Burma Business Roundup (Saturday, Aug. 18)

By William Boot 18 August 2012

A lack of transparency in political affairs and a muddy regulatory framework are hindering investment in Burma, an international business commentator says.

The much-delayed new foreign investment law is “one of several crucial pieces of legislation that must be rolled out in coming months if the country is to meet foreign firms’ wants and needs,” said Nicholas Fang, a director at the Singapore Institute of International Affairs who has just published a lengthy study of Burma.

Uncertainty about land and property rights and titles are hindering the construction industry, Fang said, quoting property developer Keppel Land of Singapore, which operates hotels in Rangoon and Mandalay.

“There is a need for the government to consider reviewing policies and laws that will create a more conducive investment environment for foreign property developers,” Keppel Land’s head of regional investments Tan Swee Yiow told Fang for his report. “For instance, there is currently no strata title law to regulate homebuyers of condominium units,” he said.

And although tourism and corporate hospitality have been identified as growth sectors, said Fang, “there is concern among hoteliers themselves that the local industry is not ready to cope with the high demands of anticipated mass tourism.”

Another major challenge to growth is the lack of talented individuals to take up the burgeoning number of jobs already being created in the domestic economy, Fang said.

“Indeed, the institutions necessary for developing human capital internally—such as the university system—are still reeling from decades of neglect under the former military regime, and therefore lack the capacity to field a well-trained workforce.”

Fang said the best short-term solution would be for large numbers of the tens of thousands of Burmese living, studying and working abroad in the United States, Singapore, Australia, India and Europe to return home to fill skilled job slots.

Shipping Line to Link Rangoon, Malaysia, Singapore

One of the world’s biggest shipping companies is to begin a freight service between Rangoon and Singapore “in response to increasing market demand.”

Evergreen Marine Corporation of Taiwan said it will start the regular container shipping service from Singapore on Aug. 21.

Evergreen is one of the biggest container ship operators in the world with a fleet of 160 large vessels.

The Singapore-Rangoon service will also call at Port Klang, Malaysia’s biggest port and close to the Kuala Lumpur market, on its 10 to 12-day round trips.

“Recent political and economic reforms have attracted significant amounts of foreign investment to the country, enhancing its potential for long-term economic growth. Evergreen will continue to monitor market development trends and remains committed to meet customer demand with quality service,” the Taipei-based firm said in a statement on Aug. 15.

US Business Group in Naypyidaw to Look at Investment

Two US ambassadors accompanied an American business group to Naypyidaw this week to discuss investment opportunities.

The Singapore-based delegation met Vice-President Sai Mauk Kham and government officials to discuss a range of business possibilities, notably in transport, power infrastructure, communications technology, a government statement said.

The business group, linked to the American Chamber of Commerce, was accompanied by the US Ambassador to Singapore David Adelman and new US Ambassador to Burma Derek Mitchell.

No other details of the brief visit have been disclosed, but it coincided with further debate in the Naypyidaw Parliament of new foreign investment legislation.

London Holds Burma Business Advice Conference

A special conference on investing in Burma is to be held in London in September, endorsed by the British government’s UK Trade and Investment Office.

To make the most of new business opportunities opening up in Burma, “British companies need to have a good understanding of the business, economic and political situation,” say organizers City & Financial, a British business research and conference company.

The one-day conference, on Sept. 27, will also be supported by the UK-Asean Business Council and the Myanmar-Britain Business Association.

The conference will provide advice and information on finding partners, markets, legal issues, and the terms of the new investment rules expected to be passed into law by then, said City & Financial.

In particular, the gathering will focus on the oil and gas, power infrastructure, tourism and mining industries.

“[The conference] has been tailored to provide delegates with practical information about doing business in Burma/Myanmar. It will also offer a platform for networking with other UK companies that are likely to be at the forefront in tendering for major contracts,” said City & Financial.

Direct Flights from Mandalay to Bangkok

Burma’s second-largest city of Mandalay will have greater connectivity with the outside world from October when low-cost airline Thai Air Asia begins direct flights to and from Bangkok.

At present there are no direct flights between the two cities and travelers must fly via China or Rangoon.

Thai Air Asia said the four-times-a-week service will begin on Oct. 4 using 189-seater A320 planes. The airline will also start flying to Naypyidaw and increase its Bangkok-Rangoon service to three times daily.

China East Airlines currently offers flights between Mandalay and Bangkok but via Kunming and other Chinese cities. China East also operates between Singapore and Mandalay.

Myanmar Airways International will also commence Mandalay-Bangkok flight in October, but via Rangoon.

Hollywood Arrives in Burma Seeking New Market

The first major Hollywood movie in decades is to be shown in cinemas in Burma after 20th Century Fox signed a distribution agreement with local operator Mingalar Company.

Mingalar will distribute the 3D version of the blockbuster movie Titanic in Burma, Fox told the Chicago Tribune on Aug. 14.

“Twentieth Century Fox International is proud to be a pioneer in entering emerging markets and working with local businesses,” studio president Tomas Jegeus said in a statement.