The Irrawaddy Business Roundup (August 16, 2014)

By William Boot 16 August 2014

Neighbors Thailand and Bangladesh Face Crises as Burma Bids to Grow

Two of Burma’s immediate neighbors, Thailand and Bangladesh, face potential crises which could seriously damage their economies, studies said.

Bangladesh faces continuing political instability and labor rights problems which are “having a deleterious impact on the country’s economy, including the vital garment export sector,” said the business risk analysts Maplecroft.

“Both of these hold important implications for investors in one of the world’s most populous and least developed nations,” the report said, noting that the ruling Awami League government has “few meaningful checks and balances on its power.”

Meanwhile, Thailand’s business and agricultural heartlands are at growing risk from the effects of climate change, the British analysts said in a separate assessment.

Many low-lying coastal areas including the capital Bangkok “are particularly vulnerable to climate change, with sea level rise posing threats to the densely populated coastal communities,” said Maplecroft.

“While facing an overall decrease in annual rainfall, Thailand is likely to experience shorter, more intense rainfall events due to climate change, increasing the severity of flooding in the future.

“The impacts of climate change on Thailand include decreased fishery and agricultural yields, and more frequent flood events, and will ultimately adversely affect economic growth prospects.”

Although Burma has a long border with Thailand, the Maplecroft report gave no indication of possible climate change knock-on effects.
Executive Jets Get Red Carpet Service at Rangoon Airport

An executive business jet service has begun operating in and out of Rangoon International Airport. The service has been established by Bangkok-based entrepreneur William Heinecke working with several Burmese firms.

The basis of the Myanmar MJets Business Aviation Center is Heinecke’s MJets operation in Thailand, which has teamed up with Burma’s Wah Wah Group, founded by Ohn Myint, and Myanma Airways.

Next to Rangoon’s domestic passenger terminal, the center includes an executive lounge, business meeting facilities and separate customs and immigration clearance.

“There is a growing market for flying in investors and company CEOs on private jet charters mainly from Singapore and Bangkok,” Ohn Myint was quoted by travel industry paper TTR Weekly saying.

About 300 private jet flights will visit Burma this year, the paper said.

“About 10% of the traffic at the centre will be for air ambulances, mostly patients from Myanmar seeking medical treatment in neighbouring countries like Thailand and Singapore,” Ohn Myint said.
China’s Trans-Burma Oil Pipeline Still Dry Due to Unexplained Delays

China’s new oil pipeline running 900 kilometers through Burma from the coast at Kyaukphyu to the Chinese border is still not close to beginning operations, although its construction was supposed be almost completed months ago.

The opening of the pipeline has been delayed for several reasons, a report by the Myanmar Times said, quoting an unnamed official from the Myanmar Oil & Gas Enterprise (MOGE).

The US$1 billion pipeline, designed to pump crude oil from the Middle East, is being built by the state-owned China National Petroleum Corporation (CNPC).

“It will take some time to start operation of the pipeline said a company official who requested anonymity due to the subject’s sensitivity,” the Myanmar Times reported.

At full operation it has a capacity of 440,000 barrels of crude oil per day, transshipped from tankers at a specially built terminal at Kyaukphyu.

Under the terms of the joint agreement between CNPC and MOGE Burma is mean to receive several million tons of oil per year.

A gas pipeline built by CNPC running alongside the oil line is operating at less than 20 percent of its capacity.
Final Contracts Signed for Onshore Oil and Gas Exploration

A number of foreign companies, including little-known firms, have signed final agreements on 15 onshore blocks with the Myanmar Oil & Gas Enterprise to explore for oil and gas in onshore areas across the country.

They include Bashneft International from Russia, Sun Apex Holding, registered in the British Virgin Islands, and Petroleum Exploration, based in Singapore, the Myanmar Times said.

Local firms named as partners in the contract awards include Apex Geo Services, Machinery and Solutions Company, Parami Energy Development and Precious Stone Mining.

Contracts for blocks won by Eni of Italy and MPRL E&P, owned by Burmese entrepreneur Moe Myint, have already been signed. India’s ONGC Videsh Limited, Brunei National Petroleum, Canada’s Pacific Hunt Energy Corp and Petronas of Malaysia have also agreed terms with the government, said the Myanmar Times.
Small Business Matching Scheme Launched with Japan and Germany

Japan and Germany are cooperating in a business matching scheme to try to help small and medium sized firms starting up in Burma to find potential partners, a report said.

A list of more than 100 Burmese firms is being distributed via Japan’s Daiwa Institute and the German Embassy and the Ministry of Industry, said Eleven Media.

The current project is only a pilot scheme however. Burma has thousands of small-to-medium firms which “face difficulties such as a lack of infrastructure, finance and technology,” Eleven Media said, quoting the ministry.