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Transport, communications sector tops FDI line-up in incumbent government period

Under the Myanmar Investment Law, transport and communications sector tops the foreign investment line-up over the four years of incumbent government period, bringing in the capital of US$6.135 billion, according to the Directorate of Investment and Company Administration (DICA). The quantum of investment in transport and communications sector is higher than in any other sectors, attracting 29 enterprises. Between the 2016-2017 and 2019-2020 budget years, the manufacturing sector has absorbed FDI of $6.13 billion from 706 projects.

Real estate sector has attracted $3.6 billion from 29 projects. The power sector has drawn 19 foreign investment projects worth $3.17 billion. Twenty-four projects worth $725.9 million has been approved in the hotels and tourism sector, while the existing enterprises increased the investments of $363 million in the oil and gas sector. The livestock and fisheries sector has pulled in an investment of $452.68 million from 36 foreign enterprises. The agricultural sector has also attracted $181.98 million from 18 foreign projects, while industrial estate sector received $390.459 million from five enterprises. The mining sector has received over $11 million from existing enterprises. Over $2.63 billion in FDI has been pumped into the other services sector from 106 businesses.

The Myanmar Investment Commission (MIC) and the respective investment committees granted permits and endorsements to 1,032 foreign enterprises over the past four years, with estimated capitals of $25.18 billion. Of them, Thilawa Special Economic Zone attracted investments worth $1.36 billion from 60 enterprises under the Special Economic Zone Law in the past four years, while FDI of $23.8 billion flowed into the country under the Myanmar Investment Law, the DICA’s data showed. Of 36 foreign countries investing in Myanmar in the past four years, Singapore put the most massive investments under Myanmar Investment Law, followed by China and Hong Kong (SAR).

MIC is prioritizing the labour-intensive businesses. In the incumbent government period, domestic and foreign projects employ over 670,000 residents, according to the DICA. Those enterprises have created over 96,000 jobs in the FY2016-2017, 110,000 jobs in the FY2017-2018, over 53,000 jobs in the 2018 mini-budget period, over 180,000 jobs in the FY2018-2019 and 210,000 jobs in the FY2019-2020 respectively. 

Source: The Global New Light of Myanmar

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Myanmar trade deficit with China estimated at $1.3 bln last FY

Myanmar trade deficit in goods with China was estimated at US$1.3 billion in the 11 months of the last financial year (Oct-Aug), the data released by the Ministry of Commerce indicated. The value of Myanmar’s bilateral trade with China in average trade and border trade topped $11.19 billion as of August in the past FY. The MoC reported that imports surpassed exports in trade with China, with exports reaching over $4.9 billion and imports valued at over $6.246 billion. This year, China has been stepping up border control measures to contain the spread of the Covid-19, causing traffic congestion in the border areas of two sides.

Next, the value of Myanmar’s bilateral trade with the neighbouring country China through maritime trade and border trade has registered approximately at US$46.247 billion in the incumbent government period, the statistics issued by the Central Statistical Organization under the Ministry of Planning, Finance and Industry indicated. The ministry reported that the imports outperformed the exports in trade with China over the past four years, with exports reaching over $21.363 billion and imports valued at over $24.8 billion. Between 2016-2017FY and 2019-2020 (as of August), China has been Myanmar’s largest trade partner beyond the regional states. Myanmar primarily exports rice, various types of peas, sesame seeds, corn, fruits and vegetables, dried tea leaves, fishery products, rubber, gem and animal products to China.

In contrast, machinery, plastic raw materials, CMP raw materials, consumer products and electronic tools flow into Myanmar. Myanmar mainly exports agricultural products to China through the border trade, which is often halted, on account of China clamping down on illegal goods. Myanmar merchants are facing difficulties in exporting goods to China through the legitimate channel as they find the tax levied by China is too high. In a bid to lower trade barriers and offer relief to Myanmar traders through the border trade channel, the Ministry of Commerce, the relevant departments and Union of Myanmar Federation of Chambers of Commerce and Industry have been negotiating with China counterparts.

Illegal trade is highly witnessed between Myanmar and China borders in the previous years. This year, traders sent the goods via legitimate trade route, and trading volume sharply fell, according to the Myanmar Rice Federation. The two countries are making efforts to set up more border economic cooperation zones and promote border trade. Myanmar’s Ministry of Commerce is trying to boost exports of rice, broken rice, agro-products, fruits and fisheries to China through diplomatic negotiations. Myanmar is carrying out border trade with the neighbouring country China through Muse, Lweje, Chinshwehaw, Kampaiti and Kengtung. 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.

Source: The Global New Light of Myanmar

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Myanmar regulatory body asks microlenders to suspend two-month loan repayment until April 2021

Microfinance Supervisory Committee has asked the microfinance institutions (MIs) not to collect the loan repayments from borrowers in November and December, and that two-month repayment amount will be suspended until April 2021. However, the borrowers from COVID-19 stricken Yangon and Bago regions and Rakhine State are entitled to this relaxation only, according to the decision of the Central Committee on Prevention, Control and Treatment of COVID-19 meeting held on 23 October 2020.

The committee stated that the lenders are asked not to collect the interest rate during the suspension time and the repayment to be made between May and October 2021 in instalment. The State-owned Myanma Economic Bank will give loan (equals to two-month repayment amount of the borrowers) to the MIs, with zero interest rate instead. Otherwise, the government pay the loan repayment to the MIs on behalf of those borrowers. It is one -year grace period. The MIs must collect the loan in the second half (six months) from their borrowers and repay the government’s loan. The MIs are experiencing difficulties in collecting the loans from borrowers hit hard by the COVID-19 during the coronavirus crisis. The committee also notified that the MIs not to collect the loan repayments from borrowers by force.

In 2011, the Microfinance Law was enacted to promote rural development, and the MIs play a pivotal role in financing firms for rural people. MIs can help support Myanmar’s small businesses as SMEs constitute 90 per cent of companies in Myanmar and plays a crucial role in creating jobs.
There are 4.6 million borrowers from the microfinance institutions across the country. Additionally, the government is providing the loan from the COVID-19 funds to ease the economic burden faced by the virus-stricken businesses.

Source: The Global New Light of Myanmar