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Newsletter | February 2018

News Inside GMBC | Office ExhibitionUpcoming Events

Myanmar Newsletter

Dear reader,

Welcome to the February edition of our Myanmar Newsletter! 

We are again proud to provide you with a short overview on the major topics and headlines about Myanmar. This month the major news is about energy and infrastructure. Further Myanmar considers to abolish the withholding tax systems.
Please see also the insights into the German Myanmar Business Chamber (GMBC) activities and the introduction of the new members.

If you wish to receive more frequent information, please like us on facebook or visit our website!

Yours truly,


Martin Klose,
Delegate of German Industry and Commerce in Myanmar

News

Political, economic and legal news

  • Myanmar's growing electricity needs
    Recently, U Win Khaing, Union Minister for Electricity and Energy, gave an exclusive interview about Myanmar's electricity sector. Access the full interview, which also includes new market data, via the link below.
    Linkicon  More information
  • Government prioritises LNG to meet electricity target
    To meet the 3,000 MW electricity gap between supply and demand, expected to occur by 2020-21, the government plans to build LNG-fired power plants. There will be 3 LNG power plants with a combined capacity of nearly 3,000 MW. One 1,230 MW plant located in Kanbauk, which includes 450 kilometers of transmission lines, is developed by Siemens and Total.
    However, Myanmar is currently not able to process its abundant gas resources to LNG, and hence the country will heavily rely on imports.
    Furthermore, Myanmar agreed with its neighbor Laos to import 100-200 MW electricity. Laos generates most of its power through hydro sources.
    Linkicon  More information
  • Myanmar Kyat appreciates against USD and is expected to remain stable
    The Central Bank of Myanmar set the MMK/USD exchange rate to 1,331 MMK per USD (22nd February 2018). Compared to the rate of July 2016 (1,360/USD), the Kyat appreciated by 2.2%. However, more interesting as the recent slight Kyat-upgrade is the, compared to previous years, remarkable stability of the Myanmar Kyat against the USD over the last 13 months, giving security for trading businesses and foreign investors.
    Since the Central Bank of Myanmar reduced its financing of the government deficit, which increased the monetary base over the past years putting pressure on inflation, there is less pressure on inflation recently.
    Another reason behind the new currency stability might be a potential intervention of the Central Bank of Myanmar on the foreign exchange market, selling foreign exchange to counteract depreciation pressure and maintain the exchange rate.
    Linkicon  More information
  • Government to abolish withholding tax
    The internal revenue department has announced that withholding tax will be abolished within the next months after cabinet approval. Some entrepreneurs argue that withholding tax accruing before they make any profits is obstructing their business.
    Linkicon  More information
  • Government presents Sustainable Development Plan and Development Assitance Policy
    On 26 February, the Government presented its future processes for handling development tasks more efficiently. In this regard, the Government plans to introduce a Public Investment Program consisting of three project categories: development partner-funded, budget-funded and PPP projects. We hope that particularly under the latter category we can see more German businesses successfully entering Myanmar. During the presentation of the new policy, the German Embassy in Myanmar as well as the Chambers of Commerce highlighted the role of the local and international private sector in promoting sustainable development.
    More information

Investment and business news

  • South Korea to build logistics hub in Yangon
    South Korean HUBS MK Co Ltd and Myanmar Trade Promotion Organization signed a memorandum of understanding about developing a 98 million USD logistics hub in Shwe Lin Ban Industrial Zone. With the hub, export conditions for agricultural, livestock and fishery products are expected to improve, particularly due to lower transportation costs.
    The South Korean company will bear the whole investment while Myanmar contributes 59.1 acres of land owned by the government.
    Linkicon  More information
  • Waste burning plant to be constructed
    The Yangon City Development Committee is planning to build a waste burning plant to manage Yangon's increasing amounts of waste. Since the city is growing, and outskirts are becoming populated as well, initial plans for burying the waste outside Yangon are abandoned, and authorities are looking for suitable land for the plant. Construction is supposed to start after the Yangon-Dala bridge is completed but it is yet unknown whether the plant shall be located in Dala or Yangon.
    Linkicon  More information
  • Energy firms head for the exit
    Major energy companies like Shell, Reliance Industries or Statoil, who awarded offshore blocks in a tender back in 2014, now relinquish their blocks to the government. Due to low energy prices, a profitable exploitation is not possible, which could in turn compromise Myanmar's energy plans relying heavily on natural gas. However, Myanmar is not yet able to process exploited gas to the needed LNG.
    Blocks that are returned to the government could be put up for tender, together with the remaining blocks from the 2014 bidding round, again in 2018. Also note that AHK Myanmar recently launched a multi-sector tender information service!
    Linkicon  More information
  • 2.5 billion USD Yangon Central Railway Station project announced
    A Chinese-Singaporean-Myanmar consortium is chosen by the government to develop one of the largest infrastructure projects in Myanmar. The new Yangon Central Railway Station is a mixed development project comprising a new central transportation hub, surrounded by buildings for housing and commerce.
    The large project will reshape the northern fringe of Yangon's downtown and is supposed to bring additional development to the area. It is estimated that about 10,000 people, mostly railway workers and their families, will have to be resettled to other townships in the context of this project.
    The project was first announced in May 2014 and tendered shortly afterwards, but many developers were not able to satisfy the requirements of the tender-issuing state-owned Myanma Railways.
    Linkicon  More information

Since 2015, the German Myanmar Business Chamber (GMBC) is the official membership organization of German businesses in Myanmar. It provides a platform for exchange, dialogue and cooperation for Myanmar and German businesses bringing together corporate activities and strengthening the German business community in Myanmar. The GMBC organizes events on a regular base covering important policy issues as well as interesting business cases. Moreover, these events are made to extend and improve the network of its members. Visit the GMBC website for more information.
This section introduces new members and covers recent activities of GMBC members in Myanmar. If you are a GMBC member and are keen to see your company featured in this section, please contact GMBC.

Welcome
new GMBC members!CLAAS Regional Center South East Asia Ltd.
  • CLAAS is a family business founded in 1913 and is one of the world’s leading manufacturers of agricultural engineering equipment. The company is the European market leader in combine harvesters. Octagon International Services is the CLAAS exclusive authorized dealer and distributor in Myanmar.


DHL Supply Chain Myanmar Limited
  • DHL is the leading global brand in the logistics industry. Our DHL family of divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management.

GMBC member activities
  • Recently, GMBC members visited Thilawa Special Economic zone including a site visit at PEB steel.
  • On 25 February 2018, CLAAS Regional Center South East Asia Ltd celebrated its CLAAS Grand Opening Day jointly with Octagon International Services, CLAAS' exclusive authorized dealer and distributor in Myanmar. More information
  • Yoma Strategic posts strong Q3 results, shares dip More information

Office exhibition

Bart Was Not Here
Linkicon  Current exhibition: Bart Was Not Here

Pyinsa Rasa Art Sapce @ The Secretariat in Yangon - Sponsorship Opportunity March-July 2018 Our partner Myanm/art gallery and other Yangon-based art initiatives are soon opening a contemporary art space at the landmark Secretariat Building. They are currently seeking funding from several established institutions and companies based in Myanmar and maybe your company is interested to support them as well. More background information on the project and its outreach can be found here.


General Information

Energy solutions
In preparation for the upcoming AHK business trip and the 2nd Myanmar-German Renewable Energies Symposium in September 2018, RENAC will host an information event in Berlin. The event on 17 May 2018 will brief interested German companies on photovoltaics and biomass energy in Myanmar with a focus on industrial projects.
More information on the event and registration
AHK job vacancy service
Starting this month, we are offering a new service for you. We will publish your job vacancies on our website, Facebook, LinkedIn and in our newsletter, helping you to find the right employee by reaching out to 2,000+ local and international experts. Advertisements can be booked on a monthly base. GMBC members get a discount. For further information, please check the full service description on our website and feel free to contact us.

AHK tender information service
This month, we have successfully launched a new tender information service. This special tender newsletter informs you in a timely manner about tenders opened by the government or international organizations in Myanmar - including information only available via hard copy and Myanmar language. This is particularly ideal for companies not yet represented on the ground but eager to set foot in Myanmar. Please find more information on our website or contact us by e-mail.


Key figures for Myanmar
 GDP growth (est. 2017) 6.4%, GDP: 72 billion USD
 Population (2017) 53 million
 Export goods (2016) 11 billion USD; China, Thailand, India
 Import goods (2016) 16 billion USD; China, Singapore, Thailand
 Export services (2015) 3.86 billion USD
 Import services (2015) 2.44 billion USD
 Current account balance,
 % of GDP (2016)1
 -5.8%
 Exports to Germany goods (2016)2 172.4 million USD; apparel, footwear
 Imports from Germany goods (2016)2 76.8 million USD; machinery, vehicles
 Inflation rate 6.9%
 Unemployment rate3 0.8% (2015, ILO), 4% (2014, Myanmar Census)
 Aggregate measure of labor underutilization 6.9% (2015, ILO)
 Central Bank interest rate
 10%
 Lending/deposit rate 13% lending, 8% deposit
 Exchange rate February (2018) 1 EUR ≈ 1,640 MMK

1
According to the IMF, the actual deficit may be significantly lower as exports are not always recorded.

2 Using mirror trade data gives significantly higher imports (155.8 million USD) and exports (358.8 million USD).
3 While the census asks 3 questions about the labor force, and only one specifically about unemployment, the ILO survey asks stepwise several questions about employment, which leads, eventually, to a much lower number of unemployed. There is no significant difference in the workforce.
Sources: Trade data: UN Comtrade and UNCTAD (FDI), Economic data: WB and IMF, CBM for interest rates

German-ASEAN Business Council
Project Calendar for the ASEAN region 2017/18   
(in German language)

Linkicon  Project Calendar ASEAN 2017/18

Upcoming Events

March 1, 2018 | Forum IHK-Akademie, Orleansstraße 10 - 12, 81669 Munich, Germany
ASEAN Insights - Geschäftschancen in Südostasien
March 2, 2018 | Berufliche Schule für Medien und Kommunikation (BMK), Eulenkamp 46, 22049 Hamburg, Germanz
Talent Pool Asia - Regional Spotlights
March 14, 2018 | Yangon, Myanmar
Networking Night with the British Chamber
March 21, 2018 | Yangon, Myanmar
Seminar on Supply Chain Management in Myanmar & Networking Night with Thai Business Association of Myanmar

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AHK Myanmar
Martin Klose
Uniteam Building, 6 floor, 84 Pan Hlaing Street Sanchaung TS
11111 Yangon
Myanmar

+95 9 4506 293 64
martin.klose@myanmar.ahk.de