PwC MyanmarWeekly Business Intelligence

Issue 16515 June 2019

www.pwc.com/mm

PwC | June 2019

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PwC | June 2019

1. Weekly Key Financial & Business News

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PwC | June 2019

Weekly Key Financial & Business NewsHeadlines

‘Myanmar not quite ready for digital economy’

Finance ministry cuts microfinance loan interest rates

Better implementation of the law needed to draw foreign investors

Local insurance providers see growth potential in industry

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Myanmar, Thailand sign agreement to facilitate overland trade

PwC | June 2019

Weekly Key Financial & Business NewsHeadlines

Govt to launch financial inclusion roadmap soon

Yangon Airport handles 2.32m passengers through April

New Competition Commission already under fire

First Myanmar business environment index published

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Thai firm sees ‘progress’ on LNG project despite delays, cost blowout

PwC | June 2019 6

Finance ministry cuts microfinance loan interest rates

A new directive from the Ministry of Planning andFinance (MOPF) has reduced interest rate formicrofinance loans and compulsory saving. Thenew rates are to take effect at the beginning ofthis month but the announcement was releasedafter four days of the effective date, causingmicrofinance institutions to be in a difficultposition.The Microfinance Business SupervisoryCommittee under the ministry issued Directive(1/2019) to revise interest rate for microfinanceloans and saving on June 5.The committee amended the interest rate where aloan of K100 monthly will be charged K2.30 andthe yearly maximum interest rate will be 28percent. The previous rate was for K100 monthlyat K2.50 and the yearly maximum interest rate isat 30pc. In comparison, the directive hasdecreased 2pc of the yearly interest rate.Furthermore, the new interest rate on compulsorysaving will be for K100 monthly, it will be chargedK1.20; while the annual minimum interest ratehas been cut by 1pc to 14pc. The previousspecification was for K100 monthly it will be

K1.25 with the yearly minimum interest rate at15pc.Interest rate on voluntary saving remained thesame. The directive designated that for K100monthly, the amount charged will be K0.80 andthe yearly minimum interest rate will be 10pc.Microfinance institutions have said that they areworried about the directive as they want to followthis directive and need a transitional period.All the microfinance institutions have alreadydrafted their business plan which includemicrofinance network expansion based on theprevious interest rates. But, due to the newchanges the institutions will again have to revisetheir plans in align with the new interest rates.Some business management procedure cannot becarried out within a short period of time, saidDaw Phyu Yamin Myat, the general secretary ofMyanmar Microfinance Association (MMFA).

Source: Myanmar Timeshttps://www.mmtimes.com/news/finance-ministry-cuts-microfinance-loan-interest-rates.html

NewspapersMyanmar Times

11 June 2019

PwC | June 2019 7

‘Myanmar not quite ready for digital economy’

Myanmar has prepared a digital transformationroadmap for the years 2018 to 2025 built off amaster plan drafted by the Digital EconomyDevelopment Committee (DEDC).Yet, the country is not ready for the digitaleconomy, if indicators such as network readinessindex, e-government development index, cybersecurity index and ICT development index areanything to go by.Based on measurements on digital readiness,Myanmar has a long way to go, as indicatorsshowed that the country ranked among the lowestin a 10-member Asean grouping.At an event promoting the digital economy atMICT Yangon on June 8, Former Deputy Ministerof Communication and Information Technology UThaung Tin said that the country also lacks a legalframework for cybersecurity or laws governing e-commerce transactions.“We are talking about cybersecurity, we don’thave a law for it, we are talking about e-commerce, we don’t have a law for that too,” hesaid.He added that the government has been slow to

implement such legislation as the majority ofpeople still lack of access to bank accounts andcredit cards. “In Myanmar, 80pc of people do nothave them while less than 10pc have credit cards,”U Thaung Tin said.On the other hand, he noted that Myanmar hasbasic telecommunications infrastructurecompared to five years ago while internet accesshas improved, judging by the 85pc of people whoare smartphone users in the country as well as themore than 100pc SIM card penetration rate.In fact, digital transformation has already startedat the grassroots level.“People cannot wait foryour digital committee implementation; they areincreasingly using the internet and changing thedigital culture. We are using a top-down approachwhen in reality, its already happening from thebottom-up,” U Tin Win Aung, Chairman ofYangon International University (YIU) said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-not-quite-ready-digital-economy.html

NewspapersMyanmar Times

11 June 2019

PwC | June 2019 8

Better implementation of the law needed to draw foreign investors

Lack of coordination between the Union andregional governments on development policies,red tape and weak implementation of new lawshas hampered the flow of foreign directinvestments (FDI) into Myanmar, said U AungNaing Oo, permanent secretary of the Ministry ofInvestment and Foreign Economic Relations.U Aung Naing Oo pointed out that having a fairlylarge population (according to the World Bank,the country’s population stood at 53.4 million in2017) and low labour costs were not enough todraw foreign investors to Myanmar.He added that political uncertainties, poorphysical infrastructure, lack of skilled labour, anunderdeveloped capital market, high taxes and alegal system with a hodgepodge of laws datingback to the British colonial era has held backinvestors.The Myanmar legal framework requires anoverhaul and has to be better rolled out andenforced. This is because foreigners will only beconvinced to channel their money into thecountry if they knew that their investments wouldbe protected by the rule of law.

“Many of Myanmar’s existing legislation is fromthe colonial era. More modern laws andregulations need to be enacted. However, there isalso a need to improve performance ofgovernment agencies and ministries in enforcingthe rules and regulations,” U Aung Naing Oo said.He added that weak institutional capacity andlack of knowledge on procedure has hampered theeffective implementation of new legislation inrecent years. “It is not enough just to enact newlaws. Good implementation of the rules andbylaws must be carried out as well. But manygovernment organisations still do not know theprocedures to enforce the law. For example, toimplement the Intellectual Property Law,authorities need to undergo professional courses,”he said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/better-implementation-law-needed-draw-foreign-investors.html

NewspapersMyanmar Times

10 June 2019

PwC | June 2019 9

Local insurance providers see growth potential in industry

The government is expecting a total of 29 foreignand local life and non-life insurance companies tooperate in Myanmar.So far, four foreign life insurance companies haveapplied to form joint ventures with local partnerswhile five non-life foreign insurance companiesmay also form similar partnerships, Daw SandarOo, the Chair of Myanmar Insurance Association,said during the Into Myanmar: Insurance Summit2019 in Yangon yesterday.“We have received the joint venture proposals andwill announce the result of the joint venturecompanies at the end of July,” said U Thant Zin,Director of Financial Regulatory Departmentunder the Ministry of Planning and Finance(MOPF). Foreign insurers are able to take stakesof up to 35 percent in local insurers.In Myanmar, insurance penetration stands at just0.07 percent of GDP, with the market valued atjust US$70 million in 2016-17. Non-life insurerscontributed to more than 70pc of the market.There are 30 categories of insurance productsnow being offered, with property insurancerepresenting 80pc of total non-life income,

according to Myanmar Insurance Association.U Myo Min Thu, managing director of AYAInsurance, told The Myanmar Times that theMyanmar life insurance market holds significantgrowth potential and that is generating highinterest among foreign providers.Of the 29 insurance providers, 17 provide lifeinsurance. These include foreign providers AIA,Chubb Tempest Reinsurance, Dai-ichi Lifeinsurance, Manufacturers Life Insurance andPrudential Life Insurance, which were permittedto operate in Myanmar on April 5.U Myo Min Thu said that competition in the lifeinsurance market is expected to be robust and willlead to better products and services forconsumers, adding that the regulator’s role isimportant in the development of the fledgingmarket.

Source: Myanmar Timeshttps://www.mmtimes.com/news/local-insurance-providers-see-growth-potential-industry.html

NewspapersMyanmar Times

12 June 2019

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Myanmar, Thailand sign agreement to facilitate overland trade

Overland cross-border trade between Myanmarand Thailand will officially commence at the endof July following an agreement to allow vehiclesfrom both sides across the border to facilitate thetransportation of goods between the twocountries.The agreement, which followed discussions thatstarted a year ago, will see the governments ofboth countries issue licenses to logisticscompanies to transport goods overland throughthe Yangon (Thilawa)-Myawaddy-Mae Sot-Bangkok (Laem Chabang) route.Under the agreement, 100 vehicles from eachcountry will be granted temporary one-yearpasses to transport goods across the border alongthe route. Thilawa would be where all Thaivehicles will have to stop for customs inspectionswhile Thailand will carry out customs inspectionsin Mae Sot.According to U Win Hlaing, deputy director forthe Road Administration Department at theMinistry of Transport and Communication,Myanmar has already issued international crossborder operator (ICBO) licenses for 40 trucks. It

will issue another 21 licenses in the initial phase.U Win Hlaing said three logistics companies fromthe Myanmar side - MK Transportation, HerculesLogistic and Resource Group Logistic - have beengranted permission to transport goods overlandthrough the border.Myanmar is the last country sharing a border withThailand to have an agreement for this overlandcross-border trade. Thailand has signedagreements allowing such trade with all its otherGreater Mekong neighbours.“Vehicles from Myanmar will stop at Mae Sot forcustoms inspections and continue to LaemChabang where goods can be loaded andunloaded,” U Win Hlaing told the MyanmarTimes. Similarly, Thai vehicles will be able to gainaccess to the Thilawa Special Economic Zone nearYangon. The vehicles will only be allowed to travelon the specified route.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-thailand-sign-agreement-facilitate-overland-trade.html

NewspapersMyanmar Times

12 June 2019

PwC | June 2019 11

Yangon Airport handles 2.32m passengers through April

Yangon International Airport served 2.32 millionpassengers in the first four months of the year, anumber that increased 4.2 percent from 2.22million passengers in the same period last year,according to the airport.The reason for the growth in traffic was theaddition of routes and destinations a few monthsago, said Ho Chee Tong, CEO of YangonAerodrome Co. Ltd. (YACL), which operates theairport.“While domestic air travel has slowed, ourinternational expansion has clearly borne fruit. Asthe operator of the international air gateway toMyanmar, YACL will continue to build on thismomentum to open up routes to more Asiandestinations in the near future,” he said.On April 2, 2019, China Eastern Airlines launchedthrice-weekly services to Yangon from Hohhot(Inner Mongolia) via Kunming. On March 28,2019, Sichuan Airlines launched twice-weeklyflights to Yangon from Chengdu.According to YACL, the growth in traffic fromJanuary through April was driven by internationaltravellers, who increased 7.9pc from a year ago,

despite a 3.1pc decline in domestic passengers inthe same period.In 2018, the airport served the passengers on 30international airlines connecting Myanmar to 32destinations. The airport welcomed 5.92 millionpassengers in 2017, 6.035 million in 2018, andthat number is likely to grow in 2019.The YACL also announced in 2018 that it willincrease the capacity of the airport and step upmarketing to open new international routesbecause YIA was facing the slow growth in airpassenger traffic.Over the past five years, the number ofpassengers using the airport had grown anaverage of 8.6pc per year. YACL said that whiletourist arrivals from Asia continue to grow, thosefrom Europe and North America appear to havebeen hurt by media reports of the humanitariancrisis in Rakhine State.

Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-airport-handles-232m-passengers-through-april.html

NewspapersMyanmar Times

12 June 2019

PwC | June 2019 12

Govt to launch financial inclusion roadmap soon

FOLLOWING liberalisation of the banking andinsurance sectors by allowing 100 per cent foreigndirect investment (FDI), Myanmar plans tolaunch a financial inclusion road map by nextmonth, according to Thant Zin, director at theFinancial Regulatory Department (FRD).He told the two-day 4th Emerging Asia Bankingand FinTech Summit 2019 that Myanmar hadfully drawn up the road map, which would beofficially launched once approved by the cabinet.“It is now in the final stage, and we expect it tocome up in the second half of this year, as early asnext month,” he said.With the support of the United Nations CapitalDevelopment Fund, the road map will aim toimprove the nation’s financial sector in the nextfew years until 2022. It will oversee three keysectors – demand, supply and regulations.“In our view, MAP means making access possible.We will help businesses meet their targetmarkets, improve the whole landscape and reduceregulatory barriers,” he said.According to the official, the road map aims toimprove financial access, usage and quality of

financial services to all. It will mainly focus onfour areas – supporting the national financialinclusion strategy and implementation plan,elevating capacity building to enhance theecosystem, promoting innovations via digitalplatforms and increasing awareness on financialeducation and consumer protection.“We will increase formal financial inclusion from48 per cent last year to 60 per cent by 2022,” hesaid.The officials said all the stakeholders must worktogether on a wide range of affordable, qualityfinancial services to support job creation, povertyreduction and household resilience.“In a country like Myanmar, financial inclusion isa topic of growing importance. At the FRD, weplay a supervisory role in the insurance andmicro-finance sectors. We have liberalised theinsurance and banking sectors over the past fewmonths,” he said.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/govt-to-launch-financial-inclusion-roadmap-soon

NewspapersEleven Myanmar

13 June 2019

PwC | June 2019 13

New Competition Commission already under fire

Myanmar’s professed commitment to competitionreform has come under fire after the governmentpacked the new Competition Commission withbureaucrats serving under a minister.Six out of the 11-member body, including thechair, are government officials, while only oneidentifies as an economist.Appointing Commerce Minister U Than Myint asCommission chair is “questionable” since his ownministry has been called out for protectionism,said U Aung Khant, who heads a Yangon-basedpolicy think tank.“The Ministry of Commerce remains protectionistacross many sectors, often in favour of a selectgroup of local business elites,” he commented. Aministry official denied this.The appointment also deviates from internationalbest practices, where governments usuallydelegate this area of decision-making totechnocrats, independent of vested interests andpolitical pressures. For example, none of thecompetition authorities in India, Hong Kong,Singapore and the UK is headed by a politician.But criticism goes beyond the appointees. Local

business people have no idea how serious theCommission is, according to Myanmarbusinessman U Zaw Naing, who owns an IT firmand who supported Daw Aung San Suu Kyi in the2015 election.The Anti-Corruption Commission has showncommitment because they are publicly takingaction against senior government figures, he said.In contrast, local businesses don’t know what theCompetition Commission intends to do and “howfar the body will go.”To be fair, the Commission is “at an infant stageand the Commissioners are still studying andlearning,” he said.“If the Competition Commission were to convincebusiness that they were a serious body, they needto tackle the high-profile issues involvinggovernment policies and activities.”

Source: Myanmar Timeshttps://www.mmtimes.com/news/new-competition-commission-already-under-fire.html

NewspapersMyanmar Times

13 June 2019

PwC | June 2019 14

First Myanmar business environment index published

Businesses in Myanmar are concerned aboutinfrastructure quality and skilled labouravailability, the latest report on private sectoreconomic governance reveals.The Asia Foundation has published the MyanmarBusiness Environment Index 2019 (MBEI), withsupport from the UK’s Department forInternational Development (DFID) through theDaNa Facility. The report is a diagnostic tool forgovernment and the private sector to betterunderstand the local business environment. Itaims to provide the authorities at different levelswith evidence to pursue decentralised economicgovernance reforms.Six key findings were high-lighted by the reportwhich includes the issue of formalisation,difficulty of bureaucratic proce-dures, businesses’concerns, and challenges.Based on a nationwide survey of 4874 businessesin the services and manufacturing sectors, theMBEI reflects the feedback from privateenterprises across the country.The study measures ten components of goodeconomic governance and provides insights and

analysis that government may use to furtherimprove Myanmar’s business environment.Inclusive economic growth is the most powerfultool to address poverty and create a prosperoussociety, said Tom Coward, Inclusive Growth teamleader of DFID.“A growing and thriving private sector is at theheart of this,” Mr Coward added. “We want tocreate an environment where responsiblebusiness is regulated in a way that means it caninvest and grow, and which will create jobs andeconomic opportunities for the people ofMyanmar.” 85pc of Myanmar businesses have atleast one documented proof of formalisation; inmost cases it is an operating license from thetownship or City Development Committee.Regulation and administrative procedures forbusinesses after they have become legal tooperate are not burdensome by internationalcomparison;Source: Myanmar Timeshttps://www.mmtimes.com/news/first-myanmar-business-environment-index-published.html

NewspapersMyanmar Times

14 June 2019

PwC | June 2019 15

Thai firm sees ‘progress’ on LNG project despite delays, cost blowout

YANGON — Thai-listed firm TTCL says it ismaking progress on power purchase agreementnegotiations with the government for its liquefiednatural gas power project in Yangon and expects adeal to be reached by the end of the year.TTCL Myanmar Power Co Ltd general manager UHtet Aung Mon told Frontier on June 12 that thecost of the project had also risen significantlybecause of Myanmar Port Authority objections tothe original plan.TTCL initially advised shareholders the projectwould cost around US$350 million, but recentlydisclosed it had risen to $620 million to $640million.Under its initial proposal, TMPC planned todeploy a floating storage and regasification uniton the Yangon River near its existing Ahlonepower plant, and build 22 kilometres oftransmission lines and 16km of gas pipelines. Theplant would have been 356 megawatts.However, it was forced to come up with analternative because of objections from the MPA,Htet Aung Mon said.“Instead of the FSRU, we will build an LNG

terminal in Dala Township and a 24km-longunderground gas pipeline,” he said.The pipeline from the terminal to the Ahloneplant will pass under the Twante Canal andSeikgyikanaungto port before crossing the YangonRiver. The project also includes a 28km, 230kVtransmission line to Hlaing Tharyar. The planthas also been expanded to 388MW.“The cost would be higher than the original plan,”he said.Under the terms of the NTP, the project was dueto come online by the end of May 2020. TTCL toldshareholders at the time of the signing that itexpected to sign a PPA by the middle of 2018.Htet Aung Mon said the company, in commonwith others awarded notices to proceed for LNG-to-power projects in January 2018, had facedchallenges negotiating the PPA with the Ministryof Electricity and Energy.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/thai-firm-sees-progress-on-lng-project-despite-delays-cost-blowout

NewspapersFrontier Myanmar

14 June 2019

PwC | June 2019

2. Weekly Key Policy News

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PwC | June 2019

Weekly Key Policy NewsHeadlines

Casinos Legalized in Myanmar

Myanmar to allow private plantations to export timber

Govt allows foreign companies to export rice, other commodities

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CBM to approve QR code payment transactions soon

An Insider’s View of Changes at the Formerly Military-Run GAD

PwC | June 2019 18

Casinos Legalized in Myanmar

On May 7, Pyidaungsu Hluttaw – Myanmar’shighest legislature – approved the Gambling Act.It legalizes casinos in this country for the use offoreignersU Thant Sin Lwin, Acting Director General ofDirectorate Investment and CompanyAdministration, said that even though no bylaw tothe Gambling Act has been passed yet, hotelsfrom Hong Kong and Macau that feature casinosare already expressing interest in makinginvestment in the newly-legalized industry.He said: “The Hong Kong Trade Mission and theMacau Trade Mission visited us, and inquiredabout making investments in the casino industryhere. They expressed interest in makinginvestments in the hotel sector – especially thecasino business.”However, the department can only approve theproposals, with the approval of the uniongovernment, after a bylaw is passed.Back in February 2018, U Aung Hlaing Win, alawmaker from Mingaladon Constituency,submitted a motion to the Pyithu Hluttaw, urgingthe government to create a plan allowing casinos

in the country, as it would generate a good deal ofrevenue. At that time, U Ohn Maung, UnionMinister of the Ministry of Hotels and Tourism,said that casinos would only be allowed after thegambling law was enacted.Lawmakers pointed out that the casino businessin Macau pulls in some $33 billion a year,generating revenues of about $3 billion in taxesfor that country. Meanwhile, Singapore is takingin some $2.7 billion in revenue from the casinobusiness.According to the Gambling Act, only foreignerswill be allowed to gamble in the casinos, andcitizens are banned from the facilities. Investorsinterested in making investments in the casinobusiness are watching closely to see what rulesand regulations are imposed.The Ministry of Hotels and Tourism estimatesthat the number of tourists coming to this countrynext year will reach about seven million people.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/casinos-legalized-myanmar

NewspapersMyanmar Business Today

11 June 2019

PwC | June 2019 19

Myanmar to allow private plantations to export timber

The government will allow trees grown inplantations owned by the private sector and state-owned companies to be harvested for their timberand exported.Myanmar Timber Enterprisegeneral manager UNyiNyi Tun confirmed to reporters on June 11 inNay Pyi Taw that the government has decided toease restrictions on exports for these timbersources but the ban on the harvesting of timberfrom natural forests stands. The ForestDepartment had announced the loosening of therestriction on May 31. Timber exports have beenbanned since April 2014.Myanmar Forest Products and Timber MerchantsAssociation vice chair U Thein Win said the easeon restrictions of timber exports from plantationswill help businesses recoup their investments insuch plantations.“The trees have been growing for 10 years andallowing the investors to get back some of theirinvestments will also encourage them to investmore in such plantations,” he said.To ensure that the timber comes only fromplantations and not harvested from natural

forests, the Forest Department will be carryingout inspections. Companies wanting to harvesttheir timber for exports will need to get thedepartment’s permission.According to a 2015 report by the Rome-basedFood and Agriculture Organisation, Myanmaraccounts for half of teak exports before thecountry banned timber exports in 2014.According to Ministry of Commerce data, thevalue of wood and timber product exports beforethe ban averaged over US$500 million annually.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-allow-private-plantations-export-timber.html

NewspapersMyanmar Times

13 June 2019

PwC | June 2019 20

Govt allows foreign companies to export rice, other commodities

The Ministry of Commerce (MOC) will now allowforeign and joint venture companies to exportspecific food and commodity items, according toNotification 24/2019 released on June 6.Foreign companies with recommendations fromrelevant ministries can buy the commodities fromlocal producers will be issued licenses to exportthe goods.The aim is to raise the quality of Myanmar exportsand boost international demand for local goods aswell as to raise earnings for domestic producers.The MOC allowed a total of seven items includingrice, meat and fish, value-added crops, pulp andpaper, seeds, refined metals, semi-finished orfinished fruit products and wood based furniture.Notably, foreign companies in Myanmar will beallowed to export value-added rice and brokenrice as well as beans, pulses and corn.Competition is likely to become more intense forlocal producers as foreign companies come withlarger capital pools and marketing networks, saidU Than Oo, secretary of Bayintnaung RiceCommodity Market in Yangon.“On the other hand, there will be more buyers in

the market, which is good for farmers andproducers. The government’s move will attractforeign investments in the agriculture sector,which is important for growth and exportquality,” he said.Myanmar exported 1.5 million tonnes of riceworth U$470 million between October 2018 andMay 2019. A third of the rice is exported to Chinaat the border while the EU and Africa account forabout 45pc of exports, according to the MyanmarRice Federation.Recently, the Myanmar Investment Commissionpermitted Singapore-listed Wilmar Internationalto form a local joint venture - Wilmar MyanmarRiceland Ltd - to produce, sell and distribute riceand rice-related products including rice, riceflour, rice bran, rice bran oil and rice husks at theThilawa port in Yangon.

Source: Myanmar Timeshttps://www.mmtimes.com/news/govt-allows-foreign-companies-export-rice-other-commodities.html

NewspapersMyanmar Times

13 June 2019

PwC | June 2019 21

CBM to approve QR code payment transactions soon

Digital payments using QR codes will beintroduced to Myanmar as soon as the frameworkfor such payments are ready.Shanghai-based financial services companyUnionPay International’s (UPI) QR code systemaccessible through mobile phones would be madeavailable when the Central Bank of Myanmar(CBM) makes the official announcement.UPI operates as a subsidiary of China UnionPay,which has the largest credit- and debit-cardnetwork in the world allowing payments to betransacted through online and mobile platforms.CBM’s Daw Than Than Swe from thebanksupervision department told the Myanmar Timesthat payments via QR code “is sure to be launchedthis year” when a standard for such payments,MMQR, is implemented.“After this standard is approved, payments can bemade through QR codes locally for any businessand banks,” she said.Meanwhile, UPI launched a 20-page guidebookon cashless transactions including with QR codeson June 10 in anticipation of CBM’s approval ofthis mobile payment system. “The main objective

of this guidebook is to educate people here onbecoming a cashless society,” UPI’s SoutheastAsia assistant general manager Vincent Ling saidat the launch.He noted that mobile payments through QR codeswould be available “within months” in the countryand that the company has been working ongetting CBM’s approval. Ling added that theguidebook provides people more information oncashless transactions and build up trust on howthe payment system works.The guidebook includes the benefits of cashlesstransactions, functions of credit and prepaidcards, card application process and how to usecards to transact payments.UPI has been building up its network throughoutSoutheast Asia, which also includes point-of-salesand ATMs. In Myanmar, the company has beenbuilding up its presence with all the major banksfor payment products.

Source: Myanmar Timeshttps://www.mmtimes.com/news/cbm-approve-qr-code-payment-transactions-soon.html

NewspapersMyanmar Times

13 June 2019

PwC | June 2019 22

An Insider’s View of Changes at the Formerly Military-Run GAD

YANGON—In December, the National League forDemocracy took a significant step in its transitiontoward democratic governance by ordering thetransfer of the military-controlled GeneralAdministration Department (GAD) to a newlycreated ministry, the Office of the UnionGovernment. The backbone of the nationaladministrative mechanism, the GAD overseeslocal governance from the village and ward levelsto the Union level, dealing with people’s day-to-day needs including registration of births anddeaths, land management, tax collection andbudget planning.The minister of the Office of the UnionGovernment, U Min Thu, said in January that theaim of the transfer was to bring administrativeprocedures in line with the political system thecountry is working toward, and to ensure goodgovernance. With the transfer process now nearlysix months along, The Irrawaddy interviewed MaKyi Pyar Chit Saw, a consultant to the World Bankand the Asia Foundation who has been workingclosely with the department on its capacitybuilding and reform processes, about the recent

developments and the challenges involved inreforming the agency.“Some have concerns over the reforms. [Minister]U Min Thu also always urges in his speeches notto be overly concerned over the reforms as theyare doing their best [to reform the GAD]. But asthey are implementers of government policies,they surely feel insecure,” Ma Kyi Pyar Chit Sawsaid about the reactions of GAD officials to thechanges. In recent months, these changes haveincluded reviews of everything from the GAD’smission and core functions to the handbookissued to department personnel. Existingdirectives and protocols and the GAD’s code ofconduct are also being reviewed for any necessaryamendments.

Source: The Irrawaddyhttps://www.irrawaddy.com/in-person/interview/an-insiders-view-of-changes-at-the-formerly-military-run-gad.html

NewspapersThe Irrawaddy

13 June 2019

PwC | June 2019

3. Weekly Investment News

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PwC | June 2019

Weekly Key Investment NewsHeadlines

KBZ Group, PTT partner to develop oil terminal

Few foreign fuel investments, but more Yangon Petrol stations planned: Chief Minister

China’s CNPC Breaks into Myanmar Fuel Retailing with Singapore Brand

24

Thilawa Multipurpose International Terminal (TMIT) Project Launched

Gov’t to call for re-tender to upgrade Kawthaung Airport

PwC | June 2019 25

KBZ Group, PTT partner to develop oil terminal

The Kanbawza Group (KBZ) and Thai state-owned PTT Public Company (PTT) will enter intoa joint-venture agreement through theirsubsidiaries for oil-terminal development andretail business expansion, the companies’ said in apress release.KBZ’s Brighter Energy Co and Brighter EnergyRetail Co will partner with PTT’s subsidiary PTTOil and Retail Business Public Co Ltd (PTTOR).The development of the oil terminal will includethe procurement of petroleum products,management of jetty, oil storage terminal,liquefied petroleum gas (LPG) filling plants andwholesale business of petroleum products locatedin southern Yangon’s Thilawa area.This project will be completed in 2021 andbecome the largest oil terminal in Myanmar withthe capacity of one million barrels of oil and 4500metric tonnes of LPG, the companies claim.Oil terminal development and retail business willinvolve over US$185 million and US$26 millionrespectively, said U Kaung San, managingdirector of Brighter Energy Co and BrighterEnergy Retail Co. The total investment is

expected to be over UD$200 million.PTTOR also plans to introduce brands such asPTT fuel stations and Café Amazon to Myanmarfor its retail business expansion to localconsumers and fuel stations will be expanded to70 stations within 2023.The company’s chair Auttapol Rerkpiboon saidMyanmar has long been a key market to expandits fuel and retail business.

Source: Myanmar Timeshttps://www.mmtimes.com/news/kbz-group-ptt-partner-develop-oil-terminal.html

NewspapersMyanmar Times

10 June 2019

PwC | June 2019 26

Few foreign fuel investments, but more Yangon Petrol stations planned: Chief Minister

The Yangon Region Government will increaseefforts to allow more Yangon Petrol Co (YP) fuelstations to open in response to high demand,regional government officials said at its annualpress conference last week.“The public frequently asks us to open more YPpetrol stations across Yangon. However, many ofthese projects have been delayed due to landissues. We will continue our efforts to enablefurther expansion nationwide,” said U Han Tun,regional minister for Agriculture, Livestock,Forestry and Energy.Yangon Region Chief Minister U Phyo Min Theinsaid state land was sold to privately-ownedYangon Petrol Co at bargain levels to set up YPstations. However, YP is expected sell fuel atcheaper prices compared with other petrolstations, The Myanmar Times understands.There are currently just three YP stations inYangon, in Thaketa, Dagon Seikkan and NorthDagon. The petrol stations are operated by theYangon Petrol Co under the supervision of theYangon Region government.The Yangon Petrol Co is reported to have bought

state-owned land from the regional governmentat K2000 per square foot, which is much lowerthan the market price. On average, YP petrolprices are around K50-K60 per litre less thanother petrol stations.The Myanmar Times understands that themajority of Yangon Petrol Co’s directors are alsoon the board of PT Power Co, which operatespetrol stations in Myanmar together with Best OilCo, which is registered in Singapore.At YP stations on June 6, the price per litre of 92octane (Ron 92) and 95 cctane fuel was K790 andK870, respectively, while a litre of diesel andpremium diesel was K905 and K915, respectively.At Max petrol stations, in comparison, Ron 92and Ron 95 fuel was priced at K830 and K905 perlitre, respectively, while diesel and premiumdiesel sold for K925 and K935 per litre,respectively.

Source: Myanmar Timeshttps://www.mmtimes.com/news/few-foreign-fuel-investments-more-yangon-petrol-stations-planned-chief-minister.html

NewspapersMyanmar Times

10 June 2019

PwC | June 2019 27

China’s CNPC Breaks into Myanmar Fuel Retailing with Singapore Brand

China National Petroleum Corp is planning toopen dozens of petrol stations in Myanmar, thefirst major foreign investor to enter the fast-growing Southeast Asian fuel market, as the stategiant expands its retail oil business, companyofficials said.The investment, which could eventually reachtens of millions of dollars, follows a new strategyto tap overseas retail margins as China's domesticfuel market is saturated. The move follows asimilar but larger investment in Brazil, whereCNPC's global trading and refining unit bought30% of a leading Brazilian fuel dealer last year.CNPC's external retailing push came after TianJinghui, a veteran fuel marketing executive tookthe helm at the global unit, PetroChinaInternational, which is also handling theMyanmar investment.CNPC sees Myanmar as a prime frontier marketfor fuel retailing, where foreign participation isminimal, but demand is growing at about 10%annually on a fast-expanding vehicle fleet andbarely existent local refining industry."Myanmar is one of the few markets in this region

that's open to outside investment and wheredemand is growing fast, "said a Beijing-basedPetroChina executive with direct knowledge of theinvestment. Officials declined to be namedbecause they are not authorized to speak to press.Myanmar is the fastest-growing economy inSoutheast Asia, with the Asian Development Bank(ADB) forecasting growth of 6.8%next year.Myanmar's removal of fuel subsidies in 2007 andopening of the market to private investors hasseen the number of petrol stations increase 10-fold over the past decade to more than 2,000, saidPetroChina officials and a Yangon-based analyst.Already the largest investor in Myanmar's energysector, operating pipelines that transport oil andgas from a delivery point on Myanmar's westerncoast to China's southwest, CNPC has out rivaledits global peers for a foothold in the market.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/china-s-cnpc-breaks-myanmar-fuel-retailing-singapore-brand

NewspapersMyanmar Business Today

11 June 2019

PwC | June 2019 28

Thilawa Multipurpose International Terminal (TMIT) Project Launched

The Japanese company Kamigumi has launchedthe Thilawa Multipurpose International Terminal(TMIT) at project plots 25 and 26 in the ThilawaSpecial Economic Zone.The $200 million investment terminal is 400meters (1,312 feet) in length, and 40 meters (131feet) wide, with one steel jacket-type main bridge,and three approaching bridges. It will also featuretwo quay cranes, six rubber tired gantry (RTG)cranes, three reach stackers, six trailers, and sixchassis.The Myanmar Port Authority, under the Ministryof Transport and Communications, said thatTerminal No. 27 in the Thilawa Special EconomicZone is expected to be complete during 2020.There are eight inland ports in Yangon, as well asone seaport, Thilawa Port, which allows ships ofup to 15,000 tons to enter. Contrary to popularbelief, a ship’s gross registered tonnage is not ameasurement of weight, per se, but rather ameasurement of enclosed volume; this figurehelps to ascertain how much usable space anygiven ship has. A ship’s actual weight is measuredby the volume, or weight, of water that it

displaces.Myanmar International Terminals Thilawa(MITT) – of which Thilawa MultipurposeInternational Terminal (TMIT) will be a part – isa multipurpose container terminal located atThilawa, some 25 kilometers from Yangon, nearthe mouth of the Yangon River. It offers acomprehensive range of safe, efficient, andproductive services to the shipping industry 24hours a day, seven days a week.How important is it for this terminal center tocontinue to expand and stay modern? Here is aclue to the answer: it is the nation’s internationaltrade portal, through which 90 percent of ourmaritime trade passes.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/thilawa-multipurpose-international-terminal-tmit-project-launched

NewspapersMyanmar Business Today

11 June 2019

PwC | June 2019 29

Gov’t to call for re-tender to upgrade KawthaungAirport

YANGON-As Tender winner Company GoldenMyanmar Airlines relinquished rights to carry outthe upgrading tasks on Kawthaung Airport inTaninthayi Region, government will be calling fora re-tender to upgrade Kawthaung Airport,according to the Ministry of Transport andCommunications.“Golden Myanmar Airlines Public Companybacked off from Kawthaung Airport upgrades. So,we are going to call for a re-tender. We have somecriteria that must be amended. The remaining twocompanies will be competing to sign thecontract,” Deputy Minister Kyaw Myo from theMinistry of Transport and Communications toldThe Daily Eleven.Plans were underway to upgrade three domesticairports: Heho Airport in Shan State, KawthaungAirport in Taninthayi Region and MawlamyaingAirport in Mon State to the international standardby joining hands with private companies.It is expected that the upgrade for Heho airportwill cost US$ 40 million, with US$ 20 million andUS$ 36 million respectively for Mawlamyaing andKawthaung Airports.

“Among three tender winners for three domesticairports upgrade, Golden Myanmar AirlinesPublic Company that was given rights toKawthaung Airport’s upgrade backed off fromproject,” Ye Htut Aung, Deputy Director Generalof the Department of Civil Aviation (DCA) toldThe Daily Eleven.Aiming to upgrade three domestic airportsthrough a public-private partnership (PPP)system, the Request for proposal had beentendered for upgrading of three domestic airportsto the local and foreign developers.“We opted out of the upgrading works of theKawthaung Airport before April. We submittedour cancelation,” said Kyaw Nyein, ChiefExecutive Officer from Golden Myanmar Airlines.Privately-owned Gold Myanmar Airlines currentlyoperates two ATR72-600s on an exclusivelydomestic network covering 11 airports inMyanmar.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/govt-to-call-for-re-tender-to-upgrade-kawthaung-airport

NewspapersEleven Myanmar

13 June 2019

PwC | June 2019

3. Weekly New Tenders

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PwC | June 2019

Tenders (Myanmar)List

Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .

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No applicable Tenders announced for the week ending 14 June 2019

PwC | June 2019

Tenders (Multilateral organizations) List

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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ADB: TA-9074 MYA: Capacity Development for Project Implementation - Senior Consultation and Participation Specialist (49297-001), Closing Date: 20 June 2019 (Individual)

ADB: SC 112749 MYA: MYA: Enhancing Capacity Arrangements to Facilitate Trade in Myanmar-International Financial Market Expert1, Closing Date: 21 June 2019 (Individual)

ADB: TA-9723 REG: Support for Human and Social Development in Southeast Asia - Preparing the MYA: Improving Non-Communicable Disease (NCD) Prevention and Treatment (52335-001), Closing Date: 25 June 2019

ADB: TA-9723 REG: Support for Human and Social Development in Southeast Asia - MYA NCD International Procurement Specialist (52335-001), Closing Date: 26 June 2019 (Individual)

PwC | June 2019

Tenders (Multilateral organizations) List (cont’d)

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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ADB: TA-9723 REG: Support for Human and Social Development in Southeast Asia - International Health Economist (52335-001), Closing Date: 26 June 2019 (Individual)

WBG: Request for expression of interest for selection # 1263320, COMMUNICATION CONSULTANT - Myanmar, Closing Date: 26 June 2019 (Individual)

WBG: Request for expression of interest for selection # 1263344, Project Manager for Biodiversity Offset: Shwe Taung Group (STG) Cement, Myanmar, Closing Date: 27 June 2019 (Individual)

PwC | June 2019

4. MIC Permitted Projects

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PwC | June 2019

MIC Permitted Projects (Meeting 8, 2019)

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No. Name of Company Type of Investment Form of Investment

1 Myanmar Unilink Communication Co.,LtdNetwork facilities services, network services and application services

Wholly Foreign Owned

2 AGB Communication Co.,LtdNetwork facilities services, network services and application services

Wholly Myanmar Owned

3 Mon Petrol Co.,LtdConstruction of jetty for container storage station, bonded warehouse and operation of storage tanks for edible oils

Wholly Myanmar Owned

4 Awra Energy Public Co.,LtdConstruction of jetty and LPG storage tanks, importation

Wholly Myanmar Owned

Source: DICA

PwC | June 2019

5. Upcoming Events

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PwC | June 2019

Upcoming Events (July 2019) List

Date Location Name of Event Sector Price Focus Points

02-03 July 2019

Mandalay Education & Career Education Free

“Education & Career event will showcasesproducts like job and educational, educationproducts and accessories, educational loanand financial services, Employees jobfacilities etc.”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

© 2019 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

www.pwc.com/mm

PwC Myanmar Weekly Business Intelligence Publication

For further information please contact:

Mark RathbonePwC Capital Projects and Infrastructure Leader, Asia+65 6236 4190mark.rathbone@sg.pwc.com

Jennifer TayManaging DirectorCapital Projects & Infrastructure, PwC Singapore

+65 8876 900jennifer.c.tay@sg.pwc.com

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