The Irrawaddy Business Roundup (Sept 17)
By Kyaw Hsu Mon 17 September 2016
Lifting of US Sanctions Welcomed
The announcement that most US sanctions against Burma will be lifted was the hottest topic among the business community this week.
The move, which includes the reinstatement of Burma under the US Generalized System of Preferences (GSP) tariff system, is expected to provide a boost to exporters and increase foreign direct investment.
A representative from a leading foreign law firm in Rangoon said that closer cooperation between Burma and the US has the potential to fuel a boom in infrastructure development and consumer spending in this country. To date, American investment in Burma has lagged behind many other countries.
“As sanctions have eased over the past two years, we have seen a range of multinationals looking to set up Myanmar-specific investment vehicles, or to include Myanmar as part of their wider emerging markets investment strategy. US multinationals have not featured as prominently in these discussions as other economic powers such as China, Thailand and Japan have, in part due to the complex sanctions regime,” Jo Daniels, Myanmar Managing Partner of Baker & McKenzie, added in a statement.
The company was hopeful that easing sanctions would mean that more US investors would begin to see opportunities emerging in Burma.
UMFCCI to Hold New Members Election this Weekend
Fresh faces are expected to emerge in elections for key leadership positions in Burma’s most influential business federation.
Voting for membership of the new central executive committee of the Union of Myanmar Federation of Chambers and Commerce Industry (UMFCCI) will take place on Saturday, Sept. 17.
The organization’s current chair, U Win Aung of Dagon International Group, told media that he would not be seeking reelection.
The non-profit federation was created in its current form in 1999 with objectives including the promotion of economic activity and economic development.
Singapore Business Group Visits Burma
A delegation of business representatives from the second-largest investor in Burma after China visited the country this week.
A total of 45 representatives from Singapore joined a six-day mission to Rangoon, Mandalay, and Naypyidaw in the first such trip from the island state since President U Htin Kyaw took office in March, according to a report in Today online.
Delegates from the property, accounting, publishing, shipping and logistics, legal, civil engineering, and construction sectors, among others, were led by SS Teo, chairman of the Singapore Business Federation.
The group took part in networking activities with local businesses in Rangoon and Mandalay. In Naypyidaw, they were briefed by key ministries, the Myanmar Investment Commission and economic development agencies.
Mr. Teo told Today, “The high participation rate of Singaporean companies in Myanmar-related events such as this business mission reflects a growing interest in the country. Indeed, our SBF National Business Survey 2015-16 showed that Myanmar is the most popular country for Singaporean companies venturing overseas.”
Singapore accounted for US$13 billion worth of approved foreign direct investment as of April this year, according to data from the Myanmar Directorate of Investment and Company Administration. Bilateral trade increased 9.6 percent from 2014 to US$2.6 billion last year.
Jade Prospectors in Conflict with Mine Operators
A rise in the numbers of hand pickers scavenging for raw jadestones has resulted in tensions around the Nam Shi Pon jade mine in Kachin State’s Kani Township, it was reported this week.
Eight companies operate at the jade mine, and conflicts have emerged between company officials and hand pickers. The number of scavengers in the area had reached 800 as of May this year and continues to rise, according to a report in the Global New Light of Myanmar.
Bamboo fences erected by jade companies to keep out further arrivals have not stemmed the influx.
A company official said that some workers had thrown stones at the vehicles of mine operators.
“We have informed the regional authorities, who responded that since the site is not a fixed living space it is difficult to take action against them,” the official said.
Jade hunting is a highly dangerous occupation in which workers sort through piles of mining refuse seeking overlooked stones, which are then sold back to the companies.
The often extremely hazardous conditions of the work made headlines in November last year when mining rubble collapsed on miners’ makeshift homes in Hpakant, Kachin State, resulting in the deaths of 116 workers and their families.
Yoma Gets Exclusive Construction Distribution Rights
Yoma Strategic Holdings has signed an exclusive deal with J C Bamford Excavators (JCB), the world’s third largest manufacturer of construction equipment, to distribute its machinery in Burma.
Yoma’s subsidiary, Convenience Prosperity Company Limited (CPCL), will be the sole distributor of JCB equipment in Burma, according to a report in the Singapore Business Review.
The agreement with JCB will complement Yoma’s offerings in the group’s automotive and equipment division, the group said.
CPCL has 11 branches in Burma and also distributes Case New Holland, an agricultural equipment brand.