Title: Views From Our Neighbours
Date: 1 October 2020, 4:00 PM
Speaker:
Moderator: U Moe Kyaw ( CEC, UMFCCI)
Contact address: pr@umfcci.com.mm
Organizer: UMFCCI
The Japan International Cooperation Agency (JICA) will disburse ¥15 billion (K190 billion) in funds under an emergency two-step loan program to help small and medium size enterprise (SMEs) in Myanmar, said JICA loan project director at the Myanmar Economic Bank. This is also the third tranche of funds distributed under the program. They are preparing to approve phase 3 of the loan agreement with JICA.
JICA’s loan has a term of 40 years at an interest rate of 0.01 percent. The funds will be distributed to state-owned and local banks, which the repackage the funds into individual loans to borrowers. Under phase 1 the program, a total of K99 billion was distributed in 2018 via 10 local banks in 2018. Phase 3 was approved by parliament in August. A borrower is allowed a maximum loan of K500 million at an interest rate of 5.5pc if there is sufficient insurance coverage, or between 6pc-10pc with lower or no insurance coverage.
The loans are repayable to the banks in five years. In the past, 80pc of the loan amount had to be allocated for fixed capital purposes, while the remaining 20pc was for working capital. Due to the current COVID-19 circumstances though, borrowers are allowed to use the latest tranche of loans solely for working capital purposes. New businesses which are less than a year old and businesses with lower income levels are free to apply for the loans.
Source: Myanmar Times
The value of Myanmar’s bilateral trade with neighbouring country Thailand in regular trading and border trade was estimated at US$18.865 billion in the past four financial years, the statistics issued by the Central Statistical Organization under the Ministry of Planning, Finance and Industry indicated. The ministry reported that exports surpassed imports in trade with Thailand in the past four years, with exports reaching over $10.73 billion and imports valued at over $8.13 billion. Between 2016-2017FY and 2019-2020 (as of August), Thailand has been Myanmar’s largest trade partner among the ASEAN states, followed by Singapore and Malaysia. Thailand accounted for 18.48 pc of total trade in 2016-2017FY with an estimated trade value of US$4.6 billion, 19.17 pc in 2017-2018FY with a trade value of $5.57 billion, 40.38pc in 2018-2019FY with $5.46 billion and 39.55pc in 2019-2020FY (Oct-April) with $3.15 billion respectively.
Exports of natural gas from Taninthayi Region has contributed to the enormous increase in border trade with Thailand in the previous year. This year, corn exports to Thailand rose significantly compared with the earlier years, the Ministry of Commerce stated. Myanmar primarily exports natural gas, fishery products, coal, tin concentrate (SN 71.58 per cent), coconut (fresh and dry), beans, corns, bamboo shoots, sesame seeds, garment, footwear, plywood and veneer, broken rice and other commodities to Thailand. It imports capital goods such as machinery, raw industrial goods such as cement and fertilizers, and consumer goods such as cosmetics, edible vegetable oil and food products from the neighbouring country. The surge in coronavirus cases in Myanmar led Thailand to close its border area in Maesai recently.
Only six trucks are now allowed on Tachilek-Maesai bridge per day after negotiations of the two countries, the Union of Myanmar Federation of Chambers of Commerce and Industry released the news on 16 September 2020. Besides Tachilek, Myanmar is carrying out border trade with the neighbouring country Thailand through Myawady, Myeik, Mawtaung, Hteekhee, Kawthoung and Maese border areas respectively. Among them, Hteekhee performed the most extensive trade in border trade with Thailand, followed by Myawady. Apart from its leading trade partner China, Myanmar’s external trade was mostly carried out with the regional trade partners. Trade with countries in the European Union, however, remained uncompetitive, compared with regional trade partners.
Source: The Global New Light of Myanmar
Domestic investments by Myanmar citizens approved by the region and state investment committees have reached K184.9 billion and US$32.195 million over the past 11 months of the 2019-2020 financial year since October, according to the statistics released by the Directorate of Investment and Company Administration (DICA). Between 1 October and 4 September in the current FY, the relevant region and state investment committees gave the green light to 67 local enterprises to invest in various sectors.
As of 4 September, Ayeyawady Region Investment Committee cleared 13 businesses, allowing an estimated capital of US$3.428 million and K41.26 billion, while Yangon Region Investment Committee gave the go-ahead to 12 enterprises with $5.886 million and K26 billion, Taninthayi to 10 projects with $10.5 million and K40.48 billion, Sagaing to eight enterprises with $2.344 million and K12 billion, Mon to five businesses with $4.328 million and K13.6 billion, Kayah to four enterprises with K8.2 billion, Mandalay to three enterprises with $2.957 million and K12.14 billion, Nay Pyi Taw Council to two businesses with $1.634 million and K6.147 billion, Chin to two enterprises with $0.17 million and K2.535 billion, Bago to two enterprises with K5.265 billion, Shan to two projects with K5.67 billion, Kayin to one enterprise with $0.7 million and K5.6 billion, Magway Region to one with $0.042 million and K2.5 billion, Rakhine to one with $0.192 million and K2.499 billion, Kachin to one with K965 million respectively.
The domestic investments are flowing into the executing manufacturing, hotels and tourism, other services, electricity, agriculture, real estate development and mining sectors. Of them, manufacturing sector pulls the most massive investments, followed by hotel and tourism and other service sectors. To simplify the verification of investment projects, the Myanmar Investment Law allows the region and state Investment Committees to endorse local and foreign proposals, where the initial investment does not exceed K6 billion, or $5 million.
While some projects no longer need MIC approval, businesses that are strategic to the government require the permit from the commission. Besides, those businesses that have large capital investments exceeding $5 million and that may have a possible impact on the environment and the local community need to be approved by the DICA’s proposal assessment team and the relevant ministries. With a fast-track way to set up a business in Myanmar having been introduced, investors can apply to the MIC or the state and regional Investment Committees to get their investment proposals endorsed, depending on the business type.
Source: The Global New Light of Myanmar