Burma Business Roundup (Saturday, May 12)
By William Boot 12 May 2012
Dawei Port ‘Not Suspended’ says Burmese Official
Plans by a major Thai construction firm to develop an international standard port at Dawei (Tavoy) on Burma’s southeast coast have not been suspended, a Burmese government official reportedly said.
Suggestions that the firm, Italian-Thai Development (ITD), lacked the finance to go ahead with the oil and petrochemicals port were “wrongly interpreted,” according to the director-general of the Directorate of Investment and Company Administration Aung Naing Oo, quoted by Bangkok’s The Nation newspaper.
The end of the financial year on March 30 had merely slowed things down, the official claimed. His comments follow suggestions last week that ITD lacked the business and financial capacity to oversee such a major project.
President Thein Sein’s senior policy adviser Ko Ko Hlaing was quoted by Bloomberg financial news agency casting doubt on the development plan, which is budgeted to cost a minimum US $8.6 billion.
ITD management “hasn’t much experience in developing such a very big special economic zone,” Bloomberg quoted Ko Ko Hlaing as saying in an interview. However, ITD insisted it could handle the project, which was awarded exclusively to the Thai company by the Burmese government.
Somchet Thinaphong, the managing director of ITD subsidiary Dawei Development Company, said his firm was negotiating with other potential investors in Dawei and would make an announcement soon.
Entry Visas to be Relaxed as Businesses Flock to Rangoon
Entry into Burma for foreign visitors is to be made easier, with priority being given to business representatives and citizens of the Association of Southeast Asian Nations.
Visas on arrival will be offered from June 1 as the number of people entering Burma via Rangoon Airport is expected to quadruple this year.
The easier entry policy comes as both business and tourist interest in Burma rockets following the lifting of sanctions by a number of countries amid political and economic reforms.
The number of international business fairs and conferences in Rangoon is rising and tourist arrivals are predicted to total 1.5 million for 2012, compared with 360,000 in 2011.
A “summit” on investment law for the energy, telecommunications, real estate and agriculture sectors is being held in Rangoon in June, followed by conference for mining firms in July.
Mekong Dam Halt ‘Shows Way for Burma’ on Salween
In a move which could have political and economic significance for Burma, the Mekong River Commission has ordered that all work on a major hydroelectric dam in Laos must be suspended pending new environmental studies.
The decision by the commission, comprised of Thailand, Cambodia, Vietnam and Laos, follows evidence by environmental groups that ground work for the massive 1,260-megawatt Xayaburi Dam directly on the Mekong was continuing despite an earlier halt order.
Protest groups have threatened to blockade a road bridge linking Laos with Thailand unless construction stops.
Thailand is financing the dam and most of the electricity generated by it would be pumped into the Kingdom—just as major dams planned in Burma would mainly benefit Thailand and China.
Cambodia and Vietnam have complained that the US $3.7 billion Xayaburi Dam would disrupt water flows downriver and destroy fishing on which millions of people depend, especially in Vietnam’s Mekong Delta region.
“This success in stopping Xayaburi not only shows the power of protest it also underlines how important regional cooperation is in deciding the future of major rivers which flow across international borders,” an environment NGO official told The Irrawaddy, referring to Burma’s Salween and Irrawaddy rivers.
The Electricity Generating Authority of Thailand is a major financial backer of the Xayaburi Dam and is behind plans to build an even bigger one on the Salween.
Stock Exchange Deal ‘May be Signed this Month’
An agreement could be signed this month on the terms of a stock market development plan for Burma.
Japanese companies and Burma’s central bank have already agreed in principle on the creation of an exchange, but no solid commitments have yet been made.
However, the Tokyo Stock Exchange Group and Daiwa Securities Group told Japanese media that talks could lead to a final agreement in May.
The Japanese companies have suggested that a viable exchange and capital market could be established by 2015— the year that the Association of Southeast Asian Nations (ASEAN) plans to begin creating a single market similar to the European Union.
The aim of the ASEAN Economic Community is to end all trade barriers and encourage borderless investment across its ten member countries.