Business

The Irrawaddy Business Roundup (March 21, 2015)

By Simon Lewis 21 March 2015

Public Called on to ‘Reality Check’ New Business Transparency Report

The Myanmar Centre for Responsible Business (MCRB) launched the research phase of its second Pwint Thit Sa, or Transparency in Myanmar Enterprises, report this week in Rangoon.

The group ranks leading Burmese companies based on how much information they publish about their activities on corruption, human rights, health and safety and the environment.

Last year’s report surveyed 60 companies, revealing that 25—including major names Asia World and Yuzana—had no website at all on which they make information public. Only about 10 companies were found to have published significant information, with the report naming the conglomerates Kanbawza, Max Myanmar and Shwe Taung alongside energy firm Parami as Burma’s four most transparent companies.

This year, the group will survey 100 companies, contacting them for feedback before publishing the rankings in July, according to a statement on Tuesday.

Vicky Bowman, the MCRB director and former British ambassador to Burma, said in the statement that last year’s report had made an impact, encouraging some companies to improve their transparency. But, said Bowman, public input was also needed to make sure companies were keeping their promises.

“As we said last year, this report measures only what companies say they do, and not what they actually do,” Bowman was quoted saying.

“We want to get more feedback from the public to act as a reality check. For example, has the company been involved in specific land-grab cases, or does it mistreat its workers or prevent them from joining a trade union?

“We hope that those who have been negatively affected by any of these 100 companies’ operations will let us know, particularly if the company has not addressed the grievance satisfactorily.”

Take Up of Condos Falling as Rangoon Building Boom Continues

A flurry of new condominium projects began in Rangoon in 2014, but the rate at which apartments are being taken up is falling, according to a market analysis by property firm Colliers International.

In a recent research and forecast report on Rangoon’s condominium market, the US-based real estate company, which has an office in the city, said 37 new condo developments were launched last year, meaning that 4,150 apartments, or units, are currently being pre-sold. The number of condo units currently on sale was up by 76 percent year on year, the report said.

“Local developments continued to lead the number, while large-scale foreign-invested projects are beginning to represent a considerable share,” the report said.

More than a quarter of upcoming developments were in Colliers’ “high-end” or “luxury” categories. A typical two-bedroom luxury condominium in Rangoon costs about US$610,000.

Burma’s political and economic reforms over the past four years have seen property and land prices in the former capital soar. Increasingly upscale residential developments have been going up to cater to wealthy Burmese and the growing expatriate community, although a long-awaited law to allow foreigners to own some condominiums has not yet made it through Parliament.

Colliers said there were now 2,681 completed condo units in Rangoon, and that number is set to almost double this year.

However, the report said, “Despite the developers’ bullish market sentiments, the sales performance of pre-selling condominiums dampened significantly as of the end of 2014.”

Across the city, only a “dismal” 68 percent of condos on sale were taken up, down from 80 percent in 2013, it said, putting the slow market down to poor sales at lower-quality developments.

“Moreover, the relatively high selling price, owing to large unit sizes, continues to deter purchases from the untapped majority of owner-occupiers, and from investors seeking rental potential amid the growing number of single expatriates in Yangon [Rangoon],” the report said.

New Trade Station to Be Opened on Chin-Mizoram Border

India and Burma are expected to inaugurate formal trade across a border crossing between Chin State and Mizoram next week, according to an Indian newspaper.

The New Delhi-based Business Standard said in a report on Wednesday that both countries’ commerce ministers would visit Zokhawthar in India’s northeastern state of Mizoram on March 25 to inaugurate formal trade at the border post close to Rih Lake in Burma.

The report cited an official in Mizoram’s commerce and industry department saying that the new land customs station was ready to facilitate trade at the crossing.

“The official said India and Myanmar, at the 5th India-Myanmar Joint Trade Committee meeting in [Naypyidaw] last month, had agreed to enhance trade and investment between the two countries by removing bottlenecks such as lack of good connectivity and banking arrangements,” the report said.

South Korea’s Exim Bank to Fund Fiber-optic Links

The Export-Import Bank of Korea will lend nearly $56 million to upgrade Internet infrastructure to some of Burma’s more out of reach cities, according to a report in state media this week.

The state-run Global New Light of Myanmar reported that the South Korean state-owned bank signed an agreement with the Ministry of Communications and Information Technology in Naypyidaw on Wednesday.

The loan worth $55.874 million is for new fiber-optic cables to provide faster Internet access to some of Burma’s more remote cities under the so-called IT Infra-Network Expansion Project, the report said.

“The loan will be disbursed by South Korea’s Economic Development Cooperation Fund. The funds will pay for expansion of high-speed fiber links between Taunggyi and Mandalay; Mandalay and Myitkyina, Dawei and Kawthoung; and Magwe and [Sittwe],” it said.

Export-import banks are government-run institutions that make cash available to countries’ companies looking to do business abroad. The export-import banks of China, the United States and India have all announced plans to make credit available in Burma.

Nervous Expats: Why Not Get Some ‘Intercultural Training’?

The events of the past week may have made some foreigners in Burma think twice about how they navigate the local culture. A bar manager from New Zealand and two Burmese associates were sentenced to two-and-a-half years in jail for offending the Buddhist religion after a poster for an event at the Rangoon establishment V Gastro Bar depicted the Buddha wearing headphones.

But rather than worrying that their ventures here might earn them a spell in the clink, foreign businesspeople might want to sign up for a new course offering “intercultural training.”

Rangoon-based consultancy Myanmar Business Answers is holding its second such training day on May 2 in Rangoon, offering tips on the local culture as well as “how to read a business meeting” in Burma and “managing Myanmar people.”

Klaus Oberbauer, an intercultural and research consultant at the firm, told The Irrawaddy that while the training was not related to any recent court cases, it “aims to support international businesspeople in their transition to the Myanmar market.”

“Dealing with Myanmar employees and partners who think and act according to traditional country-specific values can be very challenging,” he said by email.

“Our trainers have been successfully navigating these challenges for over 3 years in their own company and are happy to share their knowledge to support mutual understanding between expats and locals.”

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