The Irrawaddy Business Roundup (June 18, 2016)

By Simon Lewis 18 June 2016

Government Told to Demand Transparency From SEZ Firms

The companies involved in planning and building special economic zones (SEZs) in Dawei and Kyaukphyu are failing to disclose impact assessments and other information relating to the massive projects, according to the International Commission of Jurists (ICJ).

Progress on the Dawei SEZ, in southern Burma’s Tenasserim Division, has been delayed by a lack of funding, but the governments of Burma, Thailand and, more recently, Japan, are all involved in a project that looks to be moving ahead.

In Kyaukphyu, a Chinese-led consortium was awarded the rights to build a port and industrial zone by the outgoing government in January. Lead developer CITIC’s vice chairman Yuan Shaolin told Chinese state media in January that the company would protect the local environment and ensure the local population benefits from the SEZ.

However, researchers from the Switzerland-based ICJ said in an article posted last year that they had asked investors, developers, auditors and a research institute involved in the SEZ projects for information relating to environmental impact assessments, environmental management plans, and financial audit reports over the past three months, but “received no substantive responses.” One of the article’s authors reaffirmed these conclusions on Twitter on Saturday.

Vani Sathisan, the ICJ’s international legal adviser based in Burma, and James Tager, a Harvard Satter Fellow working with the ICJ, warned that transparency on the projects was vital to making sure they did not have deleterious effects on local populations.

They called for Burma’s new government to ensure that companies were meeting what transparency requirements were already enshrined in law, and said the Parliament should pass a new piece of legislation on environmental impact assessments, which is currently in draft form.

“[Burma’s] government has the obligation, under international law, to uphold the rights of its people to informed participation in environmental decision-making,” they wrote.

“These obligations must start with government officers committing to sharing information with communities affected by proposed projects, and must continue with enforcement of regulations ensuring that corporate actors do the same.”

U.S. Finance Institution Backs Cellphone Tower Firm

Washington’s development finance institution, the Overseas Private Investment Corporation (OPIC), has agreed to provide a loan worth US$250 million to Apollo Towers Myanmar Limited, a company building and operating cellphone towers in Burma.

The loan represents the institution’s first foray into Burma, and underlines expectations of greater expansion in telecommunications infrastructure in the country.

A statement from Myanmar Investments International Limited, a London-listed investment fund and one of Apollo Towers’ shareholders, said the company has plans to more than double the number of cellphone towers it operates.

Apollo Towers, whose shareholders also include U.S. firms Tillman Holding and TPG Growth, is one of a handful of private firms building infrastructure for the three companies currently offering mobile phone services in Burma.

The sector has expanded rapidly towards ambitious coverage targets. Myanmar Investments reckons mobile phone penetration has now reached more than 75 percent of the population, up from just 9 percent in 2013.

Apollo Towers already owns and operates about 1,800 towers, and is targeting 2,000 in its next stage of development, according to the statement.

“OPIC is pleased to be working with Apollo on this first, important investment in Burma,” OPIC’s President and CEO Elizabeth Littlefield was quoted in the statement as saying.

“Telecommunications are a critical part of ongoing development across the world and, through this project, OPIC is looking to have a significant impact on those who previously lacked access to telecommunications coverage in the country.”

Korean-Funded Research Institute Hopes to Step Up Farmers’ Productivity

South Korea’s overseas development agency is funding a new research center that it is hoped will help to address low productivity in Burmese agriculture.

Research by the World Bank recently identified low yields as a challenge for Burmese farmers, who on average put in more work for a smaller crop yield than farmers in most of the rest of Asia, despite the country’s endowment of workable soil and weather conditions.

A report in South Korean media said ground was broken earlier this month on a new Post-Harvest Research Center in Naypyidaw. The Korea International Cooperation Agency (KOICA) is funding the center to the tune of US$4.5 million, the publicly funded Yonhap news Agency said.

The report identified a “Lack of know-how and sophisticated techniques” as reasons for Burma’s lower agricultural efficiency.

“The institute will be tasked with studying techniques related to packaging, processing, storage and others deemed to be critical to improving the yields and productivity of farming products after being harvested,” Yonhap reported.

Startup Incubator Invites Applications

The downtown Rangoon-based tech hub Phandeeyar is inviting applications from local start-ups to gain a share of US$200,000 of available seed funding.

The organization recently received $2 million from the Omidyar Network, the self-described philanthropic investment firm set up by eBay founder Pierre Omidyar, which was explained in a blog post earlier this month:

“We believe that [Burma’s] ‘digital leapfrog’ can have a meaningful impact on the lives of ordinary citizens,” the organization said. “However, to do this, a new generation of technologists, civil society leaders, journalists and other change-agents will need to be equipped with the necessary skills to leverage the new connectivity infrastructure. These skills are in short supply today after decades of isolation.”

Of that cash, a seed fund of $200,000 is reportedly to be shared between at least six startups by the Phandeeyar Accelerator.

“We commit $25,000 of seed funding when you enter the Phandeeyar Accelerator,” the incubator’s website says.

“The money belongs to your startup; you can spend it as you see fit, but we do recommend that you budget carefully and spend as much as you can on promoting and growing your company.”

As well as the cash, the startups will have access to specialist mentors and other training, free services like web hosting and space in the Phandeeyar office on Merchant Street.

Chinese Tech Firm Plans to Set Up Burma Branch

Chinese company GCI Science and Technology Co Ltd is planning to set up a unit in Burma, according to Reuters.

The Guangzhou-based company is a spin-off from the Chinese Ministry of Industry and Information Technology.

According to its website, the company is involved in consulting and services relating to communications networks, cloud computing, broadband internet and set-top boxes for digital TV.

The site mentions its ambitions overseas, especially in Southeast Asia.

“Over the years, GCI Science & Technology, on the basis of further consolidating the domestic market, has actively expanded the international market [sic], set up overseas branches in Hong Kong, Indonesia, Malaysia and other places, and has become the influential [sic] professional network optimization service provider on the Southeast Asian market,” it says.

Correction: It was previously reported that the ICJ had posted its article last Thursday. The ICJ article was published in 2015. An additional statement concerning one of the article’s authors has been added.