The Irrawaddy Business Roundup (April 12, 2014)
By William Boot 12 April 2014
Burma’s Economic Revival Leaves China Struggling to Compete
China’s investment in Burma “plummeted” in 2013 to only US$20 million or 5 percent of the value invested in 2012, Chinese media reported.
And last year’s figure was a mere 1 percent of the value of Chinese investment in Burma in the peak year of 2010, said China Radio International.
“The rules of the game in [Burma] have changed. In 2011, a civilian government came to power. China’s plummeting investment coincides with the announcement of the 2012 foreign investment law,” the radio said quoting the China Business News newspaper.
“As for ranking of foreign investors, China lost the leading position for the first time in four years and dropped to around 10th,” the paper reported.
“The sharp contrast of China’s dropping investment in [Burma] and the rising total volume of FDI (foreign direct investment) is due to the failure of the Chinese companies to change their own game and catch up with developments [in Burma],” the radio station said in its report.
It said there was a degree of inevitability about China losing its No.1 investor status with the ending of Western sanctions and a changing economic culture in Burma.
“Chinese companies need to understand the situation, change their mindset, put themselves in
Myanmar’s position, use their own advantages so as to re-enter the Myanmar market with competitiveness.”
Improved Business Confidence Boosts Burma’s Growth Forecast
Burma’s economy is forecast to grow by an average 7.8 percent over the next two years.
The annual increase is predicted by the Asian Development Bank for the 2014-2015 and 2015-2016 financial years. It’s slightly higher than the bank’s estimate of economic growth during the financial year ended in March.
“Growth [in 2013] was supported by rising investment propelled by improved business confidence, commodity exports, buoyant tourism, and credit growth, complemented by the government’s ambitious structural reform program,” said the ADB in a statement.
Burma’s international investment profile was raised last year by several major factors, including the award of telecommunications licenses, airport construction bids, hosting the World Economic Forum on East Asia and staging the Southeast Asian Games, said the ADB report.
The higher profile has been helped with a “broad array of reforms, unifying the exchange rate, improving monetary policy, increasing tax collection, reorienting public expenditure toward social and physical infrastructure…and liberalizing agriculture and trade.”
Ancient Art Treasures on Show in New York Will Aid Burma’s Tourism
Burmese art treasures go on a show in New York next week for the first time at a prestigious exhibition which will draw attention to Burma as an attractive place to visit, a tourism newspaper said.
The exhibition at the Metropolitan Museum of Art will focus on the religious art of Southeast Asia’s ancient kingdoms.
“It features 160 stone, terracotta and bronze sculptures of which 22 are from [Burma], the first pieces of art loaned by Rangoon after emerging from decades of international isolation,” said TTR Weekly.
“We are especially honored that the government of Myanmar has signed its first-ever international loan agreement in order to lend their national treasures to this exhibition,” museum director Thomas Campbell told TTR Weekly.
The beautifully presented and painstakingly curated “Lost Kingdoms: Hindu-Buddhist Sculpture of Early Southeast Asia 5th to 8th Century,” opens next Monday and runs until 27 July.
The exhibition, which will also feature art from Cambodia, Malaysia, Thailand and Vietnam, opens on April 14 and last until the end of July.
Curator John Guy said the museum attracts over 6 million visitors a year and Southeast Asia “could expect spin-off benefits such as enhanced tourism and cultural cooperation.”
Indian Firm Says It’s Still Hopeful of Share in Burma’s Offshore Oil Hunt
Indian state-owned oil and gas developer ONGC Videsh said that despite failing to win any of Burma’s offshore exploration blocks awarded in March it still expects to be involved in the industry’s development.
Videsh had a swap arrangement with another international bidder which did win a block in the bidding round for 30 offshore blocks, India’s Business Standard said.
“We had a pre-bid understanding with an international oil company that if we were to win any shallow-water acreage, they will farm-in [take a share], Videsh managing director S. P. Garg told the newspaper.
“Similarly, in case that company was successful in picking up any of the deep-sea acreages it bid for, we would get a stake.”
Gard declined to identify its potential partner. The firms that won deep-water bids are: Total, Ophir Energy, Eni, Royal Dutch Shell, Mitsui Oil, ConocoPhillips and Statoil.
Bangkok’s Failure to Sign Labor Conventions ‘Hurts Migrant Workers’
The continuing problems of Burmese migrant workers in Thailand are directly linked with the fact that Bangkok has never signed international agreements on worker rights, a European NGO chief said.
“Thailand hasn’t ratified the core conventions on freedom of association and collective bargaining and migrants are not allowed to form trade unions,” the executive director of Finnwatch, Sonja Vartiala, told The Irrawaddy. “Migrant workers are not able to represent themselves”.
Finnwatch, based in Helsinki, has published a new report exposing a range of labor abuses in factories in southern Thailand involving mainly Burmese migrant workers. These include below legal minimum pay, forced long hours without rest, and use of child labor.
The NGO draws attention to goods imported by Finland and other European countries from factories in Thailand where workers are badly treated.
“In the end it’s always about the price—getting the products manufactured at the cheapest price possible,” said Vartiala.