Business Roundup

The Irrawaddy Business Roundup

By Nan Lwin 11 January 2020

The first week of 2020 has already passed, but the Myanmar government has yet to officially announce its economic reforms agenda for the year. Business has already begun in the new year in Myanmar, with new financial partnerships with Thai banks, jade emporiums in the capital, newly-exposed ownership information on extractive businesses and Western Union’s decision to cut ties with military-owned Myawaddy Bank. This week, The Irrawaddy recaps some significant business activities and events in Myanmar.

Thai Bank submits proposal to invest in Myanmar farmers bank

Thailand’s fourth-largest commercial bank submitted a proposal to invest in Myanmar’s Ayeyarwady Farmers Development Bank (A Bank) as part of a plan to increase financial cooperation between the two banks.

According to the Ministry of Information, an official from Thailand’s Kasikorn Bank (K Bank), formerly known as the Thai Farmers Bank, submitted an investment application on Wednesday in Naypyitaw to the Central Bank of Myanmar (CBM).

Founded in 2014, Ayeyarwaddy Farmers Development Bank, widely known as A Bank,

was formed by a set of companies specializing in agriculture businesses throughout the supply chain. The bank mainly offers loans to the agriculture industry, as well as for rubber production, tourism, fisheries, livestock and construction.

During the ceremony, the sides discussed opportunities the banking sectors of the two countries to cooperate to develop Myanmar’s economy, and the current cooperation between A Bank and K Bank.

The ceremony was attended by CBM Governor U Kyaw Kyaw Maung, deputy governors and directors-general, Thai Ambassador Suphatra Srimaitreephithak, Assistant Governor Mrs Nawaron Dejusuvan from Thailand’s Central Bank, and officials from A Bank and K Bank.

Myanmar and Thailand sign agreement for cross-border payments 

Myanmar’s Ayeyarwady Bank and Thailand’s Siam Commercial Bank inked a memorandum of understanding (MOU) for collaboration on cross-border payments and financial transfer services between the two countries.

The MoU by the two private banks came after CBM and Bank of Thailand signed an MoU in October to promote the use of the Myanmar kyat and the Thai baht for cross-border payment and settlement between the two countries.

The agreement also included commitments to collaborate in the areas of financial innovation and payments systems.

Ayeyarwady Bank’s statement said that the agreement also aims to encourage payment of remittances from migrant workers through official channels and to enhance officials transfers from small and medium-sized enterprises along the border between the two countries.

Gems and jade emporiums

Myanmar fetched over 59 billion kyats (US$40.1 million) in jade and gem lots at the gem emporium held from Jan. 2-7 in Naypyitaw, the capital of Myanmar, according to the Myanma Gems Enterprise.

Myanma Gems Enterprise said that through the open tender system, a total of 3,695 jade lots and 286 gem lots were put on sale. More than 2,000 gem merchants attended the sale and 3,491 of the jade lots were sold out during the six days. Nine of the gem lots, worth over 36 million kyats, were also sold out. In the previous gem emporium, over 60 billion kyats of gem lots were sold out.

Disclosure of beneficial ownership information of extractive businesses 

A government investment agency, the Directorate of Investment and Company Administration (DICA), has publicized beneficial ownership information of over 120 extractive companies and state-owned enterprises for the first time on its website, aiming to increase transparency in the sector.

According to the DICA, Myanmar collected data on beneficial owners, their links to politically-exposed persons and other related information for 158 companies and 5 state-owned enterprises operating in the country’s mineral, pearl, jade, colored gemstone and oil and gas production and transportation industries in November and December 2019. These same companies were involved in the 4th Myanmar Extractive Industries Transparency Initiative (MEITI) report covering 2016 and 2017.

On Friday, DICA said that out of 163 companies which fall under the scope for disclosure, 18 companies disclosed some data but did not submit them and 24 companies did not disclose any data. DICA said that 121 extractive companies and state-owned enterprises both disclosed and submitted their beneficial owners and related information to the taskforce.

Myanmar submitted its Beneficial Ownership Roadmap to the International EITI Secretariat in December 2016. In 2018, Myanmar formed a taskforce for the implementation of the roadmap.

Western Union cuts ties with military-owned bank

Western Union, a US-based global financial transfer service, has cut ties with Myanmar’s militaryowned Myawaddy Bank after human rights organizations called on the company to sever its links in light of accusations that the military is responsible for genocide, war crimes and crimes against humanity.

Burma Campaign for UK (BCUK) said on Tuesday that it received the notification from Western Union that the company has stopped using military-owned Myawaddy Bank as one of its agents in Myanmar after reviewing relevant regulatory requirements and Western Union’s own policies.

Myawaddy Bank is a subsidiary of a military business conglomerate, Union of Myanmar Economic Holdings Ltd (MEHL). BCUK said that profits from Myawaddy bank benefit the Myanmar military.

In October, 33 human rights organizations sent an open letter to Western Union president Hikmet Ersek calling on him to end the company’s relationship with Myanmar’s military, known as the Tatmadaw, which has been accused by UN investigators of being responsible for genocide, war crimes and crimes against humanity. The group said that by partnering with Myanmar’s generals, Western Union was risking its reputation and that of its top management.

In December 2018, BCUK named and shamed a total of 49 companies worldwide, including Western Union, that do business with Myanmar’s military in the human rights group’s “Dirty List” of firms. The companies work in sectors including energy, telecommunications and arms and military equipment. They are headquartered in countries including China, France, India, Japan, Norway, the Philippines, Russia, Singapore, Thailand, the UK, Ukraine, the US and Vietnam.

The UN Fact-Finding Mission on Myanmar also urged the international community to cut ties with the country’s military and the companies that it controls and relies on. The UN Fact-Finding Mission said that “any foreign business activity involving the Tatmadaw and its conglomerates MEHL and Myanmar Economic Corporation (MEC) poses a high risk of contributing to, or being linked to, violations of international human rights law and international humanitarian law.”

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