Business

The Irrawaddy Business Roundup (Aug 27)

By Kyaw Hsu Mon 27 August 2016

Rangoon Airport Domestic Terminal ‘80 Percent Complete’

The new domestic terminal for Yangon International Airport is expected to open in December this year, according to the Department of Civil Aviation (DCA).

About 80 percent of the terminal is currently completed as part of the project to upgrade the airport, a DCA official told local Burmese language daily The Voice.

Yangon Aerodrome Company Limited (YACL), a subsidiary of the US-blacklisted Asia World Company, was awarded the contract for the US$660 million airport project in 2013. Construction of the new domestic terminal started in May 2015.

YACL is the investor, operator and builder for the project as well as the manager of the existing airport. It holds a 30-year contract to manage the new airport.

4G Rollout Completed in Key Locations
Ooredoo Myanmar and Nokia have completed the rollout and launch of the first 4G service in Burma, the companies announced this week.

The high-capacity service is now operating in Rangoon, Naypyidaw, Mandalay and Bagan after an upgrade to existing 3G services, using the Nokia Single RAN and Packet Core platforms, which took less than three months to complete.

“We are proud to be the first to launch 4G services in Myanmar and plan to extend the network further in the future,’’ Rene Meza, chief executive officer of Ooredoo Myanmar, said in a statement.

Nokia earlier provided its managed services expertise to Ooredoo Myanmar’s 3G network, providing support from its global delivery center in Chennai, India, and in Burma.

Concerns Over Inflation
Fluctuating foreign exchange rates and rising gold prices are contributing to rising inflation in Burma, observers say.

On August 25, the US dollar exchange rate was 1,210 kyats, up from a rate of about 1,185 kyats two months earlier, while gold prices had reached 874,500 kyats ($730) per tical, according to the market. One tical is a traditional Burmese weight measurement equal to 16.33 grams (just over a half ounce).

This week the Central Bank of Myanmar announced that the current rate of inflation was 12.14 percent, surpassing World Bank predictions and causing concern among business leaders of an upward price spiral dampening local demand for goods.

U Thein Tun, chairman of the Myanmar Bankers Association and founder of the Tun Foundation Bank, told The Irrawaddy this week that an “unstable” dollar exchange rate acts as a contributing factor to inflation. The government should provide a solution, he added.

Burma’s total trade volume dipped in the first quarter of this fiscal year, compared to the same period last year.

Economist U Aung Ko Ko has flagged the adverse impact of double digit inflation on working class people in Burma who are most affected by the price of basic commodities. The official minimum wage remains at 3,600 kyats per day (US$3), among the world’s lowest.

Burma Coffee Enters US Market
The first commercial-scale exports of Burmese coffee to the United States arrived this month, Reuters reported.

Seattle-based Atlas Coffee Importers imported two containers totaling 600 60-kg bags.

US retail giant Whole Foods Market bought 41 bags, while specialty coffee chain La Colombe purchased 10 bags.

The Burmese coffee is to be sold as “single origin and as special coffee that we are offering,” said Darrin Daniel, director of sourcing for the Allegro Coffee Company, a subsidiary of Whole Foods that supplies much of the food store’s coffee.

Meanwhile, the Arabica beans were set to go on show at a La Colombe cafe in Washington D.C. this week.

The exports come in the wake of various initiatives to link Burmese growers with wider markets, including a Farmer-to-Farmer program and backing from USAID for improved production techniques.

Foreign Aid Boost for Banking, Agriculture

China will provide a package of US$150 million in aid to Burma for agriculture, education, cooperation on cultural affairs and aid to waterways, according to Deal Street Asia.

Meanwhile, the Japanese International Aid Agency (JICA) is set to issue a US$25.2 million loan to the Myanmar Economic Bank to support loans to small and medium enterprises by six local banks, local media reported.

Kanbawza Bank, CB bank, Aya Bank, Myanmar Citizens Bank, Myanmar Oriental Bank and the Small and Medium Industrial Development Bank will be enabled to offer loans of between 15 million kyats ($12,500) and 500 million kyats ($415,000), with or without collateral, according to local reports.

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