Resentment to Chinese Investment ‘Likely to Grow’ after Killing
The failure of Chinese firms to adhere to social responsibility guidelines drawn up by their own government in Beijing seems likely to foster more anti-Chinese feelings in Burma, a business risk assessor said.
“The death of a woman during a protest at a Chinese copper mine [Letpadaung] in north-western [Burma] has underscored inadequate corporate social responsibility (CSR) management by Chinese mine operators, which continues to fuel public resentment against Chinese investment across [Burma],” said Verisk-Maplecroft.
“Rich reserves of minerals, gems and metals in [Burma] have attracted large volumes of Chinese direct investment to its mining sector. However, there has been growing opposition in the country to Chinese-led projects, as CSR concerns over land expropriation, resettlement and the environmental impact to local communities remain unaddressed,” the Anglo-American risk assessment firm said.
China published a set of guidelines on CSR in October for mining companies, but the new scheme lacks teeth because it is not compulsory, Verisk-Maplecroft said.
“While large [Chinese] state-owned mining firms may be under [Beijing] government pressure to adopt the guidelines, there is no enforcement procedure to ensure compliance.
“Ongoing ethnic conflicts in Kachin and Shan states have resulted in the failure of the state to provide sufficient oversight on mining operations, aggravating socio-economic issues in affected areas.”
Rangoon Stock Exchange on Course for October Debut
Burma has moved a step closer to the Naypyidaw government’s target of opening a Rangoon stock exchange in 2015 with a formal agreement with two Japanese financial businesses.
The Myanma Economic Bank signed the agreement with the Japan Exchange Group and Daiwa Securities Group which has been helping with the technical infrastructure in establishing the exchange. The agreement, reached in late December, formalises a provisional memo of understanding which had been in place since 2012, said local and international media.
Financial observers have previously suggested that 2015 is too soon for an exchange to be put into operation. Daiwa said in a statement quoted by Myanmar Times that the “enactment of related laws and rules takes more time than we expected”.
Japan’s Nikkei financial news agency said Naypyidaw is aiming for October for a formal exchange opening. The government would “soon be issuing brokerage licenses,” Nikkei said.
“Daiwa Securities Group is currently rounding up companies interested in listing on the new exchange. Around five local companies are expected to list in the beginning, including a bank and a rice seller,” Nikkei said.
The Japan Exchange Group is the operator of the Tokyo Stock Exchange.
Lack of Deep Port in Rangoon ‘Major Obstacle’ to Economic Growth
The absence of a deep-water port for Rangoon is a major obstacle to manufacturing development in Burma, a UN agency economic planning adviser has warned.
“One of the bottlenecks of manufacturing development in [Burma] is the lack of a deep sea port to serve as a key logistical gateway,” said Masato Abe, economic affairs officer at the UN Economic and Social Commission for Asia and the Pacific.
A deep-water port is especially essential since Burma’s first special economic zone is already under construction at Thilawa adjacent to Rangoon and the river mouth.
“Unfortunately, [Rangoon] has no deep sea port and the quick development and integration of the country will benefit greatly from such an investment,” Abe wrote in a report from the Hong Kong-based think tank Fung Global Institute.
“A deep sea port is particularly crucial for the manufacturing sector because such a port is needed to facilitate the movement of goods for both sales and supplies, serving for export and import operations.”
Such as port should be a “high priority” for the Burmese government, Abe said.
Burma Survives Capex Cutback by Thailand’s Gas Developer PTTEP
Thailand’s state-owned natural gas developer PTTEP is expected to focus on its investments in Burma and Africa after it announced a cut in capital expenditure in 2015 of between 15% and 20%, a Bangkok finance company said.
PTTEP operates the Zawtika offshore gas field in the Gulf of Martaban and recently acquired licenses to explore other sites in Burma.
The investment cutback will trim about US$3 billion off planned capital expenditure over the next five years, said Asia Plus Securities.
“The expenditure reduction is to keep up with the changing situation from the global crude oil price. The capital will go mainly to local projects, while overseas investment venues are [Burma], the Middle East, and Africa, it said.
Global crude oil prices have almost halved since last July, forcing many oil and gas exploration firms to curb activities now considered economically unviable because of low returns.
Volcanic Lake with Health Tourism Prospects ‘Needs UN Help’
A rare environmental phenomenon in Burma needs protection and financial aid under the UN’s World Heritage Site mantle if it is to survive and flourish as a major visitor attraction, a tourism newspaper said.
The Twin Taung volcanic lake near Budalin in Sagaing Division is one of only a few places in the world known to produce a rare species of health-giving algae, but pollution is threatening its survival, said TTR Weekly.
“Spirulin is a blue-green freshwater algae that is rich in protein and can help boost the immune system and regulate cholesterol. It is found only in [Burma], Mexico and a few African countries,” the Bangkok based paper said.
But the algae’s survival at Twin Taung is being threatened by outside water seeping into the lake which is encouraging fish cultivation.
The Burmese government is considering nominating the lake for World Heritage Site listing along with several other natural and ancient cultural sites which are becoming popular tourist destinations.
However, the process for acceptance as a World Heritage site can be a slow one. Naypyidaw’s efforts to have the ancient city of Bagan listed will take another two years, the Ministry of Culture said in November, because an application requires detailed proposals for safeguarding its status.
