Irrawaddy Business Roundup (January 4, 2014)

By William Boot 4 January 2014

Growing Land Theft in Burma Is Investment Risk, Index Says

Burma is listed among the world’s 10 worst countries for human rights in a new index from analysts Maplecroft, which said the country’s economic resurgence has led to increased land theft for business projects.

Burma is ranked 8th out of 197 countries for its poor rights record in the Maplecroft Human Rights Index 2014.

“The economies of [Burma], Nigeria (10th), Ethiopia (28th), and Indonesia (30th), present a particularly high risk to business,” said the UK-based risk analysis firm.

“In such economies, a high rate of deforestation, coupled with the unchecked conduct of security forces and a climate of impunity for human rights violations has led to a high risk of ‘land grabs’ at the expense of indigenous peoples rights, property rights and minority rights.”

Employee protections “continue to deteriorate in low-cost sourcing countries, particularly in Asia,” the study said.

Burma is the only country in East and Southeast Asia listed in the worst top ten, which includes Sudan, Syria, Congo, Pakistan, Somalia, Afghanistan, Iraq, Yemen and Nigeria.

“Since 2008, global economic growth and investment has shifted to new markets prompting a demand for low-cost workers, water and land as well as other natural resources, said Maplecroft’s head of societal risk and human rights, Lizabeth Campbell.

“In many of these markets, human rights violations continue to get worse. Worker’s rights are seriously compromised, rural and indigenous communities face grave violations related to land grabs and forced displacement, particularly where their land ownership is not formally documented.”

Burma’s immediate neighbors do not fare much better. China is ranked 15th, Bangladesh 17th and India 18th. Thailand, where migrant workers’ treatment is rated to have improved in recent years, is at 48th.

118 Foreign Firms Given Go-Ahead by Burma in 2013

More than 100 foreign companies were given permission to establish businesses in Burma during 2013, according to the Myanmar Investment Commission (MIC).

The total number granted licenses to set up business or form joint ventures with local firms was 118 for the calendar year, said Eleven Media, citing MIC published figures.

Businesses given the go-ahead ranged from cigarette manufacturers to medicines and included brewing, vehicle services, foodstuffs processing, IT services and bamboo fiber products.

Despite high-profile promises of investment and large loans from Japan, the three biggest foreign investors in 2013 were China, Thailand and Hong Kong, said MIC.

Registering new domestic businesses is to be made easier with the opening of more offices of the Directorate of Investment and Company Administration.

Branches of the directorate outside Rangoon and Naypyidaw will be established during 2014 in Mandalay, Taunggyi in Shan State and Moulmein in Mon State, said the Ministry of National Planning and Economic Development on Dec. 29.

Hong Kong Firm Plans Burma Factory for Apartments

A major Hong Kong construction company is forming a joint venture in Burma to build a factory producing precast concrete segments for high-rise apartment homes.

Yau Lee Holdings is teaming up with the Youth Force Group of Rangoon for the project, said Eleven Media.

The partners have yet to find a suitable factory site but hope to acquire a space in the Thilawa special economic zone on the edge of Rangoon, said a statement by Youth Force.

“[Burma] is now facing high demand for housing. A precast concrete factory will be aimed at building low-cost housing apartments, which are a basic need for the public right now,” according to Youth Force managing director Tin Tun, quoted by Eleven Media.

Yau Lee said it has worked on building projects in mainland China, Singapore and the United Arab Emirates as well as Hong Kong. It has also branched out into hotel investment.

Railways for Sale as Rangoon-Mandalay Route Gets Japan Upgrade Aid

Some of Burma’s railway network, including the heavily used Rangoon-Mandalay line, will be sold off to private businesses, reports said.

Plans to privatize some lines were outlined by the Ministry of Rail Transportation as the government prepares to sign a US$200 million loan agreement with Japan to pay for the refurbishment of the Rangoon-Mandalay line.

Other lines likely to be privatized include the Rangoon circular system and the Rangoon-Myitkyina route, said the ministry without giving any timetable.

The Japanese loan, from the state-owned Japan International Cooperation Agency, could be finalized by March, said the Myanmar Times, quoting the agency’s chief representative to Burma, Tanaka Masahiko.

Track and train modernization would cut the journey time between Rangoon and Mandalay by half, Masahiko said.

Solar Power Lanterns go on Sale to Help Villages Off the Grid

Solar lanterns that can provide electricity in remote locations unconnected to the power grid are to be sold across Burma from this month.

The lanterns, consisting of a 3.5-watt solar panel and rechargeable battery, will be sold by Panasonic in corner shops and supermarkets, said Eleven Media quoting the Japanese company. They will retail for the equivalent of about US$50.

The lanterns, which store energy from the sun during the day and provide light and power for other uses at night, are designed to provide a safer alternative to kerosene lamps, said Panasonic which during 2013 donated several thousand solar lamps for distribution to rural schools, health clinics and businesses.

Burma’s development is being slowed by an acute electricity shortage with only 25 percent of the population linked to a limited-use transmission grid.