The Irrawaddy Business Roundup (May 24, 2014)

By William Boot 24 May 2014

Burma’s Tourism Industry Predicted to ‘Benefit’ From Thailand Military Coup

Burma’s tourism industry will benefit this year from the military coup and political instability in neighboring Thailand, a travel trade magazine said.

“Despite effort to put a positive spin on [Thailand’s] declining tourist arrivals performance since January, travel firms have seen their business drop by 40% to 50%, mainly from key Asian source markets such as China and South Korea,” said TTR Weekly.

“Overseas tour companies, will be forced to recommend other destinations. That’s the nature of the game. In the region, Malaysia, Vietnam and Myanmar will benefit at Thailand’s expense at least for this year.”

The magazine said Thailand’s tourism industry was “already reeling from seven months of political unrest,” before the military stepped in.

The forecast that Burma will benefit from Thailand’s troubles follows a statement by Naypyidaw’s Ministry Hotels and Tourism saying that 1 million foreign visitors came to the country in the first four months of this year.

Ironically, the largest national group of visitors in the January-April period were Thais—600,000, mostly entering Burma via the two countries’ shared border.

Capacity of Rangoon Airport to Double as Plans for Hanthawaddy Stalled

Rangoon airport is to be expanded to more than double its present annual passenger capacity, the government has reportedly confirmed.

Approval has been given for a new terminal to be built over the next 18 months that will boost capacity to 6 million passengers a year, said the Department for Civil Aviation, quoting Eleven Media.

It’s not clear how much the expansion work will cost, but it will reportedly be carried out by Pioneer Aerodrome Services, the subsidiary of the Burmese company Asia World that last year won a tender to continue its operation of the airport.

During reconstruction of the existing terminal, passengers will use the VIP hall.

Meanwhile, plans are still being finalized for a new international airport to be built in Pegu Division, 80 kilometers from Rangoon.

The US$1.1 billion Hanthawaddy Airport was scheduled to have been completed by 2017, but this deadline will likely be a year or more later because the government in March ordered a re-tendering for the main construction contract after what the Ministry of Transport described as “a major change in project policy.”

Lack of Investment Prevents Burma’s Fish Export Market from Growing

Burma’s fishing industry is suffering from a lack of investment which is undermining hopes of regaining markets lost during economic sanctions by Western countries, industry leaders said.

The problem is made worse by overfishing, which has depleted stocks in traditional trawling areas, said the Myanmar Fishery Federation.

“There is no possibility to be able to provide the sector with proper capital supports,” federation vice chairman Hnin Oo was quoted by The Myanmar Times saying.

The lack of capital has meant that most fish processing factories cannot be upgraded to meet hygiene standards demanded by the European Union, said Hnin Oo. Only 14 out of about 100 factories meet these standards, he said.

The value of fish exports in the just ended 2013-2014 financial year dropped to $536 million, said the federation, compared with $650 million in 2012-2013.

Hnin Oo warned that the export market could shrink further for the current financial year.

The industry’s problems have been exacerbated by electricity shortages which reduced operations at a number of processing factories in the Rangoon area, he said.

Huge China-Russia Gas Deal Adds to Doubts About Burma Pipeline

A massive natural gas supply agreement signed by China and Russia casts further shadow over the viability of the China National Petroleum Corporation’s (CNPC) pipeline through Burma, industry experts said.

The Sino-Russian deal will lead to 38 billion cubic meters (cm) of gas a year flowing out of Siberia into China, with provision for expansion up to 60 billion cm a year.

The controversial trans-Burma pipeline, running from Kyaukphyu on the coast into southwest China’s Yunnan Province can handle 12 billion cm per year, but so far it has been running at only 20 percent of capacity due to production delays at the offshore Shwe field in the Bay of Bengal, according to Interfax Natural Gas Daily.

The sales agreement which gives most of the gas in the Shwe field to China was signed during the secretive military regime years in Burma and remains in place even though Burma is struggling to provide enough energy for domestic consumption.

“The Sino-Russian deal has been many years in the making and some industry observers thought it might never happen, however, its achievement now makes the Myanmar pipeline seem small fry,” independent oil and gas analyst Collin Reynolds in Bangkok told The Irrawaddy.

“The long term survival of the Myanmar route may well hinge on whether China is able to build a specialized transshipment terminal at Kyaukphyu to process gas from Middle East suppliers such as Qatar.”

World Bank Aid to Help Infrastructure and Job Hopes for Burmese Villages

Infrastructure work to improve transport, water supply and sanitation to scores of villages is getting under way with the financial support of the World Bank.

The bank is donating more than $80 million to be spread over six years and hundreds of villages in up to 15 townships across Burma, according to the official New Light of Myanmar newspaper.

The paper named the first three townships to benefit as Kanpetlet in Chin State, Namhsam, Shan State, and Kyunsu in Tenasserim Divison.

Over the course of six years, the bank’s aid money will help improve infrastructures services and job prospects in about 400 villages across 15 townships, said the report.

The aid is part of a much bigger package of grants and loans being provided by the World Bank as it re-engages with Burma.