Business Roundup

The Irrawaddy Business Roundup

By Zaw Zaw Htwe 1 February 2020

YANGON—In the last week, countries around the world have gone on alert and rushed to address the global outbreak of a coronavirus originating in the Chinese city of Wuhan. Myanmar is among them and the outbreak has impacted key business sectors including tourism and trade.

Myanmar may have to lower its expectations for tourism numbers in 2020 as daily arrivals have decreased due to concerns over the coronavirus, and trade on the border with China is at a standstill.

The Myanmar government also faces objections from the European Chamber of Commerce in Myanmar over the government’s new policy of granting tax-free car import permits to senior officials. Both the government’s policy and objections from European and domestic businesses could damage foreign direct investment in the automotive industry and markets.

Meanwhile, Thai firm Amata has reached an agreement with the Myanmar government to build the US$1-billion (1.46-trillion-kyat) Yangon Amata Smart and Eco City.

Govt takes flak over tax-free car import scheme

The European Chamber of Commerce in Myanmar (EUROCHAM Myanmar) and the Automotive Association of Myanmar (AAM) have officially raised objections to a government policy allowing some civil servants to import vehicles without paying most taxes.

Under the Ministry of Commerce policy, the government will grant permits to all officials at or above the rank of deputy director-general or who have at least 25 years of civil service to import vehicles worth 30 million kyats (US$20,492). Higher-ranking officials can import more expensive cars worth up to 150 million kyats.

The imported vehicles will be exempt from customs duties and road taxes, which can total 100-150 percent of a car’s price, depending on its engine power. The government will soon issue an estimated 34,000 new tax-free car import permits.

EUROCHAM Myanmar and AAM voiced objections to the policy on Wednesday, saying that foreign-backed automotive markets have been nearly crippled by the move and asking the Myanmar government to abandon the scheme.

The latest foreign investment statistics

The Directorate of Investment and Company Administration (DICA) approved over $2 billion in foreign direct investments during the first four months of the 2019-20 fiscal year.

DICA said at a press conference that it approved nearly $2.16 billion in foreign investments and $134 million in domestic investments between October and the end of January.

The Myanmar Investment Commission also said that in the last week of January, 23 foreign direct investment projects worth $434 million were approved. The commission said these projects will create 11,951 jobs.

Border trade between Myanmar and China halted due to coronavirus outbreak 

Trade between Myanmar and China has been halted at the Muse border checkpoint in Shan State due to the outbreak of a new coronavirus in China, Myanmar merchants told the media last week.

As the Chinese government has ordered the country’s citizens not to leave their homes and prohibited transportation along many routes within the country, livestock, produce and other goods sent by Myanmar producers are stuck at the border in Muse.

Myanmar farmers have also been advised by wholesale vendors in Muse to stop sending any produce to the border in order to avoid losses.

U Sai Myint Bo, chairman of the Muse fruits wholesale center, told The Irrawaddy on Friday that trade has stopped at the border but it has not been banned.

Media reports say Myanmar exported $1.7 billion worth of goods into China via Muse between October and the third week of January.

Myanmar tourism affected by coronavirus outbreak 

Myanmar is among a list of countries who have seen their tourism sectors affected by the outbreak of a coronavirus that began in the Chinese city of Wuhan.

The Union of Myanmar Travel Association (UMTA) told The Irrawaddy on Wednesday that tourist arrivals have nearly stopped due to the virus outbreak.

UMTA chairman U Hnaung Hnaung Han said that some tourists have postponed their travel plans out of fears over the virus and some have changed their trips to visit other countries, despite having already paid for their trips to Myanmar.

U Khin Aung Tun, spokesperson of the Myanmar Tourism Federation (MTF), told The Irrawaddy that Myanmar’s tourism sector has been impacted primarily due to a drop in the number of Chinese visitors, the country’s main source of tourists.

Before the virus outbreak, up to 900,000 Chinese visitors were expected to visit Myanmar in 2020.

In 2019, more than 4.3 million tourists from 30 countries visited Myanmar, including 730,000 Chinese tourists.

New urban development project signed to Thai firm

A subsidiary of Thai firm Amata, Amata Asia (Myanmar), has signed a joint agreement with the Ministry of Construction’s Department of Urban and Housing Development to establish the Yangon Amata Smart and Eco City (YASEC) on over 800 hectares of land.

YASEC Managing Director Yasuo Tsutsui has said that the billion-dollar foreign direct investment project will create more than 33,000 jobs.

Amata also said the Myanmar government will earn at least $60 million from the project, plus additional revenue from indirect taxes.

Both Amata and the Department of Urban and Housing Development have said that the project will attract $3.75 billion in foreign direct investments.

Four telecom operators face fines

On Wednesday, the Ministry of Transport and Communication issued fines against four telecommunications operators for violating instructions on SIM card registration.

In random checks, inspector groups from the ministry have found unregistered SIMs distributed by the four operators, a ministry official told The Irrawaddy on Friday

The four operators—Myanmar Posts and Telecommunications (MPT), Telenor Myanmar, Ooredoo Myanmar and Mytel—were fined $100,000 each.

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