YANGON—Myanmar’s businesses have returned to operation as the country has reported no local transmissions of COVID-19 in major cities for several weeks. This week, State Counselor Daw Aung San Suu Kyi held talks about the government’s COVID-19 economic recovery plan with the heads of the Ministry of Investment and Foreign Economic Relations (MIFER), the Ministry of Planning and Finance (MOPFI) and the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).
During the talk, the head of MIFER said he is confident that foreign direct investment (FDI) will reach the government target for this fiscal year (2019-2020) despite the COVID-19 pandemic. The Central Bank of Myanmar (CBM) also said it will allow foreign investors to own more than a 35 percent stake in local private banks, as many of Asia’s economic giants have their eyes on Myanmar’s banking sector.
The Ministry of Information also said that the construction of the Korea-Myanmar Industrial Complex will commerce before the end of this year despite the challenge of COVID-19. Furthermore, the government said it will spend 92.62 billion kyats (US$66.1 million) to support businesses in the agriculture and livestock sector hit the hardest by COVID-19.
Myanmar will meet foreign investment target
Myanmar’s minister of investment and foreign economic relations said the country will meet its FDI target for this fiscal year despite the hits COVID-19 has dealt to countries that are Myanmar’s biggest investors.
U Thaung Tun, head of MIFER, said Myanmar received US$4.15 billion in FDI during 2018-19 and the country has so far approved $4.39 billion in FDI in the first eight months of this fiscal year, which began in October. Based on investment data, U Thaung Tun said he believes the country will meet its FDI target of US$5.8 billion for this year.
The Myanmar Invest Commission (MIC) recently approved industrial projects proposed by investors from Thailand and South Korea that will reportedly mitigate the impact of COVID-19 and create jobs for those who have been laid off because of the coronavirus, according to MIFER.
According to the Directorate of Investment and Company Administration (DICA), as of May 31, Singapore is currently Myanmar’s largest investor, driving 27 percent of total investments. China came in second, followed by Thailand and Hong Kong.
Construction of Korea-Myanmar Industrial Complex to begin
The Korea-Myanmar Industrial Complex, the first of its kind in the economic cooperation between the Korean and Myanmar governments, is expected to get off the ground before the end of this year in Hlegu Township, Yangon Region, according to the Ministry of Information.
The industrial zone was originally to be implemented in two phases, with the first running from 2019 to 2021 and the second from 2022 to 2024.
Korea-Myanmar Industrial Complex Development Co, a joint venture between Myanmar’s Ministry of Construction, the Korea Land and Housing Corporation and Global Sae-A Co Ltd, will implement the project.
The total estimated cost is US$110 million, with the first phase alone worth $48.5 million, according to a proposal submitted to the MIC.
During Korean President Moon Jae-in’s visit to Myanmar in 2019, he said the industrial complex will include garment, textile, construction, telecommunications and other manufacturing factories. Aside from local companies, around 200 Korean companies are expected to invest in the complex, which will focus on the production of export goods.
Myanmar allows foreign banks to own more than a 35 percent stake in local banks
The CBM said it will allow foreign banks to own more than a 35 percent stake in local private banks, as some of Asia’s economic powerhouses eye investments in the country’s banking sector.
CBM Deputy Chair U Soe Win said CBM has instructed local private banks that they can accept investments from foreign banks in more than 35 percent of total shares.
In January, CBM allowed foreign banks to buy up to 35 percent of shares from local private banks. In April, it approved a bid by Thailand’s Kasikorn Bank for a 35 percent stake in Myanmar’s Ayeyarwaddy Farmers Development Bank (A Bank). It also approved licenses for a total of seven foreign banks to open branches in Myanmar: the Hong Kong-listed Bank of China; Cathay United Bank and Mega International Commercial Bank from Taiwan; Industrial Bank of Korea, KB Bank and Korea Development Bank from South Korea; and SIAM Bank from Thailand.
Government announces support program for farmers
The head of Ministry of Agriculture, Livestock and Irrigation (MOALI) said they plan to use 92.61 billion kyats (US$66.1 million) to support the recovery of the agriculture and livestock sectors from the COVID-19 pandemic.
The agriculture sector’s sales have been badly hit by COVID-19, especially due to travel restrictions, the significant slowdown of trade flows, lack of demand from regular buyers and policy changes in Myanmar’s largest trade partner countries.
MOALI said it will spend 14.91 billion kyats (US$10.6 million) to support 100,000 acres of paddy seed production under a contract farming system in 287 townships. It will also provide 42 billion kyats for village-level funding, 25.5 billion kyats for the distribution of agricultural machinery in 11 states and regions and 6 billion kyats for fish breeding programs.
Recently, MOPFI also announced a special loan program for farmers to mitigate the impacts of COVID-19.
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