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June 19-25, 2014

Myanmar Business Today


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mmbiztoday.com June 19-25, 2014| Vol 2, Issue 24 MYANMARS FIRST BILINGUAL BUSINESS JOURNAL
Myanmar Summary
Inside MBT
Myanmar Can Double Rice
Exports Through Policy Reforms: WB
Report advises Myanmar to rethink its rice export strategy
M
yanmar has
the potential
to more than
double its rice exports by
implementing policy re-
forms, a new World Bank
report said.
In a bid to increase rice
exports, Myanmar has to
diversify and increase its
rice production, open its
rice milling sector to di-
rect foreign investments
and reduce export pro-
cedure costs, thereby al-
leviating rural poverty,
said the report, Myan-
mar: Capitalizing on Rice
Export Opportunities, by
the World Bank and the
Livelihoods and Food Se-
curity Trust Fund (LIFT)
of Myanmar.
Reforms are required
as a policy environment
conducive to supporting
this refocus of the rice
export sector is essential
if anything is to change,
said Andrew Kirkwood,
LIFTs fund director.
Kirkwood said much of
the policy change can be
introduced without cost
May Soe San
Lo pubIIc hnunces.
Consistent economic
policies without anti-ex-
port bias, alongside the
currenL governmenL eorL
to improve farmer access
Lo hnunce, wIII oer IIgI
rates of return for Myan-
mar rice exports, for its
farmers and for the rural
poor.
Improving agricultural
productivity and promot-
ing rice exports have been
among the top priorities
for the current govern-
ment. Despite its plan
to export four million
tonnes of rice by 2020,
the actual annual rice ex-
port has reached only 1.3
million tonnes over the
past years.
The current rice ex-
port strategy favours the
production of low qual-
ity rice, which is largely
sold to Africa and China,
the report said, adding
that farmers have earned
mInImuI prohLs und ugrI-
businesses have skipped
necessary investments. It
warned that the situation
is worsening as the global
demand for low quality
broken rice is shrinking.
This is now a govern-
ment call to capitalise on
rice export opportuni-
LIes und secure sum cIenL
incomes to smallholder
farmers, said Kanthan
Shankar, the World
Banks country manager
for Myanmar.
Rice production is a
source of livelihoods for
about 70 percent of the
population. Higher and
more prohLubIe rIce ex-
port improves farm in-
comes and food security
of the rural poor, he said.
Shankar added that in-
creasing rice exports will
spur momentum for in-
clusive growth and pover-
ty reduction in Myanmar
for the next decade.
The report said there
are good market pros-
pects for Myanmar to ac-
commodate more diver-
sIhed rIce exporLs Irom
Myanmar over the next
10-15 years, particularly
in the European Union
and Asian countries, earn
higher incomes, and di-
versIIy rIsks uIong dIer-
ent markets.
The obstacles in hitting
these marks are low pro-
ductivity and poor rice
quality at the farm level,
undercapitalised and in-
em cIenL rIce mIIIs, und
costly export infrastruc-
ture and procedures, the
report noted.
Opening the rice mills
to direct foreign invest-
ments is, according to the
report, a vital step to take
to increase quality and
volumes of rice export.
Improving infrastructure
and reducing export pro-
cedure costs would also
boost Myanmars export
competitiveness, it added.
The World Bank report
A man works in a rice eId near the ThiIawa economic zone outside Yangon.
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Contd. P 12...(\B)
When Investors Turn into
Bullies P-7
US Commerce Secretary Touts
Closer Ties with Myanmar
P-10
Myanmars Institutional Infra-
structure Constraints and How
to Fill the Gaps P-11
June 19-25, 2014
Myanmar Business Today
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2
LOCAL BIZ
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Business News in Brief
Property tax to be i ntroduced to deter specula-
ti on
Arrangements will be made to levy property taxes on
speculators after studying international practices and
consulting experts, local authorities and businessmen,
Soe Muung, u mInIsLer In LIe PresIdenL`s Om ce, LoId LIe
Parliament in response to a query. Property prices in
Myanmar have reached record highs after the country
launched sweeping economic reforms in 2012.
MOGE i nvi tes tender for consultancy ser vi ces
State-run Myanma Oil & Gas Enterprise (MOGE),
under the Ministry of Energy, announced that it is in-
terested to establish joint venture or alliance projects
for drilling, seismic acquisition and pipeline construc-
tion and maintenance services with a potential partner
who is reputable and internationally recognised in the
reIuLed heId. TIe scope oI LIe ussIgnmenL, wIIcI Is Lo
commence around August 1, is to help in legal and tech-
nical assessment as required in J V processes, tender
documenL prepuruLIon, InspecLIon und prequuIIhcu-
tion of bidders, J V agreement and contract prepara-
tion, MOGE said. Duration of the assignment will be six
months, but may be extended, MOGE added.
Cehu Pocipc, Tigeroir set sights on Mgonmor
ights
Philippine-based Cebu Air I nc, operator of budget air-
IIne Cebu PucIhc, und subsIdIury TIger AIrwuys PIIIIp-
pInes InLend Lo y Lo Myunmur und Iuve sougIL LIe up-
proval of Civil Aeronautics Board (CAB) for a combined
2,520 seat entitlements per week to Yangon, Filipino
media reports. Cebu and Tiger both want 1,260 weekly
seats for the Manila-Yangon route. The Philippines and
Myanmar signed a new air agreement on May 20, up-
dating the pact that was signed in 1979 by increasing
LIe IgIL IrequencIes und seuL uIIocuLIons us u wuy oI
improving trade and investments between the South-
east Asian neighbours. The new agreement allowed the
designated airlines of each country a total of 3,780 seats
per week or ubouL LIree IgILs per duy Ior eucI counLry
between Manila and points in Myanmar.
Tuo more prioote honks to oer mohile honk-
i ng
Two more prIvuLe bunks wIII be uIIowed Lo oer mo-
bile banking services within weeks, bringing the total
number of such providers to four, local media reported,
cILIng u senIor cenLruI bunk om cIuI. TIe om cIuI suId LIuL
I nnwa Bank and Myawaddy Bank, both owned by the
mIIILury, currenLIy oer mobIIe bunkIng servIces, und
First Private Bank and CB Bank will be granted permis-
sion for mobile banking.
Mgonmor to set up Credit Bureou
Myanmar is preparing to set up a credit bureau that
will pave the way for some important steps forward in
LIe counLry`s hnuncIuI reIorms, IncIudIng LIe use oI
credIL curds, u senIor CenLruI Bunk om cIuI suId. CredIL
Curds were hrsL used In Myunmur In eurIy 1qqos buL
they disappeared when the banks that introduced them
collapsed in 2003.
EU lounches prst notionol crisis monogement
centr e
Myunmur Ius IuuncIed LIe hrsL nuLIonuI crIsIs mun-
agement centre in Nay Pyi Taw in a bid to help local
uuLIorILIes reucL more quIckIy und eecLIveIy In Iuce oI
emergencies, the European Union said. The EU-funded
centre will be ready for 24-hour service and work to-
gether with the ASEAN Coordination Center for Hu-
manitarian Assistance and other crisis management
centres from member countries of the ASEAN in emer-
gency situations.
NRL mog export fuel to Mgonmor
ndIu`s NumuIIgurI Rehnery Ld (NR) Is now ex-
ploring opportunities to export its products to Myan-
mar and is understood to have initiated a process to
ink a deal with the neighbouring country, according to
I ndian media reports. P Padmanabhan, managing di-
recLor oI NR, suId LIe hrm Ius uIreudy sLurLed u dIs-
cussion with the Ambassador of Myanmar to I ndia and
he is positive in that regard, Assam Tribune reported.
According to a study, the demand for oil products in
Myanmar is expected to reach 60,000 barrels per day.
Myanmar Summary
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June 19-25, 2014
Myanmar Business Today
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3
LOCAL BIZ
Myanmar Summary
Myanmar Summary
Myanmar Summary
Thilawa SEZ Construction Permit by July
Htun Htun Minn
C
onstruction permits for
Thilawa Special Econom-
ic Zone will be granted
by J uly, U Set Aung, chairman
of Thilawa SEZ Management
Committee, said.
Most of the countries seeking
permit are from Asia, he added.
A total of 45 companies from
11 countries have currently
applied for permits for the
394-hectare (960 acres) Class
A area, which went on sale last
month for manufacturing en-
LerprIses us LIe hrsL sLuge oI LIe
project.
Majority of the applicant
companies are from J apan, fol-
lowed by Hong Kong. Only one
US company and three Swedish
companies have submitted pro-
posal to lease land, U Set Aung,
who is also the Vice President of
Central Bank of Myanmar, said.
Among ASEAN countries,
most proposals came from
Thailand, Singapore and Ma-
laysia. Currently, we are scruti-
nising the applications and we
will grant construction permits
by next month, he said.
I nvestors who want to lease
land inside the project area are
allowed to get the land on a 50-
year lease with $70 per square
metre, a source from the Thil-
awa SEZ Public Company said.
Companies need to submit
business and investment plans
to get the land and the board
Committee to Halt Granting
Foreign Bank Licences
May Soe San
T
he Banking and Finan-
cial Development Com-
mittee of the Parliament
will propose to the Central
Bank of Myanmar to halt grant-
ing banking licences to foreign
banks until a modern Financial
I nstitutions Law is enacted, a
member of the committee said.
nLernuLIonuI hnuncIuI Iuws
have provision to deal with
corruption in banks but My-
anmars 1990 Financial Law
doesnt have such terms. We
have to amend the current law
or enact a new one to make way
for provisions like this, U Phyo
Min Thein, who is also a Mem-
ber of the Parliament, said.
The committee recently met
with the foreign bank licence is-
suing committee and local bank
representatives and decided to
carry out further steps to having
a modern law, he said.
According to recent reports,
the government is expected to
grant licences to as many as 10
foreign banks to carry out lim-
ited operations in Myanmar.
There are 36 foreign banks who
have opened their representa-
LIve om ces In Myunmur. TIe
government may grant the li-
cences by the end of September,
a Reuters report said.
L Is very dIm cuIL Ior LIe IocuI
banks to advise regarding for-
eign bank licences as no regu-
lations have been issued by the
Central Bank of Myanmar, said
U Pe Myint, managing director
of Cooperative Bank.
Police to Beef Up Security for
Foreign Buyers at Jade Expo
Kyaw Min
M
yanmar Police Force
will arrange special se-
curity for foreign gems
buyers at the upcoming Myan-
ma Gems Emporium at Nay Pyi
Taw, U Kyaw Htay, secretary of
Gems Entrepreneurs Associa-
tion, said.
The authorities will deploy a
special tourist police force unit,
which will also provide health
services and other assistances
to foreign gems buyers, he said.
We would like to ensure safe-
ty for all the foreign buyers and
we will try to provide every kind
of assistance, U Kyaw Htay
said.
The 51st Myanma Gems Em-
porium will be held from J une
24 to J uly 6 at Mani Yadana
Hall in the capital city.
A total of 7,500 gem lots will
be displayed at the emporium
2,100 lots of which are from the
government and the rest will be
displayed by local companies.
will base their decisions de-
pending on the plans, he added.
We will decide based on the
structure of the factory and
how they are going to use those
lands. There is no time limit for
the construction of the factory.
We will also check their com-
mercial operation plan, U Set
Aung said.
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Iabourers carry out infrastructure construction work at the ThiIawa SpeciaI Economic Zone (SEZ) project outside Yangon.
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A trader checks the quaIity of jade at Myanmar`s Mid-Year Emporium for jade,
gems and pearIs at an emporium haII in the capitaI Nay Pyi Taw.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
4
Myanmar Summary
Myanmar Summary
Yusen Logistics Opens
Myunmur Omce
Aye Myat
J
apanese freight forwarder
and logistics services pro-
vider, Yusen Logistics has
opened ILs omce In Yungon, LIe
hrm suId.
TIe omcIuI InuuguruLIon oI
Yusen Logistics (Myanmar) Co
Ltd sees Yusen Logistics pres-
ence increase to 40 countries
around the world, Yusen said in
a statement.
Hiromitsu Kuramoto, presi-
dent of Yusen Logistics Co Ltd,
said: With our medium-term
business plan ... Yusen Logis-
tics will continue to push ahead
with our expansion program in
the ASEAN region.
We are continuing to build
on our established infrastruc-
ture, rolling out networks to
mirror clients changing sourc-
ing patterns.
Hiromitsu said with the grow-
ing importance of logistics in
US to Help Myanmar
Improve Highway Safety
Aung Phyo
T
he United States will
help Myanmar improve
the safety of the Yan-
gon-Mandalay highway where
hundreds of car accident cases
Iuve occurred over LIe pusL hve
years.
The United States Agency
for I nternational Development
(USAI D) and the Ministry of
Construction signed a letter of
agreement recently on this re-
gard.
US architecture and engi-
neering experts will train and
mentor Ministry of Construc-
tion engineers and technicians
in international highway safety
standards as they construct
safety enhancements along a
ten-kilometre section of road.
This demonstration section,
funded in cooperation with the
US Government, will serve as
a model for ongoing improve-
ments implemented by the
Ministry of Construction along
the full length of the highway,
the US Embassy in Yangon said
in a statement.
As the economy grows, trans-
portation infrastructure will
have to accommodate more
Lrude und Lrumc, suId US Am-
bassador Derek Mitchell.
But this issue is about more
than economic development;
it is about saving lives. I am
pleased the United States will
be able to improve a small sec-
tion of the Yangon-Mandalay
Highway, and work with the
Ministry of Construction to
help address very real concerns
about safety standards.
The Yangon-Mandalay High-
way, which is the main ground
route from Yangon to Nay Pyi
Taw and runs through the cen-
tre of the country, stretches
386 miles between Yangon,
the countrys commercial cen-
tre, and Mandalay, a city of ap-
proximately one million people.
Three thousand vehicles drive
the highway every day.
I ncreased speed and a lack of
standard highway safety meas-
ures have resulted in a dispro-
portionately high number of
vehicular fatalities on this road.
AccordIng Lo omcIuI sLuLIsLIcs,
durIng LIe hve yeurs Irom zooq
to 2014, over 700 highway acci-
dents have claimed the lives of
over 360 victims.
Myanmar, Yusen Logistics pro-
vision of valuable logistics ser-
vices will contribute to the de-
velopment of the country.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
5
Myanmar Summary
Ball Corp Becomes First US
Investor in Thilawa SEZ
Phyo Thu
A
merican packaging and
uerospuce hrm BuII Cor-
poration is to set up a
one-line beverage can manufac-
turing plant in the Thilawa Spe-
cial Economic Zone (SEZ).
TIIs mukes BuII LIe hrsL US
company to invest in the much-
touted Thilawa SEZ, 20 kilome-
tres southeast of Yangon.
Last month Ball announced
that it will open a can plant in
Myanmar, without specifying
the factory location.
A contract agreement was
signed between Ball Corp and
the Myanmar-J apan Thilawa
Development (MJ TD) Co Ltd
for the establishment of the
plant. The signing came on the
heels of US Secretary of Com-
merce Penny Pritzkers Myan-
mar visit earlier this month.
The US Embassy in Yangon
said in a statement that the
plant will employ local work-
ers und represenLs u sIgnIhcunL
contribution by a US company
to Myanmars development.
The United States believes
that responsible investment
by US companies in this coun-
try can support broad-based
economic development, help
deepen continued political and
economic reforms, and high-
light the highest standards of
corporate social responsibility,
the statement said.
The one-line plant is expected
to begin production in mid-
2015 with investment in the fac-
tory to the tune of $40 million,
Ball Corp said.
TIe hrm wIII buIId u IucII-
ity to produce beverage cans
for Coca-Cola Pinya Beverages
under a long-term agreement,
as well as other local, regional
and multinational customers, it
said.
During an event highlighting
US investment, including Balls
new plant, Pritzker said the Ball
factory opening is already en-
couraging further engagement
by US hrms LIuL ure weII-es-
tablished in Myanmar.
Coca-Cola is one of these
companies. Coca-Cola re-
opened operations here in
2012, began manufacturing lo-
cally one year ago, and has al-
ready committed to buy more
than half of the cans produced
at Balls new facility, she said.
When our [American] busi-
nesses make investments, they
bring with them the highest
standards, including a commit-
ment to corporate and social re-
sponsibility, she added.
More than 45 companies from
various countries are in the pro-
cess of setting up manufactur-
ing plants and industries in the
SEZ, state-run media reported.
MJ TD was formed by two My-
anmar companies and two J ap-
anese companies, with stakes
split 51 percent for Myanmar
and 49 percent for J apan.
The two Myanmar compa-
nies are Thilawa SEZ Manage-
ment Committee and Myanmar
Thilawa SEZ Holdings Public
Co Ltd (MTSH), while the two
J apanese companies include
MMS Thilawa Development Co
Ltd and J apan I nternational
Cooperation Agency (J I CA).
The land lease procedure for
Phase 1of the Thilawa Class A
Area, which is about 396 hec-
tares (978 acres), started last
month.
The commercial run of the
SEZ is expected in mid-2015.
Japan Gives $75m for
Construction, Rural
Ilectricution
Zwe Wai
T
Ie Jupunese governmenL wIII provIde hnuncIuI
assistance worth $75.7 million for the develop-
menL oI consLrucLIon und ruruI eIecLrIhcuLIon In
some areas of Myanmar.
Three memoranda of understanding (MoUs) were
signed between Deputy Minister for National Planning
and Economic Development Daw Lei Lei Thein and
Japanese Ambassador to Myanmar Tateshi Higuchi in
Nay Pyi Taw recently.
AccordIng Lo LIe MoUs, Jupun wIII hnunce q.zz
billion ($41.3 million) for the construction of the new
TIukeLu brIdge, z.1 bIIIIon ($zq.6 mIIIIon) Ior LIe
upgrude oI LIe nsLILuLe oI EducuLIon und qqq mIIIIon
($q.8 mIIIIon) Ior LIe ImpIemenLuLIon oI ruruI eIecLrIh-
cation projects.
Myanmar Summary
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
6
S Korea to Open Polytechnic University
in Myanmar
To provide assistance in agricultural development
Zwe Wai
S
outh Korea and Myanmar
will cooperate in technol-
ogy development by open-
ing a polytechnic university in
the Southeast Asian country.
The government has ap-
proved a draft memorandum
of understanding between My-
anmar and South Korea on this
project, according to Dr Aung
Kyaw Myat, deputy minister for
science and technology.
The South Korea Polytechnic
University and the Ministry of
Science and Technology are
conducting a feasibility study
for further discussions on sub-
jects and curriculums planned.
South Korea has been helping
Myanmar in the development
of a number of sectors includ-
ing agriculture and its mecha-
nisation, irrigation technology,
rural and socio-economic de-
velopment, and public health.
The Korea International Co-
operation Agency (KOICA) is
also providing assistance in
GAP Becomes First US Apparel
Retailer in Myanmar
Cap Inc said it pIans to produce appareI at factories in Myanmar.
A
merican clothing
and accessories re-
tailer Gap Inc said
it plans to produce ap-
parel at factories in My-
unmur, mukIng IL LIe hrsL
major US apparel retailer
to enter the impoverished
Southeast Asian nations
lucrative garment indus-
try.
The US Embassy in Yan-
gon said products made
at two Yangon factories
would be in Gap stores by
this summer.
The garment industry
stands poised to become a
sIgnIhcunL source oI jobs,
exports and opportuni-
ty for the people of this
country, the US embassy
said in a statement.
The San Francisco-
based retail giant said it
has signed a sourcing deal
with South Korean-owned
factories in Myanmar,
while the two factories
are reportedly producing
vests and jackets for the
companys Old Navy and
Banana Republic brands.
According to textile in-
dusLry hgures, Myunmur`s
garment exports had hit a
high of $850 million in
2001, but plunged after
the US toughened sanc-
tions in 2003 in protest
at the juntas detention of
Aung San Suu Kyi.
Myanmars garment in-
dustry which employed
approximately 300,000
people in the early 2000s,
according to government
hgures - wus IIL Iurd by
the trade embargo. Be-
fore the embargo, apparel
Kyaw Min
P
a
u
l
S
a
k
u
m
a
/
A
s
s
o
c
ia
t
e
d

P
r
e
s
s
accounted for nearly 40
percent of Myanmars
exports, with about half
going to the US. In 2004,
the US State Department
estimated more than
50,000 garment jobs had
been lost to sanctions.
The Obama administra-
tion started lifting those
sanctions in 2012, after
a new nominally civilian
government in Myanmar
enacted a series of eco-
nomic and political re-
forms.
More than a year ago,
Coca-Cola Co started
producing Coke in My-
anmar, pledging to spend
$200 million here over
hve yeurs. OLIer AmerI-
can companies, including
General Electric and APR
Energy, have embarked
on sIgnIhcunL InvesL-
ments in Myanmar. In
Junuury, GE`s hnuncIuI
arm signed a $960 mil-
lion contract to lease 10
Boeing aircraft to carrier
Myanmar Airways, and
in February APR Energy
won a contract to refur-
bish a 100-megawatt
power plant in the coun-
try, an investment valued
at $30 million.
Gap, which sources ap-
parel from roughly 40
countries, didnt specify
how much it is investing
in the Myanmar project.
Based on the employment
Gap expects to create
ubouL ;oo jobs Lo IuIhI
its apparel orders and as
many as 4,000 indirect
jobs in the country it is
likely one of the largest
US economic commit-
ments to Myanmar since
the end of sanctions, the
Wall Street Journal re-
ported.
Gap said its decision
to source garments from
Myanmar was taken after
a rigorous due diligence
process which saw the
company engaging ex-
tensively with US govern-
menL omcIuIs, IndusLry
and union representatives
and international and lo-
cal NGOs in Myanmar
in order to better under-
stand the opportunities
and challenges of doing
business in the country.
As part of the companys
commitment to transpar-
ency, Gap said it will vol-
untarily disclose and pub-
lish information about
its practices in Myanmar
consistent with the Unit-
ed States governments
reporting procedures.
Gap will also operate in
partnership with the US
Agency for International
Development (USAID) on
a project to improve skills
among Myanmars largely
female textile industry
workforce.
The companys partner-
ship with USAID will help
lay the foundation for Gap
Inc to provide growth and
economic opportunities
for women in the country,
the US embassy said.
By entering Myanmar,
we hope to help acceler-
ate economic and social
growth in the country,
and build on our track
record of improving
working conditions and
building local capacity in
garment factories around
the world, said Wilma
Wallace, the vice presi-
dent of Gaps Global Re-
sponsibility division.
The US embassy state-
ment, which was released
following the signing of
the USAID partnership,
added that Gap would
ensure the factories it is
sourcing from meet in-
ternationally recognised
human rights and labour
standards. Gaps ven-
dors in Myanmar will be
bound by the companys
Code of Vendor Conduct,
it said.
Workers at the South
Korean-owned factories
supplying the Gap prod-
ucts which Gap says
cunnoL be IdenLIhed Ior
competitive reasons
are paid an estimated
average of $110 a month,
with supervisors earning
as much as $1,000, ac-
cording to the Wall Street
Journal.
Gap makes clothing, ac-
cessories, and personal
care products for men,
women, children, and
babies under its Gap, Ba-
nana Republic, Old Navy,
Piperlime, Athleta, and
nLermIx brunds. n hs-
cal year 2013 its net sales
were $16.1 billion from its
stores in about 90 coun-
tries worldwide.
Myanmar Summary
Myanmar Summary
some projects being imple-
mented for the development of
agriculture, encouraging export
of Myanmars farm produce to
South Korea.
Under u hve-yeur pIun, LIe
KOICA is helping Myanmar
establish a Post-harvest Tech-
nology Application Center in
Nay Pyi Taw and provide farm
equipment for killing pests in
fruits and vegetables plants.
KOICA also helped Myanmar
in agricultural mechanisation by
training farmers at Yezin, Nay
Pyi Taw, while upgrading farm-
land in other areas in the capital.
Under a framework agree-
ment, KOICA also extended a
grant aid for 2013 to help My-
anmar in the development of
road network, a national statis-
tical system, capacity building
strategy for conferences, land
reform program for mechanised
farming and forest greening.
AccordIng Lo omcIuI sLuLIsLIcs,
South Korean investment in
Myanmar stood at $3.05 billion
in 86 projects as of January, ac-
counting for 6.7 percent of the
total foreign input placing it
sixth among foreign investor
countries.
Bilateral trade between Myan-
mar and South Korea reached
$1.76 billion in 2013, of which
Myanmars export to South Ko-
rea accounted for $554.59 mil-
lion.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
7
Myanmar Summary
Contd. P 8...(Investors) Contd. P 8...(Investors)
LOCAL BIZ
When Investors Turn into Bullies
MySQUARs Canadian founder Rita Nguyen tells a warning tale of trust in Myanmar
M
any people have
been reaching
out to me lately
to ask for details on the
management shakeup
at MySQUAR and to
date, Ive been fairly qui-
et about it because I was
hoping to keep things civ-
ilised, despite the hostile
and aggressive manner in
which the other side has
been handling everything.
Now that they have issued
a press release letting
everyone know that Ive
stepped down, its time
to set the record straight
because Im damned if
they tell my story for me.
On May 9, I came back
to Ho Chi Minh City
(HCMC) Lo hnd ouL LIuL
the MySQUAR board of
directors had removed me
as the CEO with no notice
and no reason given. Dur-
ing the course of that one
hour meeting they had cut
o my emuII und removed
me from all the internal
systems and have since
changed the locks on the
doors. Even worse, they
did the same to my co-
founder but didnt even
give her the courtesy of
letting her know. Instead,
she found out when one
oI LIe udmIns uL LIe om ce
called her to ask her about
what was going on.
The ensuing weeks have
been highly emotional but
as mentioned, Ive kept
it pretty quiet until now
simply because I believed
them when they said that
they wanted to handle
this amicably. Instead,
they have spent the past
few weeks adding insult
to injury at every turn in-
Rita Nguyen
cluding kicking us out of
the apartment in Yangon,
sending me veiled threats
ubouL my hducIury duLy
(Ive since resigned from
the board), sending us
threatening (but empty)
letters from lawyers and
as of June 6, bullying our
lawyer into dropping us
due Lo u conIcL oI InLer-
est.
One of the directors
and shareholders of MyS-
QUAR is Piers Pottinger
of Bell Pottinger, a big PR
hrm ouL oI LIe UK wIo
guess is a client in another
market. Despite the fact
that Piers invested per-
sonally (and only a small
amount) into MySQUAR,
hes decided to go through
our lawyers international
partners to put pressure
on our lawyer to drop
us. Im not entirely sure
how they do business at
Bell Pottinger but in my
world you pay expenses
and severance when you
hre someone - you do noL
engage in further bullying
tactics.
At this point the com-
pany has not paid the out-
standing expenses that my
co-founder and I have in-
curred, the salary that we
had not been paid for the
last two months as well as
anything related to sever-
ance for termination. In
addition to that, we have
found out that they had
removed or I was lied
to and the investors were
never added several of
the early investors as le-
gal shareholders in the
company. So not only am
I out tens of thousands of
dollars, so are many of my
friends and family who
believed in me back when
we didnt have anything
other than an idea and a
pitch deck. In the grand
scheme of things, its a
lot of personal money for
my co-founder and I but
little more than a round-
ing error for them. But its
been radio silence from
them, other than getting
my lawyer in Singapore to
drop us.
Given Bell Pottingers
comfort level working
with governments with se-
rious human rights viola-
tions, perhaps a complete
disregard of employment
rights is to be expected of
one of the name partners
und yeL sLIII cun`L hgure
out what possible reason
they would not only take
my company but do it in
such a disrespectful and
hostile manner. Now Im
eecLIveIy buck uL squure
one und need Lo hnd u
lawyer who is strong and
willing enough to take on
a beast like Bell Pottinger.
For those of you in My-
anmar, Bell Pottinger is
coming to the country
to work with the largest
conglomerate in Myan-
mur - one LIuL Is hrmIy

Given Bell Pottingers


comfort level working
with governments with
serious human rights
violations, perhaps a complete
disregard of employment rights
is to be expected.
Rita Nguyen, founder of MySQUAR, at a tech festivaI.
T
e
c
h
c
r
u
n
c
h
. ~.~: . :. . :. ~.~:
.~..: ~,.~ MySQUAR
. :_ e. .,~ . . ., . . . ~ .,
~:q ~._~: .~_._ ~. ~
..._., ._~.|~e ..|... ~, .
.~: .|~ . . .~: ~ .._.:
.~~~~ _._...~.~.,
.~:.|. .|... ~.e~~.~:
~~,..~ ..~_.. ~~.
~~. . . ..: .,~:_e. .|
~e. ~..~: .~~ ~
_.,.~~..~_.. ~,.~
ee.~.|_.. ..~: ~,.
~.,, _.~_.~.:..:.._.:e
..:.|_.. :....~:
~~~~ ~,.~._~:.~
.~._.:_..: ...:...|..
... q~ ., ~, .e . . .
_..~:~.,_.,.:.,.:.~:
MySQUAR ~ .|,~~:
~~ee: ~,.~ .~...
_.. ._eq._....., CEO
.,q:~.,_ e ~ . :. ~e
. ~:~ ..~q.|~e. ~.
~~ ~ ~. ,:q_~:.~:~._ .
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
8
on American sanctions
list. Whats more scary is
that Piers recently told me
that they were pitching to
jointly represent The Lady
(Daw Aung San Suu Kyi)
as well as one of the other
IIgI prohIe governmenL
omcIuIs - u mun wIo Is
a very likely presidential
candidate. Given the bru-
tal way they do business,
I fear for this country if
these leaders have com-
panies that work like Bell
Pottinger whispering in
their ears.
Crongism in Mgon-
mor - Contogious?
I was warned over and
over again to not trust
business people in Viet-
nam and yet here I am.
Lets start at the begin-
ning. A year ago when I
was launching MySQUAR
a friend in Vietnam in-
troduced me to Eric
Schaer, the CEO of Ris-
ing Dragon, an advisory
group who was helping
companies set up in My-
anmar. Given how much
this market was changing
every day, it made sense
for us to enlist the servic-
es of Rising Dragon. The
basic terms were that we
would give Rising Dragon
u IuIrIy sIgnIhcunL umounL
of equity in return for
them getting us free of-
hce spuces In Yungon und
HCMC as well as handling
out legal incorporation in
Myanmar, Singapore and
Vietnam. The other piece
here is that I would retain
proxy voting rights for the
shares. About a month
later, we also started pay-
ing Rising Dragon a hefty
From page ;...(Investors)
From page ;...(Investors)
consulting fee, about 10
percent of our burn rate
to be our acting CFO. I n
the ensuing eight months
he has been helping us
to raise money has been
a travesty and now hes
even stolen the company.
TIere`s been no Iree omce
spaces and while I have
proof that he was work-
ing on the proxy voting
docs, that never hap-
pened either. As the CEO,
this is of course my fault
to stupidly trust him and I
have learned some major
lessons on keeping your
house in order.
Eric has leveraged all
the relationships he got
through his involvement
with MySQUAR to create
his own crony network
and many of the MyS-
QUAR shareholders are
now also shareholders in
Rising Dragon subsidiar-
ies, not to mention that
Eric is also a shareholder
in many of their compa-
nies. Since theres been
complete radio silence
from all the sharehold-
ers since this happened,
I m not sure whos sleep-
ing with whom and how
deep it goes but the share-
holder list is publicly ac-
cessible in ACRA should
anyone be interested.
Any entrepreneurs who
are fundraising in Asia,
I highly recommend you
research your possible in-
vestors and talk to other
entrepreneurs who have
worked with them.
As I mentioned previ-
ously, conveniently, many
of my friends and family
who would most certainly
have not voted against
me are not in ACRA. I m
not sure why but there is
most certainly a case here
for deeper investigation
especially given the paper
trails I keep.
So where does that leave
me?
I am on the hunt for my
third lawyer now. I can
bunkrupL myseII Lo hgIL
for the compensation
owed me or I can spend
my time building some-
thing new. With all the
lessons and contacts I ve
already made, it will take
me far less than a year to
get to where MySQUAR is
today. As an entrepreneur
you learn very quickly
to move on from sunk
costs and to not let it col-
our your decisions. From
that angle, I ve lost a year
and some money, both of
which I can deal with. My
pride was also bruised and
conhdence sIuken buL `m
surrounded by amazing
people who have reached
out in an overwhelming
show of support. And of
course there is also the
reputation thing. Let me
reiterate this: there was
absolutely no reason giv-
en and frankly, no reason
that they could have given
for this move other than
greed and a full on land
grab.
I dont know exactly
whats next but rest as-
sured you havent seen
the last of me. I wasnt
named on Forbes Wom-
en to Watch in Asia list
for nothing. Thankfully
I was raised in a society
where you celebrate and
embrace failure because
this whole thing was full
oI IuIIures und `m hnuIIy
getting to a place where I
can accept that and move
forward. I hope that by
sharing this story, I can
help some others out
there who may be facing
similar issues. I f nothing
else, let this be a warning
tale of trust.
So my journey with
MySQUAR largely comes
to an end but my entre-
preneurial journey is still
in the beginning. For
those of you who have
reached out thank you.
I could not have made it
through the past month
without your love and
support. For those of you
learning about this for the
hrsL LIme, sorry Ior LIe
shock but this is just the
cII Iunger uL LIe end oI
LIe hrsL cIupLer, LIere`s
so many more good things
to come out of Myanmar.
Rita Nguyen is the
founder of MySQUARE,
Mcnmcr's jrst socicl
netuorlin site. Ritc jrst
published this post in her
blog and it has been re-
published here with her
permission. The opinions
and views expressed here
are the authors own and
don't necesscril reject
Myanmar Business To-
days editorial opinion.

Given the brutal way they


do business, I fear for
this country if these lead-
ers have companies that
work like Bell-Pottinger whis-
pering in their ears.
Rita Nguyen with MySquar staff at a tech festivaI.
T
e
c
h
c
r
u
n
c
h
Panel Deals Blow to Suu Kyis Chances of Becoming President
N
obel laureate Aung San
Suu Kyis hopes of be-
coming Myanmars
president next year have been
dealt a blow when a parliamen-
tary committee voted not to
change a constitutional clause
that bars her from the post, two
of the panel members said.
The committee tasked with
recommending amendments
opted to retain the section that
prevents anyone married to a
foreigner or with children of
foreign citizenship from becom-
ing head of state.
The two sources declined to
be IdenLIhed und dId noL suy
why the proposal was rejected
by 26 of the 31panellists.
Most experts believe the
Aung Hla Tun clause, 59 (f), was written into
the military-drafted 2008 con-
sLILuLIon specIhcuIIy Lo sIdeIIne
Suu Kyi, who became a global
Icon Ior Ier hgIL uguInsL mIII-
tary rule, most of it from house
arrest.
Her late husband was British,
as are her two sons.
OnIy hve oI LIe 1 commIL-
tee members voted in favour
of amending the section at the
closed door meeting of the com-
mittee, said a member who re-
quested anonymity because the
commILLee`s uuIrs ure meunL
to be secret.
Suu Kyi and her National
League for Democracy (NLD)
party have been pushing for
constitutional change ahead of
next years election, mainly to
reduce the political clout of the
military, which ruled Myanmar
for 49 years until a nominally ci-
vilian government led by retired
generuIs Look omce In zo11.
The committee picked to as-
sess amendments has only
two NLD members on it and is
comprised mainly of lawmak-
ers from the ruling Union Soli-
darity and Development Party
(USDP), which was created
from a social movement of a
similar name set up by the for-
mer junta.
The USDP has 14 people on
the panel and seven members
ure servIng mIIILury omcers up-
pointed as lawmakers as part of
a 25 percent legislative quota
allocated to the armed forces, a
cIuuse LIe ND, wIIcI suered
persecution by the former re-
gime, wants to change.
Myanmar lawmakers are as-
sessing changes to the constitu-
tion ahead of next years parlia-
mentary election.
A vote in the bicameral legis-
lature to change the constitu-
tion to allow Suu Kyi to become
president is still possible, al-
though political analysts say it
is extremely unlikely it would
be passed because the military
and its USDP allies dominate
parliament.
Her party, however, said it
was not over yet.
We cant say Daw Aung San
Suu Kyi has no chance of be-
coming the president until the
union parliament approves it,
said spokesman and senior par-
Ly omcIuI Nyun WIn.
We need to wait till the com-
mILLee submILs ILs hnuI sugges-
tions at the parliament.
Myanmars constitution was
crafted by the former junta as
the basis for the countrys grad-
ual transition to democracy.
The semi-civilian government
has surprised the world with
reforms that were unthinkable
under direct army control and
managed to convince Suu Kyi
and the NLD to join parliament.
Reuters
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Myanmar Summary
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
9
Myanmar Summary
APR Switches on 1ooMW Myunmur Power Plunt
APR Energy's 1UUMW power pIant in Kyaukse, MandaIay.
A
merican power so-
lutions provider
APR Energy an-
nounced that the com-
panys power generation
plant in Myanmar is now
fully operational.
I n February, APR
clinched a contract
to build a fast-track
100-megawatt power
plant in upper Myanmar,
becomIng LIe hrsL AmerI-
can company to sign a
power generation agree-
ment with the govern-
ment since the lifting of
sanctions in 2013.
Based in Kyaukse, Man-
dalay region, the plant
provides the Myanmar
Electric Power Enterprise
(MEPE) with a guaran-
teed minimum of 82MW
of power and will enable
the provision of electricity
and power to more than
six million people, APR
Energy said in a state-
ment.
The contract, which is
on a rental basis, is ex-
pected to run through to
late 2015.
Clive Turton, manag-
Ing dIrecLor AsIu PucIhc
at APR Energy, said: The
commissioning of our
thermal power generation
plant, one of the largest
in the country, is an im-
porLunL hrsL sLep Lowurds
establishing adequate re-
liable power generation
capacity in Myanmar.
We look forward to
playing a continued role
to help Myanmar supply
power emcIenLIy und reII-
ably to its people and in-
dustries.
Turton said Myanmar
is a fast growing econo-
my and the country, like
many others in the region,
needs reliable power in
order Lo begIn IuIhIIIng ILs
potential.
The project represents
another substantial in-
vestment by a US com-
pany in the infrastructure
oI Myunmur, und LIe hrm
said it will contribute to
the economic and social
progress of Myanmar by
employing local people
and supporting commu-
nity development pro-
grams.
Fuelled by natural gas
from the Shwe Gas Pro-
ject, the plant features 68
of the newest generation
CAT low-emission mo-
bile gas power modules
(GPMs) und wIII oer
Wai Linn Kyaw
one of the cleanest power
generation solutions in
Myanmar, APR said.
Penny Pritzker, US Sec-
retary of Commerce, who
was on a visit to Myanmar
recently, said APR pro-
viding power solutions
in Myanmar is critical,
particularly as 75 percent
of the countrys popula-
tion lacks access to elec-
tricity.
The engagement of US
businesses in Myanmar
will help promote inclu-
sIve growLI LIuL benehLs
all of the countrys peo-
ple, she said.
Turton, in an earlier in-
terview with Myanmar
Business Today, said the
hrm pIuns Lo work wILI LIe
ministry to provide solu-
tions for further power
needs and have more po-
tential projects.
We are very keen to
develop our businesses in
the market and we will be
looking forward to mak-
ing a lot of investments in
this country in this par-
ticular sector.
W
a
i
L
in
n

K
y
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
10
Myanmar Summary
US Commerce Secretary Touts
Closer Ties with Myanmar
Penny Pritzker discusses economic engagement, announces frst-ever Commercial Service Ofce in Yangon
Wai Linn Kyaw
T
he US Department of
Commerce Secretary
Penny Pritzker trumpet-
ed the United States commit-
ment to closer economic and
commercial ties with Myanmar
during her recent visit to the
Southeast Asian country.
To promote new investment,
Pritzker announced the open-
Ing oI LIe hrsL-ever US or-
eIgn CommercIuI ServIce omce
in Yangon, which will support
American businesses to navi-
gate and invest in Myanmar.
Since the opening up of Myan-
mar three years ago, the US has
boosted its engagement with
the country it once denounced
and courted it in a bid to curb
Chinas overwhelming domi-
nance in the country and the
Southeast Asian region Ba-
rack Obama paid a visit in 2012,
trade restrictions eased and
sanctions were lifted, Derek
MILcIeII wus uppoInLed LIe hrsL
US ambassador to the country
since 1990 and last year Presi-
dent U Thein Sein became the
hrsL Burmese presIdenL Lo vIsIL
the White House in almost 50
years.
As President Obama said
when he was here in 2012 the
hrsL US PresIdenL ever Lo vIsIL
this country the United States
values the friendship between
our two nations and we want
to contribute to your success,
said Pritzker.
We want to support your
progress and reform.
She said since Obamas visit
Myanmar has made reforms
that have helped improve busi-
ness climate in the country.
Two years ago, the United
States began allowing invest-
menL Ior LIe hrsL LIme In 1
years. Shortly thereafter, Presi-
dent Thein Sein signed a law to
help attract more foreign eco-
nomic engagement. As a result,
nearly $250 million in Ameri-
can investment is now here,
she said.
As of April 30, US companies
have plans to invest $243.6 mil-
lion in Myanmars economy,
and US exports have increased
from $9.8 million in 2010 to
$145.7 million in 2013, the US
Embassy in Yangon said in a
statement.
Pritzker said she was in Myan-
mar to talk about how we can
build on the progress of the last
two years to further strengthen
our trade relationship and en-
courage even stronger ties.
She said given the promise
of existing and future reform,
her department is opening a
new CommercIuI ServIce omce
in Yangon.
She said the Foreign Commer-
cIuI ServIce omcers, wIo ure Io-
cated in US embassies around
the world, help American com-
panies enter overseas markets,
expund, und hnd new cusLom-
ers around the world.
Pritzker said as Myanmars
economy continues to grow and
its market continues to open,
more US companies are getting
interested to do business in this
country.
The US government is en-
couraging American companies
to evaluate the opportunity. Re-
sponsible investment can help
facilitate broad-based economic
growth and economic prosper-
ity for your people, she said.
Pritzker joined APR Energy to
highlight the signing of a large-
scale turnkey power, one of the
hrsL power generuLIon ugree-
ments signed by a US company
in recent years, and joined Ball
Corporation to announce plans
to build an aluminium can fac-
tory outside Yangon.
She said the US has a funda-
mental interest in the continu-
ation of reform.
We have communicated to
your government the need to
build on the progress that has
been made by implementing
measures that increase inclu-
sive economic development,
US Secretary for Commerce Penny Pitzker.
R
e
u
t
e
r
s
promote government transpar-
ency and accountability, and
safeguard labour rights and hu-
man rights.
~..q~,~..q Department oI
Commerce Secret ary Penny
Pritzker . ~..q~,,- _.,.:
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
11
Myanmar Summary
Contd. P 12...(Fill The Caps)
Contd. P 12...(Fill The Caps)
LOCAL BIZ
Myanmars Institutional Infrastructure
Constraints and How to Fill the Gaps
David DuByne and
Hishamuddin Koh
I
nfrastructure both physical
and institutional are the key
drivers for rapid economic
growth and development in
any country. With the number
of physical infrastructure pro-
jects taking place in Myanmar
involving roads, rail lines, mari-
time ports, airports and inland
waterways; rarely mentioned in
the same breath is institutional
infrastructure which encom-
passes several other segments
of society including human
capital, legal instruments, ad-
ministrative oversight, farmers
orgunIsuLIons, mIcrohnunce,
last-mile logistics along with
health and education facilities.
I mplementation of country-
wide projects to speed Myan-
mars overall development to
date have been slow in part due
Lo IImILed hnuncIng opLIons,
economic and legal reforms
plus the bottleneck of capital
Inows oI InsLILuLIonuI IoreIgn
investors through the coun-
trys banking system. These are
hurdles institutional investors
experience, but little focus is
paid on micro-level develop-
ment throughout the rural sec-
tor which comprises 70 percent
of the countrys population of
6o mIIIIon. More specIhcuIIy
the movement of goods and
services into and out of villages
where local economies stagnate
because of lack of options for
transport, warehousing, pro-
cessIng, mIcro-hnuncIng, mon-
etary transactions and crop
yield boosting inputs.
How can a parallel set of insti-
tutional infrastructure designed
Lo hII LIe gups be ImpIemenLed
in rural locations and what im-
provements in livelihood will it
provide upon completion, not
only for local regions and farm-
ing communities but the coun-
try as a whole?
Major impediments to doing
business in Myanmar cited by
a survey of foreign managers
were LIe InemcIenL or Iuck oI
electric power, poor internet
servIce, InuLed LrunsporLu-
LIon cosLs und unreuIIsLIc omce
rental rates. Considering that
70 percent of the country has
zero access to grid delivered
electricity in 2014, what other
upgrades or issues might be ad-
dressed to boost output of com-
modities from remote locations
onward to main trunk lines in
order to economically stimulate
pockets of rural populations or-
ganically?
Scenorios ond suggestions
A common example of insti-
tutional infrastructure systems
are the actual trucks that run
collection routes through the
countryside for farmers prod-
ucts, not the actual roads. The
only sales point available for
farmers is the single company
vehicle that comes to the vil-
lage. The buyers at this juncture
have monopoly pricing in a take
it or leave it scenario to their
advantage.
I f farmers say no to these of-
fers, crops rot and there is zero
value, if they say yes, the price is
substantially below fair market
price, literally pennies on the
dollar. Farmers remain exploit-
ed by those that can bring in
trucks and access the products
at the farm gates.
The solution calls for a com-
bination of several mechanisms
to counter exploitation by trad-
ers and middlemen.
These mechanisms are: i)
Presence of strong and dynamic
farmers organisation capable of
serving the multi-dimensional
needs of rural farmers in pric-
ing and value-adding; ii) Pres-
ence of adequate warehousing,
drying and processing facilities;
iii) Presence of a solid network
of rural roads with adequate
connectivity to major roads,
highways, waterways to move
goods and services from and
to the farm-gates to expedite
transactions; iv) Transporta-
tion facilities for moving farm-
ers products and inputs at least
cost. v) Functional social servic-
es e.g. clinics, schools, farmers
educational training centres.
All these factors are institu-
tional infrastructure that com-
pliment physical infrastructure
thereby creating a complete set
of usable infrastructure which
will enable development of ru-
ral Myanmar and the majority
of its population.
1ormers orgonisotion: An
importont occelerotor for
rurol deoelopment
One aspect of institutional in-
frastructure that merits atten-
LIon Is emcIenL dynumIc Iurm-
ers organization which must
meet the following 3As criteria
in serving the multi-dimension-
al needs of the farmers: Acces-
sibility to and from farmers;
Availability resources both
servIces und InpuLs; AordubII-
ity reasonable price of inputs.
I n other words any infrastruc-
ture must take into account the
ubove A`s crILerIu Lo be eec-
tive and realistic.
Farmers organisations are
very important institutional in-
struments that will drive rural
development and create pro-
ductivity along with income
contribution in both rural and
national development. First and
foremost, multi-purpose farm-
ers organisations that can pro-
vide bargaining power for the
farmers in sales transactions
must top the list. This will pre-
vent small farmers from being
exploited by opportunist mid-
dlemen/ traders. I n well-organ-
ised and institutionalised farm-
ers associations the farmers are
constantly kept informed on
prices of their produce/ prod-
ucts which allows them to react
to market forces and obtain the
best price based on daily spot
rates.
For example in Taiwan, which
Ius u very emcIenL sysLem oI
multipurpose farmers organisa-
tions, even in the remotest loca-
tions you see farmers with AM/
FM radios slung on tree branch-
es listening to updated price
quotes for farm produce sold
onward to Taipei and abroad.
Standardised pricing to farmers
sIouId be uddressed hrsL.
The Taiwan model of multi-
purpose integrated farmer or-
ganizations has been adopted
in Malaysia and backed by the
Farmers Organisation Act 1973
passed by the Malaysian Par-
liament. This model works and
could be rapidly administered
in Myanmar if the Union Gov-
ernment chooses to do so.
Following quickly behind that
in terms of implementation
would be ways to create higher
selling prices through value-
add processing in the villages.
Something as simple as port-
able expeller presses to crush
seeds and collect oil on site, or
small rice milling machines to
polish rice and sell on to whole-
salers at a higher price point.
A secondury benehL wouId be
reduced logistics costs by trans-
porting only extracted oil, leav-
ing the bulk weight of pressed
oil cake which stays in the vil-
lage to be used as animal feed.
Currently most farming com-
munities are unable to obtain
necessary machineries to pro-
cess and send out higher value
goods in the supply chain. Con-
sider machineries for process-
ing higher value products itself
as agriculture infrastructure.
The trump card would be
modern warehousing facilities
along with training of locals in
proper storage and handling
techniques for their localised
crops. I f village Farmers Or-
ganisations have modern ware-
houses this will quickly would
alleviate the rush sale take
it or leave it sales model for
their products. Goods could
be stored for longer periods of
time until the next buyer comes
along and this in turn will send
the monopolistic collection
trucks back empty unless a fair
price is paid.

Implementation of countrywide
projects to speed Myanmars
overall development to date
have been slow in part due to
limited financing options, economic
and legal reforms plus the bottleneck
of capital inflows.
IittIe focus is paid on micro-IeveI deveIopment throughout the ruraI sector which comprises 7U percent of the country`s popu-
Iation of U miIIion.
U
A
u
n
g
/
X
in
h
u
a
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_ . . . . q, ~~ ~ ._ . ~, .~
:.._ _:.q..q:~.~~.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
12
From page ...(Fill The Caps)
From page ...(\B)
From page ...(\B)
From page ...(Fill The Caps)
Pricing mechanisms, market
intelligence, united selling/ bar-
gaining policies with Farmers
Organisations in place in ad-
dition to multiple transporters
involved in supply chain deliv-
eries, is what we mean by insti-
tutional infrastructure/ frame-
work.
On LIe IpsIde, LIese sume
transporters can bring in ferti-
lisers to boost agricultural out-
put. I n reality, if you cant move
people or crops you sure cant
move income and the economy
stagnates.
I n both Taiwan and Malaysia
when Farmers Organisations
set collective uniform pricing
und more money owed Lo IocuI
communities, the countryside
economy grew organically by it-
self without national economic
growth policies. Simply put,
more money in farmers pock-
ets meant more people spent
more money locally, with posi-
LIve eecLs oI sLImuIuLIng IocuI
businesses.
Repeati ng patter ns
This pattern will repeat itself
in Myanmar when these simple
institutional mechanisms are
put in place. It may take time
for the smallest of roads to be
built or resurfaced by the Un-
ion Government but the pattern
will repeat as has already been
observed across the Irrawaddy
Delta in Township Develop-
ment.
As a success story from the
Delta where villages receiving
more money for their rice after
starting their local rice entre-
preneurs association created
their own road building fund
and re-paved 10km leading
from the main Pathein Highway
road, themselves. This in turn
created a faster economic deliv-
ery device to enter their villages
with the result being a pocket of
economic prosperity based on
self-funded road access, which
came from collective uniform
pricing to buyers and rice mill-
ers.
A short cut to development
is using business models that
have worked over and over
again during the past years of
poverty alleviation case studies.
There is no need to re-invent
the wheel.
Another example of institu-
tional infrastructure would be
training centres focused on ef-
fective education programs
for fertilizer and pesticide us-
age. Regulatory approval for
imported agriculture products
into Myanmar should be prop-
erly labelled for usage in the lo-
cal language. Companies that
follow these procedures should
be granted fast track approval
for products such as hybrid
seed strains, fertilisers and
pesL conLroI. AIso hrms oerIng
training on seed selection and
seed storage for higher yield the
following year should be given
priority approval.
Even with a severe shortage
of skilled labour, Myanmars
farmers know how to work their
indigenous land and with a few
pointers they could turn the ta-
bles from poverty to prosperity.
When building Special Eco-
nomic Zones (SEZs) serious
consideration should be given
on wIere LIe producLs Lo hII
the containers will come from
and how and how the localised
infrastructure be aligned to ex-
pedite this movement within
Myanmar.
We have presented you with
some thoughts on the problems
and the solutions facing Myan-
mars rural development. With
the current governments dy-
namic policies directed towards
alleviation of rural poverty,
enhancing rural productivity
and boosting agrarian families
income, the time is opportune
for us to move in a direction to
meet these challenges with re-
alistic and practical approaches
suggested in this paper.
Hishamuddin Koh has 25
years of experience in agricul-
ture and rural development
and is Executive Chairman of
Hisham Koh and Associates
and the Myanmar Planta-
tion Management & Advisory
Co (MPMAC) along with My-
anmar Food Technology. He
can be reached at kohisham@
gmail.com.
David DuByne is Myanmar
Operations Director at One
Globcl Sourcin c jrm jocus-
ing on Myanmars agricultural
export sector and acts as Chief
Editor for Oilseedcrops.org. He
can be reached at ddubyne@
oneglobalsourcing.com.

Farmers organisations are


very important institutional
instruments that will drive
rural development and cre-
ate productivity along with income
contribution in both rural and na-
tional development.
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suId more emcIenL mIIIs
and lower exporting costs
would trigger changes at
farm level, helping to raise
agricultural productivity
and change farm practic-
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of rice varieties, required
to match the evolving de-
mands of importers.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
13
Myanmar Summary
Contd. P 15...(China Mobile)
Contd. P 15...(China Mobile)
Muluysiu Suys Spent $S.6m on Seurch Ior MH,o
Trinna Leong
M
alaysia has spent
a total of 27.6
million ringgit
($8.6 million) so far on
the search for the missing
Malaysia Airlines Flight
MH370, authorities said,
gIvIng u specIhc cosL hg-
ure Ior LIe hrsL LIme.
TIe hgure oI z;.6 mII-
lion ringgit was only the
sum spent by Malaysian
agencies, we do not know
how much other countries
spent, Department of Civil
Aviation chief Azharuddin
Abdul Rahman told a news
conference, saying he was
unsure of the cost break-
down.
The search for MH370,
which disappeared carry-
ing 239 passengers and
crew on March 8, is al-
ready set to be the most
costly in aviation history
and spending will rise
sIgnIhcunLIy us LIe seurcI
expands to a wider swathe
oI LIe ndIun Oceun o
Australia. Experts have
suggested the cost of
searching for the missing
jetliner could reach hun-
dreds of millions of dol-
lars.
The search has been
dealt setbacks, most re-
cently when Australian
omcIuIs suId IusL monLI
that wreckage from the
aircraft was not on the
seabed in the area they
Iud IdenLIhed, bused on
acoustic pings thought to
be from the planes black
box recorders.
Asked where the new
search area would be,
Azharuddin said he did
not know but that it will
not be very far away from
where the search is now.
The Australian and Ma-
laysian investigators have
done their analysis and are
in the process of exchang-
ing notes with Inmarsat,
he said, referring to the
BrILIsI suLeIIILe hrm wIose
analysis of signals from the
plane is the basis for the
current search area.
A Wall Street Journal re-
port on June 8 cited sourc-
es as saying investigators
were revising some of their
basic assumptions about
the planes last position.
The search area has al-
ready been extended to
a 60,000 sq km (23,000
sq mile) zone that is be-
ing surveyed by a Chi-
nese vessel. It will then be
searched by a commercial
operator in a mission ex-
pected to start in August
and take up to a year, at a
cost of A$60 million ($55
million) or more.
OmcIuIs ure openIng LIe
search operations to bids
by prIvuLe hrms. MuIuy-
sias deputy defence min-
ister, Abdul Rahim Bakri,
said those costs would be
shared equally by Malay-
sia and Australia. Reuters
Myanmar Summary
Chinu Mobile to Boy $SS1m Stuke in
Thai Billionaires True Corp
Khettiya Jittapong
S
tate-owned China Mobile
Ltd has agreed to buy an
18 percent stake in Thai
telecoms group True Corp for
$881 mIIIIon, In TIuIIund`s hrsL
major corporate deal since the
military coup last month.
True Corp, backed by billion-
aire Dhanin Chearavanonts
Charoen Pokphand Group, said
it was raising $2 billion through
a rights share issue to boost its
hnuncIuI posILIon. As purL oI
the fund raising, True Corp will
sell 4.4 billion shares to China
Mobile, the worlds biggest car-
rier by subscribers, at 6.45 baht
each, a 13.4 percent discount to
Trues last traded price.
The deal is part of the Thai
groups long-term plan to se-
cure a foreign partner and un-
derscores Dhanins strong po-
litical connections in mainland
China, sources familiar with the
matter said.
In 2013 Dhanins CP Group
emerged as a surprise buyer for
global bank HSBC Plcs $9.4
billion stake in Ping An Insur-
ance Group Co of China Ltd.
CP Group wus LIe hrsL muILI-
national to invest in Chinas
agri-business in 1979 and it was
tasked with helping to modern-
ise Chinas farm sector. It also
operates Lotus super markets
in Shanghai, according to the
companys website.
Through the proposed stra-
tegic investment in True Corp,
China Mobile is expected to
access new customers, interna-
tional business opportunities
and new earnings growth driv-
ers, wIIcI Is oI greuL sIgnIh-
cance to the telecom business of
the company, China Mobiles
chief executive Li Yue said in a
statement.
The proposed deal comes
less than three weeks since
the military seized power in
Thailand. The two companies
made no mention of the coup
or preceding political crisis,
which weighed on corporate
dealmaking. New mergers and
acquisitions in the country have
slumped by 72 percent by value
from a year ago to $648 mil-
lion by end May, according to
Thomson Reuters data. Reuters
State-owned China MobiIe Itd has agreed to buy an 18 percent stake in Thai teI-
ecoms group True Corp for $881 miIIion.
B
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
14
Myanmar Summary
China Says Vietnam, Philippines
Mingling on Disputed Isle A Farce
Ben Blanchard
C
hina denounced Vietnam
and the Philippines for
getting together on a dis-
puted island in the South China
Sea to play soccer and volley-
ball, calling it a clumsy farce
and demanded both countries
stop causing trouble.
The comments by a foreign
ministry spokeswoman were
CIInu`s hrsL response Lo LIe guLI-
ering on the Vietnamese-held is-
land of Southwest Cay on J une 8.
PIIIIppIne nuvuI omcIuIs de-
scribed the meeting of soldiers
from the two sides as a chance
to show there can be harmony
despite a web of overlapping
claims to the potentially ener-
gy-rich waters.
Dont you think this small
move together by Vietnam and
the Philippines is at most a
clumsy farce? Chinas Foreign
Ministry spokeswoman Hua
CIunyIng suId uL u duIIy brIehng.
China has irrefutable sover-
eignty over the Spratly I slands
and the seas nearby, she said.
We demand that Vietnam and
the Philippines stop any be-
haviour that picks quarrels and
causes trouble ... and not do an-
ything to complicate or magnify
the dispute.
The gathering underscores the
growing cooperation between
Vietnam and the Philippines,
which have both felt Chinas
wrath over the South China Sea,
even though both claim South-
west Cay and other islands.
The Philippines, Malaysia and
Brunei all claim some of the
Spratlys, while China, Taiwan
and Vietnam claim the whole
chain.
China also claims 90 percent
of the 3.5 million sq km (1.35
million sq mile) South China
Sea, its reach depicted on its
maps with a so-called nine-
dash line deep into the mari-
time heart of Southeast Asia.
Diplomats and experts have
described the partnership be-
tween Hanoi and Manila as
part of a web of evolving rela-
tionships across Asia that are
being driven by fear of China
as well as doubts among some,
especially in J apan, over the US
commitment to the region.
Separately, China accused
Vietnam of ramming its ships
more than 1,000 times in a
part of the sea and said while it
wanted good relations with its
neighbour, it would not aban-
don principles to achieve that.
A VIeLnumese hsIIng bouL
sank on May 26 during a con-
frontation not far from where
China has towed an oil rig,
accompanied by a cordon of
Chinese vessels, 240 km (150
mIIes) o VIeLnum.
Last week, Vietnam television
broadcast video showed a large
Chinese vessel steaming after
Lwo VIeLnumese hsIIng bouLs,
then colliding with one which
capsized.
The dispute is the most seri-
ous deterioration of relations
between the Communist states
and traditional rivals since a
brief war in 1979 following Viet-
nams invasion of Cambodia.
Reuters
Philippine Senate Passes Bill
Liberalising Banking Sector
Siegfrid Alegado
T
he Philippine senate has
approved a bill that will
open the countrys re-
stricted banking sector to more
IoreIgn hnuncIuI InsLILuLIons.
The passage paves the way for
a change in the law ahead of a
goal for economic integration
of the Association of Southeast
Asian Nations bloc of countries
in 2015.
It amends a 20-year old foreign
banking act, permitting foreign
ownership of domestic banks to
rise to 100 percent from 60 per-
cent, a statement posted on the
senates website said.
Current limits to the number
of foreign banks operating in
the country will be eliminated, it
said. The existing Republic Act
7721, which liberalised the entry
of foreign lenders in 1994, al-
lowed the entry of only up to 10
banks fully-owned by foreigners
to operate in the country.
The bill provides for the en-
try of established, reputable
und hnuncIuIIy sound IoreIgn
banks in the country and also
grants Philippine incorporated
subsidiaries of foreign banks
same banking privileges as
homegrown lenders.
A counterpart bill was ap-
proved in the lower chamber of
congress last month. The two
bills will need to be reconciled in
a bicameral conference commit-
tee before it is sent to President
Benigno Aquino for his approval.
Greater foreign participa-
LIon In LIe bunkIng und hnun-
cial sectors is expected to aug-
menL LIe hnuncIuI resources Lo
which the Philippine economy
may have access, Senator Ser-
gio Osmea I I I , who heads the
senate banks committee, said in
the statement.
He said the bills passage
would allow the country to
take advantage of economic in-
tegration of the ASEAN region.
Reuters
India Likely to Raise Foreign
Investment Limit in Govt Debt Soon
Himank Sharma, Rajesh
Kumar Singh & Suvashree
Dey Choudhury
I
ndia will likely raise the
foreign investment limit in
government debt soon, as
almost all the allocation has al-
ready been taken up as overseas
buyers pile into the countrys
hnuncIuI murkeLs, suId Iour oI-
hcIuIs wILI dIrecL knowIedge oI
the governments thinking.
The current cap is 995.46 bil-
lion rupees ($16.86 billion).
As of J une 6, foreign inves-
tors owned 886 billion rupees
worth of government debt, or
89 percent of the full available
allocation, following a surge in
Inows due Lo ImprovIng gov-
ernmenL hnunces und opLImIsm
about Narendra Modis recent
election as prime minister.
Once the limit reaches 90 per-
cent, foreign investors are only
allowed to buy debt under a
more cumbersome auction bid-
ding system.
One of the sources said the gov-
ernment could raise the amount
foreign investors are allowed to
buy by another $5 billion.
TIe hnunce mInIsLry wIII de-
cide on the matter after consul-
tations with the Reserve Bank of
I ndia and capital markets regu-
lator Securities And Exchange
Board of I ndia, the sources said.
I expect the government to
take a call on this soon, said
one oI LIe omcIuIs InvoIved In
the process. The sources de-
cIIned Lo be IdenLIhed us LIey
were not authorised to talk to
the media about the plans.
Foreign investors bought a net
$425.43 million worth of debt
on J une 6, their biggest daily
purchase since May 23 and
bringing their total this year to
$8.6 billion.
Under current rules, I ndia al-
lows all types of foreign inves-
tors to buy up to $20 billion of
government debt, although the
dollar amount depends on the
exchange rate.
The total foreign investment
limit for foreign investors is
$30 billion, with the remaining
$10 billion for investors such as
foreign central banks, sovereign
wealth funds, insurance funds
and pension funds.
I nvestors have been expecting
the government would raise the
allocation for foreign investors
once the 90 percent mark was
reached.
The country last raised the
amount of government debt
that foreign investors can buy
by $5 billion in J une last year.
Reuters
Myanmar Summary
Myanmar Summary
Morning commuters waIk aIong AyaIa Avenue in the nanciaI district of ManiIa.
The PhiIippine senate has approved a biII that wiII open the country`s restricted
banking sector to more foreign nanciaI institutions.
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About 2UU PhiIippine activists and Vietnamese nationaIs protested outside the
Chinese ConsuIate in ManiIa`s Makati nanciaI district.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
15
Myanmar Summary
From page ...(China Mobile)
Jupun PM Vows IHorts to
Resume Commercial Whale Hunt
Wai Linn Kyaw
J
apans prime minister told
parliament he would boost
IIs eorLs Lowurd resLurL-
ing commercial whaling, de-
spite a top UN courts order that
Tokyo must stop killing whales
in the Antarctic.
Shinzo Abes comments put
IIm hrmIy on u coIIIsIon course
with anti-whaling groups, who
had hoped the ruling by the
I nternational Court of J ustice
(I CJ ) would herald the begin-
ning of the end for the mammal
hunt.
I want to aim for the resump-
tion of commercial whaling by
conducting whaling research in
order Lo obLuIn scIenLIhc duLu
indispensable for the manage-
ment of whale resources, Abe
told a parliamentary commis-
sion, AFP reports.
To that end, I will step up
eorLs IurLIer Lo geL under-
standing from the international
community, he was quoted as
saying.
Abe said that in contrast to
the foreign perception that
whaling communities merci-
lessly exploit the giant mam-
mals, whaling towns appreciate
the meat and show respect to
the creatures with religious ser-
vices at the end of every hunting
season.
I t it regrettable that this part
of J apanese culture is not un-
derstood, Abe said.
J apan has hunted whales un-
der a loophole in the 1986 glob-
al moratorium, which allows le-
thal research on the mammals,
but it has made no secret of the
fact that their meat ends up in
resLuurunLs und on hsI mur-
kets.
The annual hunt in the South-
ern Ocean has proved particular-
ly controversial, with sometimes
violent confrontations between
whalers and protestors.
Australia, backed by New
Zealand, hauled J apan before
the I CJ in 2010 in a bid to stop
the yearly campaign. The court
slammed the hunt, which it said
was a commercial venture mas-
querading as research.
Tokyo cuIIed o ILs zo1q-1
Antarctic season, and said it
would redesign the mission in a
bId Lo muke IL more scIenLIhc. A
separate hunt in the northwest
PucIhc conLInues, us do IunLs
in coastal waters which are not
covered by the moratorium.
Since the I CJ ruling, J apanese
e-commerce marketplace Ra-
kuten has told online retailers
they cannot sell whale and dol-
phin meat through its site.
But dealing in whale meat
does not violate international
or domestic laws in any way,
said Agriculture, Forestry and
Fisheries Minister Yoshimasa
Hayashi, according to AFP.
Hayashi told the same par-
liamentary committee that Ra-
kuten had made a commercial
decision as a private company,
but that the increasing number
of companies that are refusing
to sell whale meat is regretta-
ble.
I nviting people to dine on
whale in his ministry, he said a
whale week campaign, which
began on J une 9, was part of
eorLs Lo IeL Jupunese peopIe
know that whaling and eating
whale meat are part of their cul-
ture.
Whales were once a key source
of fuel and food, but J apans
consumption of the meat has
considerably diminished in re-
cent decades and it is no longer
a regular part of most peoples
diet.
However, powerful lobbying
forces have ensured the contin-
ued subsidisation of the hunt
with taxpayer money.
Tokyo has always maintained
it was trying to prove whale
populations were big enough to
sustain commercial hunts.
]apan has been the most active of the whaIing nations to use the scientic research provision of the internationaI treaty on
whaIing to continue kiIIing the marine mammaIs and retain a market for their meat.
A
F
P
The deal is unusual given
the country is having a political
situation like this, said Min-
tra Ratayapas, an analyst at KK
Trade Securities,
Some foreign investors voice
concerns about the situation in
Thailand. But for True, it seems
IIke LIe buyer Is conhdenL ubouL
the company thanks to strong
connections with Dhanin.
Struggling ot home
True has been grappling with
rising debt as it invests in the
expansion of its network to
compete with market leader
Advanced I nfo Service and sec-
ond-ranked Total Access Com-
munication.
True is the only Thai mobile
company without a foreign
partner and the new invest-
ment is expected to help with
its planned regional expansion,
a source with knowledge of the
deal said.
Like True, China Mobile has
been struggling in its home
market, reporting in April its
IowesL quurLerIy prohL In hve
years as it invests heavily to
catch up with rivals in providing
4G mobile broadband services.
China Mobile, which had
$69.4 billion in cash and short-
term investments at the end of
2013, also faces challengers in
the shape of newly-licensed mo-
bile virtual network operators,
who lease capacity from the net-
work operators like China Mo-
bile and sell their own packages
to subscribers.
I f successful, the Thai deal
wouId murk CIInu MobIIe`s hrsL
transaction outside of China,
Hong Kong and Taiwan in sev-
en years, according to Thomson
Reuters data.
Thailands True Corp is get-
ting the better end of its deal
with China Mobile, Reuters
Brekingviews columnists Una
Galani and Ethan Bilby wrote.
True reduces its crippling debt
and gains a cash-rich partner to
support its aggressive growth.
For China Mobile, the minority
stake looks a pricey way to push
overseas, they said. Reuters
From page ...(China Mobile)
Group . ...:.._ True Corp .
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Pact to Halt Forced Labour
Snubbed by Thailand
Stephanie Nebehay
P
erpetrators of forced la-
bour, wIIcI uecLs z1 mII-
lion people globally, will
be punished in most countries
under a UN treaty clinched last
week, despite being snubbed
by Thailand and nearly all Gulf
countries.
More than half of the estimated
21 million caught up in forced or
compulsory labour are women
and girls and the practice reaps
an estimated $150 billion in il-
IeguI prohLs ucross ugrIcuILure,
hsIIng, mInIng, consLrucLIon,
domestic services and the sex in-
dustry, among others, the Inter-
national Labour Organisation, a
United Nations agency, said.
The new treaty, a protocol to
the ILOs Forced Labour Con-
vention of 1930, aims to halt the
practice by requiring countries
ratifying it to identify and release
victims, ensure them access to
compensation and punish perpe-
trators, it said.
It is a strong indication of the
global communitys commitment
Lo work Lowurd LIe eecLIve eIIm-
ination of forced labour, David
Garner, president of the annual
International Labour Confer-
ences committee on forced la-
bour, LoId u brIehng.
Thailands new military gov-
ernment was the only govern-
ment to vote against the treaty at
ILOs annual ministerial confer-
ence, O omcIuIs suId.
But Bahrain, Brunei, Iran, Ku-
wait, Omar, Qatar, Saudi Arabia
and Yemen were among those
abstaining, they said. The Mid-
dle East is home to an estimated
600,000 people deemed to be
forced labourers, Beate Andrees,
head of the ILO special action
programme to combat forced la-
bour, told Reuters.
Garner said forced labour,
which includes slavery but also
deceptive recruitment practices,
wus sIgnIhcunL gIobuIIy.
Its very large-scale, much of
it very well organised and so-
pIIsLIcuLed. ObvIousIy sIgnIhcunL
criminal elements are involved in
it as well. Reuters
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Myanmar Summary
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
INTERNATIONAL BIZ
16
N
othing about the
narrow cream-
colored lobby at
160 Aldersgate Street in
LIe CILy oI ondon hnun-
cial district gives a hint of
its role at the centre of the
osIore oII IndusLry.
Thats because the
building is occupied by
u Iuw hrm. YeL, on puper
at least, it is also home to
Rowan Companies, one
of the largest operators of
drilling rigs in the world.
In 2012, Rowan, which
has a market value of $4
billion, shifted its legal
and tax base from the
United States to Britain.
But not much else.
We changed our corpo-
rate structure and were
legally domiciled in the
UK but our headquarters
and our management
team remain in the US,
Suzanne Spera, Rowans
Investor Relations Direc-
tor said in a telephone in-
terview from Houston.
It has been positive.
We take advantage of try-
ing to be competitive with
our eecLIve Lux ruLe.
ndeed, Rowun hIIngs
say the shift helped cut
LIe compuny`s eecLIve
tax rate to 3.3 percent in
2013 from 34.6 percent in
2008. Spera said Rowan
complies with all UK tax
rules.
A government spokes-
woman for the Treasury
said recent changes to the
tax rules were aimed at
supporting genuine busi-
ness investment.
The UK is not a tax hav-
en. In 2015, our main rate
of corporation tax will be
20 percent, well above the
levels seen in tax havens,
she said in an emailed
statement.
In the last year around
a dozen major U.S. com-
panies including media
group Liberty Global, ba-
nana group Chiquita and
drug muker Phzer un-
veiled plans to shift their
tax bases overseas outside
the United States.
Historically, when U.S.
companies wanted to cut
their tax bill they usually
reincorporated in Carib-
bean Islands or Switzer-
land.
However, following re-
cent legal changes where-
by Britain largely stopped
seeking to tax corporate
prohLs reporLed In oLIer
Tom Bergint
countries, including tax
havens, companies are
increasingly choosing the
UK as a corporate base.
President Barack Oba-
ma and Congressional
Democrats have proposed
meusures Lo sLem LIe ow
of so-called inversions,
although Congressional
gridlock on tax reform
means new barriers to
overseas moves are un-
likely anytime soon.
TIere Is no omcIuI IIsL
of companies which have
moved their tax base to
Britain but government
omcIuIs, Lux udvIsors und
lawyers said at least seven
had re-based to London
Aon Plc, CNH Global NV,
Delphi Automotive Plc,
Ensco Plc, Liberty Global
Plc, Noble Corp Plc.
Drugs group Phzer und
Omnicom had planned to
transfer their tax domicile
to Britain, while retain-
ing US headquarters, but
the takeover deals which
were meant to facilitate
this recently failed.
US und UK hIIngs und
other company state-
ments from the seven
that relocated showed
that while redomiciling
to London can cut a com-
panys tax bill, it usually
involves relocating just a
handful of senior execu-
tives and sometimes not
even that many.
The UK has made a
very clear policy decision
to engage in tax competi-
tion for multinationals.
Its fair to say its rivalling
Ireland, said Stephen
Shay Professor of Law at
Harvard University who
Ius LesLIhed Lo Congres-
sional investigations into
corporate tax reform.
When I go to tax con-
ferences now, I hear peo-
ple talk about the UK as a
tax haven.
Bernhard Gilbey, tax
purLner uL Iuw hrm
Squires Sanders said tax
competition was common
across countries and that
companies were within
the law and indeed faced
competitive pressure to
structure themselves in
response to such govern-
mental incentives.
The companies said that
while tax was a considera-
tion in their moves, com-
mercial reasons such as
the desire to be closer to
customers was also a fac-
tor.
Poper mooes
BrILIsI hnunce mInIsLer
George Osborne has wel-
comed the trend of US
companies such as insur-
ance group Aon redomi-
ciling to Britain, saying it
reecLs Iow LIe govern-
ment has made the coun-
try a more attractive place
to do business.
In November, Ernst &
Young, one of a number
of tax advisors which ad-
vocated the tax changes
that made Britain a mag-
net for US corporations,
published a survey say-
ing that 60 multinational
companies were eyeing a
move to the UK.
EY said this could create
over 5,000 jobs and bring
in over 1 billion pounds a
year in additional corpo-
ration tax, the UKs cor-
porate income tax.
No tox uindfoll
Accounts for the com-
punIes sIow IILLIe benehL
to the UK exchequer from
the corporate relocations.
Aon and Liberty Global
the only two companies
wIIcI pubIIsIed hgures
for group UK tax pay-
ments reported UK cor-
poration tax credits for
2013.
Ensco had a UK tax
charge of $200,000 last
year. That included tax on
prohLs Irom ILs UK oper-
ating subsidiaries which
have revenues of around
$300 million a year.
Delphi Automotives
most senior UK corpo-
rate entity is a partner-
ship, which does not have
to pay tax. The company
declined to say if other
British units paid any cor-
poration tax but said in its
annual report that it had
UK tax assets which could
be used Lo oseL IuLure
LuxubIe prohLs.
CNH does not pub-
lish UK tax payments.
Its main UK operating
unit reported a tax credit
in 2012, the last period
for which accounts were
available.
What attracts compa-
nies like Rowan to Britain
is not a headline tax rate
that is half the US level
but the way the UK has
eecLIveIy sLopped LuxIng
prohLs reporLed by UK
companies overseas sub-
sidiaries.
The government intro-
duced the measures in
the 2012 budget to better
reecL LIe wuy LIuL busI-
nesses operate in a global
economy and encourage
investment in Britain.
This means companies
cun sIIIL prohLs ouL oI
the countries where their
employees and custom-
ers are based, into tax ha-
vens, and then bring the
money back to Britain and
pay it out to shareholders
without paying any tax
something that would not
be possible under US or
German tax law.
or osIore prohLs,
the UK can literally be a
nil tax jurisdiction, which
obviously compares very
well with traditional tax
havens, Kevin Phillips,
International Tax Part-
ner, Baker Tilly said.
The UK is also unusual
in not charging withhold-
ing tax on dividend pay-
ments and, for now at
IeusL, oers un uIr oI re-
spectability.
Over the last couple
of years, companies that
have used jurisdictions
like Ireland, the Nether-
lands or Luxemburg have
found themselves at the
wrong end of some poor
publicity for their attitude
to tax, said Gilbey.
It looks less likely that
that would be the case if
they put themselves in
the UK because were not
generally considered a tax
haven. Reuters
Myanmar Summary
Britain Becomes Haven for Us Companies Keen to Cut Tax Bills
A sign sits in a stone bIock outside the HM Treasury buiIding in Iondon. Many American companies are
shifting their IegaI and tax bases from the United States to Britain to take advantage of Britain`s favour-
abIe tax structure.
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lo
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Over the last couple of years,


companies that have used jurisdic-
tions like Ireland, the Netherlands
or Luxemburg have found them-
selves at the wrong end of some poor
publicity for their attitude to tax. It looks
less likely that that would be the case if
they put themselves in the UK because
were not generally considered a tax
haven.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
INTERNATIONAL BIZ
17
Myanmar Summary
Myanmar Summary
Lonch with Wurren BoHett Goes Ior $. Million
Katie Lobosco
L
unch with Warren Buf-
fett is a hot ticket item:
The winning bidder at his
annual charity fundraiser paid
$2.2 million for the privilege.
Each year on eBay, Buf-
IeLL uucLIons o un InvILuLIon
to lunch. The proceeds go to
GLIDE, a charity that runs a
number of anti-poverty pro-
grams in San Francisco.
This years winning bid, from
a man from Singapore named
Andy Chua, was more than
double last years of just over $1
million. The highest ever was in
2012, at $3.5 million.
Since the auction began 15
years ago, it has raised nearly $16
million for the organisation.
Past winners include hedge
fund manager David Einhorn,
though most bidders remain
anonymous. GLIDE did not
provide more details about
Chua.
The winner will be allowed
to invite up to seven friends
Lo Iuve IuncI wILI BueLL uL
the New York City steakhouse
Smith & Wollenksy.
GLIDE operates on a budget
of about $18 million. It serves
more than 850,000 free meals a
yeur, oers uordubIe IousIng,
and operates a health clinic in a
city with one of the highest lev-
els of inequality in the country.
The demand keeps growing,
said GLIDE founding president
Janice Mirikitani. In this area,
the cost of living is very high
und u IoL oI peopIe cun`L uord
to pay for both food and rent,
she said.
BueLL Is one oI LIe worId`s
leading philanthropists. He
started The Giving Pledge in
zo1o, un eorL LIuL Ius sIgned
up more than 100 billionaires
around the globe. They have
pledged to donate half of their
net worth during their lifetime,
or at their death. CNNMoney
Each year on eBay, Buffett auctions off an invitation to Iunch. The proceeds go to
CIIBE, a charity that runs a number of anti-poverty programs in San Francisco.
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World Bank Cuts Global Growth
Outlook as Ukraine Crisis Weighs
Anna Yukhananov
T
he World Bank
trimmed its global
growth forecast,
suyIng u conuence oI
events, from the Ukraine
crisis to unusually cold
weather in the United
States, dampened eco-
nomic expansion in the
hrsL IuII oI LIe yeur.
The institution pre-
dicted the world economy
would grow 2.8 percent
this year, below its prior
forecast of 3.2 percent
made in January, but it
expressed conhdence uc-
tivity was already shifting
to more solid footing.
In its twice-yearly Glob-
al Economic Prospects re-
port, the World Bank said
tensions between Ukraine
und RussIu IIL conhdence
worldwide. The bank also
cut its growth forecast for
the United States to 2.1
percent from 2.8 percent
to account for the toll
taken on growth by the
weather at the start of the
year.
The US economy con-
LrucLed Ior LIe hrsL LIme
In LIree yeurs In LIe hrsL
quarter, but it already ap-
pears to be rebounding.
Yes, there has been a
big downgrade in 2014,
Andrew Burns, the re-
ports lead author, said in
an interview. But thats
muInIy u reecLIon oI sLu
thats already happened.
The World Bank ex-
pects growth to quicken
later this year as richer
economies continue their
recovery. It kept its global
growth forecasts for the
next two years unchanged
at 3.4 percent and 3.5 per-
cent, respectively.
The forecasts assume
tensions in Ukraine will
persist this year but wont
worsen. An escalation in
the crisis could further
sIuke gIobuI conhdence,
prompLIng hrms Lo posL-
pone investments and
crimping growth in de-
veloping economies by as
much as 1.4 percentage
points under the worst-
case scenario, the bank
said.
The markets, inves-
tors, dont like uncertain-
ty, Burns said. Its also
pretty clear that theres a
potential for tensions (in
Ukraine) to develop, and
for the situation to de-
grade.
Russia and Ukraine are
seeking to resolve a gas
pricing dispute that is at
the heart of the crisis be-
tween the two countries.
Failing to do so could set
back peace moves that are
gaining momentum after
weeks of violence in east
Ukraine.
The World Bank also
fretted about the possibil-
ILy oI hnuncIuI voIuLIIILy In
emerging markets once
the US Federal Reserve
starts to raise interest
rates, mopping up some
of the liquidity glut in
global markets.
Burns said emerging
markets have not fully
priced in the potential for
a monetary tightening in
richer economies.
The real concern is
what happens in 2015,
2016, Burns said.
Burns also said develop-
ing countries need to do
more to address structur-
al issues that are holding
back growth.
This year marks the
third straight year that
developing economies
would expand by less
than 5 percent, a factor
that has contributed to
rising debt-to-GDP ratios
that could make those
economies more vulner-
able, Burns said.
Although the situation
in developing countries is
pretty good ... it isnt the
kind of growth theyre go-
ing to need if theyre go-
ing to make the very solid
inroads into poverty that
were hoping, he said.
Reuters
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
18
Myanmar Summary
Myanmar Summary
From page zo...(atural Cas)
From page zo...(atural Cas)
Rockwell Automation Sets Sight on Myanmar
Kyaw Min
R
ockwell Automa-
tion will now focus
on Myanmar as its
next strategic market in
Southeast Asia to drive fur-
ther growth in its already
strong revenue stream, the
US-based industrial auto-
mation company said.
The company has ap-
pointed MINs Control
Systems Solution Co Ltd
(MCSS) us ILs hrsL recog-
nised system integrator for
Myanmar to meet indus-
trial automation demand
by machine builders and
original equipment manu-
facturers (OEMs), as well
as end users.
Combining our compa-
nys industrial automation
technology with MCSS in-
depth market knowledge
and expertise, we will add
measureable value to our
customers by supporting
their existing investments,
as well as helping them
plan future projects for op-
timised return on invest-
ment, Bob Buttermore,
regional director, South-
east Asia, Rockwell Auto-
mation, said.
MCSS is well-known as
a systems integrator and
is partnering with Rock-
well across many process
industries including pet-
rochemicals, oil and gas,
waste and water treatment,
mining and cement, But-
termore said.
The Fortune 500 com-
pany has been eyeing My-
anmar to add to its other
Southeast Asian markets
of Indonesia, Malaysia,
Philippines, Singapore,
Thailand and Vietnam,
Chris Marshall, market
access director, Southeast
Asia, Rockwell Automa-
tion, said.
We are pleased that the
time is now right for us to
move in and capitalise on
its robust economic growth
and investment-friendly
environment.
Since manufacturing
constitutes about 20 per-
cent of the countrys GDP,
with oil and gas, construc-
tion, infrastructure and
consumer packaged goods
being important sectors,
Myanmar is a natural ex-
pansion market for us.
Headquartered in Mil-
waukee, Wisconsin, Rock-
well employs about 21,000
in 80 countries. Its 2011
revenue stood at $6 billion.
Japan to Help Upgrade
Inland Water Transport
System in Myanmar
Aye Myat
J apan will help upgrade inland water transport
system in Myanmar for national transport sector
development.
J apan is expected to provide technology and as-
sistance for the implementation of the master plan
which has been drafting, said Myanmar deputy
Minister for Transport U Han Sein at the coordi-
nation meeting of transport deputy ministers from
both sides held in Nay Pyi Taw.
At the meeting, Ryuji Masuno, deputy minister of
the Ministry of Land, Infrastructure, Transport and
Tourism of J apan promised to further strengthen
the friendship between the two countries and to
help in upgrading of inland water transport of My-
anmar.
Myanmar has started installing air safety and se-
curity equipment in major airports and provided
three meteorological radars and automatic weath-
er forecasting equipment.t
major disincentive to foreign investment.
Thailand still maintains a leading position in Myan-
mars hydrocarbon sector, but as the trend of the latters
economic opening continues, Bangkok should pursue
a strategy to diversify it gas supply. I n the long term,
such a strategy could include looking to other countries
and developing corresponding gas import infrastruc-
ture. I n the medium term, however, boosting domestic
producLIon wouId oer u more ImmedIuLe benehL. As
such, Bangkok should pursue E&P activities in the Gulf
of Thailand in a way that guarantees local knowledge
transfer, doesnt overly restrict the marketing of pro-
duced gas, and addresses local communities concerns.
Nicholas Borroz is an independent analyst of energy
geopolitics with a focus on oil and gas transportation
infrastructure. He works for a DC-based risk consul-
tancy and has three years experience working for the
US oternment in internctioncl cgcirs uhere he jo-
cused on development, energy, and economics. You
can reach him on Twitter @Nborroz or on his blog
nicholasborroz.wordpress.com.
M
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
19
Myanmar Summary
David Mayes
T
his is a question I
am often asked by
people, and my an-
swer is usually not what
you would expect from
someone who makes his
IIvIng by gIvIng hnuncIuI
advice. I often say that
I am only in business
because people are too
scared to make decision
themselves. The truth
is that for most people,
if they have a little bit of
time to educate them-
seIves, u hnuncIuI udvI-
sor is not required except
when you need access to
products where an inter-
mediary is required.
Most people have vari-
ous reusons Ior usIng u h-
nancial advisor, but it usu-
ally boils down to them
being overwhelmed by
the large variety of ways
to invest, information and
misinformation about the
subject, and the idea that
a professional advisor
can help them steer their
way through it all with-
out making any horrible
mistakes. The sad truth
is that even professionals
oILen hnd LIemseIves IuII-
ing into the same traps as
retail investors, although
few in the industry like to
admit this.
I f you are not likely to
make your way through
a world of decision mak-
ing under conditions of
imperfect information
thats a technical way
to say all investing has
real risks of losing mon-
ey involved without an
improved probability of
hndIng superIor InvesL-
Do You Really Need a Financial Advisor?
ments, why not take re-
sponsibility for those de-
cisions yourself? I know
that when I mess some-
thing up myself I handle
it a lot better than when
someone elses mistake
costs me time or money.
I f everyone thought this
way, I would probably
be out of business, but I
think everyone should.
The people that I believe
do need u hnuncIuI udvI-
sor are those who simply
are so busy at work, as
is happening more and
more often in the modern
age, that they dont have
time to craft a plan and
execute it. While there are
plenty of people in this
camp, I think most people
fall into the camp of being
afraid to take responsibil-
ity themselves.
A busIc hnuncIuI pIun
should include an emer-
gency cash reserve, insur-
ance against illness and
death or disability, and a
monthly savings amount
towards future goals such
as retirement or kids
schooling fees. I nvest-
ments themselves do not
need to be complicated,
and in fact keeping it sim-
ple is most likely to lead
to better performance as
well as your ability to fol-
low the strategy with dis-
cIpIIne In dImcuIL perIods.
Muny peopIe uvoId hnun-
cial investments altogeth-
er and spend their lives
building up a portfolio of
rental properties. While I
beIIeve dIversIhcuLIon Is
better, I have met many
very successful investors
over the years who have
munuged LIeIr own uuIrs
in this manner and been
very successful at it.
Regardless if you chose
to do things on your own
or use u hnuncIuI udvIsor,
always remember that a
certain element of every
advisors business is sales.
I f you need an insurance
policy or a savings plan,
do your own research on
the recommendation of
the advisor and see if there
are other users of the plan
who have given positive
or negative testimonials.
Today it is easy with the
internet to research just
about anything. Take the
time to make a little ex-
Lru eorL In wIuL Is one oI
the most important areas
of your life, it could make
u Iuge dIerence In your
standard of living when it
comes to retirement time.
David Mayes MBA
lives in Phuket and
provides wealth man-
agement services to ex-
Most peopIe have various reasons for using a nanciaI advisor, but it usuaIIy boiIs down to them being overwheImed by the Iarge variety of
ways to invest, information and misinformation about the subject, and the idea that a professionaI advisor can heIp them steer their way
through it aII without making any horribIe mistakes.
A
im
s
t
o
c
k
patriates throughout
Southeast Asia, focusing
on UK pension trans-
fers. He can be reached
at 085-335-8573 or
davi d. m@f aramond.
com. Faramond UK is
regulated by the FCA
and provides advice on
taxation and pensions.

The people that I believe


do need a financial advi-
sor are those who simply
are so busy at work, as is
happening more and more of-
ten in the modern age, that they
dont have time to craft a plan
and execute it.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
20
Contd. P 18...(atural Cas) Contd. P 18...(atural Cas)
Natural Gas: Myanmar, Thailand and Foreign Capital
Tailand depends upon imported natural gas from Myanmar to meet its domestic demand. As Myanmar becomes a more competitive market with an increasing num-
ber of foreign investors, Tailands traditional dominance in Myanmars gas sector will subside. Tailand should correspondingly seek new sources of gas, chiefy by
boosting domestic production. To do so, it will need to attract investment despite its political turmoil, and it will need to woo investors away from Myanmar.
THE MYANMAR
CONNECT1ON
Thailand depends upon
Myanmars natural gas
to supplement its domes-
tic production, which is
not enough to meet do-
mestic demand. This de-
pendence shows no sign
of slacking, as Thailand
prepares to import more
gas from Myanmar in an-
ticipation of growing do-
mestic consumption. Re-
cently, Thailand upped its
investment in Myanmars
gas E&P sector through
its state-owned oil-and-
gas company PTT. The
company already has
pipelines connecting to
Myanmars Yadana and
YeLugun heIds, und IL Is In
the process of developing
LIe ZuwLIku heId In coop-
eration with Myanma Oil
and Gas Enterprise.
Traditionally, Thailand
has been one of the few
major players in My-
anmars gas sector, but
this is changing. Foreign
investors are increas-
ingly targeting Myanmar
across all sectors, oil and
gas included. As a result,
Thailands dominance is
subsiding. In 2013, Myan-
mur uwurded PTT Lwo o-
shore blocks, reportedly
without a formal bidding
process. A repeat of such
favourable treatment is
unlikely as an increas-
ing number of investors
compete with Thailand to
take a part in Myanmars
energy projects. Addition-
ally, Myanmars domestic
demand for gas is increas-
ing. As a result, it seems
probable that more gas
that would originally have
made its way to Thailand
will instead be set aside to
generate power for Myan-
mars electricity-hungry
populace.
THE NEED 1OR D1-
VERS111CAT1ON
Given these develop-
ments, Thailand needs to
look elsewhere to meet
its gas needs. The options
are either to import gas
from other countries or
to boost domestic produc-
tion. Thailand has already
Nicholas Borroz
developed an LNG import
terminal in Rayong. How-
ever, while the import ter-
minal is useful in terms of
LIe sLruLegIc exIbIIILy IL
oers by noL LyIng TIuI-
land to a single supplier,
it is less economically ef-
hcIenL LIun ImporLIng vIu
hxed pIpeIInes. or LIIs
reason, while the LNG
terminal is an important
tool to diversify import
options, Thailand should
also look towards other
alternative sources of gas.
At the moment Thailand
is connected to only one
other country via pipe-
line besides Myanmar:
Malaysia. That pipelines
development was marred
with protests and political
controversy, and it skirts
near Thailands troubled
southern provinces, an
area where armed insur-
gency has claimed thou-
sands of lives over the last
decade. Thailand should
look into possibilities for
importing Malaysian gas
and consider developing
new pipelines with other
countries. Such interna-
tional infrastructure deals
require tedious nego-
tiations with neighbours,
though, and at best they
are long term solutions
that take years to arrange.
More immediately,
Thailand should grow its
own domestic produc-
tion. This would be easier
to arrange than interna-
tional cooperation with
gas suppliers, and for this
reason could potentially
yield quicker results. As
of yet, Thailand has been
unable to cover its own
demand with domestic
production alone. There
are rumours of sizeable
domestic reserves, how-
ever, particularly in the
Gulf of Thailand.
OBSTACLES TO 1OR-
E1CN CAP1TAL
Developing these do-
mestic resources will
require foreign capital.
Unfortunately, the invest-
ment climate in Thailand
is losing its attractiveness
for two main reasons.
First is the recent coup,
which raises concerns
about Thai markets sta-
bility. Second is Myan-
mars economic opening,
which has created a com-
petitive new investment
market across the border.
Representatives of Thai-
lands Ministry of Foreign
AuIrs recenLIy vIsILed
Myanmar, which cur-
rently chairs ASEAN, in
order to convince it that
the coup does not pose a
threat to regional stabil-
ity. That such a dialogue
could occur both illus-
trates Thailands fall from
grace and Myanmars in-
creasing importance as a
regional actor. Whereas
Myanmar is liberalising
after a half century of jun-
ta rule, Thailand has ex-
perienced yet another in a
long string of coups, with
reports of increasing au-
thoritarianism and grow-
ing numbers of political
refugees. It is important
not to overstate Thai-
lands decline and Myan-
mars rise; Thailand has
weathered many coups
and remains a strong
economy in the region,
while Myanmars transi-
tion from authoritarian
rule to democratization is
arguably stalling. Still, the
contrast in the two coun-
tries recent experiences
is striking.
ATTRACT1NC 1N-
VESTMENT
Thailand needs to at-
tract investors despite its
political turbulence, and
it needs to woo investors
away from Myanmar,
which is also seeking for-
eIgn cupILuI Ior osIore
ventures. When reaching
out to international in-
vestors, Thailand should
keep three factors in
mind:
Thailand should not
impose onerous require-
ments for selling gas to
domestic markets, as is
rumoured will happen
in Myanmar. This would
likely alienate foreign in-
vestors, especially since
there is no guarantee that
local wholesale buyers
will be able to pay market
Myanmar Summary
price for the gas.
Thailand should impose
local employment quo-
Lus Ior osIore projecLs
in order to ensure local
knowledge transfer. This
wouId benehL LIe IocuI
population and soothe
nationalist sentiments, of
which there are many. At
the same time, it would
not alienate foreign in-
vestors because Thailand
already has a fairly skilled
workforce in the hydro-
carbon industry.
Similarly, Thailand
needs to engage local
stakeholders when de-
signing and implement-
Ing osIore energy pro-
jects. This would address
concerns that such pro-
jects adversely impact
local communities and
ecosystems. From a more
business-oriented per-
spective, projects with lo-
cal buy-in meet less popu-
lar opposition, which is a

Thailand still maintains a leading


position in Myanmars hydro-
carbon sector, but as the trend
of the latters economic open-
ing continues, Bangkok should pursue
a strategy to diversify it gas supply.
R
e
u
t
e
r
s
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
21
Myanmar Summary
Vietnamese Bank Ties Up with Myanmar SME Bank
BIDV to give $30 million to state-run SMIDB
T
he Bank for Invest-
ment and Develop-
ment of Vietnam
(BIDV) has signed a deal
with state-run Small and
Medium Industrial Devel-
opment Bank of Myanmar
(SMIDB) to share infor-
mation, develop products
and services, and support
business and investment
activities in both coun-
tries.
Under the agreement,
which was signed in Yan-
gon, Vietnamese state-
owned BIDV and SMIDB
will share experiences
and information about lo-
cal regulations, and con-
sIder provIdIng hnuncIuI
and banking products for
trading and investment
by businesses in Vietnam
and Myanmar.
BIDV will also help
SMIDB upgrade its IT
systems and make greater
use of IT applications in
its operations, according
to the deal. It will help
SMIDB undertake study
tours to Vietnam in 2014-
15.
BIDV chairman Tran
Bac Ha said, With our
Aung Phyo experience and advantag-
es in providing services
to SMEs in Viet Nam, we
wish to share our experi-
ence to facilitate the de-
velopment of Myanmars
hnuncIuI murkeL und ILs
SMEs.
He announced a $30
million loan to SMIDB
with a 4 percent interest
ruLe Ior hve yeurs, und
said BIDV, which already
Ius u represenLuLIve omce
in Myanmar, is preparing
to open a branch in Myan-
mar.
SMIDBs chairman U
Maung Myint, who is
also the minister for in-
dustries, welcomed BIDV
in Myanmars nascent
hnuncIuI murkeL, suyIng
the agreement underlined
BIDVs role in strength-
ening economic ties be-
tween the two countries.
AccordIng Lo omcIuI
statistics, Vietnamese
investment in Myanmar
amounted to $513.19 mil-
lion as of April, ranking
8th among Myanmars
foreign investor coun-
tries.
In May 2013, as part of
the bilateral cooperation,
a 45-member Vietnamese
entrepreneurs delegation
came to Myanmar and
initiated a MoU with the
Union of Myanmar Fed-
eration of Chambers of
Commerce and Industry
(UMFCCI) on coopera-
tion in various economic
sectors.
Both sides said they will
cooperate in sectors such
as textile, hotel and tour-
ism, electronic and spare
parts, marine products,
food, oil and gas, con-
struction materials, fruits
and vegetables, agricul-
ture, housing and sanita-
tion.
Vietnamese Hoang Anh
Gia Lai Construction and
Development House Joint
Stock Company have made
major investments in My-
anmars hotel sector, most
notably a $300-million ho-
tel and housing project in
Yangon.
Bilateral trade between
Myanmar and Vietnam
reached $66 million in
2012-13 and it is expected
to reach $500 million by
zo1, uccordIng Lo omcIuI
statistics.
Vietnam mainly imports
forestry and marine prod-
ucts, vegetables and rub-
ber from Myanmar while
exporting iron products,
machines and spare parts,
plastic, textile and cloth-
ing.
II Triples to $q.1b in o1[1q AIter ReIorms
E
conomic reforms
helped triple for-
eign direct invest-
ment (FDI) into Myanmar
to more than $4.1 billion
In LIe hscuI yeur LIuL end-
ed on March 31, a senior
investment commission
omcIuI suId, IorecusLIng
an increase this year.
Myanmars quasi-ci-
vilian government has
pushed through a series
of political and economic
reforms since the end
of military rule in 2011
and foreign interest has
jumped as Western coun-
tries have lifted or sus-
pended sanctions.
TIe LoLuI Inow oI D In
LIe IusL hscuI yeur umounL-
ed to $4.107 billion, com-
pared with $1.419 billion a
year before and $91.17 mil-
IIon 1o yeurs ugo In hscuI
2003/04, Aung Naing Oo,
secretary of the Myanmar
Investment Commission
(MIC), told Reuters.
Aung Hla Tun
As you know, we have
opened up a number of
sectors to foreign inves-
tors, relaxed various re-
strictions, set up Special
Economic Zones and
removed unnecessary
paperwork and red tape
since April 2012, he said.
TIe omcIuI wus reIer-
ring to FDI that has been
approved during the year
but may not all have
owed In yeL.
Myanmar Summary
_., .:. -. .. :..q._._.
._.:.. . .:.._ . _.:.q .. .
- e~ ,. . q . . . _. . . .
~ .~~.q.~ BIDV ._
_.,.:.. ~..q. ~...
He forecast more FDI
In LIe presenL hscuI yeur,
which started on April 1,
with plans to make the
investment climate even
more attractive. Latest
data showed that nearly
$z6o mIIIIon owed In In
April from 28 companies.
The plans include a sin-
gle investment law for all
investors, combining the
Foreign Investment Law
passed in 2012 and the
Myanmar Citizens Invest-
ment Law from 2013.
The Myanmar Invest-
ment Commission was
recently reorganised, with
many new and younger
members, and the Com-
mission will open its of-
hce In LIe commercIuI cILy,
Yangon, saving a lot of
time and energy for poten-
tial investors, he added.
Ministries and govern-
ment agencies are in Nay
Pyi Taw, a new capital
built from scratch by the
military government a
decade ago, but embas-
sies and many companies
are still in Yangon.
Reuters
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~~ ..., ~~, ~~, _:
.q.. . ~ ~..q ~, ..'.:
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q .. ._. . . . .~: .q ~. .
~~..q.. . ..~:..~
._.:.._.
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.:.~q . , . ._ -_. .~~ .
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..|. .: ~..q ~, ..'.:
'~ .,.q.._~:. .q._.
.:.. ~.~.:..~...,.
.:.e _e .~ .~~ .q.~ SMIDB
. .~.~.~ ~.~ .:.~_.,
~. , . .~.q. ~ ~ , .
~, ..: . . . , ..:. e _ e .
~ .~~ ...q. q .. ._. . . .
..: q ~ .~ .:.~ ~_., ~. ,
~ _ . . ..q.~~~ .:.....
.._~:. .q._.
..:~_..:.~q -e~
,. . . BIDV . SMIDB
~._ _._~.~.~~_~
.~ .~. ~ ~.~ . :..
._...._.~...:.~ ~_.,
~.,..~_~.__e._.. ...
...q _:.q.~..,.
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q. .:.~ ~ _ . . .. :.q, . .
.:..__e.._~:. .q._.
_. BMIDV ._ SMIDB
~ ~ ~ ,_.._:.:.. . ~. ._.
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. . ~. ._.. .q.~~ ~ ~ ~ _
. . .. :.q._ _e. _. . ~ . . ~
~_~:.~_., ~. , .. .:.q..q.
. .:.._ . .|~ ._ _e. ._ .
The totaI inHow of FBI into Myanmar in the Iast scaI year amounted to $4.1U7 biIIion, compared with
$1.419 biIIion a year before and $91.17 miIIion 1U years ago in scaI 2UU3/U4, an ofciaI said.
R
e
u
t
e
r
s
The Bank for Investment and BeveIopment of Vietnam (BIBV) announced a $3U miIIion Ioan to Myan-
mar`s state-run SmaII and Medium IndustriaI BeveIopment Bank of Myanmar (SMIBB) in a bid to deveIop
Myanmar`s smaII and medium enterprises.
U
A
u
n
g
/
X
in
h
u
a
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
22
Myanmar Summary
In Conversation With: UOB Group Managing
Director and Head of International Ian Wong
Wai Linn Kyaw
Hou is UOB promot-
ing 1D1 ou in Mgon-
mor? Whot ore some
of the recent UOB oc-
tioities in Mgonmor?
UOB has an ongoing
unwavering presence in
Myanmar for 20 years,
working closely with the
local Myanmar banks and
the Central Bank. I n 2011,
UOB established a For-
eign Direct I nvestment
Advisory Unit to help our
existing and potential cli-
ents from our network
oI over oo omces und
branches across South-
east Asia, Greater China
and beyond to invest in
Myanmar. To date, we
have helped more than 50
companies explore vari-
ous business opportuni-
ties through our FDI Ad-
visory services.
Our client research tells
us that while Myanmar
remains a key invest-
ment hotspot for compa-
nies looking for regional
growth opportunities
in Southeast Asia, their
top concerns when ex-
panding into Myanmar
Is IImILed bunk hnunc-
ing options and the lack
of insights around local
laws and regulations. Our
latest FDI symposium in
Yangon held jointly with
Myanmar I nvestment
Commission, Myanmars
Ministry of Commerce
and I nternational Enter-
prise Singapore in Feb-
ruary this year attracted
over 300 clients across
our network.
The banks deep exper-
tise in structuring project
loans in high growth sec-
tors such as energy and oil
and gas can also contrib-
ute to the development
of Myanmars economy.
We made a start on this
Ian Wong , UUB Croup Managing Birector and Head of InternationaI.
U
O
B
when in February, UOB
sIgned u hnuncIng ugree-
ment in Nay Pyi Taw with
a Singaporean company,
Asiatech Energy, to build
Myanmars largest gas-
hred power pIunL In Mon
state. We have also part-
nered with US-based APR
Energy, a global leader in
power solutions, to sup-
port their construction of
a 100MW power plant in
the Mandalay region. The
APR Energy contract was
LIe hrsL power generu-
tion agreement signed by
a US-based company with
the government of My-
anmar since the lifting of
sanctions in 2013.
UOBs commitment to
Myanmar also extends to
the local banking commu-
nity. UOB was one of the
hrsL bunks Lo esLubIIsI u
correspondent banking
network with local banks.
The bank has a long-term
commitment to share best
practices in international
trade, risk mitigation and
working capital solutions
with the business com-
munity, regulators and
local banks.
We held a one-day
seminar on J une 2 dur-
ing which we shared with
close to 50 corporate and
central bankers in Myan-
mar our views on the in-
LernuLIonuI hnuncIuI mur-
ket and its implications
for Myanmar. I ndustry
experts from UOB and the
Singapore Management
University shared their
expertise and experience
of navigating the global
hnuncIuI murkeL und up-
dated on best practices
and real-life case studies
on how capital and treas-
ury markets could fuel the
growth and development
oI Myunmur`s hnuncIuI
sector.
The Centrol Bonk
of Mgonmor (CBMJ
uould he ollouing
foreign honks to open
br anches i n Myan-
mor. Whot ore gour
expectati ons of thi s
CBM mooe? Whot ore
the henepts of Singo-
pore honks such os
UOB coming into Mg-
onmor?
UOB welcomes a bank-
ing licence in Myanmar as
it would allow us to serve
our clients banking and
hnuncIng needs us LIey
invest and expand into
Myanmar.
TIe economIc und h-
nancial transformation
underway is real and it is
rapid. What is key now is
for more investors, for-
eign governments and
multinational organisa-
tions to help generate
trade and investment op-
porLunILIes LIuL benehL
the people and businesses
of Myanmar. I t is clear
that UOB has stayed its
course in the last 20 years
in Myanmar and will cer-
tainly step-up its engage-
ment and collaboration
eorLs responsIbIy wILI
all local stakeholders as
the country opens up its
economy.
UOB is committed to
building our businesses
here in Myanmar for the
long term and looks for-
ward to fostering even
closer ties in the years to
come.
Whot kind of foreign
busi nesses do you ex-
pect to see i n Myan-
mor?
According to our experi-
ence, businesses that are
looking to expand into
Myanmar are in indus-
tries such as energy, oil
and gas, telecommunica-
tions, manufacturing and
construction.
As the economy ex-
pands, there are also
opportunities for both
foreign and domestic in-
vestors in areas such as
real estate development,
in particular accommoda-
tion, to address the short-
age for visitors.
At the same time, with
the anticipated trend to-
wards urbanisation, the
education, health-related
und hnuncIuI servIces sec-
tors will attract investors
to cater to the popula-
tions increased spending
in tandem with rising in-
come.
Hou do gou think the
entrg of foreign honks
into Mgonmor uill
impoct the domestic
honking sector?
The I nternational Mon-
etary Fund believes that
hnuncIuI secLor reIorms In
Myanmar will open doors
to its trading partners,
particularly those within
the Southeast Asian re-
gion, and help Myanmar
take advantage of the
ASEAN Economic Com-
munity that will be estab-
lished by 2015.
UOB Is umong LIe hrsL
foreign banks to open a
represenLuLIve omce In
Yangon in 1994 and was
one oI LIe hrsL bunks Lo
establish a correspondent
banking network with lo-
cal Myanmar banks. UOB
is also working with the
Central Bank of Myan-
mar and the Myanmar
Banks Association to pro-
vide training, workshops
and study tours for local
banks in the areas of trade
and payment processing,
Lrude hnunce und credIL
risk management. We be-
lieve that this cooperation
will enhance further the
service level of the bank-
ing sector in Myanmar.
With a branch licence,
UOB will be able to work
together with local banks
for certain onshore in-
frastructure projects,
and share our knowledge
on projecL hnuncIng und
loan structuring. We see
our role as complemen-
tary with domestic banks
as foreign banks, with a
limited branch network
and restrictions on se-
lected activities, will not
BeIegates at UUB's seminar on the internationaI nanciaI market
and its impIications for Myanmar.
be in direct competition
with the local banks in
Myanmars domestic re-
tail market.
U
O
B
UOB ._ _.,.:.~
~.. ~ _~: ~__..: ..
~ .~ q _. . _., .:. _._ ~ .
~ -e~.:.. ,.~..:
..~.._. ~~~ ...~
UOB . ._.:.~~,~q...
_. . . . ~_~ ...~e ~:. e ._ .
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.~:~:q. ~,~.~q
,..,...|. ~~ .~: ~.
.:.~:. _.,.:.~ q...
_. . . . q, . . ~ . ._ .e.,
~. , ~ UOB ~ ~.,_e
~ . ~ ..| . ~ .~: ~:. FDI
~_~ ...~, ..: . . ~. .
. .. :..q.~. ~.. ..:. qq
.~: ~_...._.._e.._~:.
.q._.
. .. . .. .:. .:.~q _., .:
.._ ~.q .~:~:q~
~.~.:.- ...~. e_e..
~.~....:.~~~ q...
_. . . q, ~. ~.,q:~_ e.
~,q.,_.. ,.~.~~~.:.
q .,._ .:.. : _., .:. -
~,.~:.._ .._~..
q: ~ . . , .. _._ ~ .
.... ,_ ..,. .:.~:. ~~ .
~~.q..,_..|._..~_e.
._.
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
PROPERTY & REAL ESTATE
23
Myanmar Summary
Myanmar Summary
Hilton to Open Five More Hotels Despite Hitch in Myanmar
Wai Linn Kyaw
T
he worlds largest hotel
operator by market value,
Hilton Worldwide Hold-
ings I nc, said it plans to open
hve more IoLeIs In Myunmur
in the next three years despite
a delay in its maiden project in
the country.
Hilton has signed manage-
ment agreements with Eden
Group Company Ltd, a business
conglomerate in Myanmar, for
the hotels.
Two, which are existing prop-
erties, will be rebranded and
open as Hilton hotels in Octo-
ber. The other three are slated
to open in 2016 and 2017, it said
in a statement.
Hilton last year entered the
Myanmar market with the sign-
ing of a management agree-
menL wILI IocuI hrm P HoId-
ing Co Ltd to manage Hilton
Yungon. TIe hrsL HIILon WorId-
wide property in Myanmar, a
An exterior shot of the HiIton Midtown in New York.
A
n
d
r
e
w

K
e
lly
/
R
e
u
t
e
r
s
300-room hotel, was originally
scheduled for opening this year.
However it is now expected to
open in late 2015 or early 2016,
said Martin Rinck, president of
HIILon, AsIu PucIhc.
Working in an environment
such as Myanmar where some-
times not everything goes like
Swiss clockwork, the project is
coming later than expected,
Rinck told Reuters, adding the
delay is not deterring Hilton
from further expansion in the
country.
Hilton really is a company
that likes to be on the forefront,
Lo be LIe hrsL wIen IL comes Lo
entering emerging markets.
A surge in the number of tour-
ists in recent years has sparked
a boom in hotel development in
Myunmur, wIere onIy sIx hve-
star hotels were in operation
at the end of 2013. Hotel and
service apartment operators
including Hilton, Accor Group,
Shangri-la Group and Pan Pa-
cIhc HoLeIs Group, ure rucIng Lo
open new hotels in the country.
~. : ~_~ .. .e ~e . . , .~ . .
_~.~. . _e. ._ Hilton ._ _., .:
.~ .:._....~~. e~e
|..~.,_.e...:.q, ...,
._e .q._.
Hilton ._ _._~...,.~
~.~~.._e.._ -.~.~~..
. e~e..,....q:~..:.
..:q~q, ...,...q:..:
~ _ .~ ~ .~ . ~ .q. .. _. ._e. ._
e .q._.
~..|~.~.......|._ .:._
.~:~~:.~~. e~e~..
~ Hilton e~e~.__e ,:._
._ .: .e . . . :.q, . . .~ q _ . .
.,:~.:._e~e...~:. ~~'
~~ ....:.~~. e...:.._
e ~ _., ._~_:.~.:.~q . q
._ .
Millcon Steel, Thiha Group
Launch Steel JV in Myanmar
Aye Myat
T
hailand-based steel pro-
ducer Millcon Steel Pcl
has joined with local
conglomerate Thiha Group to
set up a joint ven-
ture in its regional
growth push.
Millcon will hold
51 percent stake in
the J V, Millcon Thi-
ha Co, while Thiha
Group will hold the
rest.
TIe new hrm wIII enguge In
the trading business focusing
on steel and construction mate-
rials, Thai media reported.
Sittichai Leeswadtrakup,
president and CEO, said the
company has proceeded with
the registration of the new com-
pany in Myanmar following its
boards approval of the joint
venture.
Millcon, which is one of Thai-
lands leading producers and
distributors of steel products,
said it sees vast opportunities
and strong growth with the
opening up of Myanmar ahead
of the ASEAN Economic Com-
munity, which is set to
launch in 2015.
AccordIng Lo dIerenL
estimates, Myanmars
population of about 60
million consumes 19 kil-
ograms of steel per per-
son per year, 1.33 mil-
lion tonnes a year, while
Thailands 65 million consumes
17.7 million tonnes, a vast gap
that has lured many construc-
LIon muLerIuIs hrms.
Several construction products
company, especially from J a-
pan, Vietnam, Singapore and
Thailand, has already ventured
into Myanmars booming con-
struction sector, which was in
shambles for decades due to a
stagnant economy.
..~._..~ ..~~..
. Millicon Steel Pcl ._ _.,.:
.q ..,.~~.~_e.._ .e
~.~~...~~.~....|...:
q~q, ...,._~:. .q._.
Millicon ._ ~~.~....|.
..:q~.- ~ q:..,.~ qq._
_e._.. ~, , q:..,.~ .e
~ . ~ ~ . . . qq ._ _e. ._ . Millicon
._ ..~. ...:.~q
._ . ~, .. .~ ~ . . ._
~.~.:.~,~ ~..~.|~~_e.
._. ..~...:.~q _.,.:.-
..~~.._..._ .~....
~.~ ~... ~ ~.q. ...
.~q._ e .q._.
B
lo
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
24
Myanmar Summary
Myanmar Summary
PROPERTY & REAL ESTATE
Thilawa Land Owners Await SEZ Start to Bag More Bucks
May Soe San
D
espite high demand
from foreign investors
for real estate around
Thilawa Special Economic Zone
(SEZ) land owners and agents
are waiting for the SEZ launch
to sell plots, anticipating fur-
ther increase in land prices, re-
altors say.
Thilawa SEZ, which is being
jointly implemented by Myan-
mar and J apan, is expected to
start its commercial run from
mid-2015, according to project
omcIuIs. TIe muILI-mIIIIon doI-
lar project, which is touted to
become a cornerstone of My-
anmars economy in the near
future, has already grabbed the
attention of foreign investors
who are eyeing using Myanmar
as a cheap manufacturing base.
Demand for lands in and
around the SEZ, along with that
the prices of them, has gone
up as the J apanese consortium
responsible for the project re-
cently started selling leasehold
rights to interested enterprises
and investors.
Thilawa is divided in two
zones local and international.
However, land sales in interna-
tional zone are outpacing that
in the local zone.
A 120 square foot land plot in
the international zone is about
K200 million ($207,000), Ko
Min Khant from Kaung Htet
real estate agency, which deals
with lands in Thilawa, Thanlyin
and Kyauktan, told Myanmar
Business Today.
A similar plot of land at lo-
cal zone was K200-250 million
seven months ago, however,
now the price have climbed up
to K350 million ($362,000)
and stagnated as demand tum-
bled, he added.
I nvestors from local zone are
waiting to see how the require-
ments at international zone un-
fold and have stopped dealing
land plots, Ko Min Khant said.
Realtors say there is no pres-
sure to build in the local zones,
while international zone land
owners have to construct the
factories and provide details
of their investment and busi-
ness to the authorities within
six months as the SEZ goes into
operation next year.
Places near the SEZ such as
new quarters in San Chin Mi
level 1, 2 and 3, Thet Yar Kon at
Nat Sin Kone ward and Pha Lan
ward are seen as lucrative as
land owners anticipate foreign
investors to buy lands in the lo-
cuI zone Lo buIId sLu IousIng
und oLIer hnuncIuI InIrusLruc-
tures like banks, realtor say.
Lift and Escalator Association Meets to Discuss Myanmar Building Codes
Phyo Thu
A
s Myanmar continues to
experience rapid urbani-
sation and attract for-
eign investment, Yangons con-
struction industry continues to
boom. Crucial to the urban de-
velopment of the city, with the
increasing number of high rise
buildings, are lifts and escala-
tors.
WILI LIIs In mInd, LIe PucIhc
Asia Lift and Escalator Asso-
ciation (PALEA) representing
delegates from all sectors of the
Lift I ndustry from twenty four
AsIun PucIhc counLrIes, decIded
to hold their 3rd annual Com-
mittee Meeting in Yangon.
PALEA is a liaison member of
both the CEN and I SO technical
committees for lifts and escala-
tors and has a close relationship
with many code writing author-
ILIes In LIe AsIu PucIhc regIon. L
has assisted many of these au-
thorities in the development of
their codes.
I n co-operation with the My-
anmar Engineering Society
(MES) and facilitated by J ar-
dine Schindler, the leading el-
evator and escalator supplier
in Myanmar, PALEA held a one
day seminar recently, where
Members of PAIEA, incIuding President Ian TodkiII, U Than Aye, Ex Beputy Bi-
rector CeneraI, EIectricaI Inspection Bept, Ministry of Industry, Members of the
Myanmar Engineering Society, Representatives from Iift and escaIator companies.
they presented the latest de-
velopment in I nternational Lift
and Escalator Standards.
U Than Aye, former deputy
director general, Electrical
I nspection Dept, Ministry of
I ndustry, said: The seminar
demonstrates the commitment
of the international lift and
escalator industry to building
local capacity and expertise
in Myanmar. Companies like
J ardine Schindler which has a
strong focus on technical com-
petencies, plays an important
role in rapid expansion of the
construction industry.
The seminar was attended by
a wide range of representatives
from both the public and pri-
vate sector.
The organisers said it provid-
ed a useful forum for PALEA to
share their technical expertise
and recommend the use of I n-
ternational Standards. There
was also a interplay of ideas as
local representatives were able
to voice concerns and share
their knowledge of the local
market with PALEA, they add-
ed.
I an Todkill, president of
PALEA, said, We hope that the
seminar has helped the Myan-
mar authorities in the develop-
ment of their own national lift
and escalator standards and we
are prepared to assist further in
the future.
A man dispIays his farm in front of his home in the ThiIawa economic zone, outside Yangon.
M
in
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a
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_., .:.-_._.._.:....:..
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~ .~~ ... ._ . . . . ~ .~~
.:.._.~. ~._.~..:~
~~.:.~ .~..~:.. .:~
.. ~:.~. ._.. ~ . . .:._.:..:.
._.e.~.~._~: ~:q..e~
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._ ~:q..e~.... ...|.
, . . ~_. ~ e .:.. e .:. .|~
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~.~.~ q, ~ , _. ~ ~ ..q, . ._e~
.~.. ._.
_.,.:.~ .:~..~:.. .~
..~:.~_.:.~ ~.~...:
.,._e.._ Jardine Schindler
._ _., .:. ~ , e:~. ..
....|._ e.~._.~.~.~ .|~
.__e._.. .,:~....' .~~:
.:~ .. ~:.. .~ .. ~:.. q:
..,.,..:.~ ~..|~._.~.~.
~ ~ _.. :.._ _e. ._ . .~ . ~, _ ~ .
_:, ..............q...._:,
. ~ e , _~:..q....e: . .., ..~.
~ e.~._.~.~..._ .~~:
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~.~~..:.~ ~~e_.. _._~.
. ~. .~ .:.~ _._ . .~: ..: q ~
.q, ~.~.q..:.q.._e ._.:
_~:.. ._ . ~. .|~._ .~.~.. ~
~_.,e.e.. ~..q. ..~
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_e.._.
~..|~._.~.~..._ PALEA
. Pacifc Asia LiIt and Escalator
~~~ .:..:~~.q.__e._.. ,.
~ -. ~~:. . , . , .. ,_ .._:
~..~..:.~ ..~......._
e ~..|....~ ._.:_~:..._.
Palea - ~_ Ian Todkill ~ e.
~ ..._ ~._ .~.~.. ~ _ ., .:
.- .:~..~:.. .~..~:.
..,.,.~.~~..:.~ ~.:~
~. _e. ..._ _e. _. . ~,:~ ~:.
~ ._ ., .~_.:.~~ ~ . . .:~
..q,...:.._e._.:.._.
.,_.,.:....|.~.~:~_
.e: ..: q ~ .~ q ..:. .~|~ .
...:..q.~,q ._.~~~.:.~ .
_.:.. . , .q .:.~ . ~e . ~:.
_.~~.,..:._. .q:.....q,
. _ . ~ ~ ,_ . .| . . ~ q ._ ~: .
.~:.~ .. .~:~~,.
..~|, ~._.._.~~...:..,.
. ~...,~ ._.:._.
.:._ ~~ ...e....~~:
. .~|~ .. .. :..q.~ , ~:. ~ , . e
.q. ..,..:...:q~q, .~
._ .~ .~: ._ _e. q: . _.:.. . , .
q.:.e~. ._.~~~ee._.~~
.:_.._e.._.
. .~|~ .. .. :..q.~ , ~~ .
Local zone . international zone
e_ ....._.:.:._.. international
zone ~. ~e.~:..:._.. .q:.
.~:.,_..,._~.,~ Local
zone ~._ .q:..~:. ~e.
~:..| .q ...:~,_..|..,._~:.
.q._.
international zone q ._.~~.:.
.: .. ~~ .~._..|~....:
.~q~ .,. ~~~ ,..|. ....,.
_e. ..'.,_. . ~e . ~:.._ .q ._~: .
_._~. Local zone ~,.: _...
._.,..~~._ .,. ~~~ .
~~ q._.. e.~.| .,. ,~~
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.q: . . ~:..| ~_ _ . .,. ~ q
._~:. .q._.
Local zone .:.~ q..._....
.:.~.,_e international zone -
.~..~~ ..:...,.~q_..
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~~e._... ~ee...:..:.
:.q._~:. .q._.
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
AUTOMOBILE
25
Myanmar Summary
Tuxis Sow Trumc Chuos in Iorope
Protesting Against Uber Car App
Drivers say app-based car service violates taxi rules
T
uxI drIvers sowed Lrumc
chaos in Europes top cit-
ies last week by mounting
one of the biggest protests ever
against Uber, a US car service
whose smartphone app sum-
mons rides at the touch of a
button.
Hundreds of licensed black
LuxIs snurIed Lrumc In LIe
streets around Trafalgar Square
in central London, hooting their
horns as they passed Downing
Street, home of Prime Minister
David Cameron, and the Hous-
es of Parliament.
n PurIs, LuxIs sIowed Lrumc
on major arteries into the city
during the morning commute.
Hundreds choked the main
road to Berlins historic centre
while commuters packed buses
and trains, or just walked, to get
to work in Madrid and Barce-
lona.
San Francisco-based Uber
Technologies I nc, valued last
week at $18.2 billion just four
years since its 2010 launch, has
touched a raw nerve by bringing
technological advances to one
of the most visible and regulat-
ed services in modern city life.
Uber customers order and
Jack Stubbs and
Brian Love
pay for a taxi with its applica-
tion on their smartphones. I n-
stead of having taxis prowl city
streets looking for customers,
Uber links to smartphone GPS
systems to locate app users and
have a nearby car go pick them
up.
This about an all-out assault
on our profession, our liveli-
hoods, said Max Small, a Lon-
don taxi driver for 34 years.
These big companies are com-
ing in, not playing by the rules.
Neu uooe of competition
Taxi drivers across Europe
say Uber breaks local taxi rules,
violates licensing and safety
regulations and its drivers fail
to comply with local insurance
rules.
Uber, backed by investors
such as Goldman Sachs and
Google, refutes that criticism
and argues it complies with all
local regulations.
What you are seeing to-
day is an industry that has not
faced competition for decades,
said Pierre-Dimitri Gore-Coty,
Ubers Regional General Man-
ager for Europe.
Now hnuIIy we ure seeIng
competition from companies
such as Uber which is bringing
choice to customers, he said,
adding the taxi industry in most
countries was highly regulat-
ed and not pro-consumer.
Uber has expanded rapidly
since it was founded by two
US technology entrepreneurs,
Travis Kalanick and Garrett
Camp, and now operates in 128
cities across 37 countries.
Uber CIIeI ExecuLIve Omcer
Kalanick last week announced
$1.2 billion in new funding,
valuing the company at $18.2
billion, one of the highest valu-
ations ever for a Silicon Valley
startup.
But ordinances keep it out of
cities such as Las Vegas and Mi-
ami. I n Chicago, San Francisco
and Washington, DC, Uber and
similar companies have faced
lawsuits from taxi companies
hoping to keep the new compe-
tition out.
I n London, the European
Unions biggest city by popula-
tion, police helicopters moni-
Lored LIe Lrumc snurI uround
the Houses of Parliament as
mopeds and cyclists weaved
through the chaos and crowds
of bemused tourists looked on.
Uher hits hock
Uber says its minicabs arrive
In hve mInuLes In cenLruI on-
don and fares are 30 to 50 per-
cent cheaper than a black cab.
I ts no surprise theyre tak-
ing business away from the cab
drivers ... but its adapt or die,
said Callum, a 24-year-old pub-
licist from London.
Uber also provides an app for
drivers to calculate the cost of
each journey, which black taxi
drIvers suy Is eecLIveIy u LuxI-
meter and thus contravenes a
1998 British law reserving the
right to use a meter for licensed
cars.
Transport for London, the
citys transport regulator, says
it thinks smartphone applica-
tions do not constitute a taxi-
meter but has asked the High
Court for an opinion.
After the disruptions, Uber hit
back in Germany by emailing
cIIenLs Lo oer u o percenL dIs-
count on all shared rides for the
rest of the day. I n London the
company took out a full page
advertisement in the evening
pupers oerIng new cusLomers
zo pounds ($.8) o LIeIr
hrsL journey.
Uber UK & I reland General
Manager J o Bertram said the
app had an 850 percent in-
crease in new customers on
Wednesday, the most in one
day since it launched in London
two years ago. Reuters
Z
a
r
n
i
M
in

N
a
in
g
Myanmar Summary
Myanmar to Taut Rules for Yangon Bus Drivers
T
he authorities will tighten
the enforcement of rules
for bus drivers in Yangon
us purL oI LIeIr eorLs Lo reduce
Lrumc uccIdenLs In Myunmur`s
commercial hub.
At least 41 people have died
and 358 others were injured
in 122 road accidents that oc-
curred during J anuary-May
LIIs yeur, omcIuI duLu sIows.
NIne Lrumc ruIe enIorcemenL
teams will now patrol Yangon
to check vehicles, state-run me-
dia reported.
Aung Phyo There are 6,600 buses run-
ning in 352 routes in Yangon, a
city that has an estimated popu-
lation of about 7 million.
To reduce the crashes and
euse Lrumc congesLIon, boLI roud
users and drivers should change
LIeIr mIndseL on Lrumc ruIes, un
omcIuI oI LIe Yungon RegIon AII
Bus-line Control Committee was
quoted as saying.
According to the citys road
transport administration, the
number of motor vehicles oper-
ating in Myanmar was 4.02 mil-
lion in 2013, with 3.418 million
motorcycles, 409,411passenger
cars, 110,705 trucks and 21,043
buses.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
AUTOMOBILE
25
Myanmar Summary
Tuxis Sow Trumc Chuos in Iorope
Protesting Against Uber Car App
Drivers say app-based car service violates taxi rules
T
uxI drIvers sowed Lrumc
chaos in Europes top cit-
ies last week by mounting
one of the biggest protests ever
against Uber, a US car service
whose smartphone app sum-
mons rides at the touch of a
button.
Hundreds of licensed black
LuxIs snurIed Lrumc In LIe
streets around Trafalgar Square
in central London, hooting their
horns as they passed Downing
Street, home of Prime Minister
David Cameron, and the Hous-
es of Parliament.
n PurIs, LuxIs sIowed Lrumc
on major arteries into the city
during the morning commute.
Hundreds choked the main
road to Berlins historic centre
while commuters packed buses
and trains, or just walked, to get
to work in Madrid and Barce-
lona.
San Francisco-based Uber
Technologies I nc, valued last
week at $18.2 billion just four
years since its 2010 launch, has
touched a raw nerve by bringing
technological advances to one
of the most visible and regulat-
ed services in modern city life.
Uber customers order and
Jack Stubbs and
Brian Love
pay for a taxi with its applica-
tion on their smartphones. I n-
stead of having taxis prowl city
streets looking for customers,
Uber links to smartphone GPS
systems to locate app users and
have a nearby car go pick them
up.
This about an all-out assault
on our profession, our liveli-
hoods, said Max Small, a Lon-
don taxi driver for 34 years.
These big companies are com-
ing in, not playing by the rules.
Neu uooe of competition
Taxi drivers across Europe
say Uber breaks local taxi rules,
violates licensing and safety
regulations and its drivers fail
to comply with local insurance
rules.
Uber, backed by investors
such as Goldman Sachs and
Google, refutes that criticism
and argues it complies with all
local regulations.
What you are seeing to-
day is an industry that has not
faced competition for decades,
said Pierre-Dimitri Gore-Coty,
Ubers Regional General Man-
ager for Europe.
Now hnuIIy we ure seeIng
competition from companies
such as Uber which is bringing
choice to customers, he said,
adding the taxi industry in most
countries was highly regulat-
ed and not pro-consumer.
Uber has expanded rapidly
since it was founded by two
US technology entrepreneurs,
Travis Kalanick and Garrett
Camp, and now operates in 128
cities across 37 countries.
Uber CIIeI ExecuLIve Omcer
Kalanick last week announced
$1.2 billion in new funding,
valuing the company at $18.2
billion, one of the highest valu-
ations ever for a Silicon Valley
startup.
But ordinances keep it out of
cities such as Las Vegas and Mi-
ami. I n Chicago, San Francisco
and Washington, DC, Uber and
similar companies have faced
lawsuits from taxi companies
hoping to keep the new compe-
tition out.
I n London, the European
Unions biggest city by popula-
tion, police helicopters moni-
Lored LIe Lrumc snurI uround
the Houses of Parliament as
mopeds and cyclists weaved
through the chaos and crowds
of bemused tourists looked on.
Uher hits hock
Uber says its minicabs arrive
In hve mInuLes In cenLruI on-
don and fares are 30 to 50 per-
cent cheaper than a black cab.
I ts no surprise theyre tak-
ing business away from the cab
drivers ... but its adapt or die,
said Callum, a 24-year-old pub-
licist from London.
Uber also provides an app for
drivers to calculate the cost of
each journey, which black taxi
drIvers suy Is eecLIveIy u LuxI-
meter and thus contravenes a
1998 British law reserving the
right to use a meter for licensed
cars.
Transport for London, the
citys transport regulator, says
it thinks smartphone applica-
tions do not constitute a taxi-
meter but has asked the High
Court for an opinion.
After the disruptions, Uber hit
back in Germany by emailing
cIIenLs Lo oer u o percenL dIs-
count on all shared rides for the
rest of the day. I n London the
company took out a full page
advertisement in the evening
pupers oerIng new cusLomers
zo pounds ($.8) o LIeIr
hrsL journey.
Uber UK & I reland General
Manager J o Bertram said the
app had an 850 percent in-
crease in new customers on
Wednesday, the most in one
day since it launched in London
two years ago. Reuters
Z
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Myanmar Summary
Myanmar to Taut Rules for Yangon Bus Drivers
T
he authorities will tighten
the enforcement of rules
for bus drivers in Yangon
us purL oI LIeIr eorLs Lo reduce
Lrumc uccIdenLs In Myunmur`s
commercial hub.
At least 41 people have died
and 358 others were injured
in 122 road accidents that oc-
curred during J anuary-May
LIIs yeur, omcIuI duLu sIows.
NIne Lrumc ruIe enIorcemenL
teams will now patrol Yangon
to check vehicles, state-run me-
dia reported.
Aung Phyo There are 6,600 buses run-
ning in 352 routes in Yangon, a
city that has an estimated popu-
lation of about 7 million.
To reduce the crashes and
euse Lrumc congesLIon, boLI roud
users and drivers should change
LIeIr mIndseL on Lrumc ruIes, un
omcIuI oI LIe Yungon RegIon AII
Bus-line Control Committee was
quoted as saying.
According to the citys road
transport administration, the
number of motor vehicles oper-
ating in Myanmar was 4.02 mil-
lion in 2013, with 3.418 million
motorcycles, 409,411passenger
cars, 110,705 trucks and 21,043
buses.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
13
Myanmar Summary
Contd. P 15...(China Mobile)
Contd. P 15...(China Mobile)
Muluysiu Suys Spent $S.6m on Seurch Ior MH,o
Trinna Leong
M
alaysia has spent
a total of 27.6
million ringgit
($8.6 million) so far on
the search for the missing
Malaysia Airlines Flight
MH370, authorities said,
gIvIng u specIhc cosL hg-
ure Ior LIe hrsL LIme.
TIe hgure oI z;.6 mII-
lion ringgit was only the
sum spent by Malaysian
agencies, we do not know
how much other countries
spent, Department of Civil
Aviation chief Azharuddin
Abdul Rahman told a news
conference, saying he was
unsure of the cost break-
down.
The search for MH370,
which disappeared carry-
ing 239 passengers and
crew on March 8, is al-
ready set to be the most
costly in aviation history
and spending will rise
sIgnIhcunLIy us LIe seurcI
expands to a wider swathe
oI LIe ndIun Oceun o
Australia. Experts have
suggested the cost of
searching for the missing
jetliner could reach hun-
dreds of millions of dol-
lars.
The search has been
dealt setbacks, most re-
cently when Australian
omcIuIs suId IusL monLI
that wreckage from the
aircraft was not on the
seabed in the area they
Iud IdenLIhed, bused on
acoustic pings thought to
be from the planes black
box recorders.
Asked where the new
search area would be,
Azharuddin said he did
not know but that it will
not be very far away from
where the search is now.
The Australian and Ma-
laysian investigators have
done their analysis and are
in the process of exchang-
ing notes with Inmarsat,
he said, referring to the
BrILIsI suLeIIILe hrm wIose
analysis of signals from the
plane is the basis for the
current search area.
A Wall Street Journal re-
port on June 8 cited sourc-
es as saying investigators
were revising some of their
basic assumptions about
the planes last position.
The search area has al-
ready been extended to
a 60,000 sq km (23,000
sq mile) zone that is be-
ing surveyed by a Chi-
nese vessel. It will then be
searched by a commercial
operator in a mission ex-
pected to start in August
and take up to a year, at a
cost of A$60 million ($55
million) or more.
OmcIuIs ure openIng LIe
search operations to bids
by prIvuLe hrms. MuIuy-
sias deputy defence min-
ister, Abdul Rahim Bakri,
said those costs would be
shared equally by Malay-
sia and Australia. Reuters
Myanmar Summary
Chinu Mobile to Boy $SS1m Stuke in
Thai Billionaires True Corp
Khettiya Jittapong
S
tate-owned China Mobile
Ltd has agreed to buy an
18 percent stake in Thai
telecoms group True Corp for
$881 mIIIIon, In TIuIIund`s hrsL
major corporate deal since the
military coup last month.
True Corp, backed by billion-
aire Dhanin Chearavanonts
Charoen Pokphand Group, said
it was raising $2 billion through
a rights share issue to boost its
hnuncIuI posILIon. As purL oI
the fund raising, True Corp will
sell 4.4 billion shares to China
Mobile, the worlds biggest car-
rier by subscribers, at 6.45 baht
each, a 13.4 percent discount to
Trues last traded price.
The deal is part of the Thai
groups long-term plan to se-
cure a foreign partner and un-
derscores Dhanins strong po-
litical connections in mainland
China, sources familiar with the
matter said.
In 2013 Dhanins CP Group
emerged as a surprise buyer for
global bank HSBC Plcs $9.4
billion stake in Ping An Insur-
ance Group Co of China Ltd.
CP Group wus LIe hrsL muILI-
national to invest in Chinas
agri-business in 1979 and it was
tasked with helping to modern-
ise Chinas farm sector. It also
operates Lotus super markets
in Shanghai, according to the
companys website.
Through the proposed stra-
tegic investment in True Corp,
China Mobile is expected to
access new customers, interna-
tional business opportunities
and new earnings growth driv-
ers, wIIcI Is oI greuL sIgnIh-
cance to the telecom business of
the company, China Mobiles
chief executive Li Yue said in a
statement.
The proposed deal comes
less than three weeks since
the military seized power in
Thailand. The two companies
made no mention of the coup
or preceding political crisis,
which weighed on corporate
dealmaking. New mergers and
acquisitions in the country have
slumped by 72 percent by value
from a year ago to $648 mil-
lion by end May, according to
Thomson Reuters data. Reuters
State-owned China MobiIe Itd has agreed to buy an 18 percent stake in Thai teI-
ecoms group True Corp for $881 miIIion.
B
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~,~~..q. China Mobile Ltd
~.,_ e ..~ . e .q.~ . ~
True Corp -qee: ~ q:..,.
~:. ~..q~,..'.: ~ .,.
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~~~ ..~.. ~:~:..._...,:~
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black box .~.~~.~.:.
~q.q._.
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
12
From page ...(Fill The Caps)
From page ...(\B)
From page ...(\B)
From page ...(Fill The Caps)
Pricing mechanisms, market
intelligence, united selling/ bar-
gaining policies with Farmers
Organisations in place in ad-
dition to multiple transporters
involved in supply chain deliv-
eries, is what we mean by insti-
tutional infrastructure/ frame-
work.
On LIe IpsIde, LIese sume
transporters can bring in ferti-
lisers to boost agricultural out-
put. I n reality, if you cant move
people or crops you sure cant
move income and the economy
stagnates.
I n both Taiwan and Malaysia
when Farmers Organisations
set collective uniform pricing
und more money owed Lo IocuI
communities, the countryside
economy grew organically by it-
self without national economic
growth policies. Simply put,
more money in farmers pock-
ets meant more people spent
more money locally, with posi-
LIve eecLs oI sLImuIuLIng IocuI
businesses.
Repeati ng patter ns
This pattern will repeat itself
in Myanmar when these simple
institutional mechanisms are
put in place. It may take time
for the smallest of roads to be
built or resurfaced by the Un-
ion Government but the pattern
will repeat as has already been
observed across the Irrawaddy
Delta in Township Develop-
ment.
As a success story from the
Delta where villages receiving
more money for their rice after
starting their local rice entre-
preneurs association created
their own road building fund
and re-paved 10km leading
from the main Pathein Highway
road, themselves. This in turn
created a faster economic deliv-
ery device to enter their villages
with the result being a pocket of
economic prosperity based on
self-funded road access, which
came from collective uniform
pricing to buyers and rice mill-
ers.
A short cut to development
is using business models that
have worked over and over
again during the past years of
poverty alleviation case studies.
There is no need to re-invent
the wheel.
Another example of institu-
tional infrastructure would be
training centres focused on ef-
fective education programs
for fertilizer and pesticide us-
age. Regulatory approval for
imported agriculture products
into Myanmar should be prop-
erly labelled for usage in the lo-
cal language. Companies that
follow these procedures should
be granted fast track approval
for products such as hybrid
seed strains, fertilisers and
pesL conLroI. AIso hrms oerIng
training on seed selection and
seed storage for higher yield the
following year should be given
priority approval.
Even with a severe shortage
of skilled labour, Myanmars
farmers know how to work their
indigenous land and with a few
pointers they could turn the ta-
bles from poverty to prosperity.
When building Special Eco-
nomic Zones (SEZs) serious
consideration should be given
on wIere LIe producLs Lo hII
the containers will come from
and how and how the localised
infrastructure be aligned to ex-
pedite this movement within
Myanmar.
We have presented you with
some thoughts on the problems
and the solutions facing Myan-
mars rural development. With
the current governments dy-
namic policies directed towards
alleviation of rural poverty,
enhancing rural productivity
and boosting agrarian families
income, the time is opportune
for us to move in a direction to
meet these challenges with re-
alistic and practical approaches
suggested in this paper.
Hishamuddin Koh has 25
years of experience in agricul-
ture and rural development
and is Executive Chairman of
Hisham Koh and Associates
and the Myanmar Planta-
tion Management & Advisory
Co (MPMAC) along with My-
anmar Food Technology. He
can be reached at kohisham@
gmail.com.
David DuByne is Myanmar
Operations Director at One
Globcl Sourcin c jrm jocus-
ing on Myanmars agricultural
export sector and acts as Chief
Editor for Oilseedcrops.org. He
can be reached at ddubyne@
oneglobalsourcing.com.

Farmers organisations are


very important institutional
instruments that will drive
rural development and cre-
ate productivity along with income
contribution in both rural and na-
tional development.
S
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suId more emcIenL mIIIs
and lower exporting costs
would trigger changes at
farm level, helping to raise
agricultural productivity
and change farm practic-
es, including the choice
of rice varieties, required
to match the evolving de-
mands of importers.
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
9
Myanmar Summary
APR Switches on 1ooMW Myunmur Power Plunt
APR Energy's 1UUMW power pIant in Kyaukse, MandaIay.
A
merican power so-
lutions provider
APR Energy an-
nounced that the com-
panys power generation
plant in Myanmar is now
fully operational.
I n February, APR
clinched a contract
to build a fast-track
100-megawatt power
plant in upper Myanmar,
becomIng LIe hrsL AmerI-
can company to sign a
power generation agree-
ment with the govern-
ment since the lifting of
sanctions in 2013.
Based in Kyaukse, Man-
dalay region, the plant
provides the Myanmar
Electric Power Enterprise
(MEPE) with a guaran-
teed minimum of 82MW
of power and will enable
the provision of electricity
and power to more than
six million people, APR
Energy said in a state-
ment.
The contract, which is
on a rental basis, is ex-
pected to run through to
late 2015.
Clive Turton, manag-
Ing dIrecLor AsIu PucIhc
at APR Energy, said: The
commissioning of our
thermal power generation
plant, one of the largest
in the country, is an im-
porLunL hrsL sLep Lowurds
establishing adequate re-
liable power generation
capacity in Myanmar.
We look forward to
playing a continued role
to help Myanmar supply
power emcIenLIy und reII-
ably to its people and in-
dustries.
Turton said Myanmar
is a fast growing econo-
my and the country, like
many others in the region,
needs reliable power in
order Lo begIn IuIhIIIng ILs
potential.
The project represents
another substantial in-
vestment by a US com-
pany in the infrastructure
oI Myunmur, und LIe hrm
said it will contribute to
the economic and social
progress of Myanmar by
employing local people
and supporting commu-
nity development pro-
grams.
Fuelled by natural gas
from the Shwe Gas Pro-
ject, the plant features 68
of the newest generation
CAT low-emission mo-
bile gas power modules
(GPMs) und wIII oer
Wai Linn Kyaw
one of the cleanest power
generation solutions in
Myanmar, APR said.
Penny Pritzker, US Sec-
retary of Commerce, who
was on a visit to Myanmar
recently, said APR pro-
viding power solutions
in Myanmar is critical,
particularly as 75 percent
of the countrys popula-
tion lacks access to elec-
tricity.
The engagement of US
businesses in Myanmar
will help promote inclu-
sIve growLI LIuL benehLs
all of the countrys peo-
ple, she said.
Turton, in an earlier in-
terview with Myanmar
Business Today, said the
hrm pIuns Lo work wILI LIe
ministry to provide solu-
tions for further power
needs and have more po-
tential projects.
We are very keen to
develop our businesses in
the market and we will be
looking forward to mak-
ing a lot of investments in
this country in this par-
ticular sector.
W
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
8
on American sanctions
list. Whats more scary is
that Piers recently told me
that they were pitching to
jointly represent The Lady
(Daw Aung San Suu Kyi)
as well as one of the other
IIgI prohIe governmenL
omcIuIs - u mun wIo Is
a very likely presidential
candidate. Given the bru-
tal way they do business,
I fear for this country if
these leaders have com-
panies that work like Bell
Pottinger whispering in
their ears.
Crongism in Mgon-
mor - Contogious?
I was warned over and
over again to not trust
business people in Viet-
nam and yet here I am.
Lets start at the begin-
ning. A year ago when I
was launching MySQUAR
a friend in Vietnam in-
troduced me to Eric
Schaer, the CEO of Ris-
ing Dragon, an advisory
group who was helping
companies set up in My-
anmar. Given how much
this market was changing
every day, it made sense
for us to enlist the servic-
es of Rising Dragon. The
basic terms were that we
would give Rising Dragon
u IuIrIy sIgnIhcunL umounL
of equity in return for
them getting us free of-
hce spuces In Yungon und
HCMC as well as handling
out legal incorporation in
Myanmar, Singapore and
Vietnam. The other piece
here is that I would retain
proxy voting rights for the
shares. About a month
later, we also started pay-
ing Rising Dragon a hefty
From page ;...(Investors)
From page ;...(Investors)
consulting fee, about 10
percent of our burn rate
to be our acting CFO. I n
the ensuing eight months
he has been helping us
to raise money has been
a travesty and now hes
even stolen the company.
TIere`s been no Iree omce
spaces and while I have
proof that he was work-
ing on the proxy voting
docs, that never hap-
pened either. As the CEO,
this is of course my fault
to stupidly trust him and I
have learned some major
lessons on keeping your
house in order.
Eric has leveraged all
the relationships he got
through his involvement
with MySQUAR to create
his own crony network
and many of the MyS-
QUAR shareholders are
now also shareholders in
Rising Dragon subsidiar-
ies, not to mention that
Eric is also a shareholder
in many of their compa-
nies. Since theres been
complete radio silence
from all the sharehold-
ers since this happened,
I m not sure whos sleep-
ing with whom and how
deep it goes but the share-
holder list is publicly ac-
cessible in ACRA should
anyone be interested.
Any entrepreneurs who
are fundraising in Asia,
I highly recommend you
research your possible in-
vestors and talk to other
entrepreneurs who have
worked with them.
As I mentioned previ-
ously, conveniently, many
of my friends and family
who would most certainly
have not voted against
me are not in ACRA. I m
not sure why but there is
most certainly a case here
for deeper investigation
especially given the paper
trails I keep.
So where does that leave
me?
I am on the hunt for my
third lawyer now. I can
bunkrupL myseII Lo hgIL
for the compensation
owed me or I can spend
my time building some-
thing new. With all the
lessons and contacts I ve
already made, it will take
me far less than a year to
get to where MySQUAR is
today. As an entrepreneur
you learn very quickly
to move on from sunk
costs and to not let it col-
our your decisions. From
that angle, I ve lost a year
and some money, both of
which I can deal with. My
pride was also bruised and
conhdence sIuken buL `m
surrounded by amazing
people who have reached
out in an overwhelming
show of support. And of
course there is also the
reputation thing. Let me
reiterate this: there was
absolutely no reason giv-
en and frankly, no reason
that they could have given
for this move other than
greed and a full on land
grab.
I dont know exactly
whats next but rest as-
sured you havent seen
the last of me. I wasnt
named on Forbes Wom-
en to Watch in Asia list
for nothing. Thankfully
I was raised in a society
where you celebrate and
embrace failure because
this whole thing was full
oI IuIIures und `m hnuIIy
getting to a place where I
can accept that and move
forward. I hope that by
sharing this story, I can
help some others out
there who may be facing
similar issues. I f nothing
else, let this be a warning
tale of trust.
So my journey with
MySQUAR largely comes
to an end but my entre-
preneurial journey is still
in the beginning. For
those of you who have
reached out thank you.
I could not have made it
through the past month
without your love and
support. For those of you
learning about this for the
hrsL LIme, sorry Ior LIe
shock but this is just the
cII Iunger uL LIe end oI
LIe hrsL cIupLer, LIere`s
so many more good things
to come out of Myanmar.
Rita Nguyen is the
founder of MySQUARE,
Mcnmcr's jrst socicl
netuorlin site. Ritc jrst
published this post in her
blog and it has been re-
published here with her
permission. The opinions
and views expressed here
are the authors own and
don't necesscril reject
Myanmar Business To-
days editorial opinion.

Given the brutal way they


do business, I fear for
this country if these lead-
ers have companies that
work like Bell-Pottinger whis-
pering in their ears.
Rita Nguyen with MySquar staff at a tech festivaI.
T
e
c
h
c
r
u
n
c
h
Panel Deals Blow to Suu Kyis Chances of Becoming President
N
obel laureate Aung San
Suu Kyis hopes of be-
coming Myanmars
president next year have been
dealt a blow when a parliamen-
tary committee voted not to
change a constitutional clause
that bars her from the post, two
of the panel members said.
The committee tasked with
recommending amendments
opted to retain the section that
prevents anyone married to a
foreigner or with children of
foreign citizenship from becom-
ing head of state.
The two sources declined to
be IdenLIhed und dId noL suy
why the proposal was rejected
by 26 of the 31panellists.
Most experts believe the
Aung Hla Tun clause, 59 (f), was written into
the military-drafted 2008 con-
sLILuLIon specIhcuIIy Lo sIdeIIne
Suu Kyi, who became a global
Icon Ior Ier hgIL uguInsL mIII-
tary rule, most of it from house
arrest.
Her late husband was British,
as are her two sons.
OnIy hve oI LIe 1 commIL-
tee members voted in favour
of amending the section at the
closed door meeting of the com-
mittee, said a member who re-
quested anonymity because the
commILLee`s uuIrs ure meunL
to be secret.
Suu Kyi and her National
League for Democracy (NLD)
party have been pushing for
constitutional change ahead of
next years election, mainly to
reduce the political clout of the
military, which ruled Myanmar
for 49 years until a nominally ci-
vilian government led by retired
generuIs Look omce In zo11.
The committee picked to as-
sess amendments has only
two NLD members on it and is
comprised mainly of lawmak-
ers from the ruling Union Soli-
darity and Development Party
(USDP), which was created
from a social movement of a
similar name set up by the for-
mer junta.
The USDP has 14 people on
the panel and seven members
ure servIng mIIILury omcers up-
pointed as lawmakers as part of
a 25 percent legislative quota
allocated to the armed forces, a
cIuuse LIe ND, wIIcI suered
persecution by the former re-
gime, wants to change.
Myanmar lawmakers are as-
sessing changes to the constitu-
tion ahead of next years parlia-
mentary election.
A vote in the bicameral legis-
lature to change the constitu-
tion to allow Suu Kyi to become
president is still possible, al-
though political analysts say it
is extremely unlikely it would
be passed because the military
and its USDP allies dominate
parliament.
Her party, however, said it
was not over yet.
We cant say Daw Aung San
Suu Kyi has no chance of be-
coming the president until the
union parliament approves it,
said spokesman and senior par-
Ly omcIuI Nyun WIn.
We need to wait till the com-
mILLee submILs ILs hnuI sugges-
tions at the parliament.
Myanmars constitution was
crafted by the former junta as
the basis for the countrys grad-
ual transition to democracy.
The semi-civilian government
has surprised the world with
reforms that were unthinkable
under direct army control and
managed to convince Suu Kyi
and the NLD to join parliament.
Reuters
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Myanmar Summary
June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
5
Myanmar Summary
Ball Corp Becomes First US
Investor in Thilawa SEZ
Phyo Thu
A
merican packaging and
uerospuce hrm BuII Cor-
poration is to set up a
one-line beverage can manufac-
turing plant in the Thilawa Spe-
cial Economic Zone (SEZ).
TIIs mukes BuII LIe hrsL US
company to invest in the much-
touted Thilawa SEZ, 20 kilome-
tres southeast of Yangon.
Last month Ball announced
that it will open a can plant in
Myanmar, without specifying
the factory location.
A contract agreement was
signed between Ball Corp and
the Myanmar-J apan Thilawa
Development (MJ TD) Co Ltd
for the establishment of the
plant. The signing came on the
heels of US Secretary of Com-
merce Penny Pritzkers Myan-
mar visit earlier this month.
The US Embassy in Yangon
said in a statement that the
plant will employ local work-
ers und represenLs u sIgnIhcunL
contribution by a US company
to Myanmars development.
The United States believes
that responsible investment
by US companies in this coun-
try can support broad-based
economic development, help
deepen continued political and
economic reforms, and high-
light the highest standards of
corporate social responsibility,
the statement said.
The one-line plant is expected
to begin production in mid-
2015 with investment in the fac-
tory to the tune of $40 million,
Ball Corp said.
TIe hrm wIII buIId u IucII-
ity to produce beverage cans
for Coca-Cola Pinya Beverages
under a long-term agreement,
as well as other local, regional
and multinational customers, it
said.
During an event highlighting
US investment, including Balls
new plant, Pritzker said the Ball
factory opening is already en-
couraging further engagement
by US hrms LIuL ure weII-es-
tablished in Myanmar.
Coca-Cola is one of these
companies. Coca-Cola re-
opened operations here in
2012, began manufacturing lo-
cally one year ago, and has al-
ready committed to buy more
than half of the cans produced
at Balls new facility, she said.
When our [American] busi-
nesses make investments, they
bring with them the highest
standards, including a commit-
ment to corporate and social re-
sponsibility, she added.
More than 45 companies from
various countries are in the pro-
cess of setting up manufactur-
ing plants and industries in the
SEZ, state-run media reported.
MJ TD was formed by two My-
anmar companies and two J ap-
anese companies, with stakes
split 51 percent for Myanmar
and 49 percent for J apan.
The two Myanmar compa-
nies are Thilawa SEZ Manage-
ment Committee and Myanmar
Thilawa SEZ Holdings Public
Co Ltd (MTSH), while the two
J apanese companies include
MMS Thilawa Development Co
Ltd and J apan I nternational
Cooperation Agency (J I CA).
The land lease procedure for
Phase 1of the Thilawa Class A
Area, which is about 396 hec-
tares (978 acres), started last
month.
The commercial run of the
SEZ is expected in mid-2015.
Japan Gives $75m for
Construction, Rural
Ilectricution
Zwe Wai
T
Ie Jupunese governmenL wIII provIde hnuncIuI
assistance worth $75.7 million for the develop-
menL oI consLrucLIon und ruruI eIecLrIhcuLIon In
some areas of Myanmar.
Three memoranda of understanding (MoUs) were
signed between Deputy Minister for National Planning
and Economic Development Daw Lei Lei Thein and
Japanese Ambassador to Myanmar Tateshi Higuchi in
Nay Pyi Taw recently.
AccordIng Lo LIe MoUs, Jupun wIII hnunce q.zz
billion ($41.3 million) for the construction of the new
TIukeLu brIdge, z.1 bIIIIon ($zq.6 mIIIIon) Ior LIe
upgrude oI LIe nsLILuLe oI EducuLIon und qqq mIIIIon
($q.8 mIIIIon) Ior LIe ImpIemenLuLIon oI ruruI eIecLrIh-
cation projects.
Myanmar Summary
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
4
Myanmar Summary
Myanmar Summary
Yusen Logistics Opens
Myunmur Omce
Aye Myat
J
apanese freight forwarder
and logistics services pro-
vider, Yusen Logistics has
opened ILs omce In Yungon, LIe
hrm suId.
TIe omcIuI InuuguruLIon oI
Yusen Logistics (Myanmar) Co
Ltd sees Yusen Logistics pres-
ence increase to 40 countries
around the world, Yusen said in
a statement.
Hiromitsu Kuramoto, presi-
dent of Yusen Logistics Co Ltd,
said: With our medium-term
business plan ... Yusen Logis-
tics will continue to push ahead
with our expansion program in
the ASEAN region.
We are continuing to build
on our established infrastruc-
ture, rolling out networks to
mirror clients changing sourc-
ing patterns.
Hiromitsu said with the grow-
ing importance of logistics in
US to Help Myanmar
Improve Highway Safety
Aung Phyo
T
he United States will
help Myanmar improve
the safety of the Yan-
gon-Mandalay highway where
hundreds of car accident cases
Iuve occurred over LIe pusL hve
years.
The United States Agency
for I nternational Development
(USAI D) and the Ministry of
Construction signed a letter of
agreement recently on this re-
gard.
US architecture and engi-
neering experts will train and
mentor Ministry of Construc-
tion engineers and technicians
in international highway safety
standards as they construct
safety enhancements along a
ten-kilometre section of road.
This demonstration section,
funded in cooperation with the
US Government, will serve as
a model for ongoing improve-
ments implemented by the
Ministry of Construction along
the full length of the highway,
the US Embassy in Yangon said
in a statement.
As the economy grows, trans-
portation infrastructure will
have to accommodate more
Lrude und Lrumc, suId US Am-
bassador Derek Mitchell.
But this issue is about more
than economic development;
it is about saving lives. I am
pleased the United States will
be able to improve a small sec-
tion of the Yangon-Mandalay
Highway, and work with the
Ministry of Construction to
help address very real concerns
about safety standards.
The Yangon-Mandalay High-
way, which is the main ground
route from Yangon to Nay Pyi
Taw and runs through the cen-
tre of the country, stretches
386 miles between Yangon,
the countrys commercial cen-
tre, and Mandalay, a city of ap-
proximately one million people.
Three thousand vehicles drive
the highway every day.
I ncreased speed and a lack of
standard highway safety meas-
ures have resulted in a dispro-
portionately high number of
vehicular fatalities on this road.
AccordIng Lo omcIuI sLuLIsLIcs,
durIng LIe hve yeurs Irom zooq
to 2014, over 700 highway acci-
dents have claimed the lives of
over 360 victims.
Myanmar, Yusen Logistics pro-
vision of valuable logistics ser-
vices will contribute to the de-
velopment of the country.
Y
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June 19-25, 2014
Myanmar Business Today
mmbiztoday.com
mmbiztoday.com June 19-25, 2014| Vol 2, Issue 24 MYANMARS FIRST BILINGUAL BUSINESS JOURNAL
Myanmar Summary
Inside MBT
Myanmar Can Double Rice
Exports Through Policy Reforms: WB
Report advises Myanmar to rethink its rice export strategy
M
yanmar has
the potential
to more than
double its rice exports by
implementing policy re-
forms, a new World Bank
report said.
In a bid to increase rice
exports, Myanmar has to
diversify and increase its
rice production, open its
rice milling sector to di-
rect foreign investments
and reduce export pro-
cedure costs, thereby al-
leviating rural poverty,
said the report, Myan-
mar: Capitalizing on Rice
Export Opportunities, by
the World Bank and the
Livelihoods and Food Se-
curity Trust Fund (LIFT)
of Myanmar.
Reforms are required
as a policy environment
conducive to supporting
this refocus of the rice
export sector is essential
if anything is to change,
said Andrew Kirkwood,
LIFTs fund director.
Kirkwood said much of
the policy change can be
introduced without cost
May Soe San
Lo pubIIc hnunces.
Consistent economic
policies without anti-ex-
port bias, alongside the
currenL governmenL eorL
to improve farmer access
Lo hnunce, wIII oer IIgI
rates of return for Myan-
mar rice exports, for its
farmers and for the rural
poor.
Improving agricultural
productivity and promot-
ing rice exports have been
among the top priorities
for the current govern-
ment. Despite its plan
to export four million
tonnes of rice by 2020,
the actual annual rice ex-
port has reached only 1.3
million tonnes over the
past years.
The current rice ex-
port strategy favours the
production of low qual-
ity rice, which is largely
sold to Africa and China,
the report said, adding
that farmers have earned
mInImuI prohLs und ugrI-
businesses have skipped
necessary investments. It
warned that the situation
is worsening as the global
demand for low quality
broken rice is shrinking.
This is now a govern-
ment call to capitalise on
rice export opportuni-
LIes und secure sum cIenL
incomes to smallholder
farmers, said Kanthan
Shankar, the World
Banks country manager
for Myanmar.
Rice production is a
source of livelihoods for
about 70 percent of the
population. Higher and
more prohLubIe rIce ex-
port improves farm in-
comes and food security
of the rural poor, he said.
Shankar added that in-
creasing rice exports will
spur momentum for in-
clusive growth and pover-
ty reduction in Myanmar
for the next decade.
The report said there
are good market pros-
pects for Myanmar to ac-
commodate more diver-
sIhed rIce exporLs Irom
Myanmar over the next
10-15 years, particularly
in the European Union
and Asian countries, earn
higher incomes, and di-
versIIy rIsks uIong dIer-
ent markets.
The obstacles in hitting
these marks are low pro-
ductivity and poor rice
quality at the farm level,
undercapitalised and in-
em cIenL rIce mIIIs, und
costly export infrastruc-
ture and procedures, the
report noted.
Opening the rice mills
to direct foreign invest-
ments is, according to the
report, a vital step to take
to increase quality and
volumes of rice export.
Improving infrastructure
and reducing export pro-
cedure costs would also
boost Myanmars export
competitiveness, it added.
The World Bank report
A man works in a rice eId near the ThiIawa economic zone outside Yangon.
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Contd. P 12...(\B)
Contd. P 12...(\B)
When Investors Turn into
Bullies P-7
US Commerce Secretary Touts
Closer Ties with Myanmar
P-10
Myanmars Institutional Infra-
structure Constraints and How
to Fill the Gaps P-11

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