«Economic Policies The Myanmar government approved the principles of an agreement to allow state and regional governments more freedom to approve ...»
News Review of Myanmar Economic Highlights 2015
The Myanmar government approved the principles of an agreement to allow state and regional
governments more freedom to approve foreign investments of up to 10 million USD and 5 billion
Kyats for local investors, without having to seek approval from the union government, starting from 1
The Central Bank of Myanmar issued an announcement on 27 May, allowing domestic currency
exchange centers to exchange kyat for two more foreign currencies: Malaysian Ringgit and Thai Baht. The announcement states that domestic currency exchange centers can now exchange Myanmar currency not only with US dollars, Singapore dollars, and Euros, but also with Thai Baht and Malaysian Ringgit.
Two years of negotiations culminated with the Myanmar government’s approval of a 3,600 kyat (US$2.80) minimum wage for all sectors, which was implemented in September 2015. The wage is considered low for the region, but marks a significant increase for many workers. It was welcomed by labor unions and factory owners alike, with the exception of the nation’s budding garment industry.
The new car import rules for 2016, issued by the Road Transport Administration Department, will oblige a wide range of importers, including nearly all government staff, to import only left-hand drive models.
References: http://www.mmbiztoday.com/articles/state-regional-authorities-given-more-say-approving-foreigninvestments, http://www.mizzima.com/business-domestic/central-bank-allows-exchange-counters-exchangekyat-two-more-foreign-currencies, http://www.irrawaddy.org/business/government-approves-2-80-minimumwage.html, http://www.mmtimes.com/index.php/business/18287-rtad-rules-out-right-hand-drives.html ********************************************* Oil & Gas Sector Between April and July 2015, there were massive inflows of foreign investment into the oil, gas and manufacturing sectors, according to the Directorate of Investment and Companies Administration.
Investment has exceeded US$2.6 billion: US$383 million in the manufacturing sector; US$2 billion in oil and gas; US$120 million in transport and communication; US$50 million in hotels and tourism; and US$46 million in other services. Australia, Brunei, China, Hong Kong, India, Indonesia, Japan, Malaysia, South Korea, Singapore, Thailand, the Netherlands, the UK, Vietnam, Qatar and South Africa invested in the oil and gas, energy, manufacturing, transport and communication, mining, hotels and tourism, real estate, agricultural, livestock, fisheries and services sectors. Investment in the oil and gas sector is the largest, and includes 151 domestic businesses.
Myanmar produced 24.7 million barrels of petroleum and 2,085.57 million cubic feet of natural gas between 2011 and 2015, from both onshore and offshore projects. Production has increased over the past five years to cope with rising energy consumption, from 15.292 million tonnes of oil in fiscal year 2013, to 17.445 million tonnes of oil in 2014. “The average energy consumption per person reached
0.3388 tons in [fiscal year] 2014 based on a population of 51.49 million,” said a Ministry of Energy official.
Woodside Myanmar, an Australian firm, has interests in six different offshore areas, known as blocks, along Myanmar’s west coast. The firm made a discovery at the Shwe Yee Htun 1 exploration well in block A-6, in which it holds a 40 percent (pc) interest. Myanmar firm MPRL E&P has a 20pc interest in block A-6 and Total another 40pc. Woodside Myanmar is solely responsible for the drilling.
The firm found a gas column of approximately 129 metres, with approximately 15 metres of “net gas pay”.
References: http://www.elevenmyanmar.com/business/oil-and-gas-tops-investmentlist, http://www.mmtimes.com/index.php/business/17287-government-reveals-energy-productionfigures.html, http://www.mmtimes.com/index.php/business/18332-woodside-discovers-offshore-gasdeposit.html ******************************************************* Hotel and Tourism One of the most significant milestones for Max Myanmar Group, and also for the booming hotel and tourism industry of Myanmar, is the new Novotel Yangon Max five star hotel, fully owned by a Myanmar entrepreneur. The hotel was opened on 3 April 2015 on Pyay Road, Yangon.
Myeik - Many Thai people are visiting the Singkhon special border checkpoint after Thailand upgraded the border checkpoint in Prachaup Khiri Khan on 23 May. Thailand allows a two-day one-night stay for Myanmar citizens while Thai citizens are allowed to stay in Myeik for 14 days. The number of Myanmar visitors has increased sharply since the border checkpoint upgrade. From June 1 to 14, a total of 2,261 Myanmar citizens - 1,093 with border pass and 1,168 with temporary border pass visited Thailand. In May, the number of Myanmar citizens reached 4,127: 1,552 with border pass and 2,575 with temporary border pass.” About 500,000 tourists visited the Mandalay region in 2015, up 37.5 percent compared to 2014, according to the Ministry of Hotels and Tourism. However, there are not enough hotels in the Mandalay region to accommodate the projected 500,000 tourists. At present, there are 144 hotels, motels and guest houses, with 5,946 rooms in the Mandalay region, and more hotels are needed. An official from the Ministry of Hotels and Tourism stated, “the number of rooms are not sufficient if the projection is 500,000. We will need more than 7,000 rooms to accommodate that figure. Hoteliers are planning to construct more hotels here.” According to an announcement by the ministry, there will be 156 hotels, motels and guest houses, and 6,345 rooms by the end of 2015. A total of 313,655 tourists visited the Mandalay region in 2014, and 219,518 visited in 2013. Most tourists were from Thailand, China, Germany and France, according to official data.
Wyndham Hotel Group announced plans on 2 September to expand its portfolio of offerings in Southeast Asia to Myanmar for the first time, with the signing of a franchise agreement for a 260 room Wyndham Grand hotel in Yangon.
The Ministry of Hotels and Tourism announced that Singapore ranks first among foreign countries investing in Myanmar’s hotel and business complexes, with Vietnam a distant second.
The Myanmar Investment Commission has allowed 48 hotels – with a total of 7,058 rooms – to open in Myanmar. Foreign investment in these hotels has reached K655 billion by the end of November 2015, according to data from the Ministry of Hotels and Tourism.
As the travel and tour industry develops in Myanmar, there’s the prospect of rapid job growth in the near future. The Myanmar Tourism Federation (MTF) has drafted a master plan to create 2 million job opportunities by 2020. According to MTF statistics, the industry now has about 1 million people employed in tourism in direct and indirect businesses. An important issue is the scarcity of skilled workers in the country, MTF officials said. An estimated 4.5 million tourists visited Myanmar in 2015, and the industry has a target of 7 million tourists by 2020.
References: http://www.maxmyanmargroup.com/index.php/news-room/news-release/183-new-five-starnovotel-yangon-max-opens, http://elevenmyanmar.com/tourism/myeik-sees-more-visitors-after-bordercheckpoint-upgrade, http://www.mmbiztoday.com/articles/more-mandalay-tourists-expected-accommodationoptions-scarce, http://www.mizzima.com/business-domestic/wyndham-hotel-group-expands-asia-presence-firstproperty-myanmar, http://www.mmtimes.com/index.php/business/18243-singapore-tops-hotel-investmentlist.html, http://www.mizzima.com/business-domestic/two-million-job-opportunities-seen-tourism-2020
Yangon became more expensive for expats compared to Paris, Sydney and Abu Dhabi, according to Mercer's annual Cost of Living Survey.
Yangon, the only Myanmar city among the 207 that were surveyed, climbed 38 places from 66 th overall in 2014 to 28th in 2015.
Yangon will need around 75,000 new apartments to be built each year to accommodate the city’s growing population, as more than 330,000 people migrate to Yangon each year. Yangon city has a population of 5.14 million, which increases by 6.6 percent each year.
The average population density for Yangon reached about 16,000 people per square mile. Most people live in downtown areas. Sanchaung, Kyimyintaing and Kamaryut townships are the downtown areas with more than 100,000 per square mile. The least dense townships in Yangon are South Dagon, North Dagon and Dagon Seikkan townships: each with around 5,000 people per square mile. Yangon has approximately 5.5 million inhabitants and covers 340 square miles.
The price for land in Myanmar is the highest among developing countries: one square metre of land in Myanmar costs 605 USD on average, which is one of the highest rates among developing countries. One square metre of land ranges between 200- 300 USD in other developing countries, such as Pakistan, Bangladesh and Indonesia, but Myanmar real estate is still a huge component of Myanmar’s Investment Sector.
Zaykabar launched the Pyay Garden Office Tower for rent. The nine storey project includes security, Wi Fi, car parking space, automatic fire sprinkler and smoke detector systems. It was built on
2.19 acres and features 27 offices of different sizes. Average monthly rent is between USD 5,000 and 6,000. The smallest offices are priced at USD 2,787 per month, rising to USD 47,750 per month for a 7339-square-foot office on the building’s top floor.
A new commercial centre has opened in Yangon: one peg of a Vietnam-backed construction project that will eventually encompass a five-star hotel and five blocks of residential housing. Myanmar Plaza – part of the HAGL Myanmar Centre on Kabar Aye Pagoda Road – opened for business on 5 December. The HAGL Myanmar Centre is owned by Vietnam’s Hoang Anh Gia Lai, and the entire project was valued at US $550 million. The new plaza spans five floors and houses more than 100 retail locations with nearly one third of them offering food, local and international beauty and fashion shops.
References: http://www.mmtimes.com/index.php/business/15093-yangon-more-expensive-for-expats-thanparis-sydney-or-abu-dhabi.html, http://www.mmtimes.com/index.php/business/property-news/16924-yangonneeds-75-000-new-apartments-each-year.html, http://elevenmyanmar.com/business/myanmar-land-priceshighest-among-developing-countries, http://www.mmtimes.com/index.php/business/17178-zaykabar-launchespyay-garden-office-tower-for-rent.html, http://www.mmbiztoday.com/articles/mandalay-s-property-marketimmature-set-rise-report, http://elevenmyanmar.com/local/average-population-density-yangon-reaches-16000square-mile, http://www.mmtimes.com/index.php/business/17998-myanmar-plaza-open-for-business.html Bank Sector On 1 October 2014, the Central Bank of Myanmar granted a provisional license to nine successful bidders and
specified that they would be allowed to open only one branch. The nine successful bidders were:
1) The Bank of Tokyo Mitsubishi UFJ (BTMU)
2) Sumitomo Mitsui Banking Corporation
3) Mizuho Bank
4) Industrial and Commerce Bank of China (ICBC)
5) Australia and Zealand Banking Group Limited (ANZ Bank)
6) Bangkok Bank
7) Malayan Banking Bhd (May Bank)
8) United Overseas Bank (UOB) Oversea-Chinese Banking Corporation (OCBC) Bank 9) Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ, and OCBC were the first 3 foreign banks to open their branch offices in Myanmar. Japan's Mizuho Bank also opened its Yangon branch office at Sedona Hotel, with 100 million USD in initial paid up capital: 25 million USD more than the minimum required by the Central Bank of Myanmar.
The largest Bank in Thailand, Bangkok Bank, opened its Yangon branch office with a paid-up capital of 200 million USD. The branch is located on Kabar Aye Pagoda Road near Yangon’s Sedona Hotel. On 1 October 2015, Malaysia's Maybank began operations at its Yangon branch office. Maybank is the only bank in the world with branch offices in all ten ASEAN member states, with total assets of 640 billion ringgit (US$166 billion) and a market capitalisation of 85.5 billion ringgit. The Australia and New Zealand (ANZ) Banking Group received a branch licence, and became the last of nine foreign banks to operate in Myanmar.
The Asian Development Bank (ADB) approved a 60 million USD loan to improve the urban environment, and to boost public health through better water management in Mandalay. The aim is to further develop the historic city as a cultural, educational and economic hub of northern Myanmar.
ADB also approved a 100 million USD loan to improve a 66.4 Kilometre section of road in Kayin State connecting Eindu with Kawkareik, which is the missing link of the East-West Economic corridor.
The Central Bank of Myanmar will initiate a second round of foreign licensing in early 2016. The aim is to license banks from “additional neighboring countries and important trading partners”, and “the main object of the second round of licensing is to further promote existing economic cooperation.” Foreign banks headquartered in countries that successfully obtained a licence in the first round, namely Australia, China, Japan, Malaysia, Singapore and Thailand – will not be allowed to participate in the second round.