YANGON—Myanmar and South Korea signed five Memorandums of Understanding (MOUs) on financial, trade and investment cooperation as well as infrastructure projects at the Myanmar-Korea Business Forum on Thursday.
Held in Myanmar’s commercial capital, Yangon, the forum was attended by South Korean President Moon Jae-in on the second day of his three-day visit to Myanmar. Moon is promoting his “New Southern Policy” to deepen relations, including economic ties, with Southeast Asian nations.
During Moon’s trip, Myanmar and Korea signed a total of 10 MOUs and a framework agreement, including five MOUs and one agreement in Naypyitaw on Tuesday. These included government-to-government, government-to-business and business-to-business collaborations.
According to the Ministry of Information, the Yangon regional government and KB Kookmin Bank—one of South Korea’s four largest banks—signed an MOU on financial cooperation in the real estate sector. The Korean bank will provide the regional government with financial support to construct affordable housing, according to the agreement.
The regional government signed another MOU with the Korean government-owned Korea Land and Housing Corporation to conduct a preliminary survey for the Dala New City Project, located in an undeveloped township in Yangon.
Addressing the forum, Moon said he hoped to help develop Dala Township into a new city with industrial zones. He promised to support the development of Dala Township together with Korean investors.
“We will reinforce cooperation on building infrastructure that contributes to helping people’s lives, as well as industries,” he said.
Meanwhile, South Korea is also helping to build the Korea-Myanmar Friendship Bridge, which will link downtown Yangon to Dala Township on the opposite bank of the Yangon River.
“Our two countries have successfully cooperated on the construction of infrastructure such as with the Korea-Myanmar Friendship Bridge, the construction of transmission networks, railway renovations and further bridge construction,” Moon said.
The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) also inked MOUs with the Korea International Trade Association (KITA) and Woori Financial Group (WFG) agreeing to cooperate on economic development, capacity building programs, trade promotion, exchange of economic information and arranging regular business meetups between the two countries.
Additionally, SME-Development Bank signed an MOU with Industries Bank of Korea (IBK) to collaborate on capacity building and technical issues, and to share investment information between the two banks.
According to the Korea Financial Supervisory Service (FSS), Myanmar has emerged as the most popular destination for Korean financial firms. Representatives from seven banks are accompanying Moon to Myanmar: Korea Federation of Banks Chairman and CEO Kim Tae-young, Industrial Bank of Korea Chairman Kim Do-jin, Korea Export-Import Bank (Exim bank) Deputy President Kang Seung-joong, Shinhan Bank CEO Jin Ok-dong, KB Kookmin Bank CEO Hur Yin, KEB Hana Bank CEO Ji Sung-kyoo and Woori Financial Group Chairman Sohn Tae-seung.
Moon offered his assurances that Korea will support Myanmar’s continued economic development, saying that together, Myanmar and Korea will be able to look beyond Asia to the global market.
He said South Korea would play its part as Myanmar’s economy takes a leap forward.
Myanmar is a focus of Seoul’s New Southern Policy, which prioritizes boosting trade and investment. Moon’s stop in Myanmar is the first by the head of state of an Asian economic powerhouse looking to benefit from Myanmar’s economic potential.
Moon praised Myanmar’s strategic location at the center of ASEAN, and between China and India, as well as its abundance of natural resources, all of which are major attractions for South Korea.
Myanmar Vice President U Myint Swe said Myanmar has introduced reforms to create a friendlier environment for investors, adopting a “people-centered, all-inclusive sustainable economic development policy”, adding that Myanmar’s 12-point economic policy was geared toward the sustainable development of the country.
Myanmar is in the process of adopting best international practices like other countries, including ASEAN members, in order to attract foreign investment, he said.
Moon landed in Myanmar’s capital Naypyitaw on Tuesday, and held discussions with State Counselor Daw Aung San Suu Kyi and President U Win Myint on strengthening economic cooperation and development between the two countries.
After the meeting with Daw Aung San Suu Kyi, the two leaders signed five MOUs and one framework agreement on the establishment of a Korea Desk in Myanmar, which will be a one-stop service center to aid incoming Korean investors on any administrative issue; cooperation on shipping, shipyard upgrading, logistics, and port development and management; science and technological cooperation; startups and innovation; and a US$1 billion (1.52 trillion kyats) loan for economic development cooperation through 2022. The South Korean government also donated 60 school buses to Myanmar.
In Naypyitaw, IBK Chairman Kim Do Jin held a meeting with U Thaung Tun, the Union minister for investment and foreign economic relations, on boosting collaboration on the development of small and medium-sized enterprises (SMEs).
South Korea is one of Myanmar’s largest Asian economic partners; as of July, it was the sixth largest foreign investor overall, with US$3.97 billion invested in 177 enterprises, according to the Directorate of Investment and Company Administration (DICA), the Myanmar government’s investment agency.
Some of Korea’s largest companies have already grabbed significant market share in Myanmar, including Posco Daewoo, Daewoo Motors, Lotte Group and Hyundai. According to government data, Korean investment is mostly in manufacturing, infrastructure projects, construction, distribution and hospitality.
According to DICA, trade between the two countries totaled nearly $798 million in fiscal 2017-18, $866 million in 2016-17, $657 million in 2015-16, $862 million in 2014-15, $1.57 billion in 2013-14, $623 million in 2012-13, and $667 million in 2011-12.
At a joint press conference in Naypyitaw, State Counselor Daw Aung San Suu Kyi said, “Trade has increased between the two countries and we are taking every step possible to enhance Korean investment in this country.”
The forum also saw the launch of the Korea Myanmar Industrial Complex (KMIC) project, a joint industrial complex in Hlegu, north of Yangon. Comprising industrial and commercial areas, a research-and-development facility and a training school, it will be implemented by the two agencies in Nyaung Hna Pin village at a cost of US$110 million. According to the Yangon Project Bank, it will be built on 558 acres and will focus on producing goods for export.
Around 200 Korean companies are expected to invest in the production facilities, which will generate a projected $10 million in taxes annually.
The Myanmar government has approved the “Korea Desk,” a single-window system designed to help Korean companies and investors deal with administrative issues.
Bilateral relations between Myanmar and South Korea have shown significant improvement recently. Last year, the two decided to dispatch Myanmar government employees to South Korea for training in the trade-related information sector, in technical support for setting up a database to implement e-commerce and in implementing trade and investment promotion and protection agreements already signed.
In May 2018, a teacher training institute was set up in Yangon at an estimated cost of $12 million. The Korea International Cooperation Agency (KOICA) provided $20 million in financial assistance to the Myanmar Development Institute, a think-tank focused on socioeconomic development.
KOICA has also provided a grant for sustainable rural development and capacity building in public service, technology, education and fundamental infrastructure building.
