Burma to Allow Foreign Banks to Begin Some Operations Next Year

Ground clearance and basic infrastructure preparation work has begun on an industrial estate inside the Thilawa Special Economic Zone, said the Japanese Kyodo News agency.

A ceremony marking the start was attended by Japan’s Mitsubishi Corporation, Marubeni Corporation and Sumitomo Corporation plus nine Burmese business partners and Naypyidaw government representatives, said Kyodo.

Mitsubishi, Marubeni and Sumitomo will jointly hold a 49 percent stake in the consortium, to be capitalized at US$100 million, while the remaining 51 percent will be owned by Burma’s government and local private companies, it said.

“The industrial complex…about 23 kilometers south of the city center of [Rangoon], is expected to draw businesses involved in apparel, car manufacturing and other services, upon its completion in 2015,” Kyodo reported.

The preparation work for industrial facilities such as factories and warehousing will include “roads, sewage treatment equipment and other infrastructure,” Kyodo said.

The start has been repeatedly delayed over the past year due to land ownership issues.

Rules to Permit More Activity by Foreign Banks ‘Expected Soon’

Burma is moving closer to allowing foreign banks to open fully independent banking operation in the country, a Japanese financial report said.

“Banking regulators are preparing a phased plan under which foreign entities would first be allowed to conduct wholesale banking services for corporate customers and eventually to hold full branch licenses,” said the Nikkei Asian Review.

A law permitting this development could be in place during the first three months of 2014, the Nikkei said, suggesting that between three and five foreign banks could be licensed initially.

“The chosen banks would be required to focus at first on corporate and trade banking. The banks would be permitted to carry out work in areas including project finance, international remittance, and treasury and trade services for local and international companies,” the Japanese report said, quoting unnamed financial sources.

Progress on plans to permit foreign banking in Burma is moving “far ahead of the expected time frame of one year or more,” Nikkei said.

“It highlights [Burma’s] efforts to overhaul a once-closed and semi-socialist financial system, in which exchange rates were heavily manipulated and international banking transactions were strictly limited to a handful of state-backed institutions.”

Burma’s Foreign Trade on Track for 36% Rise This Year

Burma is on track to achieve a target of around US$25 billion in two-way overseas trade during the current financial year.

The value of two-way trade reached $13.5 billion for the first six months of the financial year, April-October, the Ministry of Trade said.

That compares with $18.3 billion for the whole 12 months of the previous financial year, 2012-13.

Achieving the target of $25 billion for the whole year would mean a year-on-year increase of over 36 percent.

The encouraging figures come in spite of concerns by import-export traders about financial obstacles that make trading more expensive than necessary, according to the Myanmar Times, quoting a ministry official.

“Merchants are calling for increased lending and the removal of obstacles that are currently making exporting goods time-consuming and expensive,” the paper said.

However, problems for traders could be resolved by plans for a new National Export Strategy.

“Financing for exports is one of the key strategies that we considered putting in the NES [National Export Strategy], which should be completed by April,” Aung Soe, deputy director general of the Ministry of Commerce’s Department of Trade Promotion, was quoting by the Myanmar Times saying.

The bulk of trade in the April-October period was with Thailand, China, India, Singapore, Japan, South Korea and Malaysia.

Tourists Camp Among Bagan Ruins Rather Than Pay High Hotel Bills

A boom in tourism has seen a 50 percent increase in the number of foreign visitors to the historic temple sites at Bagan, but it’s also brought an accommodation problem—and a preference for camping among the ruins.

An increasing number of young tourists, mostly from Europe, are breaking site rules and staying overnight among the ruins, said the regional travel trade magazine TTR Weekly.

“Most hotels in Bagan are over-booked and rates are very high,” said the magazine. “The majority of the tourists visiting Bagan are from Europe and the younger ones are prepared to rough it for a night to catch the sunrise scenes in the historical park rather than pay for a hotel or face the shock of a wake-up call at 0400 to transfer to the site.”

In November alone, the number of visitors to Bagan was logged at 188,400, said TTR Weekly, quoting Ministry of Tourism figures. That’s a 57 percent increase on the number visiting Bagan in November 2012, it said.

New Mining Rules Could Become Law by March 2014, Ministry Hopes

Burma’s new mining legislation could become law during the first quarter of 2014, the Ministry of Mines said.

The legislation is still to be debated by the country’s Parliament and “we hope [they] will approve it within three months,” a ministry official told Reuters.

The legislation sets out the new rules for foreign investment in Burma’s potentially rich mineral resources sector, replacing a 20-year-old law.

It’s expected that foreign companies will be interested in developing Burma’s gold, copper, lead, zinc, nickel, tin and chromite, said Reuters.

Source: THE IRRAWADDY Myanmar

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