Burma Business Roundup (May 24)

By William Boot 25 May 2013

Many Naypidaw Business Deals still ‘Secretive and Closed’ to Scrutiny

An NGO monitoring Burma’s oil, gas and mining industries said that despite international praise being heaped on the government many of its deals with companies remain “secretive and closed off from public scrutiny”.

“Not one company has ever disclosed their contracts or payments to the [Burma] government, so the people … have no idea if their country is getting a fair deal, and if some of those billions in income are being misused,” Earth Rights International (ERI) campaigns director Paul Donowitz told The Irrawaddy.

The Washington-based ERI campaigns for human rights and environmental protection in many countries. In Burma it has been active in drawing attention to complaints of land and homes loss and little or no compensation suffered by communities living along the route of the oil and gas pipelines being built through Burma from the coast to China.

“The concept of Free, Prior, and Informed Consent (FPIC), which is gaining acceptance as a best practice in extractive developments, is totally absent in [Burma],” Donowitz said. “There has not been one legitimate example of a company practicing FPIC in [Burma], where the recent norm has been local communities informed that pipelines, mines, dams, and special economic zone projects will be displacing them just prior to their displacement.”

Foreign companies are still entering into joint ventures in Burma with little or no prior consultation with local communities or public risk assessments.

“The results have been environmental pollution and severe livelihood impacts, as we’ve seen around Thai operated mining sites in Dawei, and communities living along the Shwe gas and Myanmar-China crude oil pipelines,” Donowitz told The Irrawaddy.

IMF Forecasts 6.75 Percent GDP Growth, But 5.5 Percent Inflation

The International Monetary Fund said it will open an office in Burma “soon” to give technical help to the country’s economic development.

The offer was made at the end of a two-week assessment visit to Burma by an IMF team, led by the deputy head of the bank’s Asia and Pacific region, Matt Davies.

The team estimated that Burma’s economy would grow 6.75 percent during the current financial year, led by production and sale abroad of natural gas from offshore fields, said Davies at a media conference in Rangoon.

That would be slightly up on last year’s growth rate of 6.5 percent.

However, the downside is a prediction that inflation will grow by 5.5 percent, driven by money growth, real estate prices and wage increases.

The IMF said it anticipated progress on economic reform to continue this year, including a new law governing the role of the central bank.

“The authorities’ ambitious reform program is bearing fruit, with macroeconomic stability and high investor interest,” said Davies.

However, the IMF made no comment on the Naypidaw government’s continuing high expenditure by the Army, which this year will be around 12 percent of total government spending at US$2.4 billion.

Thais Top Nationality in Rangoon Airport Visitor Surge

More than a quarter of a million visitors landed at Burma’s biggest airport, in Rangoon, in the first four months of this year, said the Ministry of Hotels and Tourism.

The biggest single nationality group visiting via the airport was Thai, followed by Japanese.

And this is a trend likely to continue with a third Thai airline, Nok Air, planning to begin flights to Burma from September. Almost 15percent of the Rangoon arrivals, over 37,000 came from Thailand.

The total arrivals figure at Rangoon Airport of 253,136 is almost 44 percent more than for the same four-month period of 2012, said the ministry this week.

About 60 percent of the total came from within Asia but European arrivals In Rangoon in January-April numbered 67,460 visitors.

These figures exclude visitor arrivals at other airports and land border crossings, which for the whole of 2012 topped 1 million.

The total number of visitors in 2013, business as well as tourist, could well reach 1.5 million, according to the chairman of the Union of Myanmar Travel Association, Aung Myat Kyaw.

‘Task Force’ to Be Formed to Streamline Import-Export Rules

The Naypidaw government is planning to establish consultation groups with private businesses and the general public to gather ideas of cutting bureaucracy and red tape in import and export trade.

The groups will be formed by a “task force” to be set up by President Thein Sein’s Office Minister, Tin Naing Thein.

“Working groups will be formed between government departments and the private sector. The groups will discuss what needs to change and will report to the respective ministries,” Tin Naing Thein said in a statement.

“The ministries will evaluate and publicize the reports in newspapers to solicit the public’s opinions.”

The objective is to streamline export and import regulations to reduce delays. However, Eleven Weekly quoted management consultant Aung Tun Thet saying Burma “usually lays excellent plans, but is weak in implementation”.

No timetable for this process has been announced yet.

Foreign Fast Food Chains Jostle for Rangoon High Street Outlets

Visitors to Burma’s two biggest cities hoping for some original local cuisine face the prospect of finding the same fast-food as back home as more giant chain companies vie for main street outlets.

“Travellers who think they will be able to beat the fast food chains to [Burma] will need to think again. If the fast food chains are not already there they are clamouring at the door to set up shop as fast as possible,” said the travel trade magazine TTR Weekly.

It reports that chains from Singapore, South Korea, and Malaysia have either already opened shops or plan to soon. And they are expected to be followed by KFC, McDonald’s and Pizza Hut.

Competition for outlets in Burma is tipped to intensify after the country’s hosts an international annual fast-food industry fair, in November in Rangoon.