- This Week in Parliament (September 19-23)
- Dateline Irrawaddy: ‘We Can’t Expect to See Results Overnight’
- The Irrawaddy Business Roundup (Sept 23)
Posted: 23 Sep 2016 07:52 PM PDT
Monday, September 19
In the Lower House, U Khin Zaw of Kawthaung Township asked if the government planned to update The Police Act of 1945.
The Lower House debated the bill to amend the Ward or Village Tract Administration Law.
In the Upper House, U J Yaw Wu of Kachin State Constituency 1 asked about government actions against illegal logging in Kachin State on the Sino-Burma border.
Tuesday, September 20
The Ministry of Finance and Planning submitted the "Burma Investment Bill" to the Lower House and the bill committee put forward its report on the draft law.
Lawmakers debated the "Bill to Protect Citizens' Privacy and Security" submitted by the bill committee.
The Upper House approved the bill to amend the Civil Service Law.
The Union Parliament approved the proposal to get loans from the ADB and the French Development Agency for the Ministry of Agriculture, Livestock and Irrigation, Ministry of Education and Ministry of Health and Sports.
Wednesday, September 21
In the Lower House, U Kyaw Aung Lwin of Sidoktaya Township submitted a proposal calling on the Union government to take prompt action to care for abused and exploited Burmese migrant workers in foreign countries in cooperation with concerned governments. The Lower House approved discussion of the proposal.
The Upper House passed the bill to annul the 1950 Emergency Provisions Act. The bill had already been approved by the Lower House.
Thursday, September 22
U Htay Win Aung of Daw Pone Township submitted an urgent proposal to the Lower House to take action against the Myanmar National Human Rights Commission (MNHRC) for their insufficient handling of a high-profile abuse case against two underage domestic workers. Parliament decided to debate the proposal.
Parliament approved discussion of the proposal submitted by U Than Nyunt of Pyu Township which urged the Union government to bring the country's rail transportation sector up to an international level.
In the Upper House, U Kyaw Thiha of Mandalay Division (12) submitted a bill to amend the Myanmar Gemstones Law for debate.
Friday, September 23
Dr. U Maung Thin of Meiktila Township, submitted a proposal to the Lower House calling on the Union government to organize an inclusive seminar on basic education that enables people from of all walks of life to give their input and feedback in order to design a comprehensive basic education law. Parliament approved discussion of the bill.
In the Upper House, U Aung Thein of Pegu Division (12) asked if the Union government would relax some provisions in the Myanmar Citizenship Law to enable Burmese expatriates to return to the country. Minister for Labor, Immigration and Population U Thein Swe replied that since 2013, the government has issued appropriate ID cards for 143 of 198 Burmese expat applicants and that from January 2015 to August 2016, the permanent residency system management committee and central work committee formed by the President's Office have issued permanent residency certificates to 264 of 319 applicants. The two committees have been reconstituted by the new government.
In the Union Parliament, lawmakers debated the bill to amend the Peaceful Assembly and Procession Law, over which the two houses have differing views. Further action will be taken in line with Parliament's laws and regulations to pass the bill.
Posted: 23 Sep 2016 07:46 PM PDT
Kyaw Hsu Mon: Welcome to Dateline Irrawaddy! The United States pledged to lift economic sanctions against Burma during Daw Aung San Suu Kyi's visit last week. We'll discuss to what extent it will impact Burma's economy and citizens. MKT Construction chairman U Myo Myint and economist U Khin Maung Nyo join me for the discussion. I'm Irrawaddy senior reporter Kyaw Hsu Mon.
US President Barack Obama has promised to lift sanctions against Burma, but will it benefit Burmese citizens or only big businessmen?
Khin Maung Nyo: It will benefit Burmese citizens but only after some time. There won't be immediate impacts. We should not talk about businessmen and citizens separately. If it benefits businessmen, it should also benefit citizens. The more foreign investment that comes into the country, the more job opportunities emerge, the more incomes increase. We can expect to find more trade opportunities by loosening trade with the United States, so we can expect to increase exports and earn greater export revenues. But these things will not happen immediately.
KSM: U Khin Maung Nyo said we will have to wait for sanctions to benefit Burma. U Myo Myint, what do you think?
Myo Myint: I agree. We can't expect to see results overnight. Our country's preparation in terms of human resources and other resources is not yet adequate [to receive benefits from lifting sanctions]. We have made some preparations for the AEC [Asean Economic Community] and AFTA [Asean Free Trade Area], but there is still room for improvement. If capable businessmen who want to serve the country take a leading role in leveraging the lifting of sanctions, everyone will benefit.
KSM: Military-owned businesses such as Myanmar Economic Holdings Ltd (MEHL) and Myanmar Economic Corporation (MEC) dominate many markets in Burma. They will also benefit. To what extent will lifting sanctions impact military-owned businesses?
KMN: There has been constant criticism of military-owned business dominating many markets. But what is more interesting is that most of the military-owned businesses are taking a loss due to mismanagement. Although there is a saying that "whoever starts a business dominates it," [referring to the Burmese acronym for MEHL— Ooe-Pai: 'ooe' meaning to do something ahead of somebody else and 'pai' meaning 'own' in Burmese]. There are many examples in which they don't dominate the market even though they enjoyed many privileges. They came into existence under the circumstances of the time. The times have changed, and they have to change along with them—which they are already doing.
For example, they did not pay taxes before and now they do. They now have to compete with others on an equal footing. Foreign investors will choose business partners based on their management, business model, transparency, responsibility and accountability—not on whether or not they are owned by the military.
KSM: Many doubt that local businesses can compete with foreign businesses when foreign investment enters the country. U Myo Myint, as a builder, do you think local businesses are ready? What difficulties do they face?
MM: We are not yet ready in terms of technology and human resources. Local businesses are very weak in that regard. Before talking about foreign investment, I would like to point out the tender systems of international organizations like the UNDP and UNICEF. Their tender system is very different from local systems as they take into consideration the amount of tax we have paid, greening measures, environmental conservation, CSR [corporate social responsibility], index of transparency and capital. So, we have a lot to prepare. Frequent policy changes have been a continual challenge to businessmen in our country, but I hope this will not happen in the future.
Regarding the construction industry, the new government has abolished policies adopted by the previous government [referring to high-rise building policies]. If this continues, it will deter potential foreign investors. If every new government fulfills the pledges of its predecessor, potential foreign investors will not be hesitant to invest. No government will be in office for eternity. There will be changes. We don't mean that policies should not be changed, but if they take effect retroactively, there will be negative impacts.
KSM: What do you think government employees need to do in order to adopt good policies?
KMN: Their duty is to do whatever they are asked by the current administration. Typically, government staff do not take initiative or practice discretion. They do as they are ordered. Now, the new government has come into power and it does not know what instructions to give. That is not its fault, as it has no [administrative] experience. On the other hand, staff members are waiting for instructions. They can't just take initiative because procedures restrict them from doing so. They are not supposed to overstep the boundaries of procedure.
There are also cases of government staff exploiting weak procedures for their own benefit. While the upper echelon is shouting for continuous improvement and inclusive economic growth, I wonder to what extent the lower echelon grasps that notion. I heard there were policy clarifications in the ministries lately. Previously, the idea was simple: the goal was economic development. But now the goal is sustainable, inclusive economic growth. I'm afraid that the government has work to do to educate its staff and the public.
KSM: Cronies will see greater opportunity after the United States lifts sanctions. How should the government hold them accountable?
KMN: Previously, cronies who were close to the government enjoyed lucrative business concessions and there was only domestic competition. Now they will have to compete with foreign competitors. Foreign investors will consider norms regarding employees' rights, environmental friendliness, CSR, auditing, management and so on. There will be a lot of challenges in that regard. Burma has joined the AEC and while some have prepared for it, some haven't and some don't even know what AEC is.
After sanctions are lifted, we will have to compete with international companies. Can we compete? If we can't, how can we cooperate and are we ready to cooperate? We will have opportunities, but the benefits will depend on how capable we are of taking advantage of these opportunities. The government has already changed and [unlike the previous ones] it does not award contracts to those who are closely associated with it, but instead lets them compete. Businessmen used to pay under the table to win contracts because the government allowed them to do so. If the government does not allow it, they won't. If the government has changed, businessmen also have to change. If they can't, they will be left behind.
KSM: What will be the main challenge facing local businessmen in controlling the quality of their products if the generalized scheme of preferences (GSP) is granted by the United States?
MM: It involves technique and human resources. We have to try. If we don't try, we will be swallowed by them when they come in. For example, Max brand soft drink has been swallowed by Coca Cola now. Likewise, a toothpaste brand was swallowed by Colgate since it couldn't compete. We have to try to be able to work shoulder to shoulder with them, rather than being swallowed up by them. We have to do a lot to catch up with them both in terms of quality and capacity. Only when we exert greater efforts will we benefit.
KSM: The United States has promised to grant the GSP for about 5,000 items. How will this affect the country?
KMN: The garment industry is not included in the GSP and manufacturers say they won't be able to export as much as people expect, but we will be able to export more items at low duties. I'm concerned that we might face the same problem with the EU. The EU has granted us the GSP, but our exports do not meet its standards. If we are going to take advantage of the GSP, we need to make sure our production meet international norms.
MM: The GSP allows us to export 3,500 items and since we are a LDC [least developed country], we are allowed to export 1,500 items [duty-free], totaling 5,000 items. But one of the challenges is quality control regarding agricultural and fishery products. In the case of fruits, we have to be mindful of quality and packaging and in the case of fishery products, we need to take care of freezing techniques and packaging. We only have a few mass-produced export items. In the case of agricultural produce, we currently only buy from farmers for export. If we can establish firms and farm on a larger scale, like in foreign countries, we will benefit from the GSP.
KSM: U Myo Myint, U Khin Maung Nyo, thank you for your contribution.
The post Dateline Irrawaddy: 'We Can't Expect to See Results Overnight' appeared first on The Irrawaddy.
Posted: 23 Sep 2016 07:39 PM PDT
State Counselor to Meet Business People
State Counselor Daw Aung San Suu Kyi will meet members of the business community in Naypyidaw's MICC-2 building on September 28, according to Myo Myint Maung, deputy permanent secretary of the Ministry of Information.
The meeting follows the State Counselor's return from her recent visit to the United States, during which US President Barack Obama announced that American economic sanctions against Burma would soon be removed.
It is expected that Daw Aung San Suu Kyi will share her experiences in the US and convey messages and information from US business representatives at the Naypyidaw gathering.
Meanwhile, the new Myanmar Investment Law is also expected to be released in the coming week after it is discussed in Parliament.
Five Sectors Highlighted for Thai Investors
The most attractive sectors for Thai investors in Burma include infrastructure, information technology, agriculture and related processing, manufacturing and tourism, according to Thai business leaders quoted in a report in the Bangkok-based Nation newspaper this week.
A large number of infrastructure projects including roads, ports and postal services are being planned in Burma with the aid of foreign assistance, according to Nattawin Pongpetrarat of the Thai Business Association of Myanmar, speaking at a seminar hosted by the Bangkok Bank.
Due to poor road infrastructure and a shortage of skilled labor, many companies are investing hugely in information and communications technology (ICT), promising potential for e-commerce and online services, Nattawin said.
Agriculture is one of the top ten contributors to Burma's economy and there was demand for expertise from Thai companies in this sector, he added.
With more than 20 daily flights connecting Yangon International Airport and Thailand, tourism companies in the neighboring country should consider increasing excursion services for Myanmar-bound tourists, he said.
"Thai companies should capitalize on their expertise. If they combine this with local experience [local partners], they will prosper," said Nattawin, who has operated a furniture and garment business in Burma for more than 10 years.
"The Myanmar economy is very dynamic. Conditions change rapidly and it is necessary to have someone on the ground to point you in the right direction," he told the Thai audience.
Sanan Angubonkul, head of the Thai government's private-sector team tasked with boosting exports and overseas investment projects, advocated setting up manufacturing operations in Burma to supply the local market, as well export markets.
"The reinstatement of the United States' Generalized System of Preferences (GSP) tariff system for Myanmar will benefit exports," he said.
Sanan warned that losses were largely unavoidable for the first three years of a typical new business, but future prospects were bright, as "Myanmar is the darling of the world."
Structural Reforms Required to Unleash Banking Sector
A major shake-up of the banking sector is predicted in a new study released this week.
Burma's banking sector will expand eightfold in almost a decade, to around US$247 billion by 2025, according to an analysis titled Myanmar Banking Sector 2025: The Way Forward, by the Roland Berger consulting group. Around 120,000 jobs are also likely to be created, it says.
However, important obstacles remain to achieving these numbers, and local banks and smaller banks will face many challenges in the coming period, according to the study.
It identifies five vital structural reforms necessary for the banking sector.
First, an active interbank market that enables banks to lend to one another instead of going to the Central Bank for funds needs to be urgently developed.
"A vibrant interbank market with standard instruments will provide comfort to the banks in their ability to refinance their credit and facilitate the transmission of the Central Bank monetary policy. In short, it is the bedrock of any modern banking system," according to the report.
Second, banks and the regulator must foster access to credit through a range of regulatory adjustments and a change in lending practices, it says.
Third, the regulator should take many steps to improve current low trust in the overall banking system. Public disclosure obligations on banks should be strengthened, the report advocates.
Fourth, reform of state-owned banks must be expedited. The largest state-owned banks currently operate as commercial banks "without the required capabilities" and do not abide by the same sets of rules and regulations, the report says.
Lastly, shoring up the independence of the Central Bank and building its capacities will be critical to steer reforms, the report states.
Given the "massive" changes ahead, local banks will have to work hard to seize opportunities and overcome problems. Smaller banks will struggle even more.
"Size matters when it comes to banks, smaller ones may not survive what's to come," the report warns.
South Korea's Shinhan Bank Opens Branch
South Korea's Shinhan Bank opened an office in Rangoon's Myanmar Plaza building this week, mainly to provide services to South Korean companies in Burma.
The bank opened a representative office in the former capital in 2013 and won a preliminary license to operate six months ago.
Shinhan Bank is the only South Korean bank to receive a license to operate in Burma.
IFC to Double Burma Investment Portfolio
The International Finance Corporation (IFC), the investment arm of the World Bank, will nearly double its investment portfolio in Burma between now and the end of this year, according to a report in DealStreet Asia.
The current accumulated investment figure of $386 million will increase to around $600 million by the end of 2016, according to Vikram Kumar, the IFC's country manager in Burma.
Investments on the horizon include a $40 million loan for the combined-cycle gas turbine plant Myingyan by Sembcorp Utilities and MMID Utilities. The IFC is also set to invest in agriculture-related ventures as well as in a variety of other sectors, according to the report.
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