Electric sector tops FDI line-up as of May

Majority of foreign enterprises primarily pumped into the electricity sector in the past eight months of the current financial year, according to the statistics provided by the Directorate of Investment and Company Administration (DICA). The quantum of investment in power is higher than in any other sectors this year. Last month, Myanmar Investment Commission (MIC) permitted one large project from the UK with capitals of US$2.5 billion for the construction of a liquefied natural gas (LNG) power plant. The electricity generated by this project will be sold domestically and is expected to support the goal of cent per cent nationwide electricity from the national grid by 2030.

During the October-May period, FDI of over $3.758 billion, including expansion of capital and investments in the Special Economic Zones, has flowed into the country. MIC and the investment committees of states and regions gave green lights to 44 enterprises to invest in the country. Of 44 foreign enterprises permitted and endorsed by MIC and the respective investment committees between 1 October and 31 May of the current FY, 23 enterprises pumped FDI into the manufacturing sector with estimated capital of $254 million. Power sector received the largest FDI of $3.12 billion from six projects and livestock and fisheries sector attracted six projects worth $19.2 million.

Other service sector drew five projects (worth $103 million) while agriculture sector pulled two projects (worth $9 million) and one foreign enterprise each entered industrial estate with capital of $81 million and the hotel and tourism sectors bringing in capital of $28 million. Additionally, the existing enterprises raised capitals of $133.5 million in transport and communications sector and $8 million in real estate sector in May. MIC ensures to approve the responsible businesses by assessing environmental and social impacts. The commission is working together with the relevant departments to screen the projects. The Ministry of Investment and Foreign Economic Relations has been inviting responsible businesses to benefit the country.

Source: The Global New Light of Myanmar

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Trade deficit shrinks to $166.7 mln during over eight months

Myanmar’s trade gap has significantly narrowed to US$166.7 million between 1 October and 4 June of the current financial year 2020-2021 from just $1.24 billion registered in the corresponding period of the 2019-2020FY, according to data provided by the Ministry of Commerce. The trade deficit is attributed to the drastic drop in imports this year. Between 1 October and 4 June in the current FY, Myanmar’s external trade drastically plunged to $16.7 billion, up from $20.46 billion recorded in the year-ago period. While exports were estimated at $10.14 billion, imports were valued relatively high at $10.3 billion this FY.

Compared to the FY 2019-2020, exports showed a drop of over $2.2 billion, while imports fell by $3.39 billion. Myanmar witnessed a slump in exports and imports triggered by the coronavirus impacts. Both maritime and border trade routes dropped amid the coronavirus impacts and political changes. The neighbouring countries tightened the border security and restricted the trading in certain border areas. For maritime trade, disruption in logistic sector, spikes in container rates and banking restriction dragged down the trade. Myanmar exports agricultural products, animal products, minerals, forest products, and finished industrial goods, while it imports capital goods, raw industrial materials, and consumer goods.

The country’s export sector relies much on the agricultural and manufacturing sectors. The Ministry of Commerce is trying to reduce the trade deficit by screening luxury import items and boosting exports. The country mainly imports essential goods, construction materials, capital goods, hygienic materials and supporting products for export promotion and the import substitution. Myanmar’s trade deficit was pegged at $1.3 billion in the 2019-2020 FY, $1.14 billion in the 2018-2019 FY, $1.3 billion in the previous mini-budget period (April-September, 2018), $3.9 billion in the 2017-2018 FY, $5.3 billion in the 2016-2017 FY, and $5.4 billion in the 2015-2016 FY, according to the statistics released by the Central Statistical Organization.

Source: The Global New Light of Myanmar

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Individual trades through land border exceed K18.3 bln in eight months

Trade conducted by Individual Trading Card (ITC) holders reached over K18.3 billion through the land border in the past eight months of the current financial year 2020-2021, according to data released by the Ministry of Commerce. The Trade Department issued 149 cards in Oct-May period this FY. Imports exceeded over K15 billion, whereas exports were valued at just K3.29 billion. The Myawady border trade zone recorded the highest trade value at K11 billion, according to the Commerce Ministry. Nevertheless, the figure only reflected imports as individual trading card holders did not export goods through the Myawady gate. The value of trade engaged by individual trade card holders stood at K144 million at Tamu post, K116 million at Tachilek, K1.6 billion at Kawthoung, K5.3 billion at Mawtaung and K31 million at Kengtung, as per data from the Commerce Ministry.

At present, individual traders are no longer permitted to import the soap, detergent powder and toothpaste through border trade route with the Individual Trading Card (IRC) starting from 4 June 2020, with a view to safeguarding the interests of local SMEs and helping them survive in a highly competitive market. Nevertheless, the restriction does not impact on the regular traders with import/export licence. Additionally, Myanmar’s Trade Department under the Ministry of Commerce notified that four food commodities are to be temporarily restricted for import via Myanmar-Thailand border starting from 1 May, Myawady Trade Zone reported.

The restricted items include various beverages, coffee mix and tea mix, instant coffee, and condensed milk and evaporated milk. However, they can be imported through maritime trade. Individual trades topped K737 million in the period from 21 November 2012 to 31 March 2013; exceeded K6.6 billion in the FY 2013-2014; reached K9.37 billion in the FY 2014-2015; stood at over K6.4 billion in the FY 2015-2016; rose above K18.5 billion in the FY 2016-2017; touched K45.9 billion in the FY 2017-2018; K22.5 billion during the 2018 mini-budget period (April-September); K59 billion in the FY 2018-2019 and drastically plunged to K43.32 billion in the FY 2019-2020.

The individual traders who cannot establish their own company can carry out trading with the ITC in the border area. However, trading volume is limited. The card validity is set only one year and the card holders need to renew the cards at the respective border gates one month before expiry date. Trading with the use of ITC is based on local currency. Hundreds of exports and imports items have been allowed for individual trading via the border gates. The traders can seek the ITC at the offices of Tamu, Muse, Myawady, Tachilek, Lwejel, Sittway, Maungtaw, Chinshwehaw, Kanpiketee, Myeik, Kawthoung, Reed, Thantlang, Mawtaung, Htikhee, Kenglek, Meisei and export/import offices in Mandalay, Kengtung and Myitkyina. Businessmen can trade goods worth K3 million per day using ITCs, and the Trade Department has permitted trade of up to K15 million per day over five days.

Source: The Global New Light of Myanmar