Business

The Irrawaddy Business Roundup (July 30, 2016)

By Simon Lewis 30 July 2016

ADB Has Tips on Transportation Improvements

As much as US$60 billion of investment is required by 2030 if Burma is to address shortfalls in transportation infrastructure that risk holding the country back from economic growth and reducing poverty, the Asian Development Bank (ADB) has said.

The Manila-based multilateral financial institution has just published a lengthy “policy note” on the transport sector, comprising nine separate reports that include one on “how to reform transport institutions,” others looking at Burma’s river transport, urban transport and truck roads, and a guide on “how to improve road user charges”—the latter dealing with the thorny issue of tolls.

The reports derive from reviews on which the ADB assisted the Burmese government in 2014-15.

A press release accompanying the publication cited Bambang Susantono, ADB’s vice-president for knowledge management and sustainable development, saying the country’s “future is full of great potential.”

“The new government is ready to make use of its abundant and innate resources to eradicate poverty and ensure growth for everyone,” he said. “This includes providing access to a modern and safe transport system for all.”

Detailing some of the findings, it said that some 20 million people in Burma currently live in villages without road access during all seasons.

“The report notes that $45 to $60 billion is required in transport investments by 2030, and these should be coupled with streamlining institutions and strengthening cross-ministerial collaboration,” it added.

Ooredoo Turns a Profit

Qatar-based telecommunications firm Ooredoo has begun making profits on its operation in Burma, it announced, after more than doubling its subscriber base in a year.

In half-year results announced this week, the company said it now had more than 8 million customers in the country, and said its data network was already available in locations where more than 85 percent of the population lives.

The results say Ooredoo Myanmar made a profit almost $22 million in the first half of 2016, compared to losses of about $83 million in the first half of 2015.

Despite the growth in subscribers, Ooredoo is still behind rival private telceommunications firm Telenor of Norway, which has raced to 16.9 million subscribers, according to quarterly results published this month. Telenor made $72.3 million in the second quarter of 2016, between April and June.

But Ooredoo last year vowed to turn its fortunes around with a more mass market approach. Revenues grew by 41 percent year to year, according to the latest results. The company also said it had become the first operator to launch 4G mobile services in May, “confirming its data leadership in Myanmar.”

New South Korea-Backed Think Tank Takes Shape

The Myanmar Development Institute, a new think tank set up in Naypyidaw with funding from South Korea’s international aid agency, has picked its first director, according to a report.

The institute was officially launched in January with the intention of creating a “national think tank” to advise the government on socioeconomic issues and policy. The Korean International Cooperation Agency has committed $20 million of funding for the project over five years.

A report from Korean business publication Pulse this week cited an announcement from the Korea Development Institute naming the first director as Burmese national and World Bank economist Min Ye Paing Hein.

The new director—who will assume office in December, according to the report—has a doctorate in social science and political economy from the University of Wisconsin, and speaks Chinese, as well as English and Burmese, it said.

In a sign of what the new institute’s priorities might be, Min Ye Paing Hein has served as a poverty specialist at the World Bank, and is the author of a slideshow published online about landlessness in Burma.

At the time of its launch, a state media report said the Myanmar Development Institute’s working committee was chaired by Zaw Oo, then an economic advisor to former President Thein Sein.

Japanese Firm to Launch Crop Insurance

Japan’s Sompo Japan Nipponkoa Insurance has signed a memorandum of understanding with the leading association of rice producers to offer insurance covering crop losses due to bad weather, according to state media.

The Global New Light of Myanmar reported on Friday that the Japanese company and the Myanmar Rice Federation signed the agreement on Tuesday in Rangoon to work together on launching an insurance system in Upper Burma. It will cover crop losses due to torrential rains, the report said.

“We will provide technical assistance without gaining any profit,” Keiji Okada, general manager at Sompo Japan Nipponkoa Insurance was quoted saying. “Since Myanmar has difficulty in collecting weather data we will apply satellite technology to measure rainfall and weather conditions using photos sent by the satellite.”

The report cited Tun Win, deputy minister for agriculture, livestock and irrigation saying that the country is among those in the world most adversely affected by “erratic weather,” making the implementation of an insurance system difficult.

Private Equity Fund Raises $20M for Burma Projects

Singapore-registered private equity fund Golden Rock Capital has raised $20 million and has begun investing in business in Burma, according to dealstreetasia.com.

The website reported that the fund is targeting $100 million in total funding to make individual investments of ideally between $7 million and $10 million in the country.

It has already put money into Myanmar Personal Care, a Singapore-registered entity trading in perfumes, the report said.

Dealstreetasia.com this week cited Marvin Yeo, founder of the fund, which has offices in Rangoon and Singapore, saying that $20 million had so far been raised.

Originating partner Thura Soe Paing told the website that investments would mean firms get management help from the fund.

“We are more than a provision of capital, we would like to help the businesses grow through the contacts and connections that we have,” he was quoted saying.

“The most important thing is when we come as investors and advisors, we believe in the long term potential of the country we are not here just to make a quick buck.”

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