Professional Documents
Culture Documents
or InvesLors, urbI-
tration is one of the
most important top-
Ics gIven LIe IucL LIuL u
business relationship may
cIunge udverseIy. TIus IL
Is ImporLunL Lo know LIe
system and options to en-
Iorce ILs rIgILs. nvesLors
prefer arbitration for dis-
puLe resoIuLIon becuuse IL
Is generuIIy consIdered Lo
be IusLer, non-pubIIc und
performed by interna-
LIonuI proIessIonuIs.
TIe IegIsIuLIon govern-
Ing InLernuLIonuI urbI-
tration in Myanmar is
based on the Arbitration
AcL (1qqq) us weII us LIe
ArbILruLIon ProLocoI und
ConvenLIon AcL (1q;).
TIe ArbILruLIon AcL Ius
seL IorLI un ugreemenL
beLween LIe purLIes sLIpu-
IuLIng LIe Lerms und con-
dILIons, sucI us LIe num-
ber oI urbILruLors.On LIe
oLIer Iund,LIe power oI
LIe courL und LIe urbILru-
Lor Is governed under LIe
ArbILruLIon AcL oI 1qqq.
BesIdes LIe exIsLIng
Iuws, Myunmur Ius no
institutional arbitration
Stefanie Siegfried &
Franziska Doepel
orgunIsuLIon, sucI us
DAC In DubuI. TIe en-
IorcemenL oI LIe urbILruI
uwurd Ius Lo Luke pIuce
uL u IocuI courL. Once LIe
urbILruLIon uwurd Is en-
IorceubIe, one oI LIe pur-
LIes concerned Ius Lo sLurL
enIorcemenL procedure
uL LIe compeLenL courL
Lo reuIIse ILs rIgIL under
LIe uwurd. Persons doIng
InLernuLIonuI busIness uc-
cepL urbILruLIon ubroud
buL oI course preIer ur-
bitration in their home
counLry. NeverLIeIess
LIey ugree mosLIy on urbI-
tration to be held in third
counLrIes.
n IIne wILI LIe New
York ConvenLIon LIe en-
IorcemenL oI uwurds ren-
dered ubroud In u IocuI
courL Is possIbIe In mosL
sIgnuLory counLrIes. n
JuIy zo1, Myunmur ruLI-
hed LIe ConvenLIon on
LIe RecognILIon und En-
IorcemenL oI oreIgn Ar-
bILruI Awurds 1q8 (New
York ConvenLIon).
AILIougI under LIe New
York ConvenLIon, Myun-
mur Is IeguIIy obIIguLed
Lo recognIzse urbILruLIon
ugreemenLs reIerrIng Lo u
dispute on international
arbitration outside of the
counLry - und us u resuIL
enIorce LIe urbILruI uwurd
- LIe ArbILruLIon AcL does
noL provIde Ior LIe recog-
nILIon oI IoreIgn urbILruI
uwurds.
TIere exIsLs noIeguI
Irumework In Myunmur
LIuL governs LIe enIorce-
menL oI IoreIgn courL
judgmenLs und LIe nu-
LIonuI Iuws sLIII need Lo be
umended on LIuL poInL.
However, IL seems LIuL
LIIs probIem wIII be re-
soIved soon. n Muy,
nearly one year after rati-
hcuLIon oI LIe New York
ConvenLIon, LIe Myun-
mar parliament published
LIe IIgIIy unLIcIpuLed
druIL oI u new ArbILru-
LIon BIII. WIen LIe bIII Is
enucLed, Myunmur wIII
establish a system for the
enIorcemenL oI IoreIgn
urbILruI uwurds. L wIII
uIso demonsLruLe LIe gov-
ernmenL`s commILmenL Lo
compIy wILI InLernuLIonuI
standards of arbitration
IegIsIuLIon.
TIe ArbILruLIon BIII Is
IurgeIy bused on LIe Mod-
eI uw on nLernuLIonuI
CommercIuI ArbILruLIon
1q8 (LIe ModeI uw) oI
LIe UnILed NuLIons Com-
mission International
Trude uw (UNCTRA)
und Is dIvIded InLo Lwo
purLs.
ArbILruLIon wILIIn My-
unmur Is covered by LIe
hrsL purL, wIereus LIe
second purL deuIs wILI LIe
enIorcemenL oI IoreIgn ur-
bILruI uwurds. n supporL
oI LIe urbILruLIon process,
IocuI courLs wIII be gIven
LIe power Lo grunL In-
LerIm meusures, sucI us
preIImInury InjuncLIons.
OLIer provIsIons pro-
vIde Iow LIe IocuI courLs
sIouId upproucI InsoI-
vency-reIuLed cIuIms, LIe
Myunmur courLs wIII Iuve
LIe dIscreLIon Lo reIer
sucI InsoIvency cIuIms Lo
urbILruLIon on uppIIcuLIon
submILLed by u purLy.
UnIIke LIe ModeI uw,
or the International Arbi-
LruLIon AcL oI SIngupore,
LIe ArbILruLIon BIII sLuLes
LIuL LIe Myunmur courLs
sIuII Iuve LIe power Lo
exLend u conLrucLuuI LIme
bur Lo commence urbILru-
LIon In Myunmur. TIe Io-
cuI courL sIuII be ubIe Lo
reIuse LIe enIorcemenL oI
u IoreIgn urbILruI uwurd
onIy on LIe grounds seL
forth in the Arbitration
BIII.
BuL LIere ure uIso some
variations from interna-
LIonuI prucLIce. TIe bIII
provides inter alia that
arbitration seated in My-
unmur, buL wIIcI do noL
IuII wILIIn LIe dehnILIon
oI un InLernuLIonuI com-
mercIuI urbILruLIon, musL
udopL Myunmur Iuws us
LIe subsLunLIve Iuw gov-
ernIng LIe urbILruLIon.
TIIs provIsIon wouId
curLuII LIe purLIes` rIgIL
Lo cIoose u IoreIgn Iuw us
LIe subsLunLIve Iuw oI LIe
urbILruLIon. TIe bIII does
noL provIde Ior u com-
peLenL courL Ior LIe en-
IorcemenL oI LIe urbILruI
uwurds. However, durIng
LIe process oI enucLIng
LIe Iuw un uppoInLmenL
oI u cenLruIIsed courL Ior
urbILruLIon Is expecLed Lo
be seL IorLIuIong wILI u
jurIsdIcLIon LIuL ensures
LIe enIorcemenL oI cuses
IundIed by experIenced
und proIessIonuI judges.
TIe ArbILruLIon uw
sLIII Ius Lo be enucLed,
und LIereIore Is subjecL Lo
some umendmenLs.How-
ever, IL Is u mujor sLep
for the modernisation of
Myanmars arbitration
regIme LIuL wIII reussure
und encouruge IoreIgn
InvesLmenL In Myunmur.
PrucLIce wIII demonsLruLe
Iow LIe new enIorcemenL
sysLem wIII work und LIe
IuLure wIII sIow II My-
unmur wIII meeL LIe In-
ternational standards of
urbILruLIon.
nvesLors now wIII enjoy
LIe resuILs oI LIIs Iong-
uwuILed news regurdIng
the amendment of the
arbitration system in My-
unmur. By enucLIng LIe
ArbILruLIon BIII Myunmur
wIII murk u mIIesLone Lo-
wurds ILs reIorm process
Lo muke LIe counLry more
uLLrucLIve Ior InvesLors
und us u pIuce wIere In-
LernuLIonuI busIness cun
be done suIeIy.
Strohal Legal Group
(SLG) is c lcu jrm oj-
jerin hihl personcl-
ised services specialis-
ing in international and
cross border business.
SLG enjoys a well-estab-
lished reputation across
Europe, Southeast Asia
and the Middle East. In
Myanmar, SLG provides
Myanmar Chooses CJ as
Logistics Joint Venture Partner
S
ouLI Koreu`s IurgesL
curgo deIIvery com-
puny CJ Koreu Ex-
press suId IL wus numed u
preferred partner to form
u joInL venLure wILI LIe
Myunmur governmenL.
TIe joInL venLure wILI
sLuLe-run Roud Truns-
Aung Phyo port Administration De-
purLmenL wIII deveIop u
1,ooo-squure-meLre dIs-
LrIbuLIon cenLre In Yun-
gon und operuLe IL Ior zo
yeurs, CJ Group`s IogIsLIcs
umIIuLe suId, uccordIng Lo
SouLI Koreun medIu re-
porLs.
TIe compuny pIuns Lo
Iorm LIe JV by LIe end oI
services under the name
U Min Sein& Strohal As-
sociates Law Firm.
The views and opinions
expressed here are the
authors own and do not
necesscril reject M-
anmar Business Todays
editorial opinion.
LIe yeur, und uIms Lo es-
tablish seven distribution
buses operuLIng ubouL
zqo Lrucks Lo deIIver nu-
LIonuI suppIIes IncIudIng
cemenL, sugurcune und
buIIdIng muLerIuIs. L wIII
uIso seek Lo IuuncI gIobuI
deIIvery servIces.
Myunmur Is sLruLegI-
cuIIy ImporLunL us IL Is
IInked Lo CIInu, ndIu und
ASEAN member sLuLes.
We wIII exerL eorLs Lo
become u LoLuI IogIsLIcs
compuny In Myunmur
by mukIng LIe mosL use
oI Roud TrunsporL`s neL-
works, CJ spokesmun
CIo Jeong-Ioon wus
quoLed us suyIng.
Myanmar Summary
There exists no IegaI framework in Myanmar that governs the enforcement of foreign court judgments
and the national laws still need to be amended on that point.
S
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August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
7
LOCAL BIZ
Myanmar Summary
Foreign and Myanmar Citizens Investment Laws to Merge
I
n un eorL Lo upIoId
LIe compreIensIve In-
vesLmenL ugreemenL
reucIed by ASEAN mem-
ber states and support the
gouIs oI LIe ASEAN Eco-
nomIc CommunILy (AEC),
LIe oreIgn nvesLmenL
() und Myunmur CILI-
zens nvesLmenL uws
(MC) ure seL Lo be
merged InLo u sIngIe pIece
oI IegIsIuLIon, u senIor oI-
hcIuI suId.
SInce November oI
zo1z, LIe Ideu oI udopL-
Ing u sIngIe InvesLmenL
Iuw Ius been uL LIe IronL
oI debuLe wIen LIe
wus prepured. nsLeud,
Lwo sepuruLe Iuws were
druILed wILI LIe vIew LIuL
keepIng LIem sepuruLe
wouId proLecL domesLIc
busInesses, U Zuyur Aung,
cIuIr oI LIe Myunmur n-
vestment Commission
(MC), LoId LIe purIIu-
menL.
WILI LIe Lwo Iuws, Ior-
eIgners IeeI LIuL LIey ure
resLrIcLed, wIIIe IocuIs be-
lieve international inves-
Lors ure beIng Iuvoured.
TIereIore, un Improved
Iuw In wIIcI LIe weuk-
nesses oI boLI pIeces oI
IegIsIuLIon ure uddressed
wIII be druILed und sub-
mitted to parliament for
debuLe, Ie suId.
Ike oLIer counLrIes
In LIe regIon, Myunmur
needs Lo udopL u sIngIe
InvesLmenL Iuw becuuse
it bears the responsibility
oI promoLIng equuI und
fair business opportuni-
LIes umong cILIzens und
IoreIgners LIuL ure In IIne
wILI ASEAN ugreemenLs
und sLundurds.
TIe MC Is druILIng LIe
bIII und Is expecLed Lo
Htun Htun Minn submit it to parliament
to be deliberated in the
nexL round oI sessIons.
TIe new Iuw Is IIkeIy Lo
be enucLed In eurIy zo1,
uccordIng Lo Duw Sundur
MIn, u member oI LIe pur-
IIumenL.
One oI LIe sLIckIng
poInLs Is LIe dIerence In
Lux benehLs. Tux exemp-
tion should be equal and
LIe Iuw sIouId IeveI LIe
heId Ior uII pIuyers, Duw
Sundur MIn suId.
oreIgn busInesses ure
requIred by LIe Lo
empIoy uL IeusL z percenL
IocuI Iubour In LIe hrsL
Lwo yeurs oI operuLIon,
uL IeusL o percenL wILIIn
LIe nexL Lwo yeurs und
mInImum ; percenL In
LIe LIIrd Lwo-yeur spun.
n u joInL venLure wILI
u Myunmur hrm or gov-
ernmenL enLILy, IoreIgn
compunIes ure requIred Lo
Iuve uL IeusL u percenL
sLuke In LIe compuny.
TIe Iuw grunLs MC LIe
rIgIL Lo bun busInesses,
wIIcI cun InIrInge upon
Myanmar traditions and
cuILure, Iuve u neguLIve
ImpucL on pubIIc IeuILI
or dumuge LIe envIron-
menL.
MIC is responsible for
upprovIng busInesses LIuL
cun supporL LIe counLry`s
deveIopmenL, expund-
Ing job opporLunILIes,
munuIucLure producLs Lo
repIuce ImporLs, provIde
udvunce LecInoIogy und
prucLIce energy emcIenL
procedures.
ServIce or munuIucLur-
Ing busInesses wIIcI cun
provIde benehLs Lo LIe
counLry ure uIIowed Lo en-
joy tax exemption for up
Lo hve conLInuous yeurs,
uccordIng Lo LIe Iuw.
BusInesses LIuL vIoIuLe
LIe ure hrsL wurned,
buL couId Iuce suspensIon
oI LIeIr operuLIng IIcence
or In LIe exLreme cuse,
become bIuckIIsLed und
bunned Irom InvesLIng
LIe counLry.
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Iike other countries in the region, Myanmar needs to adopt a singIe investment Iaw because it bears the responsibiIity of promoting equaI
and fair business opportunities among citizens and foreigners that are in line with ASEAN agreements and standards.
B
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o
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b
e
r
g
August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
8
Myanmar Summary
T
he Myanmar In-
vestment Commis-
sion (MIC) has ex-
Lended ILs ugreemenL on
reseurcI Ior LIree yeurs
wILI LIe UK-bused pub-
IIsIIng hrm OxIord BusI-
ness Group (OBG) Lo pro-
duce LIe IuLLer`s second
counLry reporL Ior Myun-
mur.
Under LIe memo-
rundum oI ugreemenL
(MoU), OBG wIII Iuve uc-
cess Lo LIe commIssIon`s
resources us IL begIns ILs
reseurcI Ior TIe ReporL:
Myunmur zo1, LIe hrm
suId.
U Aung NuIng Oo, MC
secreLury, suId OBG`s
hrsL reporL on Myunmur`s
economy Iud pIuyed u
pIvoLuI purL In ussIsLIng
InvesLors by hIIIng InIor-
muLIon gups on LIe coun-
Lry`s cIungIng busIness
envIronmenL.
TIe pubIIcuLIon`s suc-
cess und u commILmenL Lo
keepIng LIe growIng num-
ber of international inves-
tors updated on Myan-
mur`s deveIopmenLs were
deLermInIng IucLors In LIe
commIssIon`s decIsIon Lo
exLend ILs ugreemenL wILI
OxIord BusIness Group Lo
LIree yeurs, Ie suId.
As LIe Group`s prImury
purLner, we Iook Iorwurd
Lo ussIsLIng ILs Leum In
LIeIr reseurcI by provId-
Ing poLenLIuI InvesLors
wILI compreIensIve mur-
ket entry point informa-
Wai Linn Kyaw
Myanmar Investment Commission
Extends Research Deal with OBG
LIon.
OBG`s CounLry DIrec-
Lor SLepIunIe HurI suId
LIe IusL puce oI deveIop-
menL ucross key secLors
oI Myunmur`s economy,
Ied by LeIecoms, bunkIng,
LrunsporL und energy, Is
openIng pIenLy oI doors
Ior IoreIgn InvesLors.
TIe IorLIcomIng presI-
denLIuI eIecLIons LIuL wIII
Luke pIuce nexL yeur, Lo-
geLIer wILI Myunmur`s
growIng presence on LIe
regIonuI sLuge, wIII onIy
IeIgILen InvesLor InLeresL
In LIe counLry, sIe suId.
TIe Myunmur nvesL-
ment Commission has
been speurIeudIng LIe
governmenL`s eorLs Lo
boosL IoreIgn dIrecL In-
vesLmenL us LIe counLry`s
ambitious reform pro-
grumme guIns ground.
um deIIgILed LIuL we wIII
benehL Irom ILs InpuL Ior
our zo1 reporL, wIIcI
is due to be published as
Myunmur upproucIes yeL
another pivotal point in
ILs IIsLory.
TIe ReporL: Myunmur
zo1 wIII expIore LIe purL
LIuL new IegIsIuLIon und
wIde-rungIng reIorms ure
pIuyIng In drIvIng growLI
sInce LIe IIILIng oI mosL
WesLern suncLIons, OBG
suId.
TIe pubIIcuLIon wIII uIso
sIIne LIe spoLIIgIL on LIe
raft of transport infra-
sLrucLure projecLs seL Lo
be roIIed ouL, wIIcI runge
Irom new uIrporLs Lo roud
upgrudes, LIe hrm udded.
U Aung Naing Uo (I), MIC secretary, and Stephanie HarI, UBC`s Country Birector, at the signing cer-
emony.
O
B
G
Myanmar Summary
Tourism Boom Continues
Ior Myunmur in o1q
T
ourist arrivals to
Myunmur In hrsL
sIx monLIs oI zo1q
sIoL up more LIun qo per-
cenL compured wILI LIe
sume perIod IusL yeur, oI-
hcIuI duLu sIows.
AbouL 1,6oq,;q6 Lour-
IsLs enLered LIe counLry
Irom Junuury Lo JuIy, u
q percenL Increuse over
LIe 1,1z1,;q vIsILors In
LIe sume perIod IusL yeur,
Ministry of Hotel and
TourIsm duLu sIow.
MosL vIsILors were Irom
AsIu, especIuIIy Irom
TIuIIund, Jupun und CII-
nu, wIIcI Iuve mude up
;1 percenL oI LourIsL urrIv-
uIs LIIs yeur, IL suId.
TourIsm hgures Iuve
Zwe Wai been on LIe rIse sInce In
Myunmur sInce IL opened
up IoIIowIng decudes oI
mIIILury ruIe. usL yeur
suw u record-breukIng z
mIIIIon urrIvuIs.
Authorities have pre-
dIcLed mIIIIon urrIvuIs
In zo1q und mIIIIon In
zo1.
PTTIP to Poor in $, Million Ior
Myanmar Onshore Oil Block
Signs PSC contract for MOGE 3
A
subsidiary of Thai
energy gIunL PT-
TEP and its joint
venture partners have
sIgned u ProducLIon SIur-
Ing ConLrucL (PSC) wILI
the state-run Myanma
OII und Gus EnLerprIse
(MOGE) Ior LIe expIo-
ruLIon und producLIon
rIgILs oI un onsIore bIock
In Myunmur.
PTTEP pIuns Lo con-
ducL LIe zD und D seIs-
mIc surveys und drIIIIng
cumpuIgn oI Iour expIo-
ruLIon weIIs Ior LIe hrsL
LIree yeurs perIod wILI
the minimum investment
commILmenL oI upproxI-
muLeIy $;z mIIIIon, IL suId
In u sLuLemenL.
TIIs InvesLmenL In My-
unmur Is u sIgnIhcunL op-
eruLIonuI progress In IIne
wILI PTTEP Iong Lerm
growLI dIrecLIon Lo ex-
pIore LIe IIgI poLenLIuI
ureus, TevIn VongvunIcI,
presIdenL und CEO oI PT-
TEP, suId.
I LIIs expIoruLIon
yIeIds u successIuI resuIL,
IL wIII LIus secure boLI
Thailand and Myanmar
energy suppIy In LIe Iu-
Lure, Ie suId.
The joint venture part-
ners IncIude PTTEP`s
Kyaw Min wIoIIy-owned subsIdIury
PTTEP SA, LIe operuLor
wILI 8 percenL sIure In
LIe bIock, PuIung SopIon
OsIore PLe Ld wILI 1o
percenL und WIn PrecIous
Resources PLe Ld (WPR)
wILI percenL sIure.
TIe conLrucL wus sIgned
Ior MOGE (PuduukpIn-
NuLmI ureu) bIock, wIIcI
covers 1,z1; squure kIIo-
meLres, und Is IocuLed In
cenLruI Myunmur, udju-
cenL Lo LIe wesL oI LIe
Ayeurwuddy RIver.
PTTEP and the joint
venLure purLners won LIIs
onsIore expIoruLIon bIock
opened Ior LIe zo1 My-
unmur OnsIore BIocks
znd BIddIng Round.
ApurL Irom MOGE ,
PTTEP has invested in six
other petroleum explora-
LIon bIocks In Myunmur
- Lwo onsIore bIocks PSC
G und EP z und Iour o-
sIore bIocks M, M11,
MD-; und MD-8.
TIe hrm`s producLIon
projecLs In Myunmur ure
Yudunu, YeLugun und
ILs recenL ZuwLIku. Cur-
renLIy, LIe ZuwLIku pro-
jecL Is producIng nuLuruI
gus uL oo mIIIIon sLund-
urd cubIc IeeL per duy
(MMSCD) equIvuIenL 1o
percenL oI LIe compuny`s
producLIon, PTTEP suId.
Myanmar Summary
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Oxford Business Group
(OBG) ~ _.,.:..q:
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August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
9
August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
10
Myanmar Summary
Myanmar Summary
Myanmar Summary
Myanmar Should Vigorously Develop
Hydropower: Energy Experts
I
nternational experts
purLIcIpuLIng In My-
unmur Green Energy
SummIL In Yungon IusL
week suggesLed LIuL My-
unmur sIouId vIgorousIy
deveIop ILs Iydropower.
n un InLervIew wILI
Xinhua on the sidelines of
LIe summIL, Dr Gordon J
Young, u CunudIun experL
and former president of
nLernuLIonuI AssocIuLIon
oI HydroIogIcuI ScIence,
noted that Myanmar has
IoLs oI LIIngs Lo do In LIe
secLor oI power deveIop-
menL especIuIIy In green
energy secLor sucI us Iy-
dropower.
MIcIueI de VIvo, u rencI
experL und SecreLury Gen-
eral of the International
CommIssIon on urge
Dums, ugreed, suyIng My-
unmur Ius u very Iuge po-
LenLIuI oI Iydropower.
VIewed Irom ILs Iydro-
power resources, Myun-
mar is estimated to have
qo,ooo MW generuLIng
cupucILy buL onIy ; per-
cenL Ius been uLIIIzed so
Iur, Ie udded.
CIInese experL ZIung
BoLIng muInLuIned LIuL
Myunmur Ius rIcI Iydro-
power resources, und LIuL
sInce LIe UnILed NuLIons
ugencIes vIew LIe deveI-
opmenL oI Iurge Iydro-
power pIunLs us deveIop-
Ing green energy projecL,
Myunmur couId ImpIe-
menL IL In u rupId und eco-
nomIc wuy.
CIuIrmun oI LIe Yun-
gon CILy EIecLrIcILy Sup-
pIy Bourd U Aung KIuIng
LoId purLIcIpunLs LIuL uL
presenL, onIy 1 percenL
oI LIe counLry`s popuIu-
LIon Ius uccess Lo eIecLrIc-
ILy und LIe governmenL
Ius IuId down u sIorL-
Lerm pIun Lo eIecLrIIy o
percenL oI LIe LoLuI pop-
ulation before the year
zo1-zo16 by IncreusIng
generuLIng cupucILy und
expundIng LrunsmIssIon
und dIsLrIbuLIon IucIIILIes.
TIe Lwo-duy summIL,
attended by international
green und renewubIe en-
ergy IndusLry pIuyers,
potential investors and
experLs Irom over zo
counLrIes und regIons,
wus orgunIsed by LIe Con-
IexIub Sdn BId oI MuIuy-
sia and supported by the
UnIon oI Myunmur ed-
eration of Chambers of
Commerce und ndusLry.
Xinhua
S Koreas Hana Bank Launches
Myunmur Micronunce Lnit
S
ouLI Koreun Iender
Hunu Bunk suId IL
has established a mi-
crohnunce InsLILuLIon In
Myunmur, joInIng In LIe
gIobuI ruce Lo Lup InLo LIe
SouLIeusL AsIu counLry.
TIe Hunu InuncIuI
Group umIIuLe IeId LIe
openIng ceremony oI
Hunu MIcrohnunce In
HIegu LownsIIp, u ruruI
communILy norLIeusL oI
Yungon, wILI uround oo
governmenL omcIuIs und
IocuI resIdenLs uLLendIng,
uccordIng Lo u press re-
Ieuse.
Hunu MIcrohnunce,
LIe hrsL overseus mIcro-
hnunce unIL esLubIIsIed
by u Koreun bunk, pIuns
to extend small-sum
Iouns under oo,ooo won
($q8) Lo resIdenLs oI z
LownsIIps ucross Myun-
mur.
TIe mIcrohnunce unIL
is set to boost the banks
corporuLe Imuge In Myun-
mar and potentially help
LIe bunk`s Iong-Lerm gouI
oI enLerIng LIe IocuI bunk-
Ing IndusLry, u Hunu Bunk
Aung Phyo
omcIuI LoId YonIup news
servIce.
SInce November zo1z,
the lender has been oper-
uLIng In Yungon. Ls busI-
ness, Iowever, Ius been
IurgeIy IImILed due Lo un
ubsence oI u suIes IIcence.
Y
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Transportation Ministry Eyes Opening up
Aviation Fuel Sector to Foreign Investors
T
he Ministry of
Transportation is
seekIng InLernu-
LIonuI compunIes Lo InvesL
In LIe IocuI uvIuLIon IueI
secLor, wIIcI Is currenLIy
posIng u mujor cIuIIenge
Ior IocuI uIrIInes, u mInIs-
Ler suId.
JeL IueI Is one oI LIe
main problems in Myan-
mars air transportation
IndusLry becuuse IL cosLs
approximately a dol-
Iur more per guIIon LIun
reIueIIng In oLIer coun-
LrIes, unIon mInIsLer Ior
LrunsporLuLIon U Nyun
Tun Aung suId.
TIe presIdenL Ius In-
sLrucLed LIe governmenL
to solve this issue as soon
us possIbIe. We ure now In
LIe processIng oI mukIng
connecLIons wILI com-
panies that sell jet fuel in
AsIu wILI LIe Iope oI se-
curIng LIeIr InvesLmenL,
Aung San Oo LIe mInIsLer suId.
TourIsLs enLerIng
Myanmar by air has in-
creused by o percenL per
yeur. However, IocuI uIr-
lines operate at a loss due
Lo LIe IIgI cosL und Iow
quuIILy oI jeL IueI. L`s Im-
portant to help them turn
u prohL.
There have been reports
cIuImIng LIuL jeL IueI soId
by the Ministry of Com-
merce conLuIns conLumI-
nunLs sucI us Iungus LIuL
cun dumuge LIe IIgI-
IeuLed purLs oI engInes,
deLerrIng IoreIgn uIrcruILs
Irom reIueIIng In Myun-
mur.
I IoreIgn InvesLmenL
pours InLo LIe IocuI jeL
IueI murkeL, Increused
compeLILIon Is expecLed
Lo IeIp reduce LIe swoI-
Ien IueI prIce, Improve
ILs quuIILy und encouruge
IoreIgn uIrcruIL Lo reIueI
wILIIn Myunmur. TIIs In
Lurn wIII reduce LIe op-
eruLIng cosLsoI uIrIInes so
LIey cun Lurn Iosses InLo
prohL, IndusLry InsIders
suy.
CurrenLIy, LIe MInIsLry
oI Commerce Is LIe soIe
supplier of jet fuel in My-
unmur.
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Aircrafts are seen at Yangon International Airport.
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August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
11
Myanmar Summary
Govt to Release Rice Reserves to
Tackle Potential Price Spiral
W
ILI rIce heIds
ucross LIe nu-
LIon beIng
ooded due Lo Ieuvy
monsoon ruIns In recenL
monLIs, LIe Myunmur
RIce ederuLIon Is prepur-
Ing Lo reIeuse rIce reserves
us u counLermeusure II LIe
sILuuLIon cuuses LIe prIce
oI rIce Lo Increuse.
Myunmur Ius currenLIy
enougI rIce reserves Lo
conLroI LIe poLenLIuI prIce
IIkes, U Ye MIn Aung,
generuI secreLury oI LIe
ederuLIon ussured.
We wIII reIeuse LIe re-
serves based on the situ-
uLIon. ReIeusIng LIem
unnecessurIIy wIII IurL
farmers in the harvest sea-
son. TIus, we ure monILor-
Ing LIe enLry oI rIce (bugs)
InLo Yungon Irom LIe usuuI
o,ooo Lo 6o,ooo per duy,
Ie LoId Myunmur BusIness
Toduy.
Myunmur RIce ederu-
LIon Is uIso monILorIng
LIe oods und coIIecLIng
Tin Mg Oo
data in order to provide
seed, IerLIIIser und oLIer
supplies as needed to
Iurmers.
ncessunL Ieuvy ruIn
ucross u Iurge swuLI
oI Myunmur In recenL
monLIs Ius LrIggered
oods In Bugo, Yungon
regIon und LIe sLuLes oI
RukIIne und Mon.
We Iuven`L seen LIe
prIce oI rIce Increuse Loo
mucI. TIe prIce per bug
Increused Irom Kz8,ooo
Lo Ko,ooo IusL monLI.
CurrenLIy, LIe prIce Is
normuI, u reLuII rIce seII-
er In Yungon regIon suId.
Around 1,ooo ucres oI
rIce heIds In HIegu Town-
sIIp In Yungon regIon
Iuve been ooded Ior u
monLI, IorcIng seed prIc-
es und producLIon cosLs Lo
doubIe, uccordIng Lo u Io-
cuI Iurmer.
Iuve noLIhed LIe uu-
thorities to help the farm-
ers wIose Iurms ure ood-
ed by compensuLIng LIem
Ior producLIon cosLs und
oLIer supporL. Becuuse oI
LIe oodIng, we ure now
experIencIng IeuILI prob-
lems like diarrhoea and a
sIorLuge oI cIeun drInk-
Ing wuLer, U PIyo MIn
TIeIn, HIegu TownsIIp`s
represenLuLIve uL LIe Iow-
er Iouse suId.
TIIs week wIII conLInue
to see heavy rain in many
purLs oI LIe nuLIon, LIe
meLeoroIogIcuI depurL-
menL Ius wurned, wIIIe
the Myanmar Port Au-
LIorILy Ius wurned LIuL
beLween AugusL q-16,
Yungon muy wILness unu-
suuIIy IIgI LIdes.
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A man works in a rice eId in Yangon.
S
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August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
12
Myanmar Summary
Ooredoo Myanmar: Ready, Set, Go...
O
n AugusL q, pur-
cIused un Oore-
doo SM curd, und
IeIL IIke wus u purL oI-
Myunmur IIsLory - weII,
uImosL.
My hrsL vIsIL Lo Myun-
mur In zooq oered LIe
mosL rudImenLury uccess
Lo InLerneL. nLerneL cuIes
proved Lo be u wusLe oI
LIme gIven LIuL wus unu-
bIe Lo uccess emuII or very
Iew InLernuLIonuI medIu
sources. TImes Iuve In-
deed cIunged.
AILer wuILIng In IIne
wILI ubouL o peopIe,
combIned wILI K6,ooo In
cub Iure Ior my buck und
IorLI LrIps, my SM curd
doesn`L reuIIy work.
TIe purcIusIng experI-
ence wus quILe pIeusunL.
wus Impressed by LIe
proIessIonuI und LIougIL-
IuI eorLs oI LIe sLu, und
mInus one super excILed
guy uLLempLIng Lo pusI
IIs wuy LIrougI LIe IIne,
IL wus u cuIm und seum-
Iess process.
WIen reLurnIng Lo LIe
Ooredoo sLore Lo cIeck
LIe probIem wILI my SM
curd, wus LoId servIce
mIgIL be spoLLy due Lo
currenL cupucILy Issues
und servIce poLenLIuIIy
noL beIng uvuIIubIe In my
neIgIbourIood.
TIe munuger expIuIned
wouId IIkeIy be ubIe Lo
cuII oLIer Ooredoo cus-
Lomers, buL couId experI-
ence dImcuILy In cuIIIng
MPT cusLomers. TIe reuI-
ILy Is IL Ius been dImcuIL
Lo connecL Lo uny pIone
number wIeLIer Oore-
doo, MPT or u IundIIne,
wIIcI Is compounded by
spoLLy und sIow InLerneL.
TIe connecLIng Issues ure
Aundrea Montao noL soIeIy my own experI-
ence. Iuve spoken wILI
muny oLIers experIencIng
LIe sume IImILuLIons.
AccordIng Lo un omcIuI
sLuLemenL Irom Ooredoo,
us LIe compuny Is pre-
purIng Ior ILs commer-
cIuI IuuncI on AugusL 1,
CusLomers ure InvILed Lo
experIence crysLuI cIeur
voIce cuIIs und IusL InLer-
neL servIces Ior Iree Irom
AugusL z Lo mIdnIgIL Au-
gusL 1q, zo1q.
TIe specIuI kIck-o pro-
moLIon, unnounced uL u
press conIerence on Au-
gusL z, gIves users qoo
Iree mInuLes und SMS Ior
on-neL cuIIs, qo Iree mIn-
uLes und SMS Ior o-neL
cuIIs, und zoMB Iree duIIy
InLerneL usuge unLII mId-
nIgIL on AugusL 1q.
To say the least these is-
sues ure u probIem gIven
LIuL LIe compuny Is run-
nIng LIIs specIuI kIck-o
promoLIon. BuL wIy oer
sucI un umuzIng promo-
LIon Lo consumers II you
are unable to deliver the
producL?
L brIngs up LIe Iurger
quesLIon - wIII LIe neL-
work be reudy on AugusL
1, LIe duy oI Ooredoo`s
proposed commercIuI
IuuncI? We wIII Iuve Lo
wuIL und see, buL um
rooLIng Ior Ooredoo.
We must also question
II Ooredoo SM curds wIII
work In LIe wIde runge oI
mobIIe devIces currenLIy
In use LIrougIouL Myun-
mur. On AugusL q, Oore-
doo published a list of mo-
bIIe devIces LIuL work wILI
LIeIr SMs. WIIIe IL mIgIL
noL be un uII-IncIusIve IIsL,
IL does send u sIgnuI oI u
poLenLIuI IImILuLIon.
HuvIng Lo purcIuse u
new mobIIe devIce couId
seL LIe uveruge Myunmur
cILIzen buck K1oo,ooo
($1oo), wIIcI In u coun-
Lry wIere LIe uveruge
monthly salary is ap-
proximately the same as a
new pIone - or uL IeusL u
IeILy cIunk oI IL - muy be
u burrIer Lo consumpLIon
oI LIe compuny`s servIces.
I we wunL LIe counLry Lo
experIence LIe IuII benehL
oI u LeIecoms revoIuLIon,
wIIcI IncIudes purLIcIpu-
LIon oI uII socIuI cIusses,
uccess Lo InexpensIve mo-
bIIe devIces ure essenLIuI.
We know LIere ure
bound to be bumps in
LIe roud us LeIecom ser-
vIces ure InLroduced
und expunded LIrougI-
ouL Myunmur; Iowever,
Lrunspurency on beIuII
oI Ooredoo (und TeIenor
once LIey IuuncI) sIouId
be u Lop prIorILy. TIe
people of Myanmar have
Ior Iur Loo Iong come Lo
expecL poor cusLomer
servIce, InuccuruLe InIor-
mation and disappoint-
menLs. WILI economIc
IIberuIIsuLIon, und LIe LeI-
ecoms revoIuLIon wILIIn
LIeIr grusp, don`L LIey de-
serve someLIIng u bIL beL-
Ler In Lerms oI servIce und
Lrunspurency?
TruIy, no one Is expecL-
Ing u seumIess process,
buL II excepLIonuI servIce
Is u process - jusL suy so.
L`s noL enougI Ior
u IoreIgn compuny Lo
come InLo LIe counLry
und operuLe, buL LIey
musL noL onIy work Lo
wIn LIe mInds, buL uIso
LIe IeurLs, oI LIe peopIe.
TIuL sLurLs wILI Lrunspur-
ency und communIcuLIon
wILI LIe consumer - gIv-
Ing LIem someLIIng LIey
have probably never be-
Iore experIenced.
Even LIougI my Oore-
doo SM curd uL besL oers
spoLLy servIce Lo duLe, sLIII
IeeI um un ucLIve purLIcI-
punL In LIe LeIecoms revo-
IuLIon. And on LIuL noLe,
cun IurdIy wuIL Lo see
wIuL wIII LrunspIre over
LIe comIng weeks, monLIs,
yeurs und decudes.
TruIy, congruLuIu-
LIons Lo Ooredoo In LIeIr
IuuncI.
Aundrea Montao is the
deputy editor at Myanmar
Business Today.
Note: Several attempts
were made to reach out to
Doredoo jor comment. At
the time oj publishin no
response was available.
Uoredoo Myanmar CEU Ross Cormack at the Uoredoo Iaunch event.
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._:q ., . . _~ ~ ..:
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...: _.~.~:._.~.~:.
_e..,._e .q._.
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MPT ..e~ _~.e,.....
.:.~ ..'q:~. ~.~~.q
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~.q..|._.
August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
13
Myanmar Summary
Chinas Factories Spring to Life as
Global Trade Reawakens
A
cLIvILy In CIInu`s
vusL IucLory sec-
tor expanded at
LIe IusLesL puce In z;
monLIs In JuIy, wIIIe In-
dusLry surveys ucross AsIu
sIowed u pIck up In ex-
port orders that hinted at
u Iong-uwuILed revIvuI In
gIobuI Lrude.
CIInu`s omcIuI munuIuc-
LurIng purcIusIng munug-
ers index (PMI) rose to
1.; In JuIy - LIe sLrongesL
sInce AprII zo1z und up
Irom 1 In June, LIe Nu-
LIonuI Bureuu oI SLuLIsLIcs
suId. EconomIsLs Iud ex-
pecLed u reudIng oI 1.q.
TIe upbeuL resuIL wus
ecIoed In LIe HSBCJ
Markit China measure
oI munuIucLurIng wIIcI
cIImbed Lo un 18-monLI
peuk oI 1.;, Irom June`s
o.;. AnyLIIng ubove o
in these surveys separates
growLI Irom conLrucLIon.
The reports added to ev-
Idence LIuL BeIjIng`s sLIm-
uIus meusures were guIn-
Ing LrucLIon In LIe worId`s
second-IurgesL economy,
und IoIIowed news LIuL
growLI In LIe UnILed
SLuLes Iud rebounded
Irom u wInLer IuII.
Tuken IILeruIIy, LIese
PMs sIgnuI un excepLIon-
uIIy sLrong sLurL Ior LIIrd
quurLer growLI In CIInu,
suId AnneLLe BeucIer, Ieud
oI AsIu-PucIhc reseurcI uL
TD SecurILIes In SIngupore.
EucI LIme LIe PMs
Iuve prInLed uround 1 Lo
z In recenL yeurs, unnuuI
economIc growLI peuked
Wayne Cole uL uround 8 percenL In LIe
sume quurLer, und so we
pencII LIuL In us u sLurLIng
poInL.
Or der s Flood I n
CIInu wus noL uIone
In scenLIng beLLer LImes
uIeud.
ndIu`s IucLory ucLIv-
ity expanded at its fastest
puce In 1; monLIs In JuIy
us hrms responded Lo
burgeonIng new orders by
IncreusIng ouLpuL.
TIe HSBC PM, com-
pIIed by MurkIL, rose Lo
.o In JuIy Irom 1. In
June, ILs IIgIesL sInce
ebruury zo1.
A ood oI new orders
Irom boLI domesLIc und
exLernuI sources Ius Ied
Lo u surge In ucLIvILy, suId
rederIc Neumunn, co-
Ieud oI AsIun economIc
reseurcI uL HSBC.
DeLuIIs wILIIn LIe sur-
vey sIow LIuL uII monI-
Lored cuLegorIes wIL-
nessed a rise in output
und order ows.
AddIng Lo LIe promIsIng
omens Ior gIobuI Lrude,
SouLI Koreu reporLed ex-
porLs Lo LIe UnILed SLuLes
expunded by over 1q per-
cenL In JuIy, LIe IusLesL
cIIp In nIne monLIs.
TuIwunese munuIuc-
Lurers, wIo do mucI oI
LIe work on AppIe`s IP-
Iones, reporLed u robusL
improvement in overall
busIness condILIons In
JuIy, wILI ouLpuL, LoLuI
new orders und new ex-
porL orders rIsIng sIurpIy.
AII oI wIIcI IeIped o-
seL u dIsuppoInLIng reud-
Ing Irom Jupun, wIIcI Ius
been sLruggIIng Lo recover
Irom u Lux-Induced sIump
In consumer spendIng.
TIe hnuI MurkILJJMMA
Jupun MunuIucLurIng
PurcIusIng Munugers n-
dex (PMI) fell to a season-
uIIy udjusLed o. In JuIy,
from a preliminary read-
Ing oI o.8 und u hnuI 1.
In June.
n u brIgILer sIgn, new
exporL orders grew Ior LIe
hrsL LIme In Iour monLIs,
uIbeIL modesLIy. PoIIcy-
mukers Iuve been counL-
Ing on un exporL rebound
to help ease the pain
Irom LIe suIes Lux IIke,
but shipments have been
sLubbornIy weuk.
Parsi ng Payrolls
or gIobuI hnuncIuI
murkeLs, LIe quIckenIng
puIse In AsIun Lrude wus
u weIcome dIversIon Irom
conIcL In LIe MIddIe EusL
und UkruIne, us weII us
ArgenLInu`s IuLesL brusI
wILI deIuuIL.
TIe U.S. IucLory survey
Irom LIe nsLILuLe Ior Sup-
pIy MunugemenL (SM) Is
uIso expecLed Lo LIck up Lo
6.o In JuIy, wIIcI wouId
be LIe besL reudIng so Iur
LIIs yeur.
L wIII be preceded by LIe
ever-InuenLIuI U.S. puy-
roIIs reporL Ior JuIy wIIcI
unuIysLs expecL wIII sIow
unoLIer IeuILIy guIn oI
z,ooo neL new jobs.
The unemployment rate
Is seen IoIdIng uL 6.1 per-
cenL, wIIcI mIgIL be weI-
comed by InvesLors wor-
rIed LIuL IurLIer LIgILenIng
In LIe Iubor murkeL mIgIL
Ieud LIe ederuI Reserve
to lift interest rates earlier
LIun oLIerwIse.
TIose concerns were In-
umed on JuIy 1 wIen
duLu sIowed U.S. Iubour
cosLs rose by LIe mosL In
more LIun -1Jz yeurs dur-
Ing LIe second quurLer.
TIey uIso goL some oI
LIe bIume Ior u seII o on
WuII SLreeL LIuL suw LIe
S&P oo .SPX suer ILs
bIggesL duIIy Ioss sInce
AprII. Reuters
Workers assembIe vehicIes on the production Iine at a pIant operated by Bongfeng Peugeot-Citroen Au-
tomobiIe Itd., the joint venture between Bongfeng Motor Corp. and PSA Peugeot Citroen, in Wuhan,
China.
T
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u
m
i/
B
lo
o
m
b
e
r
g
~, ~ . - _ ~ ..:...:
~,~...~_.: ~..
~~ .~ .~~ . ~_.,
...,._e ~..._.~~
.:. _. . . . , .~_., ...
. ~ .:.~q . ~ , . :e . .:.
_.~~.:._~:. .~qq~:
~. : ~ , . e .q.~ _~:_. . :
..:..:.:.q..: _.,._
e_e..:_..~q.~.e:.:.
..'..|~.:_.._e.._.
~, ~ . -~q:.~ ~ . .
. . ~e e . . . ., . . .:.~ , .
~ ,. (PMI) . : ~ . . ~
~ ... . _.~~.:._..
~~ -_...,:~..~_...
_e.~: ~,.~~. ~ qq:.
~.~~._.._e.._~:. ~..
.:..:q.~e:.-, ~. ._ .
. ~ . ~~ .: . .:. . :
..~..q- ~,.~:.....
..,...:..: ~q,q.:.,
._ ~: . ~.:~ ~:..:.
_ e_ ._ . ... .,_ . . _ e. ~:
~..q ~, _ ._ .: . ~
._ . e _e .. .:._., ._ _. ~~
.:_...,:~ ..'..|~.:_..
_e.._.
PMI 51 . _~:.q .:..:
~. , ~ _:. . . ...~
~~ . . . .~ ._ . .. :..q.
e _e .. . : q:. . , .~ _. ~~
._ e. . . .:.~ ~.~ ~_~
~q e. _., ._ .~ _. ~~ .,
._ e e .:.._~:. . ~:.
~._.. ~ ...:., ... . ~,~
~.:~ .._.
~ . e.~ , ~ . . .q.. . , .
.:.~._. ~..~.~
~ .~~. ~_....,._e
~ . . . .:. ~ .~~ .:_. .
~ , .. _ .. :e . .:. .~~ .:
_. .._~: _e. ._~: . . q._ .
~. :. .. q:~ , . e . ~.:.
~.:.:._., ._ .~: .. , .:
_...~~:.:.~~~ .,:~
. ~.:~ ~:.~_e. .~:
~ q .e:.~._ . ~..q ~,
_._ .: . . ~ , ~ . . ~ . .
~~ .~ ~ q:. . , . ~ .~~
.:~: ~..~~. ~_...
_e.._~:. ~_.,.:.._.
August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
14
Myanmar Summary
Myanmar Summary
Myanmar Summary
Indonesias Top Tin Firm Says New
Export Rules Will Hinder Shipments
C
Iunges Lo LIn ex-
port rules due to
come InLo eecL In
three months in top pro-
ducer ndonesIu wIII IurL
shipments of the solder
muLerIuI, un omcIuI uL LIe
counLry`s bIggesL LIn com-
puny, PT TImuI Tbk, suId.
n u bId Lo IuIL IIIeguI
mInIng und gIve IL greuLer
conLroI over prIces, ndo-
nesIu one yeur ugo Iorced
uII LIn IngoL sIIpmenLs Lo
Lrude vIu u IocuI pIuLIorm
beIore beIng exporLed.
SoIder wus exempLed un-
LII Junuury zo1.
Tin exports initially
pIunged uILer LIe ruIe wus
InLroduced, und IoIIow-
Ing u sIurp rIse In soIder
exporLs, LIe governmenL
Iooked uL wuys Lo cIose
uny IoopIoIes.
uLe IusL monLI, LIe
Lrude mInIsLry unnounced
pIuns Lo dIsLIncLIy cuL-
egorIse exporLers oI pure
IngoL, soIder, pure non
IngoL und LIn uIIoy Irom
November 1 - wIIcI wIII
Iorce InLegruLed LIn mIn-
ers Lo creuLe sepuruLe sub-
sIdIurIes und regIsLer Ior
sepuruLe exporL IIcences.
This may hinder sup-
pIIes Lo LIe gIobuI LIn mur-
keL, un omcIuI uL sLuLe-
owned PT TImuI suId.
L wIII reduce exporLs
oI LIn IngoL, TImuI Cor-
poruLe SecreLury Agung
NugroIo LoId ReuLers. L
Michael Taylor &
Yayat Supriatna
meuns one compuny, one
(export) permit and one
compuny per producL.
PrevIousIy, ndonesIun
LIn hrms Iud Lo onIy reg-
ister for one type of ex-
porL IIcence, und gIven LIe
noLorIous bureuucrucy In
SouLIeusL AsIu`s bIggesL
economy, deIuys cunnoL
be ruIed ouL.
TIn IngoL suIes by
TImuI, wIIcI IuILed ex-
porLs Ior up Lo Lwo weeks
In JuIy due Lo IuIIIng
gIobuI bencImurk prIces,
uccounL Ior uround q
percenL oI LIe hrm`s LoLuI
suIes.
TIe umended reguIu-
tion also raises the purity
requirement for solder
exporLs Lo qq.; percenL
Irom 6 percenL prevI-
ousIy, und muInLuIns LIe
IngoL purILy requIremenL
Laos Agrees to More Scrutiny on
Mekong Dam After Calls for Delay
oIIowIng up on u re-
cenL urLIcIe wroLe
wurnIng oI InvesL-
menL newsIeLLers muk-
Ing bogus cIuIms oI pusL
perIormunce, LIougIL IL
Is onIy IuIr Lo gIve credIL
wIere IL Is ucLuuIIy. WIIIe
ucudemIu IoIds LIuL IL Is
noL possIbIe Lo consIsL-
ently time the markets in
LIe Iong run, LIere ure u
Iew sLruLegIes LIuL seem
Lo IoId up. One newsIeL-
Ler LIuL Ius been mukIng
predIcLIons In reuI LIme
IoIIowIng u very sImpIe
sLruLegy sInce 1qqo Is
wrILLen by u guy numed
Sy HurdIng.
TIe newsIeLLer Is u weekIy
one cuIIed LIe SLreeL SmurL
ReporL, und IL IoIIows u very
sImpIe seusonuI LImIng
sLruLegy. TIe busIs oI LIe
sLruLegy Is LIuL LIere Is u Iu-
vourable and unfavourable
time of the year to be in-
vesLed In LIe murkeLs, und
LIIs Is sLuLIsLIcuIIy verIhed
usIng IIsLorIcuI duLu. TIere
Is u very vuIId IogIc beIInd
LIe seusonuI LendencIes oI
LIe murkeLs, wIIcI wIII
noL go InLo In mucI deLuII
Iere. TIe ImporLunL LIIng
is that mainly it stems from
LIIngs repeuLIng every
yeur sucI us Iund munug-
ers mukIng udjusLmenLs uL
years end to dress up their
porLIoIIos, peopIe receIv-
Ing unnuuI bonuses In LIe
eurIy purL oI LIe new yeur,
and institutional money
munugers LukIng LIeIr IoII-
duys durIng LIe summer
monLIs und LIus excIunge
voIumes droppIng durIng
LIIs LIme.
TIere Is un oId uduge
LIuL suys seII In Muy
und go uwuy, und wIuL
Sy HurdIng Ius done Is
reseurcIed LIe numbers
behind this and turned
IL InLo u LrudIng sysLem
LIuL LeIIs exucLIy wIen Lo
buy und wIen Lo seII LIe
broud murkeL us u wIoIe.
TIe sLruLegy Is LIus very
eusy Lo ImpIemenL usIng
one excIunge Lruded Iund
LIuL buys LIe Dow Jones
ndusLrIuI Averuge. You
cun ImpIemenL IL your-
seII onIIne wILI u dIscounL
broker wILIouL needIng
Its All About Timing
Lo use u hnuncIuI udvIsor,
but remember it needs
Lo be ImpIemenLed wILI
dIscIpIIne Lo work und us
uIwuys LIere Is guurunLee
LIuL LIe pusL perIormunce
oI LIIs sLruLegy wIII be re-
peuLed In LIe IuLure.
TIuL suId, LIe Lruck re-
cord oI Sy HurdIng Is very
ImpressIve. n LIe pusL 1
yeurs IL Ius reLurned z;1.
percenL compured Lo LIe
1q;.8 percenL reLurn LIuL
wouId Iuve goLLen Irom u
buy und IoId sLruLegy on
LIe DJA. NoL onIy LIuL,
LIe reLurns were u IoL Iess
voIuLIIe und oI LIe IusL Lwo
crusIes IL mIssed LIe hrsL
one enLIreIy mukIng sIn-
gIe dIgIL posILIve reLurns
durIng LIe doL com crusI.
DurIng LIe zoo8 crusI
LIe Ioss wus onIy .6 per-
cenL. n IucL sInce 1qqq
LIe sLruLegy Ius onIy Iud
Lwo down yeurs und boLI
were Iess LIun percenL.
TIe greuL LIIng ubouL
LIIs sLruLegy Is LIuL II you
already have any market
based investment set up
sucI us un osIore suv-
Ings pIun, you cun sLIII
ImpIemenL IL wILIIn LIe
sLrucLure. You muy need
Lo repIuce LIe DJA wILI u
sImIIur Iund sucI us u US-
bused or gIobuI bused eq-
uILy Iund, buL LIe overuII
seasonality that the strat-
egy Is bused on sIouId
produce sImIIur eecLs on
your porLIoIIo. AL u prIce
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August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
20
Myanmar Summary
Central Bank of Myanmar Strengthens
Grip over Foreign Loans
W
ILI u new cIr-
cuIur IeLLer
addressed to
Myunmur bunks duLed
JuIy zo1q (LIe CBM eL-
Ler), LIe CenLruI Bunk oI
Myanmar has reasserted
conLroI over IoreIgn Iouns
that are provided to do-
mesLIc und IoreIgn owned
borrowers In Myunmur.
TIe CBM Ius cIurIhed up-
proval requirements and
Increused LIe uccounL-
ability of Myanmar banks
Ior IoreIgn Iouns LIuL ure
brougIL InLo LIe counLry.
TIe CBM eLLer covers
sILuuLIons wIere LIe bor-
rower Ius obLuIned u per-
mit from the Myanmar
Investment Commission
(MC), us weII us uII oLIer
borrowers.
Ever sInce LIe udopLIon
oI LIe oreIgn ExcIunge
MunugemenL AcL (EMA)
und LIe oreIgn nvesL-
menL uw () oI zo1z,
LIe IuLe oI IoreIgn Iouns
Ius uIwuys remuIned
somewIuL conIusIng. AI-
LIougI LIere Is no doubL
that loans from overseas
ure possIbIe us u prIncIpIe
under boLI InsLrumenLs,
In prucLIce cIIenLs oILen
receIved conIcLIng In-
formation from bankers
und udvIsors wILI respecL
to the approvals and pro-
cess concerned. UnIorLu-
nuLeIy, LIIs conIusIon LIuL
wus noL reuIIy cIeured up
wILI LIe CBM DIrecLIve oI
zo1z wIIcI ImpIemenLed
EMA (oreIgn ExcIunge
DIrecLIve).
Edwin Vanderbruggen
Why the confusi on?
Part of the problem is
EMA ILseII. n LIe LexL
oI LIe Iuw, LIe crucIuI dIs-
LIncLIon LIuL Is mude Lo
uIIow IoreIgn excIunge
remILLunces Is LIuL oI
currenL uccounL versus
cupILuI uccounL, con-
cepLs LIuL ure oI course
adopted from interna-
LIonuI hnuncIuI Iuw. n
LIe Myunmur sysLem, uny
puymenL LIuL Is u currenL
uccounL puymenL wIII noL
be resLrIcLed by LIe CBM.
CerLuIn cupILuI puymenLs
cun be resLrIcLed by LIe
CBM. So, IL Is crucIuI Lo
know Ior uny puymenL
wIIcI cuLegory uppIIes.
IrsL oI uII, LIe dehnILIons
are not ideally drafted in
EMA sInce LIere Is onIy
u very brIeI descrIpLIon oI
wIuL comprIses LIe cur-
renL uccounL, und cupI-
LuI uccounL Is busIcuIIy
dehned us unyLIIng wIIcI
Is noL In LIe currenL uc-
counL.
Some oI LIe conIusIon
LIuL Ius pIugued IoreIgn
investors stems from
LIe IucL LIuL puymenLs
on loans are mentioned
In boLI cuLegorIes, und
wILIouL uny cIeurIy pre-
scrIbed dIerences. n s.z
(I), u sIorL-Lerm Ioun cun
resorL under currenL uc-
counL, (wILIouL specI-
IyIng LIe Lerm oI sucI u
sIorL-Lerm Ioun). How-
ever, In s.o reImburse-
menL oI Iouns In generuI
Is uIso menLIoned In con-
necLIon wILI LIe cupILuI
uccounL. n oLIer words,
Iouns ure sLruddIIng LIe
Lwo dIerenL muIn cuL-
egorIes wILIouL cIeurIy
speIIIng ouL wIIcI cIur-
ucLerIsLIcs wouId end up
a loan in the one or in the
oLIer cuLegory.
BuL LIere Is more. TIe
oreIgn ExcIunge DIrec-
LIve oI zo1z, Iouns ure In-
cIuded under LIe currenL
uccounL, buL IL Is uncIeur
if only short-term loans
ure meunL. PIus, LIe DI-
recLIve onIy reIers expIIc-
itly to loans approved by
LIe MC In ILs overvIew
table and leaves upon the
quesLIon wIuL wouId Iup-
pen wILI borrowers wIIcI
ure non-MC.
InuIIy, s.1; oI LIe or-
eIgn ExcIunge DIrecLIve
oI zo1z specIhes LIuL
Myanmar banks need
Lo revIew LIe purpose
oI LrunsIers Lo ussess
wIeLIer LIe LrunsIer wus
reuIIy u currenL uccounL
puymenL. I IL Is noL, LIe
remILLunce muy noL be
mude.
To sum IL up, LIe My-
unmur reguIuLIon oI LIe
Iouns ure cuugIL In seem-
IngIy overIuppIng Io-
cuI InLerpreLuLIon under
EMA wIIcI goes weII
beyond LIe cIussIc cur-
renL uccounL und cupI-
LuI uccounL bIIurcuLIon
us u cIunge oI owner-
sIIp In domesLIc usseLs,
ukIn Lo wIuL Is Iound In
InLernuLIonuI hnuncIuI
Iuw. Moreover, Myunmur
bunks muy Iuve LIeIr own
InLerpreLuLIon oI LIe pur-
pose oI u LrunsIer.
New CBM Letter on
for ei gn loans
TIe CBM eLLer cIeurs
up u Iew LIIngs, buL uIso
creuLes u seL oI new cIuI-
Ienges. TIe CBM eL-
Ler InLroduces u IIsL oI
elements that Myanmar
banks need to take into
uccounL wIen evuIuuLIng
IoreIgn Iouns, IncIudIng:
SIze oI Ioun und
Lenure, und Ioun conLrucL
Whether the inter-
est rate is a market-based
interest rate
Whether the busi-
ness plan of the resident
borrower Is upproprIuLe
Type oI LIe coIIuLeruI
und wIeLIer IL Is cupubIe
oI beIng perIormed In uc-
cordunce wILI LIe Iuw
Whether the repay-
menL scIeduIe Is uppro-
priate; and
OLIer eIemenLs de-
LuIIed In LIe CBM eLLer.
TIe CBM eLLer pro-
vIdes LIuL IIcensed bunks
LrudIng IoreIgn excIunge
sIuII revIew LIe poInLs
conLuIned |ubove| on LIe
busIs oI LIe IocuI busIness
sILuuLIon, LIe sILuuLIon oI
LIe projecL Lo be execuLed
wILI IoreIgn Ioun und ILs
expecLed Income, cupubII-
ity to repay loan and prof-
ILubIIILy Lo LIe counLry
und ILs peopIe.
TIe CBM eLLer envIs-
uges u new reporLIng und
upprovuI sysLem, wIere
Myunmur bunks wIII
need Lo coIIecL cerLuIn
duLu, muke un ussess-
menL ubouL cerLuIn crILe-
rIu, reporL InIormuLIon Lo
LIe CBM, und receIve un
upprovuI. L seems Lo us
that the Myanmar bank
wouId Iuve Lo go LIrougI
LIIs new process Ior eucI
Ioun, even Iouns LIuL were
already approved by the
MC. or u Myunmur
bunk noL Lo go LIrougI
LIe process und receIve
CBM upprovuI, wIIcI Is
LIeoreLIcuIIy possIbIe us
LIere Is no pIysIcuI re-
straint on release of funds
by u Myunmur bunk,
mIgIL enguge ILs IIubIIILy.
What wi ll happen i n
pr acti ce?
ObvIousIy, LIe ruLIer
wIde scope oI LIIs crILe-
rion may pose some prob-
lems for Myanmar banks
Lo InLerpreL und uppIy.
TIere Is IILLIe Lo guIn Ior
a Myanmar bank by ven-
LurIng ouL uIeud oI CBM
upprovuI, so LIe eecL
wIII oILen be LIuL Inwurd
Iunds wIII noL be reIeused
unLII LIe CBM Ius so up-
proved bused on u revIew
of the information that
musL be coIIecLed under
LIe CBM eLLer.
That means for in-
wurd remILLunces LIuL u
LrunsIer sIouId be weII
prepured In udvunce.
TIe requIred documenLs
sIouId be coIIecLed In ud-
vunce, und un ussessmenL
sIouId be mude wIeLI-
er LIe documenLs sIow
uny Iucunu wIIcI mIgIL
hold up the release of the
Iunds. CIIenLs sIouId Luke
LIe muLLer up wILI LIeIr
Myunmur bunker, und II
necessury reLuIn proIes-
sIonuI udvIce. nwurd
remILLunces mIgIL cuuse
real problems in a num-
ber oI cuses, sucI us wIen
un operuLIng IIcense Ior u
business has not yet been
secured, wIen LIe con-
LrucL Is noL enIorceubIe on
ILs Iuce, or wIen LIere ure
IeguI ImpedImenLs wILI
respecL Lo LIe usseLs con-
necLed wILI LIe Ioun. OI
course, In u more generuI
sense one mIgIL encoun-
Ler probIems wILI LIe pu-
perwork or wILI commu-
nIcuLIon.
Pr oblem scenar i os
for r epatr i ati on
It is essential for repa-
triation purposes that the
person wIo Ius brougIL
in the funds has properly
documenLed ILs InvoIve-
menL. OnIy LIIs person
cun exLrucL LIe sume
Iunds uguIn, us u ruIe. n
generuI, LIIs meuns LIuL
cIIenLs sIouId documenL
LIe process weII. n some
excepLIonuI cuses, LIere
muy be dImcuILIes wILI
LIIs. or exumpIe, In some
cuses Iunds ure brougIL
In us un udvunce Lo u IocuI
partner in a joint venture
beIore LIe ucLuuI JVCo Is
seLup In Myunmur. or
exumpIe, LIe IocuI purL-
ner mIgIL Iuve Lo puy u
deposIL on u Ieuse con-
LrucL Lo secure u properLy
before the formalities of
compuny esLubIIsImenL
Iuve been compIeLed. So,
LIe cupILuI uccounL oI LIe
JVCo wIII noL sIow LIe
person wIo brougIL In
LIe Iunds. I sucI Issues
ure noL hxed In Lerms oI
puperwork, LIere Is u rIsk
LIuL LIe re-exLrucLIon oI
LIe Iunds mIgIL be dIsuI-
Iowed uL u IuLer sLuge.
Edwin Vanderbruggen
is Partner at Yangon-
based law and tax advi-
sor jrm VD Loi.
The CentraI Bank of Myanmar has reasserted controI over foreign Ioans that are provided to domestic
and foreign owned borrowers in Myanmar, according to a recent circuIar.
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August 14-20, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
21
Myanmar Summary
Contd. P 22... Contd. P 22...
Myanmar: From Foreign Investment to
Improvement at Home
T
here must have
been u sIgI oI re-
IIeI us Ooredoo,
u QuLur-bused LeIecoms
compuny, sLurLed oer-
Ing ILs Iong-uwuILed SM
curds Lo Myunmur peo-
pIe, wIo wouId prevIousIy
pay hundreds of dollars
Ior somewIuL dysIunc-
LIonuI servIces. TeIenor,
unoLIer IoreIgn LeIecoms
IIcence wInner, vowed Lo
provIde neLwork coveruge
Ior qo percenL oI Myun-
mur`s popuIuLIon wILIIn
hve yeurs. Myunmur Ius
never Iud IL so good.
TIe Lwo IoreIgn com-
punIes ure weIcomed by
LIe governmenL us LIey
upgrude LIe counLry`s
ouLduLed LeIecommunIcu-
LIons InIrusLrucLure - one
oI LIe uIms specIhed In
LIe oreIgn nvesLmenL
uw () oI zo1z. How-
ever, us sLreums oI over-
seus InvesLors conLInue Lo
reucI Myunmur`s cousLs,
doubLs remuIn us Lo Iow
Lo LuIIor IoreIgn dIrecL
InvesLmenL (D) Lo My-
unmur`s udvunLuge, gIven
LIuL benehLs oI D Lo Ior-
eIgn hrms do noL uIwuys
coIncIde wILI LIose Lo LIe
IosL counLry.
As economIc IIsLory oI
LIIs counLry sIows, My-
anmars development
puLI wouId be exLremeIy
bumpy wILIouL Lruns-
nuLIonuI corporuLIons
(TNCs), wIIcI ure condu-
cIve Lo dIusIng LecInIcuI
knowIedge und munuge-
menL LecInIques Lo LIe
peopIe, und generuLIng
employment and taxation
Ior LIe sLuLe - Lwo oLIer
uIms LIe sLuLes.
D Ius un uddILIonuI
benehL oI dIIuLIng mo-
nopoIy power uL Iome by
exposIng renL-seekIng en-
LerprIses Lo gIobuI compe-
Gordon Wong
LILIon, us mosL economIsLs
noLe. TIIs Is perLInenL Lo
Myunmur, wIere IocuI
cronIes ure oILen uccused
oI LIILIng LIe sysLem Lo
LIeIr udvunLuge. Com-
peLILIve pressures wouId
IosLer emcIency und drIve
prIces down, und Myun-
mur peopIe wouId Iuve
LIe mosL Lo guIn.
TIuL suId, LIe pres-
ence oI cupILuI-ubundunL,
IIgI-LecI TNCs In Myun-
mur Is u bune Ior domesLIc
IndusLry, wIIcI ure sLIII
In LIeIr InIuncy. TIe 'In-
IunL IndusLry` urgumenL,
us IL Is cuIIed, sLIpuIuLes
LIuL deveIopIng coun-
tries should shield some
industries from overseas
compeLILIon so LIuL LIey
cun grow und compeLe
wILI IoreIgn ugsIIps on
u IeveI-pIuyIng heId. OLI-
erwIse, deveIopIng coun-
LrIes wIII be condemned
Lo Iow-IeveI producLIons
oI, In Myunmur`s cuse,
mInIng, jude und gus,
wIIcI ure subjecL Lo voIu-
LIIe prIce ucLuuLIons be-
yond Myunmur`s conLroI.
DeveIopIng sLuLes,
LIereIore, Iuce u dIIemmu:
eILIer InvILIng TNCs Lo
curb IocuI IndusLry In ILs
crudIe, or proLecLIng IocuI
IndusLry Lo embruce sLug-
nuLIon, sInce LIere Is no
wuy Ior IocuI IndusLry Lo
learn and adopt modern
LecInoIogIes In un uuLur-
kIc envIronmenL dehcIenL
oI LIe mosL busIc InIru-
sLrucLure.
To provIde u wuy ouL
oI LIe dIIemmu, |s|LuLes
need Lo muInLuIn u cer-
LuIn IeveI oI conLroI und
InpuL InLo LIe ucLIvILIes
oI IoreIgn InvesLors Lo en-
sure that they maximise
LIe benehLs Lo LIe IosL
counLry, RoberL O`BrIen
und Murc WIIIIums, Lwo
scIoIurs oI gIobuI poIILIcuI
economy, posIL.
Aung Sun Suu KyI, LIe
opposILIon Ieuder, ecIoes
LIIs vIew. We undersLund
that investors do not
come pureIy Ior uILruIsLIc
reusons. We uccepL LIuL
InvesLmenLs musL puy o,
investment must lead to
prohLs. BuL we wouId IIke
LIese prohLs Lo be sIured
beLween LIe InvesLors
und our peopIe, suId LIe
udy In Ier uddress Lo un
nLernuLIonuI ubour Or-
gunIsuLIon conIerence In
Genevu In zo1z.
TIe oreIgn nvesLmenL
uw oI zo1z uppeurs Lo
udopL LIIs upproucI. IrsL
und IoremosL, IL guurun-
Lees uguInsL nuLIonuIIsu-
tion and expropriation
und esLubIIsIes LIe rIgIL
Lo use Iund. TIIs ensures
LIe Inow oI D Lo be-
gIn wILI. WIuL LIe sLuLe
needs to do is to honour
its promise and thus up-
IoId ILs credIbIIILy.
One poInL oI sIgnIhcunce
Is LIuL LIe , unIIke ILs
counLerpurL In 1q88, now
requIres IoreIgn hrms Lo
uppoInL Myunmur cILI-
zens Lo uL IeusL z percenL
of skilled positions in the
hrsL Lwo yeurs, uL IeusL o
percenL wILIIn LIe second
Lwo-yeur, und uL IeusL ;
percenL wILIIn LIe LIIrd.
TIe LIme IImIL Is exIbIe
In LIuL IL muy be Increused
bused on knowIedge.
This enables Myanmar
elites to learn the best
skIIIs und prucLIces Irom
gIobuI cIumpIons, und
uILImuLeIy, Lo creuLe My-
unmur`s own nuLIonuI
brunds.
TIe sLuLes LIuL un-
skIIIed jobs uL TNCs ure
reserved Ior IocuI workers
onIy. TIe Iuw ruIes ouL
un IncreusIngIy popuIur
prucLIce oI repIucIng IocuI
workers wILI LIeIr own
counLrymen. L serves Lo
provide employment op-
portunities to millions of
unskIIIed workers In My-
unmur, wIo receIve wug-