Burma Business Roundup (Saturday, Nov. 17)
By William Boot 17 November 2012
Coal Fuel on the Agenda for Electricity Investment Conference
The government appears to be gearing up to permit coal-fueled power stations to try to overcome Burma’s continuing electricity shortages.
An industry conference planned for January in Rangoon aimed at attracting investors will discuss issues such as importing coal for new station development, said the organizers.
The conference on Jan. 28-31, to be attended by Power Minister Khin Maung Soe, will put forward investment offers to a range of business executives expected to attend.
“With growing nationwide demand for electricity and utilities, and a new era of [Burma]where the government aims to accelerate growth by encouraging foreign direct investment, there is no better time to address this pertinent infrastructural issue than at the Myanmar Power Summit,” says the Center for Management Technology of Singapore.
However, coal fuel is a contentious issue. A special economic zone focused on a new industrial port at Dawei on the southeast coast has been held up since the government vetoed plans for a large coal-fueled electricity plant to power the development.
Burma has a tiny dilapidated power system which needs refurbishment and major expansion. Up to 20 percent of electricity generated is lost in transmission due to old and inefficient cable and transformer equipment, the Mandalay Region Minister for Electric Power and Industry Myint Kyu said in October.
Burma to Have Critical Role in Creating Asean Economic community
The high-level Burmese government delegation led by President Thein Sein attending this weekend’s summit of the Association of South Asian Nations (Asean) will need to pay special attention to talks on creating a borderless economic community by 2015, say observers.
The ambitious plan will be critical to Burma in more ways than one. Not only does it stand to benefit from more development prospects under the scheme—it will also host Asean in 2014 in the final run up to the creation of the 10-country single market.
“Asean must work on the long to-do list as a result of the agenda to create an Asean community by the end of 2015,” said the chairman of the Singapore Institute of International Affairs Simon Tay.
The team accompanying Thein Sein to the summit in the Cambodian capital Phnom Penh includes Foreign Affairs Minister Wunna Maung Lwin and National Planning and Economic Development Minister Kan Zaw,
“Asean’s unity and credibility are prerequisites and thus the community project is a key pillar for the wider region,” said Tay, writing in Singapore’s Today newspaper. “Talks are due to begin for a Regional Comprehensive Economic Partnership to link Asean to six Asian partners—the big three of Northeast Asia as well as India, Australia and New Zealand—bringing together more than three billion people.”
Cambodia is this year’s host chair for Asean and the mantle will pace to Brunei in 2013.
Rangoon Gets New Shipping Link with India, Singapore
The port of Rangoon is to get a new cargo link with India and Singapore. The Singapore shipping firm BLPL said it is starting a weekly service linking Rangoon in a route between Kolkatta, Port Klang in Malaysia and Singapore.
“With the launch of our two dedicated container vessel services to Yangon and Kolkata, we look forward to participate and contribute to what we believe will be the fastest growing trade routes in this region,” BLPL vice-president Anand Sitaraman said in a statement.
The Burmese KMA Shipping Company last month won a contract to build a US $70 million wharf storage infrastructure at Thein Phyu in the Port of Rangoon in anticipation of a big rise in container traffic.
BLPL is a subsidiary of Transworld Group which is based in the United Arab Emirates but has strong roots with India.
Singapore is Burma’s fourth largest trading partner.
Foreign Firms Seek Forest Investment ahead of Export Ban
The Ministry of Environment Conservation and Forestry said it is talks with firms from South Korea, India, China and Japan about possible investment in Burma’s forests and timber business.
Firms which have expressed interest in investing in forests, wood mills and paper mills include the Hana Financial Group of Seoul, Mitsui of Japan and PL Global IMPEX based in Singapore, said Burmese media.
Earlier this month the Burmese government said it was taking action to protect the country’s declining forest by introducing a total export ban from 2014.
Timber exports are one of the primary sources of income for Burma and in 2006 brought in 10 percent of Burma’s foreign earning, said the European Forest Institute.
Burma is one of the world’s largest teak exporters but illegal shipments, often to China, and land degradation through slash and burn agriculture are eroding the country’s woodland stock, the parliamentary Natural Resources and Environment Conservation Committee said.
In the 2010-2011 business year, Burma officially earned over US $600 million exporting 864,000 tonnes of timber. India was the biggest buyer.
Credit Card Deal Makes Life Easier for Foreign Visitors
Foreign tourists and businesspeople will now be able to draw Burmese cash from ATM machines if they have credit cards with MasterCard, Maestro and Cirrus logos.
The cards will work in ATM machines operated by the local Cooperative Bank which formed a partnership with MasterCard in September.
The use of MasterCard to pay for goods and services is expected to be possible within a few months, said the Cooperative Bank.
Separately, another Western credit card, Visa, is joining up with the Kanbawza Bank, Myanmar Oriental Bank and also the Cooperative Bank to introduce similar services in the near future.
The developments represent a further loosening of controls on foreign visitors to Burma after the introduction of visa on arrival.