Category Archives: Volume 03

Bank of India, Exim Bank look at Myanmar

Bank of India and Export Import Bank of India (Exim Bank) plan to establish presence in Myanmar through branches and representative offices, to push Indian investments and support growth in bilateral trade. This plan follows Prime Minister Manmohan Singh’s visit to Myanmar from May 27 to 29. Bank of India, a Mumbai-based public sector lender, plans to set up a branch in the neighbouring country. more…

Myanmar – Thailand develop Dawei SEZ

Thailand and Myanmar have agreed on an infrastructure development plan of the Dawei special economic zone (Dawei SEZ) whose construction is underway in Southeast Myanmar. Thai Deputy Prime Minister cum Finance Minister Kittiratt Na-Ranong and Myanmar Vice President Nyan Tun, who co-chaired the meeting of the Joint High-Level Committee (JHC) of the Dawei SEZ have said that the development plan focuses on roads connecting the Dawei to the Kanchanaburi border area, a small-sized sea port,a natural gas-fuelled power plant, reservoirs and industrial estates. The plan, from 2014-2018, is expected to cost 300- 400 billion USD. At the meeting, the two sides also agreed on initial capital of the Dawei SEZ development company, which is in charge of consulting as well as selecting investors for the infrastructure project. more…

China starts receiving gas from Myanmar through pipeline

Pipeline trainees angry over pay discrepancy between Myanmar, China. photo : shwe.org
Pipeline trainees angry over pay discrepancy between Myanmar, China. photo : shwe.org

BEIJING: Energy-hungry China has started receiving natural gas from Myanmar through an 870km-long strategic cross-border pipeline co-invested by four countries, including India.

The multi-billion dollar pipeline, which was inaugurated in northern Myanmar’s Mandalay yesterday, will ship natural gas and petroleum all the way from the coastal port in Myanmar to China’s southwest Yunnan Province.

The gas pipeline, co-invested by six parties from four countries including India and South Korea, has a designed annual throughput of 12 billion cubic metres before off-loading in Myanmar.

A parallel oil pipeline is also part of the project. China National Petroleum Corporation (CNPN) is a major partner in both assets. The designed annual capacity is 22 million tonnes for the oil pipeline and 12 billion cubic metres for the gas pipeline.

The cost of the pipeline was in billions, state-run Xinhua news agency reported, without mentioning the exact investment in the project.It shortens the distance of transportation originally going through the Malacca Strait, a Chinese expert said. more…

Petroleum and gas would be shipped from the Middle East to Myanmar and from there it would be pumped to China through the pipeline.The pipeline has started to deliver gas to China, official media here reported.

Experts estimate that the pipelines will satisfy a quarter of China’s natural gas demand every year, and also bring about $1.5 billion to Myanmar each year, creating a win-win co-operation between the two countries, state media reported. more…

Cooperative Bank to offer Visa, MasterCards

The world’s most popular electronic payment cards – MasterCard and Visa – will be available in Myanmar this September if the Central Bank grants permission.

Cooperative Bank (CB Bank) Managing Director Pe Myint told Mizzima that his Myanmar based bank will forge ahead in an attempt to issue both MasterCard and Visa credit cards before the year is out. Currently, domestic banks cannot issue the cards, however CB Bank is confident it will become the first. The move would promote an improvement in credit card services, which are largely unavailable to foreigners and locals alike at this point.

photo : hongsar / mizzima
photo : hongsar / mizzima

“I think we can be the first to issue these cards. We want to use these in Myanmar after getting approval from Central Bank,” said Pe Myint. “The cash limit and credit limit will first have to be set by regulations issued by the Myanmar Central Bank.” Foreign Visa and MasterCard users could theoretically have used their cards in Myanmar since April 2013, however services are currently unreliable and most people still rely on cash for all purchases.

Focus on NE India Critical – Gateway to Myanmar

Thant says diplomatically, the reason China was so important and countries like the US and the UK would have been more important is because of their membership of the UN Security Council. | photo: beowulf sheehan/pen american center via wef
Thant says diplomatically, the reason China was so important and countries like the US and the UK would have been more important is because of their membership of the UN Security Council. | photo: beowulf sheehan/pen american center via wef

U. Myint Thant, chairman of the Yangon Heritage Trust, spoke in an interview about the state of democracy in Myanmar, the involvement of different stakeholders in its affairs and the difference between Indian and Chinese engagement with the resource-rich country. Myint Thant, author of Where China Meets India: Burma and the New Crossroads of Asia, explained the challenges facing the country, Myanmar’s perception of foreign firms, growing inequality and the importance of India’s North-East in the scheme of things. The Harvard and Cambridge educated writer also rued the lack of a direct flight between Yangon and New Delhi. Edited excerpts:

How has the Indian government’s engagement with Myanmar been? In many ways, the strengthening of relations between India and Myanmar, even under the old military government, had many positive aspects because it did prevent a situation where the country became extremely isolated. Under Western sanctions, it was already isolated from the West, but I think to be isolated from the neighbourhood as well wouldn’t have been a good thing for the country. I think we have to make some distinctions here. Diplomatically, the reason China was so important and countries like the US and the UK would have been more important is because of their membership of the UN Security Council. more…

Boom time in Myanmar

When an Indian executive first came to Myanmar in 1995 he paid $25 a night for a room in a prominent hotel. Today, the same room costs $250 prompting his company, which bagged a gas block here, to set up a guest house in Yangon.

But the shortage will soon be history. European hotel chain Accor is already constructing a business hotel, while Marriot has decided to enter a market that now boasts of brands like Giorgio Armani and others.

India’s neighbor is now open for business, resulting in a rush of businessmen looking at investment opportunities. The mood is upbeat, and even the ethnic violence that claimed several lives in the north is glossed over.

From setting up an independent telecom regulator to enacting around 50 laws amending almost an equal number, and introducing a simplified sales tax and exchange rate mechanism, the government is trying to ensure that overseas investors return after 50 years of army
rule which ended last year. The financial sector laws are expected to be amended, and the likes of
ANZ and Standard Chartered are keen to start operations in a country dominated by an informal system of finance.

Coca-Cola returned after almost 60 years by opening a bottling plant on June 4; a second will
be ready in a month and the company plans on investing $200m over the next five years. Unilever too plans a second plant and investment of $500m. more…

Telenor, Ooredoo win Myanmar Telecom Licenses

photo : townhall.com
photo : townhall.com

Norwegian firm Telenor and Qatar Telecommunications today won telecom licences in Myanmar, one of the last untapped mobile phone markets globally, pipping India’s Bharti Airtel and nine others. The government committee in charge of licence bids “is pleased to announce that Telenor Mobile Communications and Ooredoo (Qatar Telecom) have been selected as the two successful applicants”, a Myanmarese government statement said.

The expression of interest floated by Myanmar for two telecom licences received application from 91 entities and 12 including Vodafone, SingTel, Telecom-Orange and Marubeni Corporation were shortlisted. This was the first time Myanmar opened up the sector for private investments with aim to increase the overall teledensity of the country to 75 to 80% in 2015-2016.

Telenor and Qatar Telecom will be the first set of private operators to provide telecom services in Myanmar.

Telenor in an exchange filing said it will now start final discussion with Myanmar authorities.

“If a final licence is granted, Telenor will build a state-of-the-art mobile network using HSPA and LTE-ready (4G) technologies, and aims to achieve nationwide network coverage within five years. Mobile voice and data services will be commercially launched by in 2014,” it said. more…

World Economic Forum on East Asia

Courageous Transformation for Inclusion and Integration

The 22nd World Economic Forum on East Asia was a pivotal moment for Myanmar. It was the first international gathering to be held there following a series of bold and swift reforms. After years of relative isolation, a revived peace process was underway, the foundations of an open market economy were being laid and the formerly hermetic country was keen to move fast to heal its divisions and set upon a path of inclusive growth.

Session Name : Taking Myanmar to Work | Speakers: Subramanian Ramadorai, Hiroto Arakawa, Annie Koh, Daw Aung San Suu Kyi, Jaime Augusto Zobel de Ayala II | Moderated by: Aiko Doden
Session Name : Taking Myanmar to Work | Speakers: Subramanian Ramadorai, Hiroto Arakawa, Annie Koh, Daw Aung San Suu Kyi, Jaime Augusto Zobel de Ayala II | Moderated by: Aiko Doden

For the meeting’s 900 participants – coming as they do from all regions of world, backgrounds and sectors of society – Myanmar’s opening up represented an unmissable historic opportunity to analyse and help shape the country’s reforms and reconciliation. It was also a chance to explore the ramifications of plans for wider regional economic integration in the coming years. As such, senior-level leaders from government, business and civil society came together in Nay Pyi Taw to leverage their collective creative and strategic capital to address the most pressing economic and societal challenges in new ways. They focused on opportunities to accelerate Myanmar’s growth.balanced with a significant social and inclusive development agenda to benefit all stakeholders through responsible investments. Across South East Asia, the idea of regional economic integration is gathering momentumand Myanmar is part of that process. In 2014, it will chair the Association of South East Asian Nations (ASEAN) ahead of the bloc’s plans to establish a common market and transform the strikingly diverse region of 600 million people into a cohesive economic community by 2015. Participants noted that achieving this target will require a solid commitment to improving the region’s connectivity, investing in an integrated energy agenda, securing an efficientfood supply chain and building a skilled workforce. For many, the meeting provided insight to those who see an important and evolving geopolitical and geo-economic pillar of the global economy. “I believed in ASEAN probably before ASEAN believed in itself,” said Anthony F. Fernandes, Group Chief Executive Officer, AirAsia, Malaysia; Co-Chair of the World Economic Forum on East Asia. “For me, it is the final piece of the puzzle to get Myanmar into this wonderful group of countries. It is a very exciting period for us, and a great way to reduce poverty”. Located as it is between Bangladesh, China, India, Laos and Thailand, Myanmar sits at the crossroads of a market of more than a billion people. The political spring of the past two years

Foreign Delegates Meet at World Economic Forum Held in Myanmar
Foreign Delegates Meet at World Economic Forum Held in Myanmar

represents a turning point for the region and has fuelled a rush of investors excited by the prospect of transformational change in a nation that for decades had shunned and been shunned by the West. “We are part of the global community now,” President Thein Sein declared in the closing plenary of the World Economic Forum on East Asia. “We are getting back to our rightful place.”

International businesses were there to assess the country for investment. Emerging from decades of disinvestment and isolation, the country’s infrastructure needs must be prioritized. With a predominately rural population and a threadbare electricity grid, only 13% of households have electricity. As John Rice, Vice-Chairman, GE, Hong Kong SAR, a Co-Chair of the World Economic Forum on East Asia, put it, “You don’t care if a nice new road passes by your house if you can’t even turn on the light.”

Implementing comprehensive power grids is a prerequisite for all components of development not only in Myanmar, but also across ASEAN’s emerging markets. Analysts estimate that East Asia will need US$ 750 billion a year over the next five years to meet basic infrastructure goals in transport, communications and the energy sector. Lack of infrastructure is a huge drag on growth; infrastructure improvements will benefit both individual nations and ASEAN as a whole.

Aung San Suu Kyi, Chairman of the National League for Democracy (NLD); Member of Parliament
Aung San Suu Kyi, Chairman of the National League for Democracy (NLD); Member of Parliament

These advancements will also see the emergence of a more sophisticated market as ASEAN moves beyond export-oriented growth towards increased intra-regional connectivity. With a somewhat overwhelming list of regional infrastructure needs, not everything can be built at once and choices must be made; but the burden cannot rest with government alone. What governments can do is take responsibility for ensuring political stability and regulatory clarity to create an environment conducive to investment. It is certainty, not liquidity, that is lacking. “We are not looking for a riskfree environment,” said Rice, “We are looking for stability and reasonable risk-adjusted returns.” But development is more than just economics.To improve lives from the rice paddy up, less-developed nations must target growth that is sustainable and inclusive. ASEAN is a success story in terms of economic growth. But what about its human and intellectual capital, and the numbers of local patent and PhD holders? In ASEAN, participants agreed, the emphasis should not only centre on cost, but on quality. Aung San Suu Kyi, Chairman of the National League for Democracy (NLD); Member of Parliament from Kawhmu Constituency, Myanmar, called on businesses rushing into her country to be socially responsible, to invest in the skills of young people and to ensure that their investments help eradicate corruption and reduce inequality. “We don’t want our road workers to remain at the level of road work. Give us the skills to solve our own humanitarian and development problems ourselves,” said Suu Kyi. That call struck a chord with Forum participants. In Nay Pyi Taw, they took a sober look at Myanmar’s transformation

John Rice, Vice-Chairman, GE, Hong Kong SAR
John Rice, Vice-Chairman, GE, Hong Kong SAR

,examining it in the context of the regional integration. As a late arrival on the globalization wave, Myanmar can learn from the experience of its neighbours, including China and India. Yet, despite its controversial past and current communal challenges, Myanmar has its own lessons to impart about reconciliation, the sequencing of reforms and the need for inclusion. Social responsibility and sustainability are part of the culture, Serge Pun, Chairman, Serge Pun & Associates (Myanmar), Myanmar, maintained.

“We have this CSR (corporate social responsibility) culture embedded in individuals and companies,” he added. Notable to all at the meeting were reforms that could well drive financial inclusion and job creation in rural areas and enhance health and education delivery. The reformist government’s priorities have been to pass legislation on labour and land rights and lift controls on the press. Two new telecom licences – due to be awarded at the end of June – should lead to the swift growth of mobile telephone service. Economic reform are just starting, with laws on financial regulation and the central bank not yet in place. “Everybody says let’s get the economy going and workers’ rights will come later,” Pun observed. “We have it the other way around. This is a new model.”

Myanmar’s arrival at the development runway may be opportune, coming more than 15 years after the Asian financial crisis revealed the perils of cronyism and corruption and five years after the global meltdown underscored the value of resilience. Times have changed. Gone are the days of fast growth without consequences. The internet, smartphones and social media have rendered command-control leadership – even in the tightest of societies – obsolete. Protecting the environment is no longer a matter only for those who can afford to be concerned. Already evident is the impact of climate change and water scarcity.

Nay Pyi Taw/Myanmar, 6Jun13 - Mr. Serge Pun, Chairman, Serge Pun & Ms. Indra Nooyi,Chairman and Chief Executive Officer, PepsiCo, USA
Nay Pyi Taw/Myanmar, 6Jun13 – Mr. Serge Pun, Chairman, Serge Pun & Ms. Indra Nooyi,Chairman and Chief Executive Officer, PepsiCo, USA

Like a new car that has to be driven carefully and fine-tuned once or twice in its first few thousand kilometres so that it eventually runs at peak performance, Myanmar could risk a crash or malfunction if it goes too fast too soon. Argued Helen E. Clark, Administrator, United Nations Development Programme (UNDP), New York, a Co-Chair of the 2013 World Economic Forum on East Asia: “For Myanmar, a lot of boats have been pushed out and are midstream. It is now a question of prioritizing and sequencing the reforms.”

Take the development of the extractive sector. While Myanmar possesses abundant natural resources that are much sought after by large economies looking for energy security, it should open up its extractive industries in a measured way that neither leaves the economy vulnerable because of a narrow base nor wreaks havoc on the environment. From the minerals and other materials that it does unearth, Myanmar should aim to gain the most value by building up the capacity to process the raw materials rather than simply exporting them. Plentiful now, these resources could run out, leaving the prosperity of future generations in jeopardy. As in many other countries that have exploited their natural wealth, vested interests could take advantage, abuse privileges and get rich quickly, leaving others to suffer the consequences or clean up. “This is an amazingly rich country with some of the poorest

Rajeev A. Vaidya, President, South Asia and ASEAN, DuPont, India, iscaptured during the World Economic Forum on East Asia in Nay Pyi Taw, Myanmar
Rajeev A. Vaidya, President, South Asia and ASEAN, DuPont, India, iscaptured during the World Economic Forum on East Asia in Nay Pyi Taw, Myanmar

people on the planet,” observed Salil Shetty, Secretary-General, Amnesty International, United Kingdom, a Member of the Global Agenda Council on the Role of Civil Society. “The rule of law is still a work in progress at best,” he said.

In the post-crisis age where resilience is the key, inclusive transformation – whether in Myanmar or any other economy in East Asia or elsewhere – is achieved through balanced development and growth, said World Economic Forum on East Asia Co-Chair John Rice, Vice-Chairman, GE, Hong Kong SAR. Myanmar will have to move forward with improving its hardware or infrastructure, as well as its software or capacity. This includes the rule of law, regulatory frameworks and education to help the country make best use of its youth dividend. The country needs to move quickly on some fronts, such as addressing extreme rural poverty by investing in agriculture to make farmers more productive and farming profitable, and to take a deliberate approach in other areas such as the development of the extractive sector. Concluded Rice: “Balance is required to make responsible, sustainable progress.”

The deliberations in Nay Pyi Taw explicitly demonstrated the commitment of all stakeholders – from Myanmar, the region and globally – to leveraging investment towards responsible and inclusive growth both in Myanmar and in ASEAN. Only by coming together and having frank discussions is it possible to build trust and an understanding of how key social and economic development challenges such as creating jobs, improving education, ensuring better healthcare and enhancing regional connectivity can be addressed.

Preserving an archaeological heritage: The Bagan

The British rulers of the erstwhile Myanmar may have introduced some confusion into things when they began spelling it as Pagan, but the Kingdom of Bagan, as it is now named, is a marvellous archaeological confluence of many ancient cultures. With over 13,000 temples, pagodas and other religious structures originally built within this 26 sq. mile (42 sq. km.) area during the heydays of the Kingdom between the 11th and 13th centuries, little wonder then that this has earned the nomination as a World Heritage site. Evidence of early settlers by the banks of the Irrawady is traced back to the second century AD. However the first permanent settlers are correlated with the beginnings of the Kingdom of Bagan in the mid-ninth century. Two centuries later, after the Mons were overpowered, during the golden era of a united Bagan scholars, artisans, master builders and religious builders helped lay the foundations of a rich new society. Bagan became known as the land of four million pagodas, reflecting the economic and religious wealth of the new kingdom. A thriving rice culture was supported by an excellently crafted irrigation system.

Ranjit Barthakur, Founding Chairman Globally Managed Services, during his trip to Nay Pyi Taw for the World Economic Forum 2013
Ranjit Barthakur, Founding Chairman Globally Managed Services, during his trip to Nay Pyi Taw for the World Economic Forum 2013

But history also presents us with some useful learnings: In the zeal to build almost all temples and stupas with fired bricks and not perishable wood, the demand on local vegetation to fire the kilns had an adverse effect on ecological balance. Denuded land, earthquakes, floods, erosion and invasions led to economic decline and downfall of the empire. The story is another reminder for those who continue to turn a blind eye to the inevitable truth around the powerful concept of Naturenomics.

History also reminds us of the inevitable doom that is brought about by greed and avarice. Both insiders and outsiders have, through the ages, been party to the systematic looting of Bagan’s artefacts and treasures. Unfortunately, more visitors coming to witness the site may also result in its frescoes, statuary and various antiquities being in jeopardy of falling ultimately into the hands of wealthy private collectors, despite the Myanmar authorities having slapped a ban on their export.

As a resurgent economy with its recently open doors prepares to grapple with many issues of progress and balance, we hope and pray that Myanmar’s wealthy heritage will be viewed and leveraged with depth of understanding and maturity. This Bagan is certainly no Pagan symbol! Hence, in lining up to view and appreciate the hidden treasures that the Bagan Kingdom represents, we should certainly mind our ‘P’s and queues!

– Ranjit Barthakur, Publisher.

Myanmar: India Inc’s next big destination

photo – davidmckee.org
photo – davidmckee.org

‘Lets Go Myanmar’ seems to be the new mantra of an Indian industry, which is keen to tap the market there. From infrastructure to energy to aviation, Indian companies are trying to mark their presence in Myanmar. Although a late entrant, India now seems to be determined to make up for the lost time, while countries such as the US, Japan and China have already started making deep inroads there. At present, Indian investment in Myanmar stands at around $273.50 million, which is expected to soar to $2.60 billion over the next few years.

photo : sify.com
photo : sify.com

Some of the Indian companies present there include ONGC Videsh Limited (OVL), Jubilant Oil and Gas, CenturyPly, among others. Other investors having operations in Myanmar are Tata Motors, Essar Energy, RITES, Escorts, Sonalika Tractors, Zydus Pharmaceuticals Ltd, Sun Pharmaceuticals Ltd, Ranbaxy, Cadila Healthcare Ltd, Shree Balaji Enterprises, Shree Cements, Dr. Reddy’s Laboratories Ltd, Cipla, Gati Shipping Ltd, TCI Seaways, Apollo and AMRI.

During the recent visit of Commerce and Industry Minister Anand Sharma to Myanmar, the government set up India- Myanmar Joint Trade Committee, to be co-chaired by Bharti Enterprises’ Sunil Bharti Mittal. The first meeting of the committee took place on June 7. “Out of Myanmar’s total trade volume of over $18 billion, India accounted for around 7.5 per cent (in 2011-12) and India is behind China, Singapore, Thailand and Japan in exports to Myanmar,” said D S Rawat, Secretary General of Assocham. India-Myanmar bilateral trade expanded significantly from $12.4 million in 1980-81 to $1,070.88 million in 2010-11. more…