Burma Business Roundup (February 15)

By William Boot 15 February 2014

Burma’s Tourism Industry Must Diversify to Grow

Burma’s tourism business is heading in the wrong direction and needs refocusing, an industry leader said.

The country is catering too much to big pre-paid tour groups when the future really lies with independent travellers and families, said Union of Myanmar Travel Association Vice Chairman Thet Lwin Toe.

“It is true that [Burma] is increasing tourism, but the real profit is to be gained from independent travellers and a change of direction will help the owners of small enterprises,” he was quoted by industry magazine TTR Weekly as saying. “We must try to make the cake bigger. If you can’t expand your market, you will eventually lose.”

There is evidence that the tour group market is already declining in Burma but the industry has not geared up to cater for independent travellers, Thet Lwin Toe warned.

Bangkok-based TTR Weekly reported the tour group market is losing share when compared with other segments, while little is being done to develop niche or special interest tourism. It said it would take several years to address Burma’s lack of quality tourism accommodation.

Germany Cancels US$741 Million Debt to Aid Burma’s Economy

Germany has cancelled US$741 million of debt owed by Burma since the days of the former military regime.

The cancellation covers half of the total debt to Germany. The Berlin government has agreed with Naypyidaw that the remaining $741.5 million can be repaid over the next 15 years at the low interest rate of 3%, Burma’s state radio reported. The first repayment instalment can be delayed for another seven years.

The debt restructuring plan was agreed during the visit to Burma by German President Joachim Gauck. It is part of a wider agreement reached between Burma and other countries of the so-called Paris Club to whom Naypyidaw owes money in order to help with resuscitating of the Burmese economy.

Gauck met President Thein Sein and other government leaders as well as opposition leader Aung San Suu Kyi.

Muse Listed as Burma’s Richest Cross-Border Trading Town

Business with China through the frontier town of Muse accounted for three quarters of all Burma’s cross-border trade over the first ten months of this financial year, according to Chinese news agency Xinhua

Two-way trade through Muse between April and January totalled US$3.1 billion, Xinhua quoted statistics publish by the Naypyidaw government.

The total value of trade across all 14 official border trading points with Burma’s four land neighbors—Bangladesh, India, Thailand and China—in the ten-month period was US$4.1 billion.

The approved border trade points include three other links with China’s southwest Yunnan Province—Lewjie, Chin Shwe Haw and Kanbiketee, said Xinhua.

Singapore Leads Foreign Investment in Burma in January

Tiny Singapore was the biggest country investor in Burma in January, Eleven Media reported, quoting the Directorate of Investment and Company Administration (DICA).

Businesses from the city state are investing in hotels and other property development, tourism, agriculture and the energy market.

Figures for January indicated a total of US$1 billion foreign investment for the month, with Singapore in top place, followed by Hong Kong, South Korea and Japan, the DICA said.

The focus of investment by the leading four countries was in the garment manufacturing, beverages and telecommunications.

Hotel development and tourism continues to attract large investment, DICA said, and Singaporean companies are the biggest contributors, with 14 firms in the past year spending around US$880 million.

Agencies Sending Burmese Workers Abroad Under Closer Scrutiny

Recruitment agencies in Burma that send Burmese workers abroad are to face closer scrutiny following repeated complaints of mistreatment of workers, especially in Thailand.

The government will take action against unscrupulous employment agencies, the Deputy Minister for Labour, Employment and Social Security Htin Aung told Parliament this week, The Myanmar Times reported.

Some agencies have been accused by human rights NGOs of working in collusion with employers to unlawfully take passports and money off workers, effectively putting them in labor bondage.

Burma now has so-called labor affairs officers attached to its embassies in Thailand, Malaysia and South Korea, said Htin Aung, and this service might soon be extended to the embassies in Kuwait and Singapore.

These labor officers will be available to help migrant Burmese workers who face problems, he said. Agencies providing jobs abroad are supposed to advise migrant workers on their labor rights in the country they are traveling to, Htin Aung said.

Rangoon Seeks Foreign Firms to Build Low-Cost Housing

Foreign companies are being invited to bid for contracts to build low-cost housing in Rangoon. The city’s development committee is planning housing projects in several townships around Rangoon, The Myanmar Times reported this week.

Firms interested in winning contracts have until the end of March to place bids, but must first lodge a US$50,000 bond, said the committee.

The Rangoon authorities have been accused of placing too much emphasis on high-end development in the city, such as expensive condominiums and shopping malls, while ignoring the housing needs of people on low incomes.

Rangoon has seen a surge in population and more rural people seeking jobs amid the economic boom.