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Virtual Workshop on Electricity Markets in Transition: Privatization, Competition, and Regional Cooperation

by EVENT

Date: 4 – 5 November 2020 , 12:20P.M – 4:00 P.M

Summary

The liberalization of the global electricity sector has subjected electricity markets to varying levels of competition and regulation. Growing demand for electricity and investment in the sector in Asia and the Pacific is prompting the region’s developing economies to strengthen their energy reform agendas while taking into account the need to raise the share of renewable energy in electricity generation.

This ADBI virtual workshop will feature new research on the liberalization of the global electricity sector, resulting variations in competition and regulation, and energy reform outlook for developing Asia and the Pacific. Among the focuses will include effective policy development, raising renewable energy share in electricity generation, and prospects for greater regional cooperation within the sector.

Objectives
  • Explore electricity reform experiences and lessons learned
  • Guide electricity sector planning and design for developing economies in Asia and the Pacific and beyond
Participants
  • Policy makers and experts from think tanks, universities, and other institutions, as well as post-graduate students
Output
  • Enhanced understanding of recent electricity market reforms
  • Impetus for greater policy dialogue and research on electricity markets and increasing renewable energy share in electricity generation
  • Presentation slides to be made publicly available on the ADBI website
  • Papers presented during the workshop will be considered for publication as ADBI working papers and possible inclusion in a journal special issue

Host: Asian Development Bank Institute – ADBI

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Myanmar traders suffer loss as China suspends marine products imports

by TRADING

CHINA halted fisheries products imports through Muse land border effective 15 October, causing losses for Myanmar traders, industry sources
said. Myanmar traders export the frozen fish and live fish, crab, eel, long-finned eel and other fisheries products to China through Muse land
border. During the last financial year ending on September 30, a total of 128,067 tonnes of fisheries products, w3ith a total value of US$170.735 million, were exported through Muse. In the FY2018-2019, the figures stood at $128.429 million with 102,018 tonnes. Therefore, the export value saw an increase of $42.306 million, and the volume was up by over 26,048 tonnes in the past FY.

Ribbonfish, Katla, white pomfret, silver pomfret, yellow pike conger, white croaker, soldier croaker, yellow croaker, Ilish, loach, mackerel and pufferfish, and pink, white, Vannamei and Tigers prawn, dried shrimp, squid and salted fish are exported to China. Myanmar’s fish exports to China in June-August dropped. It was attributed to the fights in the Shan State during August and fishing banned season. During the early outbreak of COVID-19, trade flow was steady. During the exemption period of advanced income tax on exports, the export amount increased. At present, the export volume of live crab dropped by $5.966 million worth over 1,875 tonnes, and the export volume of live eel plunged by $6.929 million worth 1,735 tonnes compared to a year-ago period. However, the country saw an increase of 24.791 million (8,617 tonnes) in fish exports, $4.537 million (919.68 tonnes) in prawn exports, and $25.494 million (20,059 tonnes) in other fishery products exports against last year, data of the Fisheries Department (Muse) showed.

The suspension in fishery export does not concern with Chinese authorities. The trade is temporarily halted among the traders of China. Prawns exported to foreign countries, of which more than 4,000 tonnes of prawns are sent to the Japanese market. They notified the local traders of trade suspension in advance. On 5 October, China stopped frozen fish purchase and so did the crab and eel on 16 October. Only dried fish and prawn are flowing into China through its Mang Weing border. Chinese traders have not informed when they will be back into the business. The eels are stockpiled at the depot. Some even experience capital loss. Some local traders also stopped buying the eel. The trade will return to normal once trade with China is opened. For the time being, traders are facing loss. The eel fetched only K3,000-3,500 per vises (1.6 kg). The market primarily depends on China. The trade suspension in China side harms both the traders and those harvesting eel and shrimp. The local traders can only wait for the reopening of trade in China.

Source: The Global New Light of Myanmar

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Second review of Myanmar’s investment policy conducted

by INVESTMENT

The Ministry of Investment and Foreign Economic Relations (MIFER) has conducted a review of Myanmar’s investment policy with the aim of restructuring and creating an attractive environment for local and foreign investors. The review, conducted with the help of the Organization of Economic Co-operation and Development (OECD), focused on infrastructure connectivity, building a green development investment framework, improving land use rights and enhancing the role of the economic zones, according to the MIFER. The outcome of the review, which is the second conducted in six years, will be released this month.

Although substantial progress has been made on the investment front since the first review in 2014, the reform momentum needs to be deepened for new investments to be viable and growth to be sustainable. This second review takes stock of Myanmar’s recent achievements and assesses the remaining challenges in attracting new investments with a view of enabling a responsible business environment and ensuring the benefits are shared with society. It places a strong emphasis on haw foreign investments can help Myanmar achieve the Sustainable Development Goals and improve the lives of the people of Myanmar, the OECD said.

The MIFER will seek to develop more Special Economic Zones and new industrial zones in strategic areas and sectors, and partnership with reputable, internationally experienced developers. Also, they will aim to modernize and expand fiscal incentives on offer under a revised Myanmar Investment Law and through a revised Myanmar Investment Promotion Plan. The OECD released the first Myanmar Investment Policy Review in 21014, as a result of which the Myanmar Investment Law and the Myanmar Companies Law were enacted to support and regulate further investments in the country. The first investment policy review included financial sector reform, investment promotion and facilitation, infrastructure development and responsible business practices.

Source: Myanmar Times

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

by INVESTMENT

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

by TRADING

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

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

by ECONOMY

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

Future prospects for Yangon Stock Exchange (YSX)

by ECONOMY

Yangon used to be busy and have a lot of people everywhere, but now number of vehicles and people has become smaller and smaller due to the ongoing Covid-19 crisis. The number of those who are staying at home has been gradually increasing as they curb possible contacts in their daily relationship. At such a time, much of the work is shifted to online. In the financial market, the trading on Yangon Stock Exchange is moving more sluggishly than normal. The value traded on YSX by normal trading system during August reached K747.5 million worth of 118,850 shares. The value traded on YSX by block trading system reached K197.45 million worth of 54,874 shares. The total value traded on YSX during August touched K944.95 million and the value traded daily was around K47 million, cited for the announcement of the YSX.

The YSX’s trading decreased by about 5% when it was compared to July this year. As a new development step, the YSX allowed the foreigners and external organizations to buy shares of YSX listed companies starting on 20 March in 2020. It was learnt that the foreigners and external organizations bought more than 53,200 shares from YSX listed companies during five months following the official announcement of the YSX. The official statistics recorded on 9 September indicated that the foreigners and external organizations bought 9,606 shares from FMI, 37,974 shares from MTSH, 5,465 shares from Ever Flow River Group Public Co., Ltd and 200 shares from TMH Telecom Public Co., Ltd. The YSX allowed foreign investors and organizations to participate in the share trading with the purpose of picking up stock share trading speed among YSX listed companies. The foreigners have to open designated bank accounts and trade in stock shares. It is already informed by Securities and Exchange Commission under the Ministry of Planning, Finance and Industry. The foreigners living inside the country and those from foreign countries are allowed trading in stock shares of YSX listed companies.

In a bid to extend YSX share trading into the international community, regulatory procedures have to be observed as Myanmar instructed. If the return on the investment is wanted to be sent to the relevant foreign country, the foreign listed company will have to be under supervision by the Central Bank of Myanmar following rules and regulations as well as directives issued by the Central Bank of Myanmar besides the provisions of Foreign Exchange Management Law. It is aimed at ensuring a systematic financial flow when the YSX carries out share trading. Only then can errors be reduced at a time when financial matters are being carried out and stock shares are being traded in. The global pandemic of Covid-19 slowed down the favourable prospects for economic growth and local and foreign investments in Myanmar.

Businesses and investments are moving to the countries having better economic potentials in the future right now when there has been an increase in the number of business contacts. The YSX is one of the interesting businesses of international investors. There is also a plan to change State-owned businesses into YSX listed companies in order to attract the attention of local and foreign investors in the YSX running with slow share trading. It is to intend local and foreign investors to pay more attention to share trading among the strong businesses.

The international investors have shown great interest in doing business in Myanmar. The foreign investment volume reached USD5.2 billion during 2019-2020 financial years reported by Myanmar Investment Commission. The MIC has so far allowed more than 330 new foreign investments. The foreign investment volume the MIC expected for this financial year is USD5.8 billion. According to investment promotion project of the State, foreign investment volume has been expected to be USD5.8 billion by the MIC year on year until 2020-2021FY. Moreover, foreign investment volume has been expected to be USD5.8 billion from 2021-2022 to 2025-2026FY as well. With such expectations, investment volume will increase and businesses will develop. At the same time financial flow will be smooth and secure and then the YSX’s share trading will make progress.

The YSX started on 25 March in 2016 has been in operation for more than four years. The FMI, the MTSH and the Myanmar Citizens Bank and the First Private Bank became YSX listed companies within one year of its birth. The share volume among these four listed companies reached 3.6 million and was valued at K800 billion within one year. At such a time, the YSX is planning to invite the public to the share trading encouraging profitable State-owned businesses to participate in the stock exchange. This move will be able to make the share price go down, thereby revitalizing slow-running YSX livelier than now. A Japanese company named Daiwa Securities suggested that Myanmar government should privatize State-owned businesses and encourage them to participate in the YSX.

The share volume in the hands of YSX listed companies reached more than 300,000 with 33,000 people opened bank accounts. The share trading is now running slow affected by the Covid-19 pandemic, but share prices are not expected to be going down too much. The FMI stood at K9,900 on closing market price chart, the MTSH at K3,700, the MCB at K8,000, the FPB at K22,500, the TMH at K2,700 and the EFR at K3,050 respectively. The YSX’s share trading went on to some degree despite Covid-19 crisis. The share trading of some listed companies went well but some didn’t. The share value for the whole month of August stood at K47 million. The YSX Expo that is held every year was held via online in order to avoid crowds as the Covid-19 cases were still going on.

When taking a look at share trading throughout the year, the share trading valued at K72 billion in 2016, K29 billion in 2017, K14 billion in 2018 and K14.5billion in 2019. When reviewing the share trading on the YSX, it is like running slow. The YSX allowed foreigners to own 32 % to the listed companies. The share trading did not become brisk as expected although it went well. At such a time, the stock market is expected to be better in the post period of Covid-19. Some State-owned businesses should be changed into public ones and they should be YSX listed ones. If investments and businesses enormously increased, the stock share trading would develop a lot, attracting the attention of local and foreign investors. 

Source: The Global New Light of Myanmar

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Myanmar aims to hit FDI target despite higher uncertainty this year

by INVESTMENT

Foreign investors are still keen to invest in Myanmar despite COVID-19, even though a number are holding back due to the uncertainty surrounding the investment environment in the country, according to U Maung Maung Lay, Vice President of the Union of Myanmar Federation of Chamber of Commerce and Industry (UMFCCI). Many foreign investors want to expand their businesses here but there is no certainty for growth and returns at this point. It is very difficult for growth and returns at this point. It is very difficult for them to invest during the COVID-19 period.

This is because of travel restrictions imposed to control imported cases of the virus, under which international flights have not been allowed to land in Myanmar since March. It has not been possible for potential investors to enter the country to conduct the surveys and negotiations needed to make concrete investment decisions and as a result, the Myanmar economy has halved in the six months since the pandemic was announced. Garment manufacturers, which contributes significantly to Myanmar’s exports to Europe, Korea and Japan, have been affected, while 80 percent of the construction sector is now facing various challenges from pricier imports of construction materials to the inability to continue developing ongoing projects.

Local businesses have also been affected by declining demand and many are also unable to procure raw materials from China to continue operations. Myanmar has so far received 24 foreign investment proposals worth US$3.5 billion for fiscal 2020-21. Most of the proposals were submitted to the Myanmar Investment Commission (MIC) in fiscal 2019-2020, however, due to the large capital amounts involved, the projects require MIC permits before getting the green light to proceed. The MIC has to consider the possible impact on the environment and local communities before giving approval. In any case, the MIC intends to reach its foreign direct investment (FDI) target of US$5.8 billion for the current fiscal year. It will priorities investments in agriculture, healthcare, industrial and digitization. Myanmar fell short of the FDI target of US$5.8 billion in fiscal 2019-2020 due to COVID-19.

Source: Myanmar Times

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MoTC further extends international flight ban to end-Nov

by COVID

The effective period of the Temporary Measures to Prevent Importation of COVID-19 to Myanmar through Air Travel issued on 29 March 2020 by the Ministry of Health and Sports was extended up to 31 October 2020, 23:59 hours Myanmar Standard Time, in line with the approval of the National Level Central Committee on Prevention, Control and Treatment of COVID-19.

In order to continue to contain the spread of COVID-19 in Myanmar effectively, the existing period has been further extended, in accordance with the approval of the National-Level Central Committee for Prevention, Control and Treatment of COVID-19, until 30 November 2020, 23:59 hours of Myanmar Standard Time.

Source: The Global New Light of Myanmar

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Announcement on Extension of the Precautionary Restriction Measures Relating to Control of the COVID-19 Pandemic until 30 November 2020

by COVID
  1. With a view to the further strengthening of measures to contain the spread of the COVID-19 pandemic, the Ministry of Foreign Affairs of the Republic of
    the Union of Myanmar has issued the following announcements regarding temporary entry restrictions for visitors from all countries. All those restrictions were
    extended until 31 October 2020 by the Ministry’s announcement dated 28 September 2020.
    (a) Announcement dated 15 March 2020 regarding precautionary measures for all travellers visiting Myanmar;
    (b) Announcement dated 20 March 2020 regarding additional precautionary measures for travellers visiting Myanmar and temporary suspension of
    issuance of visa on Arrival and e-visa;
    (c) Announcement dated 24 March 2020 regarding additional precautionary measures for travellers from all countries visiting Myanmar;
    (d) Announcement dated 28 March 2020 regarding temporary suspension of all types of visas (including social visit visas) and visa exemption services.
  2. In order to continue its effective response measures to protect the population of the country from the risks of importation and spread of the COVID-19, the
    Government of the Republic of the Union of Myanmar has decided to extend the afore-mentioned entry restriction measures until 30 November 2020.
  3. In case of urgent official missions or compelling reasons, foreign nationals, including diplomats and United Nations officials, who wish to travel to Myanmar
    by available relief or special flights, may contact the nearest Myanmar Mission for possible exception with regard to certain visa restrictions. However, all visitors
    must abide by existing directives issued by the Ministry of Health and Sports relating to the prevention and control of the COVID-19 pandemic.

Source: The Global New Light of Myanmar