The Irrawaddy Business Roundup (April 1)
By The Irrawaddy 1 April 2017
ADB Focuses on Infrastructure in New Burma Plan
Improving access to rural and urban markets is a key goal in a new country partnership announced between the government and the Asian Development Bank (ADB).
The medium-term country partnership aims to support the government’s goals to improve economic growth and job creation, according to an ADB release.
The 2017-2021 strategy is designed to leverage Burma’s strengths and its strategic location in Asia by improving links between rural and urban areas as well with regional and global markets.
The plan is also intended to support Burma to build a skilled workforce and to modernize its economy, the ADB said.
“ADB’s operations will focus on areas that are of fundamental importance to the country’s development,” said James Nugent, the director general of the bank’s Southeast Asia Department.
“Access to sound transport networks, electricity, and urban infrastructure, as well as a skilled workforce will be critical to build a modern economy. These sectors will also transform the rural sector, boost productivity, create quality jobs, and, ultimately, improve people’s livelihood.”
ADB operations will focus on infrastructure such as energy transmission and distribution, transport upgrading, and urban development. The bank will also continue to support rural development, education, improving the business climate, disaster risk management, gender equity, and regional cooperation, among others.
The bank’s plan is fully aligned with the government’s strategic and policy priorities, said U Kyaw Win, Myanmar’s Minister of Planning and Finance. “We welcome ADB’s support as our country accelerates its transition and builds the foundations for inclusive and sustainable growth,” he said.
The ADB will expand sovereign concessional lending for projects from about US$150 million to $350 million per year through 2021. The bank is also expanding its lending, equity investment, and guarantees to the private sector.
Bangladeshi Telecoms Service Firm Plans Growth
Telecoms services firm Crystal Future Venture from Bangladesh is set to invest $1 million to expand its presence in Burma over the next three years.
The company has provided support services to mobile operators including Telenor and MPT since 2014 and the new investment is with an eye to growing the firm’s long term presence in Burma, according to DealStreet Asia.
The company’s main activities so far have included telecom network surveying, the design and planning of telecom network, and telecoms maintenance services.
Gold Smuggling from Burma to India on the Rise
India’s demonetization of small notes last year resulted in a reduction of gold smuggling into the country, with a 60 percent fall in seizures in 2016-2017 over the previous year, according to India’s Business Standard.
Gold smuggled in from Sri Lanka and Burma has replaced that from traditional sources like Dubai and Thailand, according to the report.
“Seizures showed a large quantity of gold is being smuggled in from Burma through the north-eastern states. These consignments are brought to Kolkata, from where they are distributed to various parts of the country,” an official told the outlet.
Insurgency in Sri Lanka and Burma supports the illegal trade in gold, according to the official.
According to India’s Directorate of Revenue Intelligence (DRI), it seized 560 kg of gold valued at 1.62 trillion rupees (about $25 million) in 2016-17 (until March 26) against 1,417 kg, worth 4.1 trillion rupees (about $63 million), in 2015-16.
The agency conducted 105 search operations and arrested 188 people in connection with smuggling gold in 2016-17.
“Seizures in the last quarter indicate attempts by organized criminal networks to resume large-scale gold smuggling,” said the official. Smugglers are now attempting to regroup and are seeking new routes for their contraband, he added.
Junction City Mall and Offices Open in Rangoon
Junction City opened phase one of its large retail mall and office complex in downtown Rangoon on March 29.
The retail section of the mall is still in the process of being filled, while office tenants in the $300 million development include Allen & Gledhill, Wong Partnership, VDB Loi, Samsung, ZTE and the British Chamber of Commerce.
A Pan Pacific Hotel is due to open later this year in the first phase of the complex operated by Shwe Taung Group and Keppel Land, in partnership with the Yangon City Development Committee and Pan Pacific.
Phase 2 of the project will include offices, serviced residences, and car parks, and is due to be completed by 2019.
External Trade Value Up, Deficit Rising
Burma’s external trade value between April 1 last year and March 17 this year was $27 billion, up by $572 million over the same period the previous year, according to the Global New Light of Myanmar state newspaper.
Exports were valued at $10.8 billion while import value reached $16.15 billion, according to statistics from the commerce ministry.
Burma exported mainly agricultural products, animal products, minerals, forest products and manufactured goods, while imports were mainly capital goods, raw industrial materials and personal goods.
The government is working to reduce the trade deficit and is particularly scrutinizing imports of luxury goods, according to the report.
Unprofitable State Businesses Under Review
Loss-making state-owned businesses will be suspended or handed over to the private sector, according to the Ministry of Planning and Finance.
Steel mills in Myingyan Township, Mandalay Division and Pangpet in Taunggyi Township, Shan State; paper mills in Thabaung Township, Irrawaddy Divison, and a heavy industry in Thagara, Bago Division, were among the loss-makers facing changes within six months, according to planning and finance minister U Kyaw Win.
“We have to terminate some industries and privatize some businesses to cut spending.”
the minister said in an Eleven News report.
More than 40 businesses are reported to be under suspension while their operations are scrutinized.
“We will review the businesses to see whether to resume them, or run them through joint ventures. We’re not completely terminating them. Some factories have shown losses for years,’’ another official said.