YANGON—Myanmar’s economy has been hurt badly, especially in the trade, tourism and textile sectors, since mid-January due to the outbreak of coronavirus, which has spread across China from its epicenter in the city of Wuhan and claimed more than 2,000 lives so far.
This week, Myanmar postponed a gem emporium due to the outbreak and garment factories are at risk of shutting down due to a lack of imported raw materials from China.
Foreign investment, however, has continued to grow. The Myanmar Investment Commission (MIC) announced it has received over US$2.5 billion during the first five months of the fiscal year.
South Korean conglomerate Posco International also said it has found a new offshore gas field in the Shwe natural gas project off the coast of western Rakhine, and two bus companies from Myanmar and India signed a memorandum of understanding (MOU) for cross-border bus service with hopes of increasing tourism and business relations.
Myanmar postpones gem emporium
Myanmar decided to postpone the 57th jade and gems emporium due to be held in Naypyitaw in March as the majority of buyers coming from mainland China and Hong Kong are unable to travel amid the coronavirus outbreak.
The secretary of the central committee for organizing the emporium, U Min Thu, told The Irrawaddy that the Myanmar Gems and Jewelry Entrepreneurs Association talked with its Chinese counterparts, government officials and business owners and decided to postpone the event because of travel difficulties.
China has imposed travel restrictions on its citizens aimed at curbing the rapid spread of coronavirus. The death toll from the coronavirus in China reached 2,118 on Thursday. Across the country, there were about 74,570 confirmed infections. The virus has spread across China and to at least 20 other countries.
At the gem emporium held from Jan. 2-7 in Naypyitaw, Myanmar fetched over 59 billion kyats (US$40.1 million) from jade and gem lots.
Myanmar’s garment factories face closure
Myanmar’s garment factories are facing possible shutdowns over a lack of imported raw material from China due to the coronavirus outbreak, according to the Myanmar Garment Manufacturers Association (MGMA).
Myanmar’s garment industry, which largely uses a cut-make-package (CMP) model, imports up to 90 percent of its raw materials from China and the rest from Indonesia, Vietnam, Thailand and South Korea.
According to the MGMA, the majority of clothing factories have stopped running overtime due to dwindling stocks.
The Chinese government’s travel bans have blocked logistics channels to and from China. Trade of Myanmar’s main exports to China—rice, sugar, corn, melons, shrimp, sea crab and eel—has virtually ground to a halt since mid-January at the major border checkpoints in Shan State’s Muse and Chinshwehaw and Kachin State’s Kanpiketi.
More than 500,000 people work in the garment sector in Yangon Region, according to the Confederation of Trade Unions of Myanmar (CTUM), with nearly 300,000 employed in 500 to 600 garment factories in Hlaing Tharyar Township alone.
Myanmar received over US$2.5 billion in FDI
The MIC said Wednesday that Myanmar has received over $2.5 billion in foreign direct investments during the first five months of the current fiscal year, from Oct. 1 to Feb. 13.
U Thant Zin Lwin, director general of the Directorate of Investments and Company Administration (DICA), said the country has received $500 million per month since the start of the fiscal year.
In a meeting on Feb. 13, the MIC gave the green light for 12 new foreign-backed enterprises worth more than $500 million. The MIC has forecasted that Myanmar will receive $5.8 billion in the current fiscal year.
According to DICA, FDI in the 2018-2019 fiscal year increased to $4.2 billion, up from $3.3 billion in the previous year.
As of December, Singapore is the country’s largest foreign investor, contributing nearly 27 percent of Myanmar’s total FDI. Singapore is followed by China, Thailand and Hong Kong.
South Korean conglomerate discovers new gas field in Rakhine
South Korean conglomerate Posco International announced on Monday that the company has found a new offshore gas field in the Shwe natural gas project off the coast of western Myanmar’s Rakhine State.
Posco said in a statement that a test drill in the Shwe Block A-3 found a gas reserve capable of producing 38 million cubic feet (1.08 million cubic meters) per day.
According to the company, extraction of the new offshore gas is expected to begin in 2021.
Posco International is currently producing and selling gas extracted from Myanmar’s Shwe and Mya offshore gas fields. The company signed an agreement covering Block A-1, off the coast of Rakhine, in 2000. The company later discovered additional gas at Shwe in 2004, at Shwe Phyu in 2005 and at Mya in 2006. It took 13 years to develop the first project and Posco’s first gas production began in 2013. Posco said that its gas projects in Myanmar constitute the largest overseas resource development project ever undertaken by a private South Korean company.
Myanmar-India cross-border bus service to begin
Myanmar bus company Shwe Mandalar Express Co. Ltd and India’s Seven Sisters Holidays Co. Ltd signed an MOU in Mandalay last Friday to operate cross-border bus service.
The 579-km journey between Mandalay and Imphal, the capital of India’s Manipur State, will be the first bus link between the countries, following 17 years of planning and government talks as part of India’s Look East policy.
The bus is expected to run once per week with 27-seater buses and tickets costing around $40. At the Moreh border checkpoint, passengers will need to change to a Seven Sisters bus for the 140-km journey to Imphal.
Passengers will need to apply for a visa from the Indian Embassy in Yangon or the Indian Consulate in Mandalay.
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