade, the BRI has been the biggest vehicle for China’s chequebook diplomacy.

The loans have crippled many poor economies and now, some of them are waking up to this fact — for instance Afghanista and Myanmar.. 

China claims to have signed agreements with 138 countries. Estimates say the BRI projects will cost over a trillion dollars.

China is running this lending operation for access and power.

While many countries are already drowning in Chinese debt without realizing it, Afghanistan and Myanmar have taken the first step by rejecting Chinese loans.

China’s renewed push in Afghanistan is a curious case. At first, China wanted nothing to do with this country as ridden by violence, it made no business sense.

However, Beijing sensed an opportunity as soon as Trump said he wanted to exit Afghanistan. Ever since, China has been trying to take CPEC into Afghanistan.

But Kabul sees the pitfalls. Afghanistan’s national debt stand at over 1.3 billion dollars, and China wants to give more loans to Kabul. President Ashraf Ghani has declined the loan.

In Myanmar, the auditor general has cautioned the government against Chinese loans.

Myanmar is already busy paying back loans taken during decades of misgovernance under the military junta. But, Myanmar is firmly in China’s grip. So, saying no to chinese loans won’t be easy…

China is Myanmar’s largest lender, and its biggest trading partner.

Myanmar’s current national debt stands at 10 billion dollars — 40 percent of this debt is already owed to China.

From 1988 to 2010, China gave out massive loans to Myanmar. These loans have been coming due since 2018, and Myanmar is paying back around 500 million dollars per year, including principal and four percent interest rate.

This is a classic example of China’s preadatory lending.

The auditor general has pointed out that loans from China come at higher interest rates compared to loans from financial institutions like the world bank or the IMF. He said, “I would like to remind government ministries to be more restrained in using Chinese loans.”

However, will the government listen?

In January, Chinese President Xi Jinping and Myanmar leader Aung San Suu Kyi agreed to speed up projects under the BRI. This resulted in 33 agreements, from mega power projects to railways.

Myanmar has already suffered once, it must not repeat the mistake again.

China’s gameplan

Chinese financial institutions lend money for BRI projects. Construction contracts are awarded to mostly Chinese firms.

A Chinese company receives much of the proceeds of the loan and then projects tend to suffer delays or cancellations. There are corruption concerns, and the host country ends up with a massive pile of debt.

Edited By:  Palki Sharma


Myanmar Factories Face ‘Irreversible’ Harm If Shutdown Extended

Shirts sit at a textile embroidery machine at a factory in Yangon, Myanmar in 2018.  Photographer: Taylor Weidman/Bloomberg

The majority of Myanmar’s 60,000 registered factories face “irreversible damage” if shutdown measures prompted by the Covid-19 pandemic are extended beyond May 15, according to the head of the nation’s largest manufacturing trade group.

“Many factories in Myanmar have been unproductive since early April and they may collapse if they are not able to operate after May 15,” Aung Thein, president of the Myanmar Industries Association, said in a telephone interview Friday.

He was responding to speculation that the government is mulling an extension to lockdown, stay-at-home and business-closure measures. Myanmar had 176 confirmed cases of the coronavirus and six deaths as of Friday morning.

Myanmar’s de facto leader Aung San Suu Kyi said at a panel later on Friday that she is concerned about the potential for an outbreak among laborers similar to what happened in Singapore.

“Some factories have hundreds of workers so it will become a very big problem if one of them gets infected,” Suu Kyi said, adding that Myanmar doesn’t have the resources to deal with an outbreak similar to Singapore’s.

But the trade-group president business leaders and other stakeholders should be consulted by the government before anything is finalized.

“If we remain unproductive for three months, then many factories may completely shut down and no one can heal this economy,” Aung Thein said.

By Khine Lin Kyaw



India’s Exim Bank under its Market Outreach Programme has evinced interest to invest in the healthcare sector of Myanmar. Post its liberalisation, interest from the global sphere in Myanmar’s investment landscape has revitalised, making the country more engaged and interested in the buzzing economic prospects offered by the word outside.

To fiscally benefit and support Myanmar’s health segment, a delegation from India’s Exim bank reached Myanmar early February as part of the bank’s Market Outreach Programme. This programme was undertaken to help the people of Myanmar receive better medical facilities in their own country. India has been well equipped in treating health problems owing to its advanced medical expertise and knowledge. This arrangement aims to provide affordable and efficient medical attention to the ailing people of Myanmar and prevent the urgency to travel to countries abroad for an expensive medical treatment leading to outflow of foreign capital from the reserves of the country.

Along with it, the opportunity to finance Indian investment in Myanmar was reckoned tantamount to Government of India’s Act East Policy. The delegation, on studying various sectors in the region perceived healthcare domain as the most significant segment in need of private sector investments. The Market Outreach Programme was carried out by the Exim Bank at Hotel Sule Shangrila, in association with the Ministry of Commerce and Industry.

The delegation to Myanmar was led by the Deputy Managing Director of Exim Bank of India Mr. Debashish Mallick. Members from Indian private sector hospitals, medical equipment and devices manufacturers, pathology labs, and hospital management companies were part of the delegation.

South Korea to swell financing service in Myanmar

To escalate the financial service, particularly, with the drive to boost the farming equipment business in Myanmar, South Korean financial firm: Nong Hyup Financial Group is all set to help this South Asian country in achieving the same. It intends to move ahead by roping in its subsidiary- Nong Hyup Finance Myanmar, established in 2016. Also, a joint task force has been formed to aid in business planning; dedicated to the purpose of distributing farming equipment in Myanmar.

With the initial capital of $3 million, the subsidiary- Nong Hyup Finance Myanmar, managed an elevation in its capital generation; about $8 million. The Korean financial group intends to swell the subsidiary’s business prospects by aiming to enhance its customer pool; from 28,000 to 50,000 by supplementing more outlets to its present base of nine branches.

The project is slated to activate its operations in the month of July with Myanmar’s HTOO Group and the Nong Hyup Group of South Korea —  both the financial groups being the major business frontiers of their respective countries. The groups plan to provide their expertise and explore additional areas of cooperation, extending to banking and insurance.

With more than 20 affiliates in the domain of agriculture, aviation, food, construction and distribution, Myanmar’s HTOO Group business ventures are massive, and the aforementioned South Korean financial institution is an essential part of the National Agricultural Cooperative Federation.

World Bank appoints Ellen Goldstein as the new director of Myanmar, Cambodia and LAO PDR.

Miss Ellen Goldstein

Miss Ellen Goldstein has been appointed as the new director of Myanmar, Cambodia and Lao PDR by the World Bank. Miss Goldstein’s efforts in promoting peace, prosperity and ending extreme poverty would require her to foster partnerships and deepen relationships with client countries while strengthening economic reforms, to fulfill the roles and responsibilities of her position.

Miss Goldstein is a dual Master degree holder in International Economics and Development Studies from Princeton University, and in International Health and Population Dynamics from John Hopkin’s University.

She has held several meritorious positions prior to this recent appointment. These include – Director for the Western Balkans and Central Asia Region, Director for Bangladesh and Nepal. She has been associated with the World Bank for more than 30 years and has discharged key responsibilities.

Map of Myanmar

With Myanmar liberalizing its economy, welcoming global resources and aggressively connecting with global networks, the World Bank, in placing a Director in Yangon for the first time, has exhibited its deep, engaging interest in Myanmar’s transition to a market-oriented economy.

Miss Goldstein remarked, “I am honored to have been appointed to represent the World Bank in Myanmar, Cambodia and Lao PDR, and look forward to better understanding their unique histories and development paths.”
“Most recently, Myanmar, Cambodia and Lao PDR have seen the fastest economic growth in East Asia. Through our partnership strategy in each country, the World Bank will continue to support inclusive growth that benefits the poor,” stated Miss Goldstein.

With the US $ 2.17 committed by the World Bank in supporting more than 40 active projects in these countries, the World Bank’s inclusive growth mission to benefit the impoverished by providing access to health, nutrition and education facilities, is an integral part of these projects.

Worlds Bank Extends Aid to Myanmar by Two Years

The World Bank

Steadfast in its quest to mitigate poverty, unemployment, and to let the business climate of Myanmar keep buzzing with further opportunities, developments and investments, the World Bank has pushed the time frame of its Aid-Programme by two years to 2019, from the initially frozen 2017.

The Senior Economic Advisor of World Bank, Mr. Sjamsu Rahadja stated, “Since 2015, we have provided $3 billion in aid to Myanmar. We have made the commitment to provide aid for two more years after the agreement with State Counsellor and the Ministry of Finance and Planning.”

Driven by its primary goal of alleviating poverty, generating job opportunities and enhancing human capacity, the World Bank’s activities for the extended period involve – developing irrigated farmland spanning 10,000 hectares, electricity access to more than 3 million people and building bridges for connectivity in rural areas. In addition to this, scholarship programmes, preparing Extractive Industries Transparency Initiative Report for Oil, Mining and Gas Sectors, are also on the World Bank’s task-list aimed for 2019.

The Public Relations Officer of World Bank Myanmar, Mr. U Kya Soe Lin stated, “To be successful or unsuccessful, the project depends on the public, the beneficiary of the project. By receiving feedback from the public, we will keep working on the project and know what to make our priorities.”

The World Bank’s list of activities also includes disbursal of loan worth $500 million to private sector corporates.

Bangladesh hopes speedier implementation of India-Aided Projects

Mr. AbulMaal A. Muhith
Bangladesh’s Finance Minister Mr. AbulMaal A. Muhith

Bangladesh is hopeful that the Indiaassisted developmental projects in the country will be implemented quickly. “The hope has risen after the Indian Government announced a fresh US $4.5 billion aid package”, stated Mr. AbulMaal A. Muhith who is the Finance Minister of Bangladesh.

IFM Arun Jaitley
Indian Finance Minister Mr. Arun Jaitley

The announcement for this line of concessional credit was announced by India’s Prime Minister Mr. Narendra Modi during Bangladesh’s Prime Minister Ms. Sheikh Hasina’s visit to India in April 2017. India previously promised financial aid of US $1.5 billion and adding this new amount it takes the total to US $6 billion. Mr. Muhit said that the implementation of projects under the previous assistance package took longer than expected but he hopes that this time these projects will be implemented quickly.

The bilateral aid package and projects associated with it were discussed in a bilateral meeting with visiting Indian Finance Minister Mr. Arun Jaitley. This meeting was led by Mr. Muhith and various important issues and topics were discussed in detail. Mr. Muhit said that Bangladesh getting a US $6 billion credit line from India is quite a remarkable event. He further stated that even though the financial aid from China is much more and amounts to US $ 22 billion but Indian projects are time oriented and implemented quickly while there is no such timeline for Chinese aid. He also expressed his happiness at seeing that Indian private sector investment is now flowing into Bangladesh.