Category Archives: Volume 01

A Balanced Road to Development

Photo: Catherine Cussagnet / Huff Post
Photo: Catherine Cussagnet / Huff Post

With economic growth and capitalisation being the worldwide focus today, the current model of economic development forces us to make a choice between progress and sustaining natural resources. Naturenomics relates to capital formation for a region or organisation through the creation of ecologically ‘compliant’ assets in a sustainable manner.

Current mainstream industrial agricultural practices around the world are destructive, destroying forests, topsoil and polluting the air and water. Myanmar, though, is dedicated to bring about a change by embracing development keeping a keen eye on sustainability. Its varied ecosystems and different elevations from sea level to high mountainous region, with an elevation of near 6,000 meters make the nation rich in biodiversity. With extensive natural resource endowments, increasing foreign direct investment and a central location in Asia, Myanmar is poised to experience substantial economic development gains in the coming years. Myanmar can indeed take the lead in carbon neutrality in its progress mapping, so as to ensure bio-diversity, and proper utilisation and conservation of waste, water and air.

Photo: www.carnegieendowment.org
Photo: www.carnegieendowment.org

A Naturenomics-based economy primarily attempts to secure 4 key natural assets – food, water, energy and environment.

The industries that will thrive in this new model will be the ones the emphasise recycling and reuse rather than extractions along with using renewable energy source rather than fossil-based fuels. Increasing energy and material efficiency in productions processes, reducing wastes from production and promoting recycling, promoting use of new and renewable sources of energy, using environmentally sound technologies for sustainable production, reducing wasteful consumption and increasing awareness for sustainable consumption are set down.

Hence this means deriving our food and water needs through effective land and water resource management and not by exploiting these resources, by satisfying our energy needs through hydrogen and solar-based fuels rather than carbon based fuels, and satisfying our ever-increasing appetite for materials by increasing reuse and recycling and not by increasing extraction. UN Secretary-General Ban Ki-moon stressed that sustainable development is intricately linked to happiness and wellbeing. Myanmar’s Gross National Happiness (GNH) attempts to measure the value of the nation’s natural, human, social, and cultural wealth rather than only its manufactured and financial capital. The term originated in the 1970s, when the Himalayan kingdom introduced the new measurement of national prosperity, focusing on people’s well being rather than economic productivity. Myanmar balances the material and non-material aspects of wellbeing and the central challenges of the 21st century: achieving sustainable human development.

Myanmar Connect

The opportunities in Myanmar are tremendous but it is only with the right approach that one can succeed. the core mantra is the selection of the right business module.

  • The basic proposal should be kept “low cost” to fund up-gradation programmes.
  • Technology should be kept simple for the world at large to understand.
  • A few business models that can be introduced include IT outsourcing, enterprise level software development for back office, hotels, factories and health institutes.
  • The other fields where there is a scope of opportunity include mining, oil exploration, hydro power, inbound tourism and IT education.
  • Other core areas include smart phone applications, scanning inventory management and improvement in the connectivity sector.
  • Knowledge corridor: Education, in terms of both technical and business management is also a key potential sector to explore with students preferring to study abroad.

Financial Aspects:

  • US financial sanctions have been suspended for one year.
  • The direct transfer of funds, for business purposes, to Myanmar is now possible.
  • Indian Banks initially could only transfer funds for business transactions to Myanmar via Singapore and not directly. However, with the lifting of sanctions on 4 Banks, funds can now be sent directly to Myanmar.
  • MICB, (Myanmar Investment and Commercial Bank) continues to deal with Indian Banks for direct remittance from India.
  • With Myanmar moving towards positive reforms, growing foreign trade and businesses will further strengthen the nation’s economy and progress.

With rising interest in the country’s economy, Indian organisations can now look at being a part of Myanmar’s growing fiscal development by providing their expertise on areas sic as facilitation, incubation and legal tax compliance and advisory services for enterprises planning to enter the business space in the country.

Fast track registration can be executed in 3 to 4 weeks from DICA (Department of Investment and Company Administration).

This will enable Indian companies to provide ‘start-up’ facilitation services for smooth entry of enterprises to establish themselves in Myanmar.

Indian companies will provide insight into all legal, banking and other necessary mandates for the new company to independently handle the formalities on its own.

Assistance in terms of offering necessary back-end support such as setting up of virtual offices can be provided for the enterprise to establish a firm foothold in the business scenario.

Myanmar, with its business friendly policies, provides the ideal corridors for foreign companies to exponentially grow.

These polices along with the support of Indian companies, would further generate growing interest for Indian enterprises to venture into Myanmar’s market.

The minimum capital requirement amounts to $50,000, of which 50% is payable as a first instalment, immediately after the registration has been obtained.

The tax implication on a local company is 25% whereas a non-resident company has to pay 35%.

Under special Myanmar Foreign Investment Law and Economic Zone Rules, repatriation of profits and capital are allowed after paying tax. Areas such as Manufacturing, Infrastructure, Power Plants and Aviation will be allowed, although the process deems to be lengthy.

Separate registrations are required for each vertical of any business.

Service related activities are allowed if the company is set up as a service company.

Similarly, the license for Manpower services has to be separately obtained from the Ministry of Labour, etc.

With Myanmar’s growing economic progress through foreign investments, the manpower cost is quite reasonable However, the rent for the office and accommodation has sky rocketed. Such high rentals are dissuading some foreign companies from starting operations and rethinking on investments.

Indian enterprises can benefit by playing a major role in providing their support of facilitation of foreign ventures to successfully establish their businesses in Myanmar.

Upcoming Events & Conferences

New Road to Mandalay:
The promise and challenges of a new relationship
When: Friday, May 10, 2013 5:00 PM – 6:30 PM
Where : iLEAD Institute, 113/C/1, Matheshwartala Road, Topsia, Kolkata As Myanmar’s gradual transition to democracy opens a new chapter of opportunity in Indo-Myanmar relations, its relations with the external world is also evolving steadily. Myanmar rejoining the global mainstream has also become the latest arena for Asia’s contentious geopolitical environment and the window of opportunity is short for India to stamp its own footprint, vis-à-vis existing and emerging competition.

Pramit Pal Chaudhuri, Foreign Editor, Hindustan Times and Member of National Security Advisory Board of Government of India will be leading the discussion which will be moderated by Dr. Kingshuk Chatterjee, Assistant Professor, Department of History, Calcutta University and guest faculty at the Institute of Foreign Policy Studies. more…

North East India-Myanmar Business Conclave
When: May 26 and 27, 2013
Where : Monywa and Mandalay
In a bid to boost trade relationship between Myanmar and India, especially in the northeast region, this first ever Business Conclave would be held under the auspices of Indian Chamber of Commerce with the support of Myanmar Government, will deliberate on various issues with special focus on development of border trade and tourism.

In the business conclave, there would be discussion of various major issues related to promotion of trade between India and Myanmar in general and the North Eastern States and Myanmar in particular. It would also focus on investments prospects of Indians in Myanmar. Various sectors including food processing, oil seed extraction, electrical and electronics, agriculture, contract farming, teak and timber, mining, hotel, logistics, infrastructure, transport, manufacturing and textiles will be given attention.

Ba Hla Aye Charge dAffaires

Ba Hla Aye Charge d’Affaires, a.i, Embassy of the Republic of the Union of Myanmar
Ba Hla Aye
Charge d’Affaires, a.i, Embassy of the Republic of the Union of Myanmar

I am delighted to learn that Globally Managed Services will be publishing Myanmar Matters newsletter as a tribute to the cordial relations between Myanmar and India and to promote greater understanding between the people and trade relations between the two countries. Myanmar-India relations have always been cordial. For the benefit of both countries and people, the leaders oftwo countries have been endeavoring to enhance the bilateral relations further building upon what we already have. I believe that Myanmar Matters will makecontributions in this regard. I commend Mr. Ranjit Barthakur, founder Globally Managed Services, for the warm sentiments he has for Myanmar and its people and for his vision in publishing Myanmar Matters. I wish him and Globally Managed Services every success.

An Invitation from a Neighbour

Myanmar is open for trade and investment but the response from Indian business has not been adequate despite the growing political ties between the two countries.

V. S. Seshadri, Indian Ambassador to Myanmar from July 2010 to February 2013
V. S. Seshadri, Indian Ambassador to Myanmar from July 2010 to February 2013

A message coming out from our neighbour Myanmar that is transforming itself after 50 years of military rule is ‘we are open for business.’ Are our commercial establishments listening and are they ready?

Our bilateral relations with Myanmar have gathered momentum in recent times. We have agreed on a wide-ranging development cooperation agenda. India has made substantial commitments to assist Myanmar in the areas of capacity building, connectivity, infrastructure and border region development. Our trade and economic ties have however not kept pace. India figures at only the seventh place in Myanmar’s total imports and ranks, even lower at the13th place in terms of foreign investments into Myanmar. Being a large and contiguous neighbour, a closer overall engagement would call for a more robust trade and investment share that seems definitely possible at a time when rapid changes are unfolding.

Inclusive Politics

To what extent has Myanmar transformed itself? President Thein Sein has, in the last two years, taken the country towards a democratic path that has made political life more inclusive; it has also enabled Daw Aung San Suu Kyi and her National League for Democracy to enter Parliament, albeit in a small way. The government has released a great majority of political prisoners and launched an ethnic reconciliation process to build peace with the various minority groups that have been out of the national mainstream from before independence.

Some problems have no doubt arisen in taking forward this process. Hostilities broke out with the Kachin rebels but the atmosphere has improved since late January. Tensions have also been building between the Buddhist and Muslim communities. Deadly riots erupted last year in Rakhine state in two spells between the Rohingayas and the Rakhine Buddhist community, leading to casualties and displacement of people. Last month there were attacks against the Muslim community in certain areas in Central Myanmar.

President Thein Sein has acknowledged that rioters have harmed the image of the country buthe has also talked about adoption of a different approach to build trust. In a recent meeting with Muslim leaders, Ms Suu Kyitold them that the law has to be just for all and she would want everyone to feel proud of being a citizen of the country. Building trust and peace to pave theway for an inclusive society is a delicate and painstaking process. It is hoped that the troublemakers are firmly and effectively dealt with and the supremacy of the rule of law is maintained.One can expect that responsible leaders of Myanmar would not want adverse domesticdevelopments to affect its hosting of international events in the coming months – for the first time, the World Economic Forum East Asia Summit in June and the South East Asian Games in December 2013. It will also chair the ASEAN from January 2014.

More Open Economy

Myanmar is also moving towards an accelerated development programme with the promise of a more open economy. An unexpectedly deliberative Parliament, social activism and loosening of media controls have further energised the process. An economic reform programme launched with more debate is likely to be more acceptable and enduring even if the process is slower.Several steps have already been taken. An IMF Staff Assessment Report on Myanmar acknowledges that the government has embarked on a bold set of reforms and cites changes brought about in the areas of foreign exchange, banking, budget formulation, agriculture and improvement in business climate. It further notes that economic performance has improved projecting 1 6.25 per cent growth for 2012-2013 and a growth rate of 7 per cent over the next five-year period. The local currency Kyat, for example, has seen a fair degree of stability.

On the financial front, private local banks have been granted an enhanced role, including in handling foreign exchange transfers, and allowed to consolidate themselves. Steps are under way to make the Central Bank more autonomous from the Finance Ministry.

On the trade side, procedures for import and export licences have been made easier. Myanmar products will also now enjoy concessional market access with the European Union making them eligible for benefits under its GSP scheme. This will be particularly attractive for those establishing garment making units in Myanmar. On the investment front, a new Foreign Investment Law was enacted in November 2012 after which new regulations and procedures for the processing of investment proposals have been issued. The Myanmar Investment Commission has provided further details about the areas where, and in what form, foreign investments will be allowed.

Lake of adequate infrastructure is a constraint and an opportunity. The government is paying attention to setting up power and other infrastructure projects. Expansion of telecom network, airport development, hotel zones in major cities and real estate development, including affordable housing, are other areas where one can see specific initiatives being taken. This is apart from the offers invited for a large number of onshore petroleum and gas blocks for which bids were due by mid-March and which should have elicited a good response. A few
days ago, the government also invited bids for 30 offshore blocks, 19 deep sea ones and 11 in shallow waters.

File photo of Commander-in-Chief of Defence Services Vice-Senior General Min Aung Hlaing meeting the then - Indian Ambassador to Myanmar, V. S. Seshadri | Photo: www.thazinnew.blogspot.in
File photo of Commander-in-Chief of Defence Services Vice-Senior General Min Aung Hlaing meeting the then – Indian Ambassador to Myanmar, V. S. Seshadri | Photo: www.thazinnew.blogspot.in

Many Indian trade and industry associations have mounted delegations to Myanmar during the last several months. A few product shows have been held. Some companies are exploring trade and investment opportunities. A few have also been shortlisted for certain infrastructure projects. Our companies and industry associations will however need to pack in a lot more punch to significantly improve our trade and investment ranking. The $500 million concessional Line of Credit extended by EXIM Bank of India to the Myanmar government
could play an important role in enhancing trade relations to mutual benefit. Both the governments and the agencies concerned will however need to ensure that the proposals for utilising these credit lines are quickly finalised and translated into contracts.

Development Programmes

Devising suitable commercial strategies can also help to build on our development cooperation programmes. For example, our businesses can explore possible commercial ventures that can ride on the back of some of the infrastructure that will be created from the Indian government- assisted Kaladan project in western Myanmar or the Kalay-Yargyi road project in the North-West that will enable Moreh on our Manipur border to be connected to Mandalay and beyond by 2016 as part of the India-Myanmar-Thailand trilateral highway project. Similarly, our IT companies could work on commercial spillovers of benefit to both countries from the Myanmar Instituteof Information Technology that is being set up with the Indian government support as a centre of excellence in Mandalay. All such commercial proposals will no doubt need host country approvals but if they are well conceived and bring value addition, they would be welcomed.

File photo of Myanmar President U Thein Sein (R) meeting with visitng Indian Prime Minister Manmohan Singh in Nay Pyi Taw, Myanmar, May 28, 2012. The Indian PM visited Nay Pyi Taw during his three-day official tour to Myanmar | Photo: Xinhua/U Aung/ www.titanherald.com
File photo of Myanmar President U Thein Sein (R) meeting with visitng Indian Prime Minister Manmohan Singh in Nay Pyi Taw, Myanmar, May 28, 2012. The Indian PM visited Nay Pyi Taw during his three-day official tour to Myanmar | Photo: Xinhua/U Aung/ www.titanherald.com

On its part, our government will also have to try and make the cost of doing business with Myanmar more competitive. Encouraging enhanced direct air connectivity between our metros and Yangon is now rendered easier with a more liberal bilateral air services agreement signed during Prime Minister Manmohan Singh’s visit to Myanmar in May 2012. As of now, there is only a tri-weekly Air India flight from Kolkata to Yangon. It is woefully inadequate. Compare this with airlines from Japan, the Republic of Korea, Qatar and Taiwan which have introduced regular flights to Yangon in the last six months, and airlines from China, Singapore and Thailand now flying more frequently every day and to more destinations in Myanmar.

Shipping, Banking & Finance

Furthermore, direct shipping services that will enable our goods to reach Myanmar in a matter of a few days, as in fact they did during the colonial days, than several weeks at present, would play a critical role in facilitating greater trade. The Shipping Corporation of India will need to take the initiative here with some initial support from the government to make the services viable.

Banking and finance are other areas. The United Bank of India made a beginning with the opening of a representative office in Yangon in December 2012. More Indian banks need to follow. Making available easy credit finance would provide a big to suspend or waive the economic sanctions imposed by them earlier, these have not altogether translated into allowing U.S. Dollar denominated letters of credit to be opened vis-à- vis Myanmar. Our banks need to operationalise these as soon as they become possible.

Finally, our businesses have also to learn how to do business in Myanmar. Businesses from countries like China, Thailand, Korea, Japan and Singapore frequent the country. Many of them have established a strong local presence keeping regular contacts with government ministries in Nay Pyi Taw, the new capital, and networking with the local business people in Yangon, Mandalay and other business centres, all of which form an important part. Trade and industry associations of these countries have also made Myanmar a priority country. It is essential that as our political ties and development cooperation efforts gather momentum, our trade and investment relations also gain further strength so that they get to reinforce one another.

Nay Pyi Taw to offer 10,000 Rooms by 2014

Over 10,000 hotel rooms will be available at the Nay Pyi Taw Hotel Zone in 2014.

There would be over 80 hotels in hotel zone. Constructed in 2006, there are 31 hotels in Nay Pyi Taw Hotel Zone currently. The Nay Pyi Taw is expected to have high demand of accommodations when many foreign visitors arrive to attend the Southeast Asia Game at the end of this year and the Asean Summit. Myanmar has a total of 787 hotels with 28, 291 rooms. These includes 5 five-star hotels, 18 four-star hotels, 83 three-star hotels, 115 two-star hotels and 103 one-star hotels.

Myanmar Filmmakers set for Bollywood Study Tour

A group of leading Myanmar filmmakers will leave for India to study production at film studios in the country and will continue their study tour in Thailand. The group comprises Kyi Min Thein, Ko Ko Tin, Director Waig, Soe Thein, Khin Lay Theint and officials from Myanmar Motion Picture Enterprise.

“Our excursion includes studying film production materials and visits to studios,” said Win Kyi, secretary of the association. The Myanmar excursion team will visit institutes and studios in Mumbai before proceeding to Chiang Mai and Bangkok where they will observe the making of 3D and animation films at the Dolby Film Company, Cineplex and other studios.

Myanmar Mine ‘Must Pay’ for Land Grab

Demonstrators hold posters during a peaceful protest against the Latbadaung Mountain Copper Mine project, in Ynagon Dec 2, 2012 | Photo: Reuters
Demonstrators hold posters during a peaceful protest against the Latbadaung Mountain Copper Mine project, in Ynagon Dec 2, 2012 | Photo: Reuters

People whose land was seized to allow the expansion of mine in northwestern Myanmar, prompting protests that were crushed by police, should be compensated before the project goes ahead, according to an official report. The report, led by opposition leader Aung San Suu Kyi, also found that inexperienced police fired smoke bombs containing harmful phosphorous into a protesters’ camp at the Monywa copper mine last November, causing serious injuries. The heavy-handed raids on protesters called into equation the sincerity of Myanmar’s reforms, kicked off in 2011 by a quasi-civilian government that replaced a military regime that had run the country for half a century. Land grabs are increasingly contested by residents exercising new-found freedoms and no longer afraid to speak out.

“The commission does not think the project should be allowed to continue as it is,” the report said regarding the $1 billion expansion of the mine. It said a “lack of transparency” was the main reason for events leading up to the violence. Over 100 people, including 99 Buddhist monks, ended up in hospital after the suppresssion of the protests. The report recommended changes to the expansion plans, which locals said involved the unlawful seizure of more than 7,800 acres (3,160 hectares) of land.

It recommended greater compensation for residents, including the return of 1,900 acres for farming as the original compensation was insufficient.

President Thein Sein has set up a committee to implement the recommendations, including representatives of the government and of the joint owners, the military-owned Union of Myanmar Economic Holdings Ltd and a unit of China North Industries Corp, a Chinese weapons manufacturer. more…

Progress shouldn’t make us Strangers to Each Other

I recently made my trip to Myanmar, a place I’d been wanting to visit for years, and I’ve come back with fond memories that I will keep for a lifetime. Even before the country began opening up to the outside world, Myanmar held a fascination for me, so this trip was an eye-opener for me and the photographer who accompanied me. There was no group, no tour guide, just the two of us.

We spent nine days in Myanmar: six in Yangon and three in Dawei. In the latter city, I experienced some impressive moments with people living there. During our stay in Dawei, we had a chance to experience traditional performances at a temple fair. As Dawei is not a tourism destination, we were the only foreigners, and our dress gave us away.

While I stood alone, thinking of either walking to the front of the stage or waiting for the photographer, a girl smiled and walked up to me. She asked me in Thai if I was Thai. She told me her name was Mi Mi and that she had worked in Thailand for five years, which explained why she was able to converse with me.

No question, Thailand is more developed when compared with Myanmar. I just pray that the development in Myanmar will not change the way people are. We in “advanced” Thailand could learn some valuable lessons from our good-hearted neighbours, funny accents and all. more…

Dam to Undergo Environmental, Social Impact Analysis

Khin Maung Oo (Minister, Kayah)
Khin Maung Oo (Minister, Kayah)

A 4000 mega watt hydropower dam project on one the four main rivers of Myanmar facing public protest will undergo environmental and social impact analysis, according to Minister of Kayah State. Experts from international organisations in Norway and Sweden will conduct the required analyses on Ywathit dam project to be built on Thanlwin River in Bawlakhe district of Kayah State, Minister Khin Maung Oo told Eleven Media on March 15.

On March 14 or International Day of Action for Rivers, a group of local people prayed for an end of this joint project between Chinese Datang Corporation and Myanmar government. In fact, about 3000 people planned to stage a demonstration then, but the authorities stopped them.

The state minister said that the project team is carrying out geographic surveys, and dam construction will begin next year, although local people claimed they sighted heavy machineries that are extracting gold and metals at the project area and dump trucks carrying earth from the project site to China. Security forces have also been heavily deployed, they added.

“Geographic surveys on the dam project which will generate 4000MW have begun. The project will be implemented onlynext year. Also, international experts will carry out possible environmental impacts of the dam. If they say there are hazards from the dam, we will stop the dam. If not, we will proceed. If we get extra electricity [from the project], we will sell it to the neighbouring countries,” the minister said.

He also added that security issues of the project are responsible by the Ministry of Energy and the state ministry does not have any right to intervene the government’s project.

“There are things I can tell the public and things I cannot. Why security forces are heavily deployed is to guard the area from the possible threats of outside parties,” State Minister said.

Ethnic people in the region are concerned over the consequences of the dam project. Some of them formed an informal organisation called Thanlwin-lovers, and protested against the dam.