The Irrawaddy Business Roundup (December 10)

By Kyaw Hsu Mon 10 December 2016

Business Chiefs Optimistic, But Urge More Policy Clarity

A survey of almost two hundred senior executives from companies of different sizes during August and September indicated that most were positive about the business outlook for growth and expansion, but caveats remain.

Executives from a wide range of sectors were surveyed, including telecommunications, media, technology, construction, real estate, utilities, chemicals, retail, banking, and tourism.

Almost 80 percent of respondents cited Burma’s status as a frontier market with a large and growing population as a top reason for investing in the country. A total of 66 percent felt that the government’s commitment to reform was a key reason to enter the market, the Myanmar Business Confidence Survey by Roland Berger says.

Almost three-quarters of respondents felt that the overall business landscape would get better and 92 percent expected to expand their operations within a year.

‘‘Success in Myanmar is a matter of commitment and patience,’’ Roland Berger said. The firm pointed out that 70 percent of firms operating in the country for more than five years were satisfied with their performance, while only 50 percent of firms that have been in the country for less than five years were satisfied with how they were faring.

Challenges identified by respondents included labor issues, notably a lack of skilled workers, and, especially, a lack of legislative certainty.

‘‘While there is broad acknowledgement that important actions such as the new investment law have been taken, the business community is missing a program that is broad enough to cover the major parts of the economy, specific enough to build business and investment plans on, and quick enough to take advantage of the goodwill created by the change in government and lifting of sanctions, before it evaporates,’’ the report said.

‘‘These obstacles indicate the need for comprehensive public sector reform. Despite ongoing initiatives, meaningful improvements to public services will be inevitably challenging, reflecting the urgent need for swift implementation and quick wins,’’ said Thomas Klotz, Managing Partner of Roland Berger South-East Asia.

Car Assembly Plants Well Underway

Ford, Nissan, and Lisan auto manufacturers are progressing with assembly units in Burma and gearing up for sales, according to a report in DealStreetAsia.

It quoted Dr. Soe Tun, chairman of Myanmar Automobile Manufacturers and Distributors Association as saying that Japan’s Nissan, which has an assembly plant in Hlaing Tharyar, could be ready to sell cars by February 2017.

The US-based Ford company was planning to sell vehicles by June and Chinese manufacturer Lisan would also be ready to sell cars during next year, he said.

Aertel to Boost Connectivity in Burma

Indian’s largest mobile phone operator Bharti Aertel will invest in an international fiber optic cable link between India and Burma in order to tap into Burma’s rising demand for high-speed data services for the business and consumer markets, the Economic Times reported.

The company is investing an undisclosed sum in a 6,500-km route terrestrial fiber-optic cable link to boost internet speeds in Burma, the media outlet report. The link will be connected to Airtel’s landing stations in Chennai and Mumbai.

Aertel failed to win a mobile services license in Burma in 2013 when the previous government awarded permits to Norway’s Telenor, Qatar’s Ooredoo and state-owned Myanmar Posts & Telecommunications (MPT). The Burma government was due to award a fourth mobile operator license earlier this year but the process has been delayed. Airtel did not comment on whether it had entered a fresh application in the latest bidding round, the report said.

Inle Lake Zone to Charge in Dollars

Entrance fees to the hotel zone in Inle Lake will be collected in US dollars instead of kyat starting on December 10, according to a travel website quoting local sources.

The current entrance fee of 12,500 kyat will change to US$10 according to the Myo Group which is responsible for collecting the fee, it reported.

The move follows the recent decline in the value of kyat, U Zaw Htay Aung of the Myanmar Tourism Association said in the Global New Light of Myanmar newspaper.

The move is likely to inconvenience travelers who are not carrying dollars, the report added.

Vietnam Govt Upbeat on Burma Investment

The government of Vietnam will encourage investment in Burma by Vietnamese businesses, the country’s president Trần Đại Quang pledged this week.

Investments in agriculture, fish farms, mining and the tourism industry would especially be encouraged, the president told the Burmese Minister of Home Affairs U Kyaw Swe during the minister’s visit to Hanoi, Viet Nam News reported.

President Trần Dai Quang said that cooperation between the two countries had progressed, especially in priority areas including agriculture, industrial tree plantation, aquaculture, finance and banking, telecoms, and oil and gas.

Minister Kyaw Swe expressed admiration for Việt Nam’s development achievements and highlighted a determination to enhance ties between the Ministry of Home Affairs and Việt Nam’s Ministry of Public Security. He said that Burma would create optimal conditions for Vietnamese investors and do its utmost to protect their legitimate rights, the report said.

Entrepreneurs to Attend Networking Event in South Africa

A group of Burmese entrepreneurs will travel to South Africa and Kenya next year to gain business insights and network with business persons from around the globe and in the two African countries.

The trip scheduled for March will include attendance at the Global Entrepreneurship Congress 2017 from March 13-16 in Johannesburg, South Africa.

The congress gathers together thousands of entrepreneurs, investors, researchers, policymakers from more than 160 countries to identify new ways of helping founders start and build up new ventures. The tour will also include a trip to the Kenyan capital Nairobi which is recognized as a dynamic entrepreneurship hub along with Johannesburg.

The study tour is being organized by a local branch of the US-based Global Entrepreneurship Network (GEN).