Myanmar Business Guide for Brazilian Businesses
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2019 Myanmar Business Guide for Brazilian Businesses An Introduction of Business Opportunities and Challenges in Myanmar Prepared by Myanmar Research | Consulting | Capital Markets Contents Introduction 8 Basic Information 9 1. General Characteristics 10 1.1. Geography 10 1.2. Population, Urban Centers and Indicators 17 1.3. Key Socioeconomic Indicators 21 1.4. Historical, Political and Administrative Organization 23 1.5. Participation in International Organizations and Agreements 37 2. Economy, Currency and Finances 38 2.1. Economy 38 2.1.1. Overview 38 2.1.2. Key Economic Developments and Highlights 39 2.1.3. Key Economic Indicators 44 2.1.4. Exchange Rate 45 2.1.5. Key Legislation Developments and Reforms 49 2.2. Key Economic Sectors 51 2.2.1. Manufacturing 51 2.2.2. Agriculture, Fisheries and Forestry 54 2.2.3. Construction and Infrastructure 59 2.2.4. Energy and Mining 65 2.2.5. Tourism 73 2.2.6. Services 76 2.2.7. Telecom 77 2.2.8. Consumer Goods 77 2.3. Currency and Finances 79 2.3.1. Exchange Rate Regime 79 2.3.2. Balance of Payments and International Reserves 80 2.3.3. Banking System 81 2.3.4. Major Reforms of the Financial and Banking System 82 Page | 2 3. Overview of Myanmar’s Foreign Trade 84 3.1. Recent Developments and General Considerations 84 3.2. Trade with Major Countries 85 3.3. Annual Comparison of Myanmar Import of Principal Commodities 86 3.4. Myanmar’s Trade Balance 88 3.5. Origin and Destination of Trade 89 3.6. Composition by Products 90 4. Economic Relations Between Brazil and Myanmar 92 4.1. Bilateral Trade 92 4.2. Bilateral Investment 94 4.3. Principal Economic Agreements with Brazil 94 4.4. Lines of Credit from Brazilian Banks 94 4.5. Opportunities 94 5. Market Access 95 5.1. Tariff System 95 5.1.1. Myanmar Customs Department 95 5.1.2. Myanmar Automated Cargo Clearance System 95 5.2. Regulation of Foreign Trade Activities 97 5.2.1. General Regulations 97 5.2.2. Types of Entities That Can Carry Out Trading Transactions 98 5.2.3. Exporter/Importer Licensing 98 5.2.4. Import/ Export License Procedure 98 5.2.5. Prohibited Items for Import and Export 102 5.2.6. International Courier Services Operating in Myanmar 102 5.2.7. Specific Regulations 103 5.3. Documentation and Requirements 104 5.4. Special Customs Regimes 105 5.4.1. Customs Transit Declaration 105 5.4.2. Drawback 105 6. Transport Infrastructure 106 6.1. Domestic Infrastructure 106 Page | 3 6.1.1. Road Network 106 6.1.2. Rail Network 108 6.1.3. Water Network 109 6.1.4. Air Navigation Network 111 6.2. Import/Export Infrastructure 112 6.2.1. Maritime Ports and Connections 112 6.2.2. Airports and International Connections 112 6.2.3. Domestic and International Airlines in Myanmar 112 7. Sales and Marketing Structure 116 7.1. Distribution Channels 116 7.1.1. General Considerations 116 7.2. Marketing Channels 118 7.2.1. Marketing Channels 118 7.2.2. Promotions 119 7.2.3. Selling 119 7.2.4. Publicity Programs 119 7.2.5. Partnerships 119 7.2.6. E-commerce 119 7.3. Trade & Business Practices 119 7.3.1. Import Negotiations and Agreements 119 7.3.2. Cultural Aspects of Doing Business 120 7.3.3. Market Entry Strategy 121 7.3.4. Selection of Business Partner 122 7.3.5. Shipping Insurance 122 7.3.6. Trade Disputes and Arbitration 122 8. Recommendations to Brazilian Companies 123 8.1. Summary of Customs and Industry Practices in Trading 123 8.1.1. Relationship is Key. 123 8.1.2. Initiatives to Enhance the Current Trading Ecosystem and Environment 123 8.1.3. Complications Everywhere 123 8.2. Recommendations 124 8.2.1. Work with Agents. 124 Page | 4 8.2.2. Establish A Local Presence. 124 8.2.3. Conduct Due Diligence Prior to Making Commitment. 124 8.2.4. Establish Good Connections with Government Agencies. 124 8.2.5. Stay Updated with Frequently Changing Regulations. 125 8.2.6. Be Part of Associations. 125 8.2.7. Stay Alert for New Opportunities. 125 8.2.8. Participate in Trade Fairs and Expos. 125 8.2.9. Be Aware of Cultural Aspects. 125 8.2.10. Myanmar Can Be a Gateway. 125 8.2.11. Barter Opportunity Exists. 126 8.2.12. Advocate for G to G Collaborations. 126 8.3. Major Sectors of Opportunity for Brazilian Investors 126 8.3.1. Coffee 126 8.3.2. Corn 132 8.3.3. Livestock Sector 138 Annex I – Contacts and Addresses 145 Annex II – Freight and Communications with Brazil 158 Annex III – Additional Information 161 Page | 5 Acronyms ADB Asian Development Bank AFTA ASEAN Free Trade Agreement AI Artificial Insemination AM Action Matrix AMRDP All Mon Region Democracy Party ANP Arakan National Party ARF ASEAN Regional Forum ASEAN Association of Southeast Asian Nations BCF Billion of Cubic Feet BIMSTEC Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation BOT Build-Operate-Transfer BRI Belt and Road Initiative BSPP Burma Socialist Programme Party CAC Codex Alimentarius Commission CBM Central Bank of Myanmar CEPT Common Effective Preferential Tariff Scheme CIF Costs, Insurance and Freight CITIC China International Trust and Investment Corporation CMEC China Myanmar Economic Corridor CQI Coffee Quality Institute CSO Central Statistical Organization CSR Corporate Social Responsibility CUSDEC Customs Declaration Form DICA Directorate of Investment and Company Administration DOC Day Old Chick DRD Department of Rural Development DTIS Diagnostic Trade Integration Study EAS East Asia Summit EIF Enhanced Integrated Framework EU European Union FAO Food and Agriculture Organization FDA Food and Drug Administration Department FDI Foreign Direct Investment FMCG Fast Moving Consumer Goods FMI First Myanmar International FTA Free Trade Agreements GAP Good Agricultural Practices GP Grand Parent GSP Generalized System of Preferences Page | 6 HS Harmonized System ICAO International Civil Aviation Organization ICRM International Civil Aviation Organization ID Import Declaration IDA International Development Association IEL Import/Export License IFAD International Fund for Agricultural Development IFC International Finance Corporation IHRB Institute for Human Rights and Business ILO International Labor Organization IMF International Monetary Fund IP Intellectual Property JICA Japan International Cooperation Agency LC Letter of Credit LIFT Livelihood Food Security Fund LNG Liquid Natural Gas LPG Liquefied Petroleum Gas MAC Middle-class and Affluent Consumer MACCS Myanmar Automated Cargo Clearance System MAI Myanmar Airway International MCA Myanmar Coffee Association MCD Myanmar Customs Department MCEA Myanmar Construction Entrepreneur Association MCRB Myanmar Centre for Responsible Business MEC Myanma Economic Corporation MIC Myanmar Investment Commission MIL Myanmar Investment Law MIMU Myanmar Information Management Unit MLF Myanmar Livestock Federation MLRD Myanmar Livestock Resources Development MNP Mon National Party MOE Ministry of Education MOEE Ministry of Electricity and Energy MONRE Ministry of Natural Resources and Environmental Conservation C MOPF Ministry of Planning and Finance MOU Memorandum of Understanding MPT Myanmar Posts & Telecommunication MR Myanma Railways MTE Myanmar Timber Enterprise MTP Mid-Term Program MyCO Myanmar Companies Online NEMC National Energy Management Committee Page | 7 NEP National Electrification Plan NGO Non-government organization NLD National League for Democracy NLMP National Logistics Master Plan NTMP National Transport Master Plan NUP National Unity Party NYDC New Yangon Development Company OSB Offshore Supply Bases Pcode Place Code PNO Pa-O National Organization PPP Public Private Partnership PS Parent Stock SEZ Special Economic Zone SLORC State Law and Order Restoration Council SME Small and Medium Enterprises SNLD Shan Nationalities League for Democracy SPDC State Peace and Development Council TNP Ta'ng National Party UMEHL Union of Myanmar Economic Holding Limited UMFCCI Union of Myanmar Federation of Chambers of Commerce and Industry UMTA Union of Myanmar Travel Association UN United Nations UN United Nations UNESCO United Nations Educational, Scientific and Cultural Organization UNIDO United Nations Industrial Development Organization UNODC United Nations Office on Drugs and Crime UNWTO United Nations World Tourism Organization USAID US Agency for International Development USDP Union Solidarity and Development Party VC-RD Value Chains for Rural Development Project WCO World Customs Organization WHO World Health Organization WMO World Meteorological Organization WTO World Trade Organization WWF World Wildlife Fund YSX Yangon Stock Exchange YVQC Yangon Vehicle Quota Certificate ZCD Zomi Congress for Democracy Page | 8 Introduction The objective of this report is to introduce Myanmar (formerly known in Portuguese as “Birmânia” and in English as “Burma”) to Brazilian companies, as well as the potential economic opportunities it offers. The report entails many topics and sections that allows readers to establish an understanding of the political and economic contexts, regulatory framework and the economic opportunities for Brazilian investors across specific sectors. Myanmar has undergone a series of political and economic transformations. Therefore, political and economic developments in the country have been presented in chronological order to allow readers to understand the trends and developments over the years. With the intention of reflecting the real situation, significant political and economic scenarios have been presented as they are, and an analysis has been drawn to give readers an understanding of their impacts, encompassing the different aspects of the economy that have been affected. From that, a future outlook has also been presented based on experts’ and industry stakeholders’ opinions and projections on how the economy in general, and specific sectors, could progress in the future. Since 2011, Myanmar has undergone a series of political and economic events that have transformed the country. For example, the administration has changed from decades of military rule to a civilian government, and the economy has opened to international investors after decades of a closed-door, isolated economic system.