Economy

The Irrawaddy Business Roundup (January 25, 2014)

By William Boot 25 January 2014

Burmese Workers in Thailand Win Landmark Rights Agreement

A group of Burmese workers at a major fish processing factory in Thailand have successfully negotiated pay and employment rights which could become a model for the huge migrant worker sector, said the International Labor Rights Forum (ILRF).

The Thai shrimp canning industry based around Samut Sakhorn, south of Bangkok, employs large numbers of Burmese, but many are facing wage cuts or being fired because of a disease which is decimating shrimping farms.

With the support of the ILRF and the Migrant Workers Rights Network, a worker group has negotiated with their employers in the first cooperation of its kind in the tough industry, said ILRF representative Abby Mills in a statement.

“Workers agreed to an additional day off and a monthly support payment that makes up for about 50% of the lost wages. No worker will be fired,” Mills said.

“The most significant outcome, however, was that a labor committee would have official standing within the factory and be composed of representatives the workers select themselves.

“This is an outstanding model for the industry, and one that should be followed by others,” Mills said.

The shrimp processing company which reached the agreement has not been named.

Fish Stock Shortages Trim $76M Off Export Earnings

Declining fish stocks in seas around Burma’s coastline are blamed for a slump in the fishing industry’s earnings from exports.

Export revenue fell by US$76 million to a total $414 million between April 2013 and this month, said the Ministry of Livestock, Fisheries and Rural Development.

The period saw a decline in export volume of almost 20,000 metric tons.

In the same period of the 2012-2013 financial year, fish exports totaled 270,000 metric tons, bringing in revenue of $490 million, ministry figures quoted by Eleven Media showed.

The overall value of fish exports for the full 2012-13 year reached $650 million and the industry had been targeting revenue for this year of $700 million.

The target for this year has now been revised down to $500 million.

Financial Framework Needs Expanding to help Economy, Says IMF

Burma needs to develop more independent financial institutions in order to main economic growth, the International Monetary Fund (IMF) said.

“I think the government’s decision last year to establish an autonomous central bank is a very important one. [Burma] needs to build more institutions to manage its economy [and] the central bank is crucial to that,” IMF spokesman Matt Davies was quoting by Eleven Media as saying this week.

The central bank needs full budgetary autonomy and a strengthened market framework to implement effective monetary policy, he said.

The bank became free of the direct influence of the Ministry of Finance in July last year and is scheduled to become fully autonomous in July this year.

Meanwhile, media reports said foreign banks are still on schedule to open and operate full service branches sometime this year.

“Drafting of regulations to govern such operations is underway with the help of World Bank and IMF,” the Chinese news agency Xinhua said. “Meanwhile, private banks have been granted permission to run money changers for official trading of three foreign currencies, the U.S. dollar, Singapore dollar and euro.”

More than 20 foreign banks have so far opened representative offices with limited activity in Rangoon, the financial capital.

China Border to Become New Tourist Crossing as Visits Top 2 Million

With the number of tourist visits to Burma officially topping 2 million in 2013 the government said it is planning to declare another border crossing as a visitor entry point.

Muse on the Shan State border with China will soon be upgraded as a tourism entry and exit point, Immigration Minister Khin Yi told an industry conference in Rangoon.
“Last year [Burma] fully opened four checkpoints on the Burma-Thai border, namely Tachileik-Mae Sai, Myawaddy-Mae Sot, Tiki-Sunarong and Kawthoung-Ranong,” said regional travel trade magazine TTR Weekly.

“[Burma] has 16 border checkpoints with neighbouring countries, but most of them offer limited access.”

The Minister of Hotels and Tourism, Htay Aung, told TTR Weekly on Jan. 21 that Burma received 2.04 million visitors in 2013, up from slightly more than 1 million in 2012. Data showed 900,000 visitors arrived by air and cruise ships and slightly more than 1.1 million overland from neighboring countries

Htay Aung predicted that Burma would have 3 million tourists in 2014.

2014 ‘Key Year’ in Burma’s Economic Regeneration, Says Study

As new laws governing key sectors of Burma’s economy take shape, this year should see more growth in agriculture, telecoms, mining and manufacturing, said the Oxford Business Group.

“Prospects for economic growth are improving as modernisation, micro-finance and new laws take shape. Foreign direct investment in the mining sector has lagged due to red tape and transparency issues. However, government plans to implement the Extractive Industries Transparency Initiative, as well as a new mining law due to be passed in March 2014, mean that foreign participation is set to rise steadily,” said the London-based investment analysis firm.

The government had done much to enhance transparency but Burma “still has a long road ahead in rooting out corruption,” it said.

“Looking ahead, the government and the [central bank] will need to keep a watchful eye on various indicators, and with upcoming state elections nearing, 2014 promises to be a key year.”

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