Thura NewsViews. Myanmar Economics and Politics. Weekly Newsletter. Issue 318 May 31, Politics

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1 Issue 318 May 31, 2018 Thura NewsViews Politics First refugees return from Bangladesh, says government Myanmar says that dozens of refugees in Bangladesh have begun returning to the country, in what would be the first repatriation since the large-scale exodus from northern Rakhine State began last August. In state-run media reports, Myanmar has said that 58 people have returned to the country because they no longer find it tenable to live in Bangladeshi refugee camps. Those who have returned are reportedly being held temporarily in camps near the town of Maungdaw, in northern Rakhine State. However, Bangladeshi have said they are not aware of the returns taking place through official channels, indicating the rift between the two countries regarding the issue, which has seen an estimated 700,000 people flee the country. Myanmar has repeatedly said it is willing to accept refugees returning, but Bangladesh and many in the international community have said that conditions on the ground are still not conducive to returns taking place. U Soe Win nominated as new finance minister President U Win Myint has nominated U Soe Win, a well-respected financial professional, to be the country s next Minister of Finance and Planning. He is expected to replace U Kyaw Win, who retired from the role last week amid reports that he is being investigated on corruption charges, although the government has refused to comment on the accusations. Soe Win, 80, is currently the managing partner of Deloitte & Touche in Myanmar, and throughout his career worked in different finance-related roles within the government, including state-owned Myanmar Foreign Trade Bank. He also has experience working on tax and investment for international companies. Soe Win is also a Thura Swiss Ltd. Economic Research Shwe Hinthar B /2 Miles Pyay Road 11 Qtr. Hlaing Tsp., Myanmar Phone +95 (0) Fax +95 (0) info@thuraswiss.com May Highlights The Ministry of Health and Sports Medical Research Department has said it has allocated MMK1.5 billion for healthcare research in the next financial year Australian company Perilya Limited has reportedly signed an agreement to be part of the Bawdwin polymetallic deposit mine Chinese hotpot restaurant Little Sheep will open its first franchise in Myanmar this year, through an agreement with Yoma Strategic, reports say

2 board member of the Renaissance Institute, a think-tank that advises the government on economic policy. In a statement, the government said Kyaw Win had resigned on his own volition, and did not mention the reported investigation. Businesspeople will be hoping that U Soe Win s appointment will give new energy to the economy, which has stagnated since the National League for Democracy (NLD) came to power more than two years ago. Record drugs bust in Malaysia, shipped from Myanmar Malaysia seized almost 1.2 tonnes of crystal methamphetamine, a record amount which officials says was disguised as tea shipped from Myanmar. The haul was worth US$18 million, according to reports, and was shipped in a container from to Port Klang, on the outskirts of Kuala Lumpur, Mr Subromaniam Tholasy, Customs Director-General, told reporters. Officials also said they arrested six people in the operation, three Myanmar nationals and three Malaysians. Crystal methamphetamine is a highly addictive synthetic drug also known as yaba, speed or shabu. We are still investigating, but we believe the syndicate involved has links with syndicates in Myanmar, said Subromaniam, adding that officials also seized a small amount of heroin and about 1 million contraband cigarettes. Myanmar has for decades been Southeast Asia s largest producer of opium, and its refined form heroin, but while those figures appear to be declining, the volume of methamphetamine being produced in Myanmar is reportedly on the rise. Economy Myanmar plans megacity development projects Three companies have reportedly been selected for three mega city development projects in that cost a combined total of US$2.29 billion. An international report said that South Korean state-backed Korea Land and Housing Cooperation, and local companies Alliance Star Group of Companies and Shwe Taung Group will work alongside the Ministry of Construction on the projects in. The report said that the ministry will soon select the company to develop a planned new city at Pyin Oo Lwin, about two hours from Mandalay. The projects include the Korea Myanmar Industrial Complex in Hlegu Township, located on 555 acres of land and expected to cost $110 million. A second project, Eco Green City also in Hlegu Township, is a joint venture between the Ministry and Alliance Star and will include low-cost housing, hospitals and hotel zones, at an estimated cost of $2 billion. The third development, named Ayarwun-Yadanar Smart District Project, is at Dagon Seikkan Township, and will be between the Ministry and Shwe Taung, at a cost of $185.7 million for a housing development. Companies and Investments MyTel planning to roll out services in Myanmar A telecommunications joint-venture between Vietnam s military-run Viettel Group and a Myanmar consortium expects to roll out its 4G services in Myanmar within the next few weeks, the Vietnamese government has said. The My- Myanmar in Figures GDP (PPP): $330.88bn (2017) GDP (official ex.rate): $59.5bn (Jan 2018) GDP growth rate: 7.23% (2017) Population: mn people (Oct 2017) Inflation: 6.5% (2017) Foreign trade: $29.2bn ( ) FDI: $75bn (31/12/2017) International reserves: $5.2bn (Jan 2018) CBM rate Kyat/$ = 1355K/1$ (31/05/18) For advertising with Thura Swiss please contact us by info@thuraswiss.com or by phone +95 (0) Please note that our advertisement contracts are based on a subscription of a minimum of 4 weeks. 2

3 Tel network, developed by Viettel, Myanmar National Holding Public Ltd and Star High Public Co Ltd, is aiming for between two and three million subscribers before the end of the year, according to a statement. MyTel will become the fourth telco operator in Myanmar, behind state-backed MPT, and Ooredoo and Telenor, which joined the market in 2014 and broke up MPT s monopoly. With a newly opened and fast-growing economy, Myanmar offers great opportunities for telecommunications companies, Le Dang Dung, deputy director general of Viettel, said in a statement. As well as across Asia, Viettel also has operations in almost a dozen markets in Africa and America. Myanmar Strategic Holdings acquires EXERA London-listed Myanmar Strategic Holdings has announced that its wholly-owned subsidiary, Myanmar Strategic Services, is on the brink of acquiring -based safety and security firm EXERA in a deal worth an estimated US$2.2 million, according to reports. An international publication said the deal is expected to be completed before the end of May and that the deal would be completed through $2 million in cash and the issuing of 7,408 shares at a price of $27 per share. MSH described EXERA as an internationally managed safety and security services provider operating exclusively in Myanmar. The report said that through a workforce of about 1,000 security personnel, EXERA provides guarding, protective services, transportation, training, and risk consulting for international and local clients in the country. Over the past few years, EXERA has established itself as one of the best foreign operators, effectively supporting its clients with their security needs as those clients have expanded throughout Myanmar, said Enrico Cesenni, MSH s CEO. Netherlands grant programme to develop business plan for Myanmar companies Myanmar companies which have potential investment plans can invite Dutch companies to assess the technical and commercial feasibility of such investment and draft a solid business plan. Potential projects should have an envisioned investment of minimum US$ 1 million and could take place in all kinds of sectors (such as agro-food, oil & gas, automotive and logistics). There are no conditions for Myanmar companies to buy any products/services of the Netherlands companies involved in the study. Costs are taken care by the Dutch grant program. Proposals can be handed in till August Thura Swiss and its Netherlands partner can support your company with enrolment. 3

4 Legal Box by Duane Morris & Selvam LLP Ministry of Commerce Open Retail and Wholesale Sector to 100% Foreign-Owned Companies and Joint Ventures Under the Myanmar Export and Import Law, the Ministry of Commerce and Trade ( MoC ) recently issued Notification 25/2018 dated 9 May 2018 ( Notification ), permitting wholesale and retail trading by foreign companies and joint venture companies in Myanmar. The Notification sets out the rules in connection with undertaking wholesale and retail business by wholly owned foreign entities, wholly owned Myanmar entities and joint venture entities. This is what you need to know: 1. The Notification provides for objectives including creating choice and lower prices for consumers through development of competition; causing increased foreign investment, restricting unfair competition, and creating more job opportunities; 2. Wholly foreign-owned, wholly Myanmar-owned or joint venture companies are allowed to carry out retail and wholesale trading venture as follows: a. Goods manufactured in the country or imported, except prohibited items, may be sold and distributed through retail and wholesale trading in accordance with the prescribed procedures; and b. Retail and wholesale trading may be carried out in any township in the Regions and States according to the prescribed procedures; 3. Goods manufactured in Myanmar or imported, except prohibited items, may be sold and distributed through retail and wholesale trading in accordance with prescribed procedures; 4. Retail and wholesale trading may be carried out in any township in the Regions and States according to prescribed procedures; 5. For wholly foreign owned companies to engage in retail and wholesale trading they are required to meet the below investment thresholds: a. In cases of wholesale, the initial investment must be USD 5 million (or more) for goods intended to be sold, excluding the rent for the land; b. For retail, the initial investment must be USD 3 million (or more) for goods intended to be sold, excluding the rent for the land; 6. For joint venture companies intending to engage in retail and wholesale trading they are required to meet the following investment thresholds: (i) if a local company has an equity ratio of 20% or more in the company, the company shall abide by the following requirements; (a) in the case of wholesale, the initial investment must be USD 2 million and have goods to be sold, exclusive of the land rental fee; (b) in the case of retail, the initial investment must be USD 700,000 and above for the goods to be sold, exclusive of the fee of the land rental fee; (ii) Myanmar citizens that have an equity ratio of less than 20% in the company, shall carry under the provision of paragraph 5(a) of the requirement; 7. There is no minimum investment threshold for wholly Myanmar owned companies. 8. Wholly foreign-owned, wholly Myanmar-owned or a joint venture company established after 9 May 2018 are required to apply to the MoC for registration of retail and wholesale business. The Notification also provides the details of the application dossier; 9. Wholly Myanmar-owned companies established before 9 May 2018 with an initial investment of USD 700,000 and above are required to apply to the MoC for registration of retail and wholesale business within 150 days of issuance of the Notification; 10. Wholly local owned companies, wholly foreign owned companies or joint venture companies operating a retail or wholesale distribution business shall pay the specified duties for the import or distribution of goods according to the law, rules, regulations, procedures, orders and directives of the relevant departments; 4

5 11. Wholly citizen or foreign owned companies and joint venture companies permitted for wholesale or retail trading shall not be allowed to sell goods restricted under existing Myanmar laws; 12. Wholly foreign owned companies or joint venture companies shall not operate a minimart or convenience store with a floor area of less than 929 square metres; 13. Wholly Myanmar- owned companies, wholly foreign owned companies or joint venture companies operating a retail or wholesale distribution company shall comply with Myanmar law and shall not engage in unfair competition practices; 14. Companies having registered with the MoC that wish to open a new branch or to expand an existing branch, are required to inform MoC 90 days in advance. We are optimistic that the implementation of the new Notification will increase foreign investment in Myanmar s diverse trading sectors. Through our office in, Duane Morris & Selvam advises corporations on investment, business and regulatory processes in Myanmar. For further information, please contact Mr Krishna Ramachandra (kramachandra@duanemorrisselvam.com), Ms Babita Ambekar (bambekar@duanemorrisselvam.com), Mr Rory Lang (rjlang@duanemorrisselvam.com) or Ms Bei Wang (BWang@duanemorrisselvam.com) or visit Duane Morris & Selvam is recognised as a leading law firm for Myanmar related Corporate and M&A Work The Legal 500 (2018). 5

6 Events Name Details Organizer/Ministries Contact Information Myanmar-EU Economic Forum Venue: Kempinski Hotel, Nay Pyi Taw Date: 06 June 2018 EuroCham Myanmar +95 (0) International Exhibition & Conference on Cosmetics, Beauty, Hair & Spa Venue: Novotel Max Date: June 2018 ECMI ITE Asia Sdn Bhd rd Emerging Asia Banking & FinTech Summit 2018 Venue: ParkRoyal, Date: June 2018 Magenta Global Events Argus NPK Fertilizers Conference Venue: Sule Shangri-La, Date: June 2018 Argus Media Singapore Group Pte Ltd Myanmar Supply Chain Summit Venue: Date: 29 Aug 2018 Global Supply Chain Council (GSCC) Health & Humanitarian Supply Chain Forum Venue: Date: 30 Aug 2018 Global Supply Chain Council (GSCC) Livestock Myanmar 2018 Venue: Rose Garden Hotel, Date: Sep 2018 Minh Vi Exhibition and Advertisement Services (VEAS) Medical Myanmar Venue: Novotel Max Date: Oct 2018 Fireworks Trade Media Pte Ltd +95 (0) (0) International Congress of the Pacific Rim College of Psychiatrists (PRCP) and Myanmar Mental Health Conference Venue: Sedona Hotel, Date: Oct 2018 PRCP and Myanmar Mental Health Society credential@prcp2018.org Agro Myanmar 2018 Venue: Rose Garden Hotel, Date: Nov 2018 Minh Vi Exhibition & Advertisement Services Co., Ltd info@veas.com.vn ~63 International Franchise & Business Opportunities (IFBO) Myanmar 2018 Venue: Sedona Hotel, Date: Nov 2018 BizLink Exhibition Services Pte Ltd IFBO@bizlink.com.sg 6th International Exhibition & Conference on Pharmaceutical & Medical Industry Venue: Rose Garden Hotel, Date: Dec 2018 Minh Vi Exhibition & Advertisement Services Co., Ltd (VEAS) info@veas.com.vn ~63 6

7 Tenders Mandalay City Development Committee: Invitation for Bids (IFBs) 1. Mandalay City Development Committee (MCDC) invites sealed bids from eligible Bidders for the construction and completion of Amara Water Works. The project cost will be covered by part of the financing received from the Agence Française de Développement (AFD). The eligibility rules and procedures of AFD will govern the bidding processes. Loan/Grant No. & Title: Financing Agreement CBU 1005, Amarapura Water Supply and Sanitation Project Contract No: WTSN_AMPA_WORKS_ Title: Amarapura Water Works 2. The work includes: Improvement of the existing production tubewells; Construction of a chlorination house at BPS 10 and Kyantan sites; Construction of a reservoir and pumping station at Kyantan site; Rehabilitation of BPS 10 pumping system; Replacement of existing and installation of new distribution networks (around 20 km), including service connections 3. Interested Bidders must demonstrate their specific experiences or capabilities by their: Financial situation Historical financial performance Average annual construction turnover Availability of financial resources cash flow capacity Construction experience Contracts of similar size and nature Construction experiences in key activities 4. The complete qualification criteria is described in the Bidding Document. 5. National Competitive Bidding (NCB) will be conducted in accordance with AFD s Single-Stage: One-envelope bidding procedure and is open to all Bidders from eligible countries as described in the Bidding Document. 6. To purchase the Bidding Documents in English, eligible bidders should write to the address below requesting the Bidding Documents for contract named above, pay a non-refundable fee of eighty-five thousand Myanmar Kyats (85,000 MMK) in cash to the Project Management Office located in MCDC compound, 26 th Street, Mandalay. 7. Bids shall be delivered to the address below on or before at 3:00 p.m. together with a Bid security (15,000 Euros) as described in the Bidding Documents. 8. A pre-bid meeting will be organized on at 9:00 a.m. in MCDC compound. 9. To obtain further information and inspect the bidding documents, bidders shall contact: Daw Khin May Htay, Project Manager, MUSIP Project Management Office, MCDC compound, 26 th Street, Mandalay, Myanmar Phone no: +95 (0) Fax no: +95 (0) pmomusip@gmail.com 10. Mandalay City Development Committee (MCDC) will not be responsible for any cost or expense incurred by bidders in connection with the preparation or delivery of bids. 7

8 Region Government: Invitation for Bids (IFBs) 1. The Region Government intends to develop a Jetty, Inland Container Depot, Container Freight Station and CFS-Warehouse and Warehouse/Bonded Warehouse project near the Ngwe Pin Le Industrial Zone and Ale-Ywa to support the transportation and logistics sector within Region. 2. Sealed bids are invited from qualified developers who are interested to develop the Ngwe Pin Le Integrated Logistics Zone & IWT Jetty Link Port Project with Build-Operate-Transfer (BOT) Program as follows: No. Tender Description Bidding Document Fee (USD) 1 Jetty, Inland Container Deport, Container Freight Station and CFS- Warehouse 5,000 2 Warehouse/Bonded Warehouse 3, The biding document shall be purchased by interested bidders after signing the Non-disclosure Agreement (NDA) upon submission of a formal request on payment of a non-refundable fee indicated above for each set of tender documents. 4. The bidding documents are available at the office stated below, from onward on working days from 9:00 a.m. to 4:00 p.m. (local time). 5. A pre-bid meeting will take place at the below address (date and time will be confirmed later) for the discussions of various issues raised by the prospective bidders. 6. The bid duly completed in all aspects as described in the bidding document shall be submitted in a sealed envelop to the Region Government on or before at 12:00 p.m. (noon - local time). Late submission will not be considered. 7. The Region Government reserves the right to accept or reject any or all bids at its discretion without assigning any reason or whatsoever. Region Government is not bound to accept the lowest offer/bid and reserves the right to negotiate with bidders. 8. Contact address Metropolitan Development Public Co., Ltd. Room 222, Ahlone Road, Region Government Office,, Myanmar Phone no: +95(0) , +95(0) , +95(0) project.finn.sg@sg.pwc.com Ministry of Electricity and Energy: Open Tender The Department of Hydropower Implementation under the Ministry of Electricity and Energy invites open tenders for the supply of required Dam Instrumentation for the Upper Keng Tawng project and construction materials for D.D.P. (Upper Keng Tawng/ Paung Laung) in Myanmar Kyat. No. Tender No. 1 06/DHPI/Dam Instrumentation/ /DHPI/Mining Spare/ Technical proposal and financial proposal shall be submitted separately at or before 12:00 p.m. (noon) on Detailed information on the tender can be viewed and downloaded at the website of the Ministry of Electricity and Energy: 8