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. The civilian government has initiated a series of political and economic reforms that have resulted in a positive economic performance. For the first time in history, Myanmar’s economy was performing well as the fastest growing economy in Asia in 2016, according to the Asian Development Bank (ADB).

However, Myanmar’s economy has seen ups and downs, resulting in a fluctuating performance over the years. Myanmar, a frontier market that is strategically located with a mass market and huge labor force, has a lot to offer to international investors.

Despite the attractive opportunities it offers, Myanmar also has complex market dynamics and practicalities, as well as a frequently changing regulatory framework, which makes it difficult for foreign investors to grasp a thorough understanding. In addition, there is limited information and data publicly available. This report serves as a comprehensive guide to fill this gap by providing investors with information and recommendations on how to tackle the on the situation on the ground.

This report provides the readers with facts about Myanmar’s economy, significant rules and regulations, recent developments, an overview of the key sectors, a deeper dive into specific sectors that could be of interest to Brazilian companies, trading rules, procedures and the practicalities, challenges on the ground and recommendations on how to tackle practices on the ground.

Page | 9 Basic Information

Area : 678,500 km2 Population : 53.9 Million1

Table 1: Distribution of Population

In Thousand

States and Regions Male Female Total

Union 24,825 26,662 51,486

Union (enumerated) 24,229 26,051 50,280

Union (not enumerated) 596 610 1,206

Source: Myanmar Statistical Yearbook 2017

Population density : 76/km2

Currency : K (Myanmar Kyat)

Table 2: Exchange Rate – US$ to K

2016 2017 2018(Jan to Jul) 2018 (Aug)

1,232 1,344 1,344 1,564

Source: Central Statistical Organization (CSO)

Table 3: GDP

In US$ billion

2013-14 2014-15 2015-16 2016-17 2017-18

GDP 37 42 46 51 60

Source: Ministry of Planning and Finance

Table 4: Composition of GDP

2013-14 2014-15 2015-16 2016-17 2017-18

Agriculture 31.4% 29.9% 28.9% 27.2% 26.2%

Industry 28.6% 29.7% 30.0% 30.9% 31.6%

1 www.dop.gov.mm

Page | 10 Services 40.0% 40.5% 41.1% 41.9% 42.2%

Source: Ministry of Planning and Finance

Table 5: GDP Growth over 5 Years

2013-14 2014-15 2015-16 2016-17 2017-18

Real GDP 8.4% 8.0% 7.0% 5.9% 6.4% growth (%)

Source: Ministry of Planning and Finance

Table 6: Per Capita GDP

In US$

2011 2012 2013 2014 2015 2016 2017

Per Capita GDP 895 981 1,002 1,071 1,200 1,269 1,375

Source: Ministry of Planning and Finance

Administrative capital and its population : Nay Pyi Taw (1.2 Million) – officially launched as the new capital of Myanmar since 2006

Major cities and their population : Yangon (7.4 Million), Mandalay (6.1 Million)

Urban, rural ratio : 30:70

Gender ratio (M: F) : 48:52

Life expectancy : 64.8 years

Working age population (15-64) : 33.8 Million (63%)

1.General Characteristics

1.1. Geography

Country :Myanmar, officially the Republic of the Union of Myanmar and also known as Burma), is a country in Southeast Asia. The country is bordered by India and Bangladesh to its west, Thailand and Laos to its east and China to its north and northeast. To its south, about one third of Myanmar's total perimeter of 5,876 km (3,651 mi) forms a coastline of 1,930 km (1,200 mi) along the Bay of Bengal and the Andaman Sea. The former capital,

Page | 11 Yangon, has been known as the commercial capital of the country since 2006, when Nay Pyi Taw was officially proclaimed as Administrative capital of Myanmar. Yangon is among the most populated regions in Myanmar with a population of 7.4 million, and is the fastest growing city with vibrant opportunities. It has 29 industrial zones, more than 6,200 small- and-medium enterprises, and is the top contributor to the country’s GDP.2

In 2011, the military-backed democratic government led by former President U Thein Sein took the office following the 2010 general election. Since then, the country has opened its economy and encouraged foreign investments. As the first civilian government after decades of military junta, the government initiated a series of political and economic reforms, and as a consequence the country was able to improve its relations with foreign countries. This has also led to the easing or relaxation of general and targeted sanctions imposed by Western countries. There has also been growing support from the international community that has helped the country in many aspects. As a country that is once again open after decades of isolation, Myanmar is a greenfield market that offers investors attractive opportunities across many sectors.

In 2015 general elections, the opposition party, the National League for Democracy, won a landslide victory and formed the new government. Political icon Daw Aung San Suu Kyi, known for her decades of fight for democracy and the chairperson of the National League for Democracy (NLD), assumed the role of State Counselor. The military still holds control of three ministries, namely defense, border affairs and home affairs, and 25% of seats in the parliament. Despite the government’s continuing attempts to keep up the momentum, the economy has been stagnant due to many factors, such as continuing criticism of the government’s treatment of ethnic minorities, its response to ongoing conflicts between the military and the ethnic armed groups, and conflicts between communities in Rakhine State at the border with Bangladesh.

Nationality: noun: Myanmar (formerly “birmanês” in Portuguese and “Burmese” in English). Adjective: Myanmar (formerly “birmanês” in Portuguese and “Burmese” in English).

Flag:

Myanmar borders China to its north, India to its west and the rest to its south and east. Strategically located between China and India, Myanmar’s position means it could benefit from the economic opportunities in both countries.

The Ayeyarwaddy, the main river of Myanmar, flows from north to south through the Central Myanmar Basin and ends in the Ayeyarwaddy delta. The Mekong runs from the Tibetan

2 Two-year-performance of Yangon Region Government | Global New Light of Myanmar

Page | 12 Plateau through China's Yunnan province and northeastern Myanmar into Laos. The length of the coastline is 1,930 kilometers, while the size of the total water area is 23,070 square kilometers.

The major cities in Myanmar are Nay Pyi Taw (the capital since 2005), Yangon (largest commercial city and former capital), Mandalay, Mawlamyine, Bago and Pathein. Yangon is still the center of business, with the main port and airport in the country, and is located close to the sea. Mandalay, the second largest city, is located in the center of the country and is a trading city with strong links to China.

Figure 1: Myanmar Location in the World Map

Page | 13 Figure 2: Myanmar Map

Neighboring Countries : China, India, Bangladesh, Thailand, Laos

Climate There are three seasons – hot season, rainy season and cold season. Hot season is from February to May; rainy season is from June to September; and cold season is from October to January. Myanmar lies in the monsoon region of Asia, with its coastal regions receiving more than 5,000 millimeters (196.9 inches) of rain annually. The northern regions of Myanmar are the coolest, with average temperatures of 21 °C (70 °F). Coastal and delta regions have an average maximum temperature of 32 °C (89.6 °F).

Table 7: Monthly Mean Temperature

Page | 14 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

NAY PYI TAW

Yezin 23.6 25.8 28.6 31.6 30.8 28.9 28.0 27.9 28.5 27.9 26.4 23.9

Tatkone 23.6 25.9 29.0 31.7 30.6 28.6 27.7 27.7 28.5 28.3 27.1 24.0

Pyinmana 24.4 26.0 28.9 31.3 30.5 29.2 28.4 27.9 28.5 28.2 26.9 23.7

KACHIN STATE

Myitkyina 18.5 20.9 24.3 26.6 28.1 27.9 27.7 28.7 28.1 26.6 22.5 19.0

Mohnyin 17.0 19.1 23.0 26.0 27.5 27.6 27.3 27.5 27.3 25.5 21.7 18.0

KAYAH STATE

Loikaw 18.6 20.8 24.0 26.6 25.9 24.9 24.5 24.3 24.8 23.9 21.9 19.0

KAYIN STATE

Hpa-an 25.5 27.4 29.3 30.7 28.9 26.8 26.1 26.0 26.9 28.5 28.3 26.2

CHIN STATE

Falam 14.6 16.7 19.9 21.7 21.7 21.5 20.8 21.0 20.9 19.9 17.9 15.0

Hakha 10.4 12.5 15.8 18.3 19.0 19.3 18.9 18.7 18.3 16.5 13.1 10.7

SAGAING DIVISION

Katha 18.8 21.0 24.4 26.1 27.0 26.9 26.8 26.6 26.6 25.2 22.3 18.9

Mawlaik 19.2 21.2 25.0 28.5 29.6 29.6 29.4 28.9 28.6 27.0 23.8 20.3

Monywa 22.0 24.6 28.6 31.7 31.9 31.3 31.3 30.3 29.7 28.1 25.6 22.3

Shwe Bo 21.6 23.6 28.2 30.5 30.2 29.7 29.6 28.9 28.7 27.4 24.6 21.6

Hkamti 16.8 19.3 22.9 25.8 27.5 27.1 26.5 27.3 27.3 25.5 21.5 17.9

TANINTHARYI DIVISION

Dawei 25.9 27.2 28.5 29.5 28.1 26.8 25.9 26.1 26.1 27.3 27.5 26.3

Myeik 27.0 28.0 29.0 29.9 28.9 27.6 26.9 27.0 26.7 27.7 28.1 27.3

BAGO DIVISION

Bago 24.2 26.4 29.3 31.0 29.6 27.7 27.0 26.9 27.3 28.2 27.5 25.1

Pyay 24.0 26.1 29.0 31.4 30.2 28.2 27.3 27.5 27.9 28.1 27.0 24.6

MAGWAY

Page | 15 DIVISION

Magway 22.2 24.6 28.6 31.5 31.0 28.9 28.3 28.7 29.0 28.0 26.0 22.3

Gangaw 19.8 22.6 27.0 30.8 31.0 30.0 29.4 28.6 28.4 27.0 24.2 20.6

MANDALAY DIVISION

Mandalay 22.4 24.8 29.2 32.5 31.8 31.0 30.8 30.2 30.0 28.7 26.2 22.8

Pyin Oo Lwin 15.1 16.7 20.7 23.3 23.6 23.6 22.6 22.2 22.6 21.4 18.4 15.3

Nyaung Oo 22.0 24.6 29.0 31.4 32.8 31.4 31.2 30.3 29.9 28.5 26.3 22.6

MON STATE

Mawlamyine 25.7 27.5 29.3 30.6 29.0 27.4 26.6 26.7 27.1 28.3 28.2 26.5

Yay 26.4 27.6 28.7 30.3 28.9 27.7 26.8 26.8 27.3 28.2 28.2 27.1

RAKHINE STATE

Sittwe 21.2 22.8 25.7 28.3 27.9 27.4 26.5 26.4 26.8 26.9 25.3 22.7

Thantwe 22.0 23.1 26.1 29.0 29.1 27.7 27.0 27.1 27.6 28.2 26.8 23.6

YANGON DIVISION

Yangon 24.9 26.9 29.1 30.8 29.3 27.6 27.0 26.8 27.1 27.8 27.5 25.6

SHAN STATE

Lashio 16.2 18.0 21.7 24.8 25.9 26.5 25.8 25.7 25.8 24.2 20.9 17.4

Taunggyi 16.5 18.1 21.3 23.4 22.7 21.9 21.2 21.2 21.7 20.9 19.3 17.0

Keng Tung 18.6 20.3 23.4 26.3 27.0 26.7 25.9 25.7 25.4 23.9 21.6 19.0

AYEYARWADY DIVISION Pathein 25.0 26.9 29.0 30.8 29.7 27.8 27.2 27.1 27.3 28.0 27.6 25.5 Source: Department of Metrology and Hydrology, Climate, Statistical Yearbook 2011

1.2. Population, Urban Centers and Indicators Population

The Ministry of Immigration and Population, with technical support from United Nations Population Fund (UNFPA), undertook the country’s first national census in 30 years between 30th March and 10th April 2014. A total of 110,000 enumerators visited over 12 million households to gather data to provide social,

Page | 16 economic and demographic characteristics of people and households for the purpose of on-going reforms, development planning and good governance.3

Ethnic groups :There are 135 recognized ethnic groups. The major ethnic groups are: Burmese 68%, Shan 9%, Karen 7%, Rakhine 4%, Chinese 3%, Indian 2%, Mon 2%, other 5%.

Religions :Buddhism 87.9%, Christianity 6.2%, Islam 4.3%, Hinduism 0.5%, Tribal religions 0.8%, others 0.2%, atheism 0.1%.

Languages :Burmese is the official language, and most commonly used. Burmese is spoken as a second language by most educated members of other ethnic groups, although some of those groups have little grasp of this language. Many educated urban residents speak English as a second language, but it is not widely spoken among the population as a whole. Shan is as a commonly-used second language for many ethnic groups in Shan State, while Jingphaw is spoken as a second language by many ethnic groups in Kachin State.

Table 8: Total Population by State and Region

In Thousand

States and Regions Male Female Total Percentage Kachin State 878 811 1689 3% Kachin State (enumerated) 855 787 1643 3% Kachin State (not enumerated) 23 24 47 0% Kayah State 144 143 287 0% Kayin State 775 799 1574 3% Kayin State (enumerated) 739 765 1504 3% Kayin State (not enumerated) 36 34 70 0% Chin State 230 249 479 1% Sagaing Region 2517 2808 5325 9% Tanintharyi Region 701 708 1408 2% Bago Region 2322 2545 4867 8% Magway Region 1814 2103 3917 7% Mandalay Region 2928 3237 6166 11% Mon State 987 1067 2054 4% Rakhine State 1526 1662 3189 6% Rakhine State (enumerated) 990 1109 2099 4% Rakhine State (not enumerated) 537 553 1090 2% Yangon Region 3516 3844 7361 13% Shan State 2911 2914 5824 10% Ayeyawady Region 3010 3175 6185 11% Nay Pyi Taw 565 595 1160 2% Total 28005 29934 57939 100%

3 The 2014 Myanmar Population and Housing Census | Myanmar Information Management Unit (MIMU)

Page | 17 Source: Statistical Yearbook 2017

Table 9: Annual Population Growth

Year Population (Million) Annual Growth Rate (Percentage) Total Male Female

2014 - 2015 51.99 25.07 26.92 0.88

2015 - 2016 52.45 25.26 27.19 0.88

2016 - 2017 52.92 25.45 27.47 0.89

Source: Department of Population, Population, Statistical Yearbook 2017

Table 10: Average Population Density by State and Region

States and Regions Area (sq.km) Density (People per square km)

Kachin State 89,041.80 19

Kayah State 11,731.51 24

Kayin State 30,382.77 52

Chin State 36,018.90 13

Sagaing Region 93,702.48 57

Tanintharyi Region 43,344.91 32

Bago Region 39,404.43 124

Magway Region 44,820.58 87

Mandalay Region 30,888.09 200

Mon State 12,296.64 167

Rakhine State 36,778.05 87

Yangon Region 10,276.71 716

Shan State 155,801.38 37

Ayeyawady Region 35,031.88 177

Nay Pyi Taw 7,057.10 164 Source: Department of Population, Population, Statistical Yearbook 2017

Page | 18 Figure 3: Current Population Structure

In Million

Male Female Age Range

1 0.7 >70

1.7 1.4 60-69

2.6 2.3 50-59

3.5 3.2 40-49

4 3.9 30-39

4.4 4.3 20-29

5 5 10-19

4.7 4.7 0-9

Source: Department of Population

The figure shows the current population structure according to the 2014 census. The country has a favorable labor population with 63% aged between 15 and 63 years. Seventy percent of the people reside in rural areas, whereas 30% live in major cities such as Yangon (7.3 million), Mandalay (6.1 million), Ayeyarwady Region (6.1 million), Shan State (5.8 million) and Nay Pyi Taw (1.1 million) respectively.

With 40% of the labor force involved in farming, forestry and fishing, agriculture is the main source of employment. The unemployment rate is high for youths aged between 20 and 24 – 10% of urban youths and 8% of rural youths are unemployed. Among the working age population (15-64 years old), 86% of male are employed, while only 51% of females are in the labor force.4

Figure 4: Population Growth Projection by 2050

In Million

4 Global New Light of Myanmar

Page | 19 Male Female Age Range

4.2 2.5 >70

3.6 2.7 60-69

4.1 3.4 50-59

4.4 4.2 40-49

4.5 4.3 30-39

4.6 4.6 20-29

4.4 4.6 10-19

4.1 4.2 0-9

Source: Department of Population

The total population of Myanmar is estimated to reach 65 million by 2050. The projection is based on steadily declining population growth rate over the projection period: from 0.9 per cent in 2015 to 0.3 per cent in 2050. The main reason for the decline is a fall in birth rates. The proportion of the urban population is expected to rise from 29.3 per cent in 2015 to 34.7 by 2050. Yangon Region is expected to see a more rapid growth than any other regions by over 39%.5 According to Boston Consulting Group, the population of the middle-class and affluent consumer (MAC) is expected to nearly double to 10.3 million by 2020.

1.3. Key Socioeconomic Indicators

The following are some of the key indicators reflecting socioeconomic conditions in Myanmar.

Table 11: Key Socioeconomic Indicators

Descriptions 2016 2017 2018

GDP per capita (%) 4.9% 5.9% 5.9%

Inflation (%) 6.8% 4% 6.2%

Current account balance (%) -3.9% -5.0% -5.4%

5 Census report projects population growth over 35 years, and supports long-term planning | UNFPA Myanmar

Page | 20 Source: Economic indicators for Myanmar | Asian Development Bank

Table 12: Other Indicators (2018)

Descriptions 2013 2014 2015 2016 2017 2018

Unemployment Rate - 4.2% 0.8% - 2.2% 4%

Food Price Index 5.4 6.9 13.1 9.2 4.4 - (National)

Nonfood Price Index 12.9 2.1 3.8 3.1 4.9 - (National)

Source: Economic indicators for Myanmar | Asian Development Bank

Table 13: Number of Schools, Nationwide

Primary Schools Middle Schools High Schools

2012-2013 36,359 2,245 1,343

2013-2014 37,579 2,267 1,549

2014-2015 38,651 2,511 1,779

2015-2016 38,017 2,615 1,924

2016-2017 38,197 2,635 1,972 Source: Statistical Yearbook 2017

Table 14: Teacher Population, Nationwide

Primary Schools Middle Schools High Schools

2012-2013 184,743 67,883 27,200

2013-2014 187,327 69,212 28,817

2014-2015 197,124 80,660 33,924

2015-2016 234,605 97,455 39,051

2016-2017 226,357 99,437 39,478

Source: Statistical Yearbook 2017

Page | 21 Table 15: Student Population, Nationwide

Primary Schools Middle Schools High Schools

2012-2013 5,139,632 2,370,861 669,056

2013-2014 5,166,317 2,542,830 730,866

2014-2015 5,121,203 2,687,801 792,670

2015-2016 5,071,458 2,730,879 840,706

2016-2017 5,139,305 2,843,363 925,410 Source: Statistical Yearbook 2017

Daily Minimum Wage

In early 2018, the National Committee for the Minimum Wage set the country’s new daily minimum wage at K 4800 (US$ 3.60) or K 600 per hour for an eight-hour day. However, with rising commodities prices as a result of a fall in the Kyat value, the new minimum wage is still much lower compared to that of neighboring countries with similar economy. Myanmar’s monthly minimum wage is around US$ 80 per month. This is much less than Laos with US$110.34, Cambodia with US$140 and Vietnam with US$147.47.6

1.4. Historical, Political and Administrative Organization Brief History of Post-Independence Myanmar

After the end of the Second World War, a group of young Burmese leaders, led by General Aung San, negotiated the country’s independence from the United Kingdom, which was formally granted on 4th January 1948. General Aung San, who is considered the father of the country’s independence, was tragically assassinated in July 1947, together with a group of his closest political allies, creating a leadership vacuum. Myanmar enjoyed a short period of parliamentary democratic rule, during the Government of Prime Minister U Nu, who was deposed in 1962 when the Armed Forces, led by General Ne Win, took control of the Government. General Ne Win guided his rule by the “Burmese Way to Socialism” programme and established the Burma Socialist Programme Party (BSPP) as his basis of

6 Government sets new daily minimum wage at 4,800 | Myanmar Times

Page | 22 support. In 1988, an economic crisis and political frustrations led to a mass uprising organized initially by students in Yangon and later adhered to by all segments of society. It was during this period that the main political opposition party was created, the NLD, with the participation of Daw Aung San Suu Kyi, daughter of the independence hero and who would become the symbol of the country’s struggle for democracy.

The protests were crushed by the Armed Forces, which staged a new coup, this time led by Generals Saw Maung and Than Shwe. In 1990, the Armed Forces called general elections, which were won by landslide by the NLD, but the party was never allowed to form a Government and the military remained in power through the newly-established “State Law and Order Restoration Council” (SLORC). In 1997 the SLORC was transformed into the “State Peace and Development Council” (SPDC), which planned, from 2003 onwards, a slow political transition named as the “seven-step roadmap to democracy”, including the promulgation of a new Constitution in 2008 and general elections in 2010. Following the roadmap, the elected Parliament was established and retired General Thein Sein, himself a member of SPDC, was chosen as President by the two Houses of Parliament, taking office in March 2011.

U Thein Sein’s Government initiated a series of political and economic reforms, which have included the release and the amnesty of political prisoners – including Daw Aung San Suu Kyi – and the signing of preliminary peace agreements with many major ethnic armed groups. In the general elections held in November 2015, the NLD Party won a landslide victory. The current government took the office in April 2016 and is already halfway through its five-year term. Current president U Win Myint became the 10th President of Myanmar in March 2018 following the resignation of the former president U Htin Kyaw due to health issues. The next general elections are scheduled for 2020.

Figure 5: Myanmar Government Structure Figure : Myanmar Government Structure

Legislature Executive Judiciary

Pyidaungsu Hluttaw Union Government Union Courts (Union Parliament)

Amyotha Pyithu President State Supreme Constitution Courts Hluttaw Hluttaw Counsellor Court al Tribunal Martial (Upper (Lower House) House) 2 Vice National Page | 23 Presidents Defense & Security Council Fi State/Region Hluttaws State/Region State/Region Courts

879 members of Chief Minister State/Region High Parliament Courts

Ministers District Courts of the Courts self- Ethnic Affairs administered Mi i t territories Minister of Security and Border Affairs

Chairperson of self- administered

Source: State and Region Governments in Myanmar 2018 | The Asia Foundation

Figure 6: Myanmar Administrative Structure

Page | 24 Myanmar

15 States and Regions

74 Districts

URBAN RURAL 429 Cities or Town 330 Townships

82 Sub-Townships

3,228 Wards 13,601 Village Tracts

66,691 Villages

Source: General Administration Department, Ministry of Home Affairs

There are 15 States and Regions. However, Shan State is subdivided into three sub-states, and Bago Region is subdivided into two.

This number is in the Myanmar Information Management Unit (MIMU) Place Code (Pcode) list release VIII.I, which also includes settlements as reported by United Nations (UN) and non-government organization (NGO)s field offices differs from the GAD list (villages as of GAD 63,845 and villages not registered yet in the GAD list – 2,846).7

This chart was updated in September 2017.

Administrative Organization

7 Myanmar Administrative Structure | MIMU

Page | 25 Myanmar is composed of twenty-one administrative subdivisions, seven states, seven regions, six self- administered zones and one self-administered division. The seven regions were called divisions prior to August 2010. The regions can be described as predominantly ethnically Myanmar, while the states and zones are ethnic-minority dominated.

States and Regions are divided into districts, which consist of townships that include towns, wards and village-tracts (groups of adjacent villages).

Political Organization

Type of Government: Parliamentary Republic

Constitution : Promulgated in 2008 and in full force from March 2011 onwards, with the inauguration of Parliament and the extinction of the Military Junta (SPDC).

Executive Branch: Head of State : President U Win Myint (since 28 March 2018); Vice-President U Henry Van Thio (since 30 March 2016); Vice-President U Myint Swe (since 30 March 2016);

Head of Government: President U Win Myint (since 28 March 2018)

Cabinet : Cabinet is appointed by the President and confirmed by Parliament.

Elections : A general election was held in November 2015. The NLD party led by Daw Aung San won a landslide victory with 135 seats in the Amyotha Hluttaw (Upper House) and 255 seats in the Pyithu Hluttaw (Lower House). In March 2016, U Htin Kyaw was sworn in as President of Myanmar, but in March 2018 resigned from his position due to health issues. Following his resignation, U Win Myint, previously the Speaker of the Pyithu Hluttaw resigned from his position, won more votes than his opposing party and became the 10th President of Myanmar by the Pyidaungsu Hluttaw. The next general elections are scheduled for 2020.

Legislative Branch: The two houses – Amyotha Htuttaw and Pyithu Huttaw form the National Parliament (Pyidaungsu Hluttaw).

1. The Upper House (Amyotha Hluttaw) or National Assembly. The Upper House has 224 seats, with 168 MPs elected per state/region and 56 MPs nominated by Commander in Chief. Members serve a five-year term.

2. The Lower House (Pyithu Hluttaw) or People’s Assembly. The Lower House has 440 seats, with 330 MPs elected and 110 appointed by the Commander in Chief. Members serve a five-year term.

Judicial Branch : Remnants of the British-era legal system are in place. The 2008 Constitution established a Supreme Court and a Constitutional Tribunal of the Union at the top of the Judicial branch of power.

Political Parties: The list of major political parties is as follows:

Page | 26 Table 16: List of Political Parties

No. Party Name Acronym 1 National League for Democracy NLD 2 Union Solidarity and Development Party USDP 3 Arakan National Party ANP 4 Shan Nationalities League for Democracy SNLD 5 Ta’ang National Party TNP 6 Zomi Congress for Democracy ZCD 7 Mon National Party MNP 8 National Unity Party NUP 9 Pa-O National Organisation PNO 10 All Mon Region Democracy Party AMRDP Source: www.Ayeyarwaddy.com/election/parties-regions

Table 17: Ministries and Departments

President Office

Departments Union Minister Office

President Staff Office

Vice President (1) Staff Office

Vice President (2) Staff Office

Politics and Security Department

Economic Department

Social and Culture Department

Administration and Finance Department

Department of Houses

Department of Chief Security Officer

Research, Information and Complaints Department

Myanmar State Counselor Office

Departments Union Minister Office

Department of Union Peace Formation

Department of Policy Affairs

Ministry for Union Government Office

Page | 27 Department Union Government Office

Ministry of Health and Sports

Departments Union Minister Office

Department of Public Health

Department of Medical Services

Department of Human Resources for Health

Department of Medical Research

Department of Food and Drug Administration

Department of Traditional Medicine

Department of Sports and Physical Education

Ministry of Defense

Departments Union Minister Office

Department of International and Internal Affairs

Accounts Department

Directorate of Procurement

Ministry of Industry

Departments Union Ministerial Office

Directorate of Industrial (DI)

Directorate of Industrial Supervision and Inspection (DISI)

Pharmaceutical and Foodstuff Industries (PFI)

Textile Industries (TI)

Paper and Home Utility Industries (PHUI)

Central Research and Development Centre (CR & DC)

No(1)Heavy Industries Enterprise (HIE-1)

No(2)Heavy Industries Enterprise (HIE-2)

No(3)Heavy Industries Enterprise (HIE-3)

Ministry of Agriculture, Livestock and Irrigation

Page | 28 Departments Union Minister Office

Cooperative Department

Small-scale Industries Department

Irrigation Department

Department of Land Management and Statistics

Agricultural Mechanization Department

Department of Agriculture Research

Department of Agriculture

Department of Cooperative

Department of Fisheries

Irrigation and Water Utilization Management Department

Livestock Breeding & Veterinary Department

Department of Planning

Department of Rural Development Affairs

Department of Small Industry

University of Veterinary Science

Yezin Agricultural University

Ministry of Commerce

Departments Union Minister Office

Department of Consumer Affairs

Myanmar Trade Promotion

Department of Trade

Ministry of Planning and Finance

Departments Union Minister Office

Directorate of Investment and Company Administration

Central Equipment Statistics and Inspection Department

Project Appraisal and Progress Reporting Department

Page | 29 Myanmar Foreign Trade Bank

Financial Regulatory Department

Security and Exchange Commission of Myanmar

Budget Department

Central Statistical Organization

Customs Department

Myanmar Microfinance Supervisory Enterprise

Myanmar Foreign Relations Department

Myanma Economic Bank

National Archives Department

Pension Department

Planning Department

Revenue Appellate Tribunal

Treasury Department

Myanma Insurance

Myanma Investment and Commercial Bank

Internal Revenue Department

Ministry of Construction

Departments Union Minister Office

Department of Bridge

Department of Building

Department of Highway

Department of Urban and Housing Development

Department of Rural Road Development

State Estate Department

Village Development Department

Ministry of Ethnic Affairs

Page | 30 Departments Union Minister Office

Department of Ethnical Literature and Culture

Department of Ethnic Rights

Ministry of Border Affairs

Departments Union Minister Office

Education & Training Department

Border Areas and National Races Development Department

Ministry of Foreign Affairs

Departments Union Minister Office

ASEAN Affairs Department

Consular and Legal Affairs Department

International Organizations & Economic Department

Planning and Administrative Department

Political Department

Protocol Department

Strategic Studies and Training Department

Ministry of Education

Departments Union Minister Office

Department of Higher Education

Department of Educational Research, Planning and Training

Department of Basic Education

Department of Myanmar Examinations

Department of Myanmar Nationalities Languages

Department of Alternative Education

Department of Technical, Vocational Education and Training

Department of Research and Innovation

Department of Technology/Promotion and Coordination

Page | 31 Department of Monitoring and Evaluation (Education)

Department of Monitoring and Evaluation (Research)

Ministry of Home Affairs

Departments Union Minister Office

Bureau of Special Investigation

General Administrative Department

Special Investigation Department

Correction Department

Fire Services Department

Ministry of Information

Departments Union Minister Office

Information and Public Relations Department

Myanmar Radio and Television

News & Periodicals Enterprise

Printing and Publishing Department

Ministry of Transportation and Communications

Departments Union Minister Office

Central Institute of Transport and Communications

Inland Water Transport

Department of Marine Administration

Department of Civil Aviation

Department of Meteorology and Hydrology

Myanma Post

Myanma Post & Telecommunication (MPT)

Myanma Railways

Myanmar National Airlines

Post and Telecommunications Department

Page | 32 Road Transport Administration Department

Directorate of Water Resources and Improvement of River Systems

Directorate of Communications Department of Information Technology and Cyber Security

Myanmar Aviation Academy

Myanmar Port Authority

IT and Cyber Security Department

Ministry of Electricity and Energy

Departments Union Minister Office

Oil and Gas Planning Department

Myanmar Oil and Gas Enterprise

Myanmar Petrochemical Enterprise

Myanmar Petroleum Products Enterprise

Department of Electric Power and Planning

Department of Hydropower Implementation

Department of Electric Power Transmission and System Control

Electricity Supply Enterprise

Electric Power Generation Enterprise

Yangon Electricity Supply Corporation

Mandalay Electricity Supply Corporation

Ministry of Social Welfare, Relief and Resettlement

Departments Union Minister Office

Department of Social Welfare

Relief and Resettlement Department

Department of Disaster Management

Department of Rehabilitation

Ministry of Natural Resources and Environmental Conservation

Departments Union Minister Office

Page | 33

Department of Geological Survey and Mineral Explorer

Myanma Gems Enterprise

Myanma Pearl Enterprise

No(1) Mining Enterprise

No(2) Mining Enterprise

Department of Mines

Ministry of Mines

Forest Department

Ministry of Religious Affairs and Culture

Departments Union Minister Office

Department of Archaeology, National Museum & Library

Department of Fine Art

Department of Historical Research

National University of Culture (Yangon)

International Theravada Buddhist Missionary University

The Department of Religious Affairs

Department for The Promotion and Propagation of The Sa'sana

National University of Arts and Culture (Yangon)

National University of Arts and Culture (Mandalay)

Ministry of Hotels and Tourism

Departments Union Minister Office

Directorate of Hotel &Tourism

Directorate of Hotel &Tourism Development

Ministry of Labor, Immigration and Population

Departments Union Minister Office

Immigration Department

National Registration and Citizenship Department

Page | 34 Department of Population

Department of Labour

Social Security Board

Factory and General Labour Laws Inspection Department

Department of Labour Relations

Office of the Auditor General of the Union

Departments Union Civil Service Board

Union Civil Service Board, The Office of the Chairman

Personnel Department

Department of Civil Service Selection and Training

Union Attorney General's Office

Departments Legislative Vetting and Advising Department

Legal Advice Department

Prosecution Department

Administration Department

Central Bank of Myanmar

Departments Governor Office

Administration & IT Department

Financial Institutions Regulation & Anti-Money Laundering Department

Financial Institutions Supervision Department

Financial Market Department

Policy Research, International Relations & Training Department

Financial, Information, Inspection & Survey Department

Currency Management Department

Foreign Exchange Management Department

Payment & Settlement System Department

Internal Audit Department

Page | 35 Monetary Policy Affairs Department

Ministry of Investment and Foreign Economic Relations

Ministry of International Cooperation

Union Civil Service Board

The Supreme Court of the Union

National Constitutional Tribunal

Union Election Commission

Nay Pyi Taw Council

Nay Pyi Taw City Development Committee Source: www.president-office.gov.mm

Table 18: Self-administered Zones in Myanmar

No. Name of Self-administered Zone

1 Naga self-administered zone

2 Pa-O self-administered zone

3 Pa Laung self-administered zone

4 Kokang self-administered zone

5 Wa self-administered zone

6 Danu self-administered zone Source: www.president-office.gov.mm

1.5. Participation in International Organizations and Agreements

Myanmar Trade Agreements : So far, Myanmar has signed 12 bilateral agreements with Israel, Republic of Korea, US, Indonesia, Japan, India, Thailand, Kuwait, Laos, China, Vietnam and Philippines.

ASEAN Free Trade Area : Myanmar, an ASEAN member is part of the ASEAN Free Trade Area. The agreement was made with the purpose to liberalize and facilitate the trade in goods and services.

Myanmar is also part of several international organizations such as

Page | 36 . Asian Development Bank (ADB) . ASEAN Regional Forum (ARF) . Association of Southeast Asian Nations (ASEAN) . Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation (BIMSTEC) . East Asia Summit (EAS) . Food and Agriculture Organization (FAO) . International Civil Aviation Organization (ICAO) . International Red Cross and Red Crescent Movement (ICRM) . International Development Association (IDA) . International Fund for Agricultural Development (IFAD) . International Finance Corporation (IFC) . International Labor Organization (ILO) . International Monetary Fund (IMF) . the United Nations (UN) . the United Nations Educational Scientific and Cultural Organization (UNESCO) . the United Nations Industrial Development Organization (UNIDO) . the United Nations World Tourism Organization (UNWTO) . World Health Organization (WHO) . World Trade Organization (WTO) and . World Meteorological Organization (WMO).

2. Economy, Currency and Finances

2.1. Economy

2.1.1. Overview

Since 2011, the Myanmar economy has been reopened and the country has seen a series of drastic changes economically and politically. After five decades under military rule, the first quasi-civilian government was started with military-backed USDP, led by former President U Thein Sein. With the release of political prisoners, media transparency and the lifting of pre-publication censorship, Myanmar improved its image among the international community and saw significant interest from foreign firms. A year later, in 2012, the European Union (EU) suspended sanctions and the US agreed to lift some of its restrictions. With a major transformation in banking system, the opening of oil and gas tenders, simplification of a complex exchange rate system and telecom licenses issued to two companies from Norway and Qatar to build mobile phone networks, Myanmar rapidly tried to reconnect with the world and catch up with its peers.

In 2016, the NLD Party, led by Daw Aung San Suu Kyi took office and has continuously introduced significant legislative reforms. The current government’s main focus is to create an investment-friendly environment for both foreign and local investors. During the years of 2014, 2015 and 2016, the country saw a dramatic increase in Foreign Direct Investment (FDI), hitting a record US$ 9 billion in 2015-16 fiscal

Page | 37 year when multinationals such as Coca-Cola, Telenor, Unilever, and Mitsubishi entered Myanmar.8 The major reforms include introducing new laws such as the Myanmar Investment Law, Myanmar Companies Law, and the Special Economic Zone (SEZ) Law.

However, for the past two years, the country’s economic indicators and business sentiment level are hardly encouraging, mainly influenced by the Rakhine issue. The issue has created a negative sentiment towards the country and put Myanmar in an unfavorable position on the global stage. The other major challenge for foreign investors is lack of a clear economic policies and plans. As a result, investors have reduced confidence to do business in Myanmar, which is heightened by political instability and armed conflicts in several regions. The GDP growth has slowed and FDI has dropped – in December, the World Bank downgraded the country’s GDP from initial projection of 7.2% to 6.2% for 2018-19 whilst FDI declined to US$ 6.6 billion in 2016-17 and US$ 5.7 billion in 2017-18.

Nevertheless, Myanmar’s transformation over the past seven years has been remarkable, and is expected to gain even more momentum in the future. So far, it has introduced several economic and political initiatives and the economy is in line with the other emerging economies. According to McKinsey Global Institute, Myanmar is one of the 18 developing countries in the world driving a lion’s share of world’s economic growth and of rising consumption. Myanmar (6.2% GDP growth) was listed as one of the three ASEAN recent outperformers along with Vietnam (7.2% GDP growth) and Cambodia (5.5% GDP growth).9 Considering its large working-age population, recent new reforms, mega infrastructure development plans and abundance of natural resources, Myanmar is a large market full of vibrant opportunities. Finally, it should be remembered that Myanmar’s geographic location lends itself to be the trade gateway that connects emerging economies in Asia and two of the world’s largest economies – India and China.

2.1.2. Key Economic Developments and Highlights

. Infrastructure

As the country’s infrastructure has lagged far behind other countries, the current government has rolled out strategic plans such as New Yangon City Development and is taking part in China’s ambitious Belt and Road Initiative (BRI).

With the number of increasing city dwellers, Yangon region has faced several issues ranging from transportation, flooding, and water scarcity. The government has started making efforts to build a more livable city in correspondence with an urban development plan. As of April 2018, the regional government has approved approximately US$ 20 million for the construction of bridges in Yangon. In the next year, the whole region will have 24 hours electricity, which will be produced by three power plants. In the past three years, there has been a noticeable increase in mixed use development projects, for example, Junction City Tower, Vantage Tower, HAGL Myanmar Center mixed-use, Sule Square, Golden City and Kantharyar Center mixed-use and Times City.

Yangon Regional Government has founded New Yangon Development Company Limited (NYDC) to develop “Yangon’s New City” a landmass that will be twice the size of Singapore upon completion. The project is part of the Strategic Urban Development Plan of Greater Yangon by Japan International

8 Myanmar opens stock exchange as rehabilitation continues | CNBC 9 Outperformers – ASEAN discussion paper | Mckinsey Global Institute

Page | 38 Cooperation Agency (JICA). It was launched on 20,000 acres west of Yangon River and is under initial stage to transform the area into “new city” by developing housing units, infrastructures, industrial zones, and waste management system. It is expected to create job opportunities for two million citizens.10

In September 2018, the Myanmar government signed a 15-point memorandum of understanding (MoU) with China to implement China Myanmar Economic Corridor (CMEC), a massive BRI-backed project.11 The CMEC will include a whole range of projects across sectors including energy, ports, road, and railway projects.12 Although the government has approved those infrastructure projects to go ahead, detailed plans including budgets, stakeholder lists, and management teams are still unknown. The possible BRI-linked projects are 1) Kyauk Phyu SEZ project 2) Kyauk Phyu deep sea port project 3) Kyauk Phyu-Kunming high speed railway project 4) China-Myanmar border trade (Muse Border Trade Zone) 5) Muse Central Business District.

. Financial Sector

With regards to Myanmar’s financial sector, the country launched its first stock exchange in 2015. The six companies were approved to list on Yangon’s new bourse are 1) First Myanmar Investment Company, 2) First Private Bank Limited, 3) Great Hor Kham Public, 4) Myanmar Agribusiness Public Corporation 5) Myanmar Citizens Bank 6) Myanmar Thilawa SEZ Holdings Public.13 Since the new Myanmar Investment Law (MIL) was introduced in mid-2018, foreigners residing in Myanmar have been permitted to buy shares on the Yangon Stock Exchange (YSX).14 In 2015 and 2016, the Central Bank of Myanmar (CBM) issued 13 new banking licenses to foreign banks.157 of the 13 foreign banks have been allowed to provide export-financing services.16 Private banks have also been given more autonomy, and as a result have expanded their offerings in retail and business banking. An example is hire purchase loans and Small and Medium Enterprises (SME) loans that have gained popularity over the years. In addition, microfinance licenses were also issued to NGOs, local and international institutions, and currently, there are approximately 176 microfinance institutions serving the vulnerable poor and micro enterprises. Recently, the government has announced numerous reforms – insurance liberalization and further easing of restrictions on foreign banks.17 Recently in December 2018, the CBM allowed foreign bank branches to provide loans and other banking services.18

. Telecommunications Sector

Myanmar’s telecommunications sector has seen a much-needed liberalization. The new telecommunication law was enacted in November 2013 and the first two private telecom licenses were granted to Telenor from Norway and Ooredoo from Qatar.19 In 2017, MyTel, a consortium of military-back Myanma Economic Corporation (MEC), Viettel and 11 local firms, was awarded a telecom license to become the fourth telecom operator in the country. For decades until 2013, Myanmar’s telecom industry was dominated by the state-owned Myanmar Posts & Telecommunication (MPT), and the mobile penetration was very low back then due to the very high price of SIM cards and a lack of infrastructure.

10 Local, foreign investors invited to participate in Yangon’s new satellite towns project | Myanmar Alinn 11 Gov’t signs MoU with Beijing to build China-Myanmar Economic Corridor | The Irrawaddy 12 The grand plan for the China Myanmar Economic Corridor | Frontier Myanmar 13 Six companies to trade on Yangon Stock Exchange | Myanmar Times 14 Resident foreigners will be permitted to trade on YSX | Myanmar Times 15 Four more foreign banks get Myanmar license | Straits Times 16 Banking sector reforms in Myanmar | ASEAN Briefing 17 Myanmar steps up financial reforms | Bangkok Post 18 Foreign banks allowed to set foreign currency loan interest rate | Myanmar Times 19 Myanmar investment guide 2018 | DICA

Page | 39 The opening up of the sector has allowed telecom operators to develop basic infrastructure, improve the public’s access to SIM cards at an affordable price, introduce attractive packages and offerings and ultimately, enhance mobile penetration. According to a government survey in 2017, there were 56.8 million mobile phone users, surpassing the total population of 54 million.

. Energy Sector

In 2016, the Ministry of Electric Power and Ministry of Energy merged to form the Ministry of Electricity and Energy. The energy sector has undergone major changes over the years with significant liberalizations that allowed private and foreign participation in the activities that were previously dominated only by the government. There has been private sector involvement in the business activities of the value chains of the electricity and energy sectors. In the electricity sector, there has been increased participation of the private sector in production, distribution and transmission while in the energy sector, private participation has increased in exploration, storage, distribution and retailing.

Foreign companies are actively seeking opportunities, and there are specific activities in the space of electricity and energy that have been opened to them. The Myanmar Energy Master Plan was launched by Myanmar’s National Energy Management Committee (NEMC) in 2016 which sets forth the milestones of the electricity and energy sectors. 20 “Notices to Proceed” were issued to four major generation projects in January 2018 including three LNG gas-to-power solutions.21

. Education Sector

Myanmar’s education sector has lagged behind its regional peers for many decades. Public schools and universities were the only source of education for many years, until a few years back when private schools gained popularity in the market. Private international schools were among the first to enter the market and the government slowly allowed private high schools that follow the same curriculum as public schools and private universities and colleges. Since April 2018, the Myanmar Investment Commission (MIC) has permitted foreigners to make full capital investments in private schools in Myanmar. They can freely adopt a curriculum provided by either the Ministry of Education (MoE) or an international curriculum.22 . The number of private schools in Myanmar has grown from over 50 in 2012-1323 academic year to 1115 in 2017-18.24 The private education sector is governed by the 2011 Private School Registration Act.25 In addition to allowing private sector participation, the government has also been making improvements to the current public education system by adopting 13 years schooling program, introducing new curriculums and implementing capacity building initiatives for teachers. While 2011 Private School Registration Act governs private schools, there is no regulatory framework governing private tertiary education providers, thus, they are being government by the rules of the MIC instead. A draft Private University Law has been submitted to the parliament for review.

. Retail Sector

Since May 2018, permission to carry out retail and wholesale businesses have been granted both to 100 percent foreign-owned companies and joint ventures with local companies. With the opening up of the

20 Energy guide 2018 | CCI France 21 White Book 2018 | Eurocham Myanmar 22 Myanmar permits full foreign capital investments education sector | Myanmar Times 23 Why private schools are the better choice | The Myanmar Times 15 May 2017 24 Education Directory 2018 | MMRD 25 Myanmar Report | Oxford Business Group

Page | 40 sector, both full foreign companies and JVs are allowed to trade all types of permitted commodities, although they are not allowed to open a store with an area that is less than 929 m2, for example, mini- markets and convenience stores.26 There is a rising interest from international investors in different regions across the country away from the major cities of Yangon and Mandalay. There is also interest in the e-commerce market. Gabarmart, which was launched in December 2018, is a member of Onelink Technologies and will be the first service that allows Myanmar customers to buy from international e- commerce sites and have products delivered to their homes. According to Colliers International Myanmar, as an outcome of the liberalization, there is increased interest in shopping malls of 50,000 m2 and above as well as condominiums with space for retail.27

International ride-hailing apps make debut.

In the first half of 2017, two international ride-hailing firms – Grab and Uber entered the Myanmar market. However, in early 2018 Singapore-based Grab acquired Uber’s Southeast Asia operations. In 2016, local startups such as Hello Cabs and Oway Ride had launched their services. In February 2018, Grab launched “Grab for Business”, which is targeted towards companies and employees.

Vehicle import policy changes market dynamics.

In October 2017, a new vehicle import policy was launched. With the new policy, in the future, imports of only new left-hand-drive cars will be allowed. According to Myanmar Automobile Manufacturers and Distributors, in 2018, the Government allowed 25,000 cars to be imported in Yangon Region. In June 2018, online registration for Yangon Vehicle Quota Certificate (YVQC) was introduced, whereby registration fees are different according to car type and engine power. Locally assembled and produced CKD/SKD cars will be charged only 10% of YVQC for Yangon license. Car models from no earlier than 2016/2017/2018 models are permitted to attain a Yangon license.

Special Economic Zones and deep-sea ports on their way. The SEZ Law, which paved the way for SEZs in Myanmar, was enacted in 2014, followed by its implementing rules in 2015. Prior to that, Myanmar businesses relied solely on dilapidated industrial parks that could not fulfill businesses’ fundamental needs such as basic infrastructure. Seeing the need for international standard economic zones to serve international investors, the government came up with the plan of developing SEZs. With the intention of attracting more investors, the law provides investors significant tax and other benefits to invest in SEZs. Myanmar currently has only one up and running SEZ at Thilawa, in the outskirts of Yangon. Dawei SEZ, in Tanintharyi Region, and Kyauk Phyu SEZ, in southern Rakhine State, are under development.

Thilawa SEZ

Size - 250 km2

Location - 25 km South of Yangon along the Yangon River

Thilawa SEZ is the first Special Economic Zone in Myanmar. In October 2013, the Myanmar and Japanese governments established a consortium including Mitsubishi, Marubeni, Sumitomo and JICA to

26 Myanmar opens up for foreign retailers and wholesalers | Myanmar Times 27 Five sectors driving Myanmar’s economic growth in 2018-19 | Myanmar Times

Page | 41 develop the project. Currently, in Zone A (Phase A), 96% of land is being used and investments value US$ 1.2 billion. Currently, 91 factories are being operated and 74 are under construction. Companies from 16 countries have invested in the project.28

The development of Zone B for 101 hectares was started in early 2017 and planned to be accomplished by mid-2018.29

Table 19: Permitted Investment by Industry Type (as of 31 Dec, 2017)

Total Permitted Enterprises No Sector Number Approved Investment % . (US$ million) 1 Manufacturing 65 896.80 74.50 2 Logistics 8 77.25 6.5 3 Trading 8 127.76 10.75 4 Services 4 56.04 4.72 5 Real Estate 1 30.00 2.52 6 Hotels 1 12.00 1.01 Total 87 1199.85 100 Source: Myanmar SEZ guide

Table 20: Permitted Investment by Country (as of 31 Dec, 2017)

Total Permitted Enterprises No Country Number Approved Investment % . (US$ million) 1 Singapore 23 452.91 38.12 2 Japan 30 361.05 29.54 3 Thailand 10 125.31 10.55 4 Hong Kong 5 46.65 3.93 5 Republic of Korea 4 54.60 4.60 6 Myanmar 4 46.50 3.91 7 UAE 1 15.16 1.28 8 Austria 1 15.35 1.29 9 Panama 1 13.91 1.17 10 China 1 12.00 1.01 11 Malaysia 1 15.93 1.34 12 Australia 1 7.00 0.59 13 Vietnam 2 7.58 0.50 14 Brunei Darussalam 1 8.50 0.72 15 Taiwan 1 16.00 1.35 16 Netherlands 1 1.40 0.12 Total 87 1199.85 100.00 Source: Myanmar SEZ guide

28 Directorate of Investment and Company Administration 29 Myanmar SEZ guide

Page | 42 Dawei Deep Sea Port and SEZ

Size - 196.5 km2

Location - Located in Southeastern Myanmar, the capital of Tanintharyi Region, adjacent to the Andaman Sea and near the Gulf of Thailand.

In 2008, Italian-Thai Development Company was awarded as part of the first MoU between Thailand and Myanmar. However, the project was postponed in November 2013 due to financial constraints. The new agreement to separate the project into an initial phase (up to 27 sq.km) and a full phase (196.5 sq.km) was granted in 2016.

As of September 2018, negotiations are ongoing between the Myanmar SEZ Central Committee and Dawei SEZ Management Committee for the project to resume. A full phase master plan for Dawei SEZ has been completed by JICA. The implementation of initial phase of the SEZ will involve the construction of roads and a port as well as electricity generation. It is estimated to cost around US$1 billion for the development of the initial phase and expected to become one of the biggest mega-projects in Southeast Asia once completed.30

Kyauk Phyu Deep Sea Port and SEZ

Size - 120 km2 Location - Located about 400 km northwest of Yangon

The China International Trust and Investment Corporation (CITIC) Construction Company, together with four other Chinese companies and one Thai firm, formed a consortium that won the tender for building an industrial park and a deep-sea port in the SEZ on 30 December 2015. The project is leveraging on the strategic location of the site area, which lies at the crossroads of the powerful and vibrant markets of China, India and ASEAN. Once completed, the deep-sea port will open doors for international trade as a trade corridor connecting those markets. The consortium will build industrial and fishery parks as well as energy and residential projects in the Kyauk Phyu SEZ.

With the construction of a terminal with the capacity for two to three vessels, the first phase is expected to cost US$1.3 billion, and further expansion is to be made if the first phase is proved profitable. Construction is funded at a ratio of CITIC to Myanmar government at 70:30. The framework has not been finalized yet, but considering a loan is involved, Myanmar government will try to ensure it gets the lowest interest rate possible.31

2.1.3. Key Economic Indicators

30 Dawei SEZ to be developed in full | Myanmar Times 31 Myanmar successfully renegotiates debt, ownership terms for Kyauk Phyu | The Myanmar Times

Page | 43 Figure 7: Annual GDP growth rate

9 8.4 8 8.5 8 7.5 7 7 6.5 6.4 6 5.9 5.5 5 4.5 4 2013-14 2014-15 2015-16 2016-17 2017-18

Source: Ministry of Planning and Finance

Myanmar has one of the highest GDP growth predictions in Asia – ADB forecasted Myanmar’s GDP to grow by 7.2% in 2019 until earlier 2018. However, in December 2018, the World Bank launched the Myanmar Report and downgraded Myanmar’s GDP forecast at a slower pace of 6.2% compared with 6.8% last year. The outlook was also cut to 6.5% and 6.8% for 2019-20 and 2020-21.32

Over the past few months, the country saw the conflicts in Rakhine State intensifying and this tops the list of major concerns for slow GDP growth. In addition, a sharp devaluation in the kyat value has left many business people baffled, and discouraged some from continuing their operations. Until July 2018, the exchange rate averaged at K 1.344 to one US dollar. Starting from August, the Kyat value has fallen dramatically, hit a record low in August before stabilizing at around K 1,550 per US dollar recently.

2.1.4. Exchange Rate Table 21: Average FE Rates and Inflation Rates Comparison

Year 2015 2016 2018 (Jan to Jul) FE Rate (Kyat/US$) 1,178 1,232 1,344

Source: Central Statistical Organization

A sharp decline in Kyat value against the US$, and macroeconomic instability has left many investors worried. As a result, many businesses have reduced confidence about seeing growth in the near future. With soaring costs, import dependent businesses, especially manufacturing, see the current inflation rate as one of the most critical concerns. Businesses clearly believe that the government should prioritize on building strong economic infrastructure and financial resources.33

Figure 8: Yearly FDI Inflow (Permitted)

In US$ Billion

32 World Bank cuts Myanmar’s growth forecast to 6.2% | Myanmar Times 33 Business Sentiment Survey Report 2018 | MMRD

Page | 44 Permitted Yearly FDI Inflow 25.00

20.00 20.00

15.00 13.81

10.00 9.49 8.01 6.65 5.72 5.00 4.64 4.11 1.42 1.80 0.21 0.98 0.33 0.00

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

1988-89 to 2005-06 2018 (as of October)

Source: Directorate of Investment and Company Administration

FDI stood at US$ 5.7 billion in 2017-18 which showed significant slowdown compared to previous years. According to Directorate of Investment and Company Administration (DICA) data, FDI value has experienced a downward trend – (US$9.4 billion in 2014-15; US$ 6.6 billion in 2016-17; US$ 5.7 billion in 2017-18). As of October 2018, the FDI value stood at US$ 1.8 billion.

Figure 9: Accumulative Approved FDI by Sector (1988-89 FY to 2018-19 FY)

In US$ billion

Page | 45 By Sector 6000 Total $77.77 billion

5000 Agriculture Livestock & Fisheries Mining 4000 Manufacturing Power Oil and Gas 3000 Construction Transport & Communication 2000 Hotel and Tourism Real Estate Industrial Estate Other Services 1000

0 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018 (4 2018-19 to 9) (As of 31 October 2018) Source: Directorate of Investment and Company Administration

Figure 10: Accumulative Approved FDI by Country (1988-89 FY to 2018-19 FY)

In US$ billion

Page | 46 By Country Total $77.77 billion China Hong Kong India Japan 9000 R.O.K 8000 Singapore Thailand 7000 The Netherlands U.A.E 6000 U.K 5000 U.S.A Vietnam 4000

3000

2000

1000

0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018 (4 to 2018-2019 9) (As of 31 October 2018)

Source: Directorate of Investment and Company Administration

Figure 11: Approved FDI by Sector as of November 2018 (%)

Approved FDI by Sector (%)

28.67 26.96

13.17 12.2 6.72 3.89 3.71 2.96 0.8 0.52 0.35 0.05

Power Mining

Oil and gas Real estate Agriculture Construction Manufacturing Other services Industrial estate Hotel and tourism Livestock & fisheries

Transport & Communication Source: Directorate of Investment and Company Administration

Nearly a third of foreign investment comes from oil and gas, followed by power closely behind. With many infrastructure projects going on and increased mechanization, FDI in manufacturing is ranked third place with 13 percent of the total. Dependency on agriculture is likely to decrease, while the service sector is expected to see a rise in FDI with recent liberalization in the education sector and new reforms in the construction and banking sectors.

Page | 47 Figure 12: Approved FDI by Country as of November 2018 (%)

By Country (%)

25.96 25.96

14.23 10.08 5.78 4.97 2.76 2.51 1.96 1.5 0.98

U.K China Japan India Thailand Vietnam Malaysia Singapore Hong Kong

The Netherlands Republic of Korea

Source: Directorate of Investment and Company Administration

With the Belt and Road Initiative, FDI from China is expected to increase substantially. Singapore is on a par with China as a result of huge interest from businesses around the distribution of products, either by forming JVs with local companies or opening a representative office in the country.34 Meanwhile, Thailand is seeing opportunities in Myanmar’s agriculture and tourism sectors, especially in less-developed regions, for example, Tanintharyi Region, which borders Kanchanaburi Province.35

Figure 13: Percentage Contribution of Sectors in GDP

% Contribution of Sectors in GDP

40% 41% 41% 42% 42% Agriculture Industry 29% 30% 30% 31% 32% Services

31% 30% 29% 27% 26%

2013-14 2014-15 2015-16 2016-17 2017-18

Source: Ministry of Planning and Finance

According to Ministry of Planning and Finance, the service sector is the largest contributor at 42%, particularly in response to the sharp increase in trading – both export and import. This is followed by Industry with 32%, and Agriculture at 26%. Trading value was recorded as the highest in 2017-18,

34 More Singapore firms planning to invest in Myanmar in next two years 35 Myanmar seeks closer Thai business ties | The Nation

Page | 48 increasing from US$29 billion in 2016-17 to US$34 billion in 2017-18. For some examples, in 2017-18, the trade of reached the highest level in 50 years with 3.5 million tons traded. The top export items were natural gas with over US$ 3 billion, CMP garments with US$ 2.3 billion and rice with over US$ 1 billion. According to the World Bank, the role of the agriculture sector is expected to decrease, while services and industrial outputs are likely to rise, driving the country’s economy in the years to come. However, with the decline in the number of tourist arrivals in the past two years and slow reforms in banking and finance industry, Myanmar’s service sector is expected to post moderate growth.

2.1.5. Key Legislation Developments and Reforms

. Myanmar Investment Law (MIL)

On 18th October 2016, the MIL came into effect, replacing the Foreign Investment Law 2012 and the Citizens Investment Law 2013. A major objective of the new law is to not only to create a favorable business environment for local and foreign investors, but also to bring much-needed reform and liberalization to support Myanmar’s fast-growing and changing economy. The new law also includes tax exemptions by zones – 1) seven years for less developed regions (zone 1); 2) five years for moderately developed regions (zone 2); 3) three years for regions considered the most developed (zone 3).36 Income tax exemptions are granted for a period of three to seven years from the year of commencement. The income tax exemptions are only available for businesses in one of the eight promoted sectors (see below).37

. Myanmar Companies Law

The law was enforced in 1st August 2018. As observed from draft regulation, the law will allow foreign investors to take up to a 35 percent stake in domestic companies, which has raised hopes for increased investment for domestic and foreign businesses. The Myanmar Companies Online (MyCO) registry permits the electronic registration of companies means in accordance with the Myanmar Companies Law 2017 and provides reliable and up-to-date information on all registered companies.

. Financial Institution Law

The new Financial Institution law was enacted in 2016, replacing the old law from 1990. With the new law, banks in Myanmar are expected to operate in correspondence with the Myanmar Companies Law. It promises to deliver a stable and modern banking system, and includes detailed guidelines for financial institutions ranging from commercial, state-owned, private and foreign banks.38

. Condominium Law

The Condominium Law came into effect in 2017. According to the new law, foreigners are allowed to own up to 40 percent of space in one condominium project. No more than 25% of ownership is allowed to be registered under one particular owners (foreigner) name. A foreigner can resell, lease, or enter mortgage loans.39 The law clearly defines necessary criteria to be approved as a public-owned condominium – it

36 Myanmar investment law 2016 and rules 2017 | www.conventuslaw.com 37 Myanmar investment guide 2018 | DICA 38 Union tax law turning point | Global New Light of Myanmar 39 https://www.mmtimes.com/news/new-condominium-rules-allow-more-flexibility-foreigners.html

Page | 49 has to be built on registered publicly owned land with an area of no less than 20,000 square feet and have at least six floors.40

. Union Taxation Law 2018

The Union Taxation Law was approved in March 2018, while a tax exemption law is to be enacted separately. As per the new law, corporate income tax and commercial tax on 41 commodities are reduced42 and industries such as real estate, automobile, and stock market are likely to perform better than before. In an attempt to create inclusive growth for SMEs, the new law is expected to help businesses to become responsible tax payers and support creating a stable macroeconomic climate.

. Special Economic Zones Law

The Myanmar Special Economic Zones Law was passed in January 2014. In the law, three types of zone are observed – free zones, promotion zones and other zones. A free zone is mainly focused on export- oriented markets including manufacturing, transportation and wholesale areas. Promotion zones are mainly based on the domestic market and the market in SEZs.

The tax incentives for investors in SEZs are as follows:

 Income tax exemption for the first seven years for businesses within promotion zone or a SEZ  Fifty percent income reduction for the second five years for businesses within an exempted or promoted zone  Fifty percent income tax reduction for the first five years on profits derived from the reinvestment of a business within an exempted or promoted zone  Import duty exemption on raw materials, machinery and equipment and other specific goods for use in exempted zone  Losses carried forward for five years from the date the loss was incurred43

Eight Promoted Sectors

The published list of eight promoted sectors by DICA is as follows:

Table 22: Eight Promoted Sectors

No. Sector 1 Manufacturing (except manufacturing of cigarette, liquor, beer and other harmful products to health) 2 Construction and infrastructure development 3 Education services 4 Healthcare services 5 Information technology services 6 Hotels and tourism 7 Science research development business

40 http://www.myanmarinsider.com/new-condominium-law/ 41 https://www.mmtimes.com/news/union-tax-law-approved-without-tax-amnesty-clause.html 42 http://www.globalnewlightofmyanmar.com/2018-union-tax-law-turning-point-dramatic-change-higher-economic- growth/ 43 Myanmar investment guide 2018 | DICA

Page | 50 8 Agriculture, livestock and fishery Source: Directorate of Investment and Companies Administration

2.2. Key Economic Sectors

The following is a brief analysis of the main economic sectors that could trigger economic development for the country.

2.2.1. Manufacturing In recent years, Myanmar’s industrial sector has recorded a dramatic growth mainly supported by increased demand for garment and textiles, and agricultural processing. In 2007, manufacturing accounted for 15% of GDP, but by 2017 that had grown to 24% of GDP.44According to DICA, in 2018, the manufacturing sector ranked third in terms of FDI value with over US$ 13 million, after oil and gas and the power sectors. FDI in manufacturing grew over 65 percent in 2017-2018 compared to 2016-2017.45

Myanmar possesses a demographic advantage with the working-age population accounting for 63% of the total population. In addition, Myanmar offers investors access to a large labor force at a low cost with minimum wage set at K 4,800. The Nikkei Myanmar Manufacturing Purchasing Managers’ Index, or PMI, stood at 51.3 in November 2018, up from 48 in October, posting a strong gain and return to normal for the first time in six months.46

Manufacturing is one of the eight promoted sectors, in particular the garment sector. Included in the National Export Strategy, the garment sector is expected to drive Myanmar’s economy in 2019 and continue to bring a large sum of export earnings. In 2017-18, US$ 3 billion in exports was generated by the sector alone, comprising more than 72% of the total export value to Europe. In the same year, 65 new garment factories opened in the country, and the sector currently employs more than 500,000 workers.47 Earnings from Europe have increased almost tenfold from 2012, the year before Myanmar’s Generalized System of Preferences (GSP) membership was reinstated.48

However, in October 2018, news that the European Union was considering suspending trade privileges for Myanmar emerged, raising concerns among garment firms in the country. If the EU decides to suspend these privileges, the decision could affect more than one million workers in the manufacturing industry. In addition, the sector, exposed to import costs and fluctuations in exchange rates suffered tremendously recently as the Kyat’s value depreciated against the US dollar by 30% within just two years.49 For labor intensive industries, major challenges include a lack of a stable electricity supply and skilled labor, as well as difficulties in accessing bank credit.

Products from Myanmar are often in raw form because of a lack of technology, as well as underdeveloped infrastructure. The sector is in need of investment in infrastructure and technical support from the government to transform it into an export-oriented industry with value-added Myanmar products. According to the MIC, investment is encouraged in 1) labor intensive manufacturing (e.g. garment textiles,

44 Manufacturing key to Myanmar’s growth | Myanmar Times 45 Myanmar Economic Monitor 2018 | World Bank 46 Myanmar manufacturing PMI rises strongly in November | Nikkei Asian Review 47 Five sectors driving Myanmar’s economic growth in 2018-19 | Myanmar Times 48 EU trade privileges move alarms garment sector | Frontier Myanmar 49 Business Sentiment Survey Second Quarter 2018 | MMRD

Page | 51 stationery), 2) skilled labor-intensive manufacturing (e.g. skills-intensive machinery assembly), 3) capital intensive manufacturing (e.g. agricultural processing, canning, bottling, automotive parts manufacturing).50

Table 23: Existing Industrial Zones in Myanmar

No State/ Regions Industrial Zone Name

1 Yangon 30 Industrial zones in 4 districts

5 Mandalay Mandalay

6 Myingyan

7 Meiktila

8 Sagaing Monywa

9 Kalay

10 Magwe Yaenan Chaung

11 Pakokku

12 Bago Pyay

13 Ayeyarwady Pathein

14 MyaungMya

15 Hinthada

16 Shan Taunggyi (Ayethaya)

17 Mon Mawlamyaing

18 Tanintharyi Myeik

19 Kayin Hpa-an

20 Myawaddy Source: Myanmar Industries Association

Since 1990, the first industrial zone was established in Shwe Pyi Thar Township in Yangon Region. Currently, there are 30 zones in Yangon Region across four districts, comprising four industrial zone groups in the region. The Yangon Region Government has earmarked 11 townships in which an industrial zone can be constructed with an estimated size of 1,000 acres each. These include townships from the southern districts as well as the northern districts of Yangon.51 While such industrial zones are

50 Myanmar investment guide 2018 | DICA 51 Myanmar Industries Association

Page | 52 expected to contribute to the economy by drawing FDI and creating jobs, the government needs to first ensure sufficient and reliable infrastructure such as electricity, roads and water.

The Food & Beverages industry accounts for the highest percent in terms of the number of industrial enterprises, whereas construction materials and mineral and petroleum products rank second and third respectively. The majority of industrial enterprises are small and medium enterprises.

Table 24: Industrial Structure (Registered Private Industries)

No. Commodity Group Number of Industrial Enterprises %

Large Medium Small Total

1 Food & Beverages 3751 5657 19577 28985 57.251

2 Clothing, Apparel & Wearing 810 833 1361 3004 5.933

3 Construction Materials 1160 1460 1919 4539 8.965

4 Personal Goods 664 613 441 1718 3.393

5 Household Goods 145 92 89 326 0.644

6 Printing & Publishing 100 210 137 447 0.883

7 Industrial Raw Materials 224 186 179 589 1.163

8 Mineral & Petroleum Products 390 703 2245 3338 6.593

9 Agricultural Equipment 12 29 39 80 0.158

10 Machinery & Equipment 28 36 32 96 0.190

11 Transport Vehicles 76 32 21 129 0.255

12 Electrical Goods 65 15 17 97 0.192

13 Miscellaneous 241 1169 5870 7280 14.379

Total 7666 11035 31927 50628 100.00

% 15.14 2180 6360 100.00 Source: Myanmar SME Development Agency

2.2.2. Agriculture, Fisheries and Forestry

. Agriculture Agriculture is the backbone of the economy, and agricultural products are the second largest export commodity in Myanmar. According to the World Bank’s estimate, agricultural products account for 38% of

Page | 53 the total GDP and 23% of total exports. As 70% of the total population is living in rural areas relying on farmland and forests for their livelihoods, the agricultural sector is one of the most important for rural development. In July 2016, the government announced a 12-point economic plan aimed at developing a market-oriented economy focusing on strengthening farming production, enhancing food security, increasing exports and improving the living standards of the rural population.

Myanmar’s abundant natural resources and diverse agro-ecological conditions provide a wealth of opportunities for investment across the entire supply chain. The vast potential of land resources is accessible with different weather, and various soil conditions with the help of technology can enhance the production of cash crops and industrial crops. Various types of cash crops and industrial crops are able to be cultivated in Myanmar such as rice, pulses, beans, maize, sesame, rubber, coffee, tea, sugarcane, jute, wheat, cotton, pepper, oil palm, numerous kinds of herbs, variety of fruits and vegetables, among others.

Table 25: Production of Selected Crops

In Thousand Ton

No. Descriptions 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 Cereals Paddy 32065.1 28552.1 26216.6 26372.1 26423.3 26210.3 Wheat 181.0 169.8 177.6 182.9 182.4 179.3 Maize 1354.4 1461.5 1501.6 1600.6 1693.4 1748.5 Millet 212.6 219.2 210.5 225.1 238.8 240.3 2 Oil Seeds 2244.6 2270.1 2274.1 2332.2 2351.7 2393.9 3 Pulses 5486.3 3886.7 4091.4 4207.8 4276.1 4425 4 Spices and 1447 1450.4 1468.7 1532.4 1575.2 1580.4 Condiments 5 Tobacco and Betel 396.8 433.4 459.8 467.4 474 503 6 Beverages Sugarcane 9249.5 9537.4 9413.1 10307.4 11128.4 10142.4 7 Vegetables and Fruits Plantain 190163 190967 190619 197057 208127 221614 Potato 563.6 555.7 551.1 540.1 542.3 560.3 8 Fiber Cotton 541.1 524.9 459.4 501.1 524.1 512.9 9 Miscellaneous Rubber 126.2 147.3 161.8 174.1 194.9 208.7 Source: Department of Agriculture Land Management and Statistics

According to official statistics, Myanmar exported 1209.8 metric tons of agriculture products, worth US$ 381.58 million in the 2017-2018 fiscal year. Rice, the primary product in the country accounting for 60% of production value, is grown on nearly 20 million acres (7.8 million hectares) during the two seasons of summer and monsoon. Myanmar’s second largest agricultural product for export is beans and pulses which export value exceeded the value of rice exports with the value of US$ 626.93 million.

Page | 54 According to the 2016 Farm Economic Study by the World Bank, the productivity of both land and labor in Myanmar’s agricultural sector is lower than that of other nations in Asia. As an example, during monsoon season, one day of work produces only 23 kg of paddy in Myanmar compared to 62 kg in Cambodia, 429 kg in Vietnam, and 547 kg in Thailand. Moreover, a farm laborer in Myanmar earns on average US$ 1.8 – 2.5 per day during monsoon season and US$ 3.0 – 3.5 in dry season. In comparison, a Thai farmer earns US$ 8.5 per day and in the Philippines US$ 7 per day.

Myanmar’s agricultural sector lacks modern farming practices, quality seeds, warehouses, equipment, distribution and logistics facilities and packaging to boost the agricultural sector’s ability to reach its full potential. Farmers are also constrained by limited awareness and knowledge on efficient farming practices while at the same time, face limited access to capital and other necessary support to expand their operations. In addition, agricultural exports face challenges for quality, with products often not up to the standards of other markets, such as in European countries. There have been incidences where exports were rejected and sent back to Myanmar due to chemical residues. Realizing the need to target more attractive export markets, agricultural stakeholders have been making individual or collective attempts to enhance the productivity and quality of respective agricultural products to tap into more lucrative markets that demand higher quality. The government has also been making efforts in collaboration with the private sector and international agencies to enhance the competitiveness of Myanmar’s agricultural products through better quality and higher productivity. Resulting from all these attempts, some agricultural exports such as tea, rice, beans and pulses and vegetables, from Myanmar have been exported to high-end international markets. While it is difficult for Myanmar products to go to quality markets, it is rather more challenging to sustain in the long run.

According to the new MIL, an investor is allowed to use up to 50,000 acres of uncultivated land for the production of perennial crops such as oil palm, rubber, etc. According to the Department of Trade, under the Ministry of Commerce, foreign investments into the agricultural sector are only currently 0.5% of total FDI. The government is empowering the development of agro-based industries by setting up sugar mills, as well as cotton, jute, rubber, seed, and edible oil industries, and food processing and animal feed plants. The existing supply of these crops does not meet the demand, creating an opportunity for foreign investors to engage in diversification of value-added crops to meet local demand and export targets.

There are five areas foreign investors can focus on:  Input Industries (seed, fertilizer, agrochemical, machineries, irrigation systems and facilities);  Production and Processing Industries (crop production, value-added production research and development);  Wholesale Market Industries  Service Industries  Animal Feed Industries.

. Fisheries Myanmar is located next to the Andaman Sea and the Bay of Bengal and has a total coastline is 2,832 km divided into three coastal regions: the Rakhine Coastal Region, the Ayeyarwady and Gulf of Mottama Region and the Tanintharyi Region. Inland water bodies such as natural lakes, reservoirs, rivers, and ponds cover an area of about 8.2 million hectares. Its river system consists of the Ayeyarwady (2,150 km long), the Chindwin (844 km), the Sittaung (420 km), the Thanlwin (2,400 km), and a small section of the Mekong river basin.

Although there are individual small and medium sized fish farmers, large-scale commercial farms managed by companies account for a bigger percentage in terms of productivity. During the 2015-2016

Page | 55 fiscal year, Myanmar produced 5.59 million metric tons accounting for the production of marine fish at 3 million metric tons and production of freshwater fish at 2.59 million metric tons respectively. The majority of the production is consumed domestically with only a small percentage exported. Fisheries are a major component of the economy, employing 3.2 million of the country’s population – 57% in freshwater fisheries and 43% in marine fisheries. According to the Department of Fisheries, at present, 117 cold storage processing plants and factories and 301 ice plants are producing both raw fishery products and value-added products in Myanmar.

Figure 14: Fisheries Production in Myanmar

In Metric Ton

Fisheries Production in Myanmar 3500000

3000000

2500000

2000000

1500000

1000000

500000

0 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Marine Fresh Water (Aquaculture) Fresh Water (Leasable) Fresh Water (Open)

Source: Department of Fisheries

Figure 15: Fisheries Production in Myanmar

In Metric Ton

Page | 56 Fisheries Export from Myanmar

2015-2016

2014-2015

2013-2014

2012-2013

2011-2012

0 50000 100000 150000 200000 250000 300000

Fish Prawn Others

Source: Department of Fisheries

The fisheries sector is also challenged by a number of factors that constrain its growth. In general, the sector lacks fundamental needs from farming methods, feed and other essential farm inputs, to infrastructure. Not every farm practices systematic feeding because of a lack of knowledge and affordability concerns. Farms also find it a challenge to get support from the government in order to increase their land to expand their operations. In the case of viral disease outbreaks, there is often a slow response in action from the government. Farms are also not well prepared with proper risk management and contingency plans and they are heavily affected during adverse weather conditions.

The EU has been providing technical assistance to Myanmar for the production of fishery products that are in-line with EU regulations and 20 processing establishments have obtained approval to export fishery products to EU nations.

Regarding the fisheries sector in Myanmar, various laws such as Law Relating to the Fishing Rights of Foreign Fishing Vessels, Myanma Aquaculture Law, Myanma Marine Fisheries Law and Freshwater Fisheries Law have been enacted and the sector has been accorded priority status by the MIC. Despite many challenges, the fisheries sector has huge room for growth if managed properly and given support from the government and other partners. Endowed with rich water and land resources, the sector can still manage significant expansion to enhance productivity in order to supply beyond the domestic market.

The following are the economic activities in the fisheries sector that are open to foreign investment.

 Fishing jetty and fish auction market;  Culture of fish, marine fish and shrimp;  Processing and manufacturing of fisheries products;  Cold storage, canning and packaging enterprise; and  Research and development.

. Forestry

Page | 57 Myanmar is covered for a large extent with both natural and planted forests. According to the FAO (2015), Myanmar has around 29 million hectares (44.2% of the total land area) of forest land comprising 28.1 million hectares of primary forest and 944 thousand hectares of planted forest. Due to Myanmar’s wide geographical spread, there are plenty of forest types such as mixed deciduous forest (38% of the total forest area), hill evergreen forest (25%), evergreen forest (16%), dry forest (10%), deciduous dipterocarp forest (5%), and tidal, beach, dune and swamp forest (4%). Myanmar is rich with natural teak forests, which are classified among mixed deciduous forests. According to International Tropical Timber Organization (ITTO) (2011), more than 16 million out of the world’s 19 million hectares of natural teak forests are in Myanmar.

Teak and hardwood are the major forestry products that are exported, with the others being insignificant in terms of numbers.

Table 26: Production and Distribution of Teak and Hardwood

Absolute Value in Cubic Ton

No. Description 2011-12 2012-13 2013-14 2014-15 2015-16 1 Teakwood (logs) Production Opening Stock at Mills 219,596 166,942 100,235 6,285 66,180 Arrival at Mills 287,293 300,083 329,315 128,220 70,826 Distribution Local Sales 566 1,923 6,891 9,726 15,789 Export 285,544 309,054 367,376 172,800 108,982 Stock 166,942 100,235 6,285 66,180 62,534 2 Teakwood (Sawn Timber) Production Opening Stock at mills 14,313 22,009 19,874 19,972 9,451 Sawn Timber during the 19,838 12,635 16,477 7,116 5,959 year Distribution Local Sales 5,216 4,831 5,770 5,592 3,506 Export 6,926 9,939 10,609 8,888 11,845 Stock 22,009 19,874 19,972 9,451 6,495 3 Hardwood (Logs) Production Opening Stock at Mills 95,858 187,455 67,459 44,311 105,283 Arrival at Mills 1,405,115 1,558,104 1,284,424 613,527 621,240 Distribution Local Sales 169,304 84,366 201,419 360,723 290,715 Stock 187,455 67,459 44,311 105,283 152,825 4 Hardwood (Sawn Timber) Production Opening Stock at Mills 29,591 41,686 52,836 31,261 8,332 Sawn Timber during the 221,218 142,663 147,675 49,105 44,490 year Distribution Local Sales 185,039 122,952 167,082 72,932 43,605 Export 537 973 1,232 1,515 - Stock 41,686 52,836 31,261 8,332 13,329 Source: Myanmar Timber Enterprise

Page | 58 All forest area is owned by the state and the extraction rights are given directly and exclusively to the state-owned Myanmar Timber Enterprise (MTE). MTE is managed by Ministry of Natural Resources and Environmental Conservation (MONREC) and takes part in controlling timber exports. In Myanmar, timber is largely harvested, transported and exported by private companies in cooperation with the MTE. All timber must be shipped out through designated Yangon timber ports with MTE markings. The timber is mainly exported to other Asian countries, especially China and India as can be observed in the following figure.

Figure 16: Export Market of Wood Products in Myanmar

Export Market of Wood Products in Myanmar, 2017

11.80% 2.20% 2.60% 3.00% 38.30% 3.70% 4.40% 5.40%

12.10% 16.70%

India China Thailand Italay USA Malaysia Nepal Singapore Germany Others

Source: Intertribal Timber Council, 2018

In August 2016, the government of Myanmar agreed a temporary national logging ban and a 10-year logging ban in the Bago Yoma region to let its beleaguered forests recover from being exploited for several years. The national logging ban ran until the end of March, 2017, however, all exports of round logs from the country have been banned since 1st April, 2016. For the duration of the new national ban, Myanmar will rely on stockpiled timber to supply its domestic wood processing industry and the international market.

2.2.3. Construction and Infrastructure Myanmar’s construction sector has faced several challenges over the past few years resulting from economic and political constraints. With high tax and interest rates, regulatory changes, budget deficits, slowdown in FDI, increased expense for importation of raw materials, difficulties in attaining working capital, slumps in sales and purchases of property, cash flows have turned negative and the performance of the industry is weakening. According to the Myanmar Construction Entrepreneur Association (MCEA), the current capital gain tax on the sale of a property is 30%. Interest rates on bank loans are currently 13 percent and mortgage terms are 15 years, while banks can loan up to 30 percent of the owned assets

Page | 59 submitted by a construction company. Property contractors are under pressure from rising costs of building materials as a result of the higher dollar-to-kyat exchange rate. However, construction rental businesses report they have been performing somewhat better compared to other businesses, particularly in response to increased public sector infrastructure development projects.52 Compared to other countries, Myanmar’s tax rate is much higher. Accordingly, stakeholders are asking for a longer mortgage term and lower bank interest and government tax rate.53

Between 2012 and 2014 developers saw huge profit coming from the residential and commercial building markets, resulting in the large-scale development of hotels, serviced apartments, high-rise condominiums and shopping complexes in Yangon. However, the real estate market started to cool off in early 2015. In 2014, the price of land and housing units skyrocketed, reaching record levels in the past 10 years. However, over the past two years, the condominium and apartment prices have been declining. On average, the apartment and condominium prices have dropped by 30 to 40 percent compared to prices three years ago.54 According to World Bank, the construction industry growth remains at 7.6 percent, representing half of the growth rate in 2015-16. Approved FDI in real estate reached US$1.1 billion in 2017-18,55 indicating an increase of 21 percent compared to 10 percent a year before. Increasingly, there is a lower demand for high-rise buildings, particularly condominiums although there is a rising demand for low to mid-tier projects.

According to Colliers International, the market for these mid-range housing units remain untapped.56 Construction of affordable housing is one of MIC’s prioritized sectors and investment in this area is encouraged.57 As of 2017, in Yangon, there is a huge oversupply of condominiums and serviced apartments but a deficit of low-cost housing units estimated at around 20,000 units.58 With the passing of the Condominium Law, the construction sector is expected to attract foreigners residing in the country. However, condominium projects are still required to provide 1.2 parking spaces per unit, discouraging the developers to design smaller units. This creates a gap in the market for those wanting smaller and more affordable, but high-quality houses. According to the government data, as of 2017, the construction market size was around US$5 billion, with the private sector taking up 57 percent and the public sector taking the remaining 43 percent of market share.

On a positive note, local banks have rolled out loan options for buyers to purchase property on partial payment of up to 30 percent. With more bank loan options, property buyers can apply for mortgages of up to 25 years at an interest rate of 13 percent and can use the asset once the down payment is completed. The loan application process takes up to one month, and the local banks currently offering property loans are AYA Bank, KBZ Bank, Myanma Apex Bank, Yoma Bank and CB Bank. The stakeholders are also expecting the Apartment Law and enactment of the 2016 Condominium Law in the near future.59

Table 27: Key Statistics in the Yangon Property Market Q2 2018

Total office stock Annual net take- Citywide rental Average prime

52 Myanmar Business Sentiment Survey Q2 2018 | MMRD 53 Construction sector under threat from high tax, interest rates 54 Analysts say 2016 is the worst year for Rangoon construction sector | The Irrawaddy 55 Myanmar economic monitor 2018 | World Bank 56 Property Report Q1 2018 | Collier International 57 Myanmar business guide 2018 | DICA 58 Government data 59 Prospects better in 2019 with improved laws, loan options | Myanmar Times

Page | 60 up rate rental rate Office market 381,000 sqm 15,400 sqm US$42.9 US$50 sqm/month sqm/month

Total leasable Average YOY increase in Citywide stock occupancy rate average rental rental rate rate Retail market 348,000 sqm 93% 5% US$32.1

Total supply stock Upcoming No. of existing No. of supply hotels upcoming hotels Upper-scale hotel 48,000 keys 3,100 keys 14 8 market

Total supply Total Units for Upcoming Upcoming stock launched/unde completion units in the units in the r construction by 2018 outer city inner city Condominiu 6,600 units 10,200 units 5,300 5,600 4,300 m market

Total supply stock Upcoming Average Share of mid- supply occupancy tier serviced rate apartment Serviced apartment 2,015 keys 2,300 keys 84% 28% market Source: Colliers International

Figure 17: Construction Market Share by Segment 2017 (Private Sector)

Constrction Market Share by Segment (Private Sector)

Residential 8%2%2%1%1% Infrastructure Industrial Office building Shopping Complex Hotel 16% Others

70%

Source: Government data

On the other hand, the current government has prioritized improving Myanmar’s infrastructure. According to the ADB, Myanmar’s infrastructure gap between now and 2030 is worth US$120 billion.60 Accordingly,

Page | 61 Myanmar will need an additional US$320 billion investment on infrastructure when considering fast urban population growth. According to IFC, 10,000 more towers need to be installed for the telecom sector. With this in mind, it is high on the government’s agenda to address the country’s infrastructure needs around power, water and transport. The industry sees much potential in the construction of roads, bridges, deep sea ports, airports and is expecting more investments from infrastructure sector in the residential and commercial sectors in the future.

According to DICA, private investment in infrastructure development under public private partnership is encouraged in 1) transportation; 2) power transmission; 3) telecommunications.

Three major plans for infrastructure development are

. Myanmar’s National Transport Master Plan (NTMP)

In November 2014, the NTMP was released, with the assistance of JICA. The Master Plan included transport modes such as road, railway, waterway, aviation and maritime transport, as part of the government’s plans to establish a safe, efficient and affordable transport system.61

. National Electrification Plan (NEP)

The NEP is funded by the World Bank through a loan of US$400 million. Implemented by the Ministry of Electricity and Energy (MOEE) and the Department of Rural Development (DRD), the plan aims to achieve 100 percent electrification by 2030.62

. National Logistics Master Plan (NLMP)

Cargo movement in Myanmar is forecasted to double to 312 million tons by 2030. Under the National Logistics Master Plan, there are 167 project, and each project is estimated to cost an average of about US$29 million. The objective of the NLMP is to implement multimodal transportation in the country.63

Figure 18: Construction Market Share by Segment 2017 (Government Sector)

60 www.myanmarinfrastructuresummit.com 61 Myanmar formulating National Transport Master Plan, with assistance of Government of Japan | The Global New Light of Myanmar 62 Myanmar National Electrification Project Report 63 Strategy to build up logistics sector, boost national transport plan revealed | Myanmar Times

Page | 62 Construction Market Share by Segment (Government Sector)

Building & infrastructure Road Dam & Irrigation 17% Bridge 2% Railway 2% Water Supply System Power Plant 5% 48% Grid & Transmission 5% Other Infrastructure 6% 7% 8%

Source: Government data

Table 28: Major Roads Linked to Neighboring Countries

No Roads linked to neighboring countries . 1 Asian Highways 2 ASEAN Highways 3 Greater Mekong Subregion, GMS-Highways 4 India-Myanmar-Thai Tripartite Highways 5 Ayeyarwaddy – Kyaukphayar – Mekong Highways 6 Bimstec Highways 7 Paletwa border road projects and highways for various development of Kalatan River 8 Rid – Tiddim Highways 9 Myanmar and China Bilateral road projects Source: www.myanmarinfrastructuresummit.com

Table 29: Proposed Projects in Myanmar Railways

No Project Name Length (km) . 1 Yangon Mandalay Rail Line Modernization Work 616.8 2 Yangon City Urban Rail Line Modernization and Rehabilitation Works 124.5 3 Repowering of Locomotives 4 Mandalay-Myitkyina Track and Signaling Upgrading Project 552 5 Bago-Dawei Track Upgrading Project 507 6 Tamu-Kalay-Segyi-Monywa-Mandalay Rail Line Project 500.22 7 Yangon-Pyay Track Upgrading Project 259 8 Upgrading of Railway Technical Training Center 9 National Railways Strategic Plan Source: www.myanmarinfrastructuresummit.com

Page | 63 Table 30: Airport Development Plan

No Airport Name Brief Description . 1 Yangon International Airport Airport to accommodate 6 million passengers annually 2 Hanthawaddy International Airport As a major gateway meeting international standards and fulfilling the future demand capacity up to 2030 3 Mandalay International Airport Development of Mandalay Airport as a major logistic hub to handle 3.5 mil 4 Bagan-Nyaung U Airport The safety operation of Category 1 standard landing aids, terminal upgrading and related facilities. 5 Heho Airport The safety operation of Category 1 standard landing aids, terminal upgrading and related facilities. 6 Thandwe Airport Terminal building upgrade 7 Dawei Airport Upgrading domestic airport to international airport. Source: www.myanmarinfrastructuresummit.com

Table 31: Potential Deep Sea Port Projects in Myanmar

No Deep Sea Port Name Location . 1 Dawei SEZ together with Deep Sea Port Tanintharyi Region on the South Coast 2 Kyauk Phyu Deep Sea Port Rakhine State on the West Coast 3 Kalagauk Deep Sea Port Between Mawlamyine and Ye Region on the South Coast 4 Westport Deep Sea Port Ngayoke Bay, Ayeyarwady Region Source: www.myanmarinfrastructuresummit.com

Table 32: Urban Development Plans for Yangon

No Project Name . 1 Future urban structure and land use of greater Yangon 2 Sub-center with Green Isle system 3 Urban function 4 Industrial function 5 Green and water function 6 Road network 7 Logistics network 8 Historical and cultural heritage conservation 9 Eco Green City, 10 Korea Myanmar Industrial Complex

Page | 64 11 Dagon Seikkan Smart District in Yangon Source: www.myanmarinfrastructuresummit.com

Table 33: Urban Development Plans for Mandalay

No. Project Name 1 Conceptual master plan for future Mandalay growth 2 Urban transport network 3 New Mandalay Resort City in Mandalay 4 Five-year housing development plan (FY 2017-2021) Source: www.myanmarinfrastructuresummit.com

2.2.4. Energy and Mining Myanmar has an abundance of energy resources particularly natural gas and hydropower. Natural gas is a major export product, and the current source of power use in the country mainly comes from natural gas and hydropower.

As part of reforms of the sector, the MOEE is opening tenders for up to 31 oil and gas exploration blocks in early 201964. These tenders will be open to foreign and local companies as well as JVs. Field surveys and exploration works by multinational companies such as PTTEP, ENI, Daewoo and Woodside in 20 onshore and offshore blocks are also expected in the near future. In 2017, the MIC approved offshore supply bases (OSB) for companies based in Myanmar to efficiently operate. Otherwise, the daily cost to use platforms in Singapore and Thailand is extremely high, and trips can take up to 10 days. In 2018, the MIC approved six OSBs that are likely to be operational by 2020 the earliest.65

Another major improvement is the government’s plan to address the growing use of electricity in the country is by importing Liquefied Petroleum Gas (LPG). Meanwhile, natural gas will remain as an export item as a major source of foreign earnings. However, many believe this could be an answer to the current shortage level of electricity. In the longer term, Myanmar needs to consider the use of its power plants. In 2018, four Liquid Natural Gas (LNG) power stations were approved by MOEE. These stations will produce an additional 3,000 MW, which is nearly equivalent to the current production of 3,190 MW. The total investment of the stations could reach around US$ 5 billion.66

Types of energy in Myanmar are as follows:

1) Coal

2) Natural Gas

3) Oil (crude oil and petroleum products)

4) Electricity and Heat

5) Renewable Energy (Solar, Wind, Mini/Micro hydropower, Bio mass, Bio fuel, Biogas)

64 Five sectors driving Myanmar’s economic growth in 2018-19 | Myanmar Times 65 Over the last year, Myanmar’s energy sector stumbles in right direction | Myanmar Times 66 Myanmar to double electricity capacity with LNG-fueled plants

Page | 65 . Oil and Gas Myanmar produces a significant amount of natural gas, which is one of the major contributors to foreign currency, accounting for 40 percent of the country’s income. Myanmar is ranked first in terms of natural gas export volume in the region – in 2018, Myanmar exported 1.6 billion cubic feet of natural gas on a daily basis. Major export countries are Thailand and China ordering 90 percent of the country’s natural gas production.

As of 2018, there were altogether 105-listed oil and gas blocks, of which 54 were onshore and 51 were offshore. 67The country’s proven natural gas reserves are estimated to be 1,820 billion of cubic feet (BCF) and oil reserves with 139 million barrels.68

Current Operations in Oil and Gas Blocks Figure 19: Onshore Blocks

Onshore Blocks

16

38

Source: Ministry of Electricity and Energy

Figure 20: Offshore Blocks

67 Energy guide 2018 | Eurocham 68 Over the last year, Myanmar’s energy sector stumbles in right direction | Myanmar Times

Page | 66 Offshore Blocks

13

38

Source: Ministry of Electricity and Energy

Table 34: Existing Offshore Projects in Myanmar

Yadana Project Total Production 910 million cubic feet UNOCAL Operating Companies PTTEP MOGE Daily export 711 million cubic feet Daily production for domestic use 119 million cubic feet

Zawtika Project Total Production 350-360 million cubic feet PTTEP Operating Companies MOGE Daily export 250 million cubic feet Daily production for domestic use 100 million cubic feet

Shwe Project Total Production 500 million cubic feet DAEWOO ONGC Operating Companies GAIL KOGAS MOGE Daily export 400 million cubic feet Daily production for domestic use 100 million cubic feet

Yetagon Project Total Production 250 million cubic feet Operating Companies PETRONAS

Page | 67 NIPPON PTTEP MOGE Daily export 200 million cubic feet Daily production for domestic use Source: Ministry of Electricity and Energy

Figure 21: Yearly Growth of FDI in Oil & Gas Sector (1988-2018)

Year Growth of FDI in Oil and Gas Sector Total Value US$22.42 billion 12.00 10.18 10.00 8.00 6.00 4.82 4.00 2.63 3.22 2.00 0.17 0.11 0.28 0.25 0.31 0.01 0.00 2

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

2018 (4 to 9)

1988-89 to 2005-2006

2018-2019 (As of 31 October Source: Directorate of Investment and Company Administration

FDI in oil and gas sector accounts for almost 30 percent of the total FDI value with over US$22 billion from 1988 to 2018.

Table 35: Annual Oil and Gas Production

2005- 2010- 2012- 2013- 2014- 2015- 2016- Commodity Unit 2006 2011 2013 2014 2015 2016 2017 Crude oil, natural gas and petroleum products (000) US Crude oil* barrel 7964 6788 6197 6115 5851 4706 4297 Million 4377 4503 4670 4822 6532 6955 6700 Natural gas* Cuft 29 81 25 76 88 91 81 a) 4362 4433 4605 4750 6475 6893 6628 Pipeline gas M-Cuft 89 41 96 22 82 59 67 b) Compressed natural gas M-Cuft 1440 7040 6429 7254 5706 6232 7214 1071 1290 1008 7050 6591 4419 3839 Motor spirit (000) gal 48 52 30 8 6 9 1 5407 6304 4358 3973 4292 3264 Diesel oil (000) gal 8 4 6 3 1 4355 2 LPG (000) gal 3962 3290 4210 2417 6703 4150 2846

Page | 68 1344 1560 1091 1202 Furnace oil (000) gal 0 2 9 9122 9503 8640 2 1597 1165 Aviation turbine (000) gal 0 7 9210 5879 5744 4355 3826 Kerosene (000) gal 409 434 175 89 163 65 32 1951 1661 1321 1352 1298 1217 Petroleum coke M.t 5 9 4 0 2672 6 0 Source: Statistical Yearbook 2017

. Power

The current production figure of electricity in Myanmar is more than 3,100 MW. Electricity production sources are hydropower, natural gas and diesel, with hydropower accounting for about 60 percent. According to the Ministry of Electricity and Energy (MoEE), power consumption in Myanmar is increasing annually from 15 percent to 17 percent. In 2021-22, the electricity consumption is expected to reach 5,774 MW.69 The country’s electricity originates from 83 power plants, including 62 hydropower stations, 20 gas-fired plants and 1 coal power plant. The Myanmar Energy Master Plan (MEMP), and the Myanmar National Electrification Plan (NEP) have established benchmarks to provide 47 percent of sustainable power in 2020, 76 percent in 2025 and 100 percent in 2030.70

Table 36: Current Number of Power Plants

Hydropower Coal-fired Gas-fired Number of Installed plants 62 1 20 Installed capacity in MW 3,033 120 1,823 Number of proposed plants 51 10 1 Proposed capacity in MW 46,000 7,994 270 Number of ongoing plants 7 ( out of planned 51) 1 2 Capacity of ongoing plants in MW 1,656 405 625 Source: ADB, Myanmar Energy Assessment, Strategy and Road Map

It is reported that in 2016-17, only 38 percent of Myanmar’s population had access to electricity, indicating that about 35 million people are living without electricity. Meanwhile an LNG import plan aims to solve the short-term electricity needs, although Myanmar needs to rely on hydropower plants for sustainable production. Hydropower has the potential for more than 100,000 MW of energy, and locations of ten planned hydropower projects to come online from 2019 to 2022 to generate an additional 3,117 MW of power are as follows:

Table 37: Location of Additional Hydropower Projects

No. Planned Projects Location (State/Region) 1. Kengtawg/Kyaingtaung Shan State 2. Upper Yeywa Shan State 3. Kyauk Phyu Rakhine State 4. Kanbauk Tanintharyi Region

69 MOEE to provide 3,600 MW of additional power in four years | Myanmar Times 70 www.export.gov/article?id=Burma-Energy

Page | 69 5. Ywama Shan State 6. Patolon Sagaing Region 7. Myanaung Ayeyarwaddy Region 8. Thilawa Yangon Region 9. Mee Luang Chiang Ayeyarwaddy Region Source: MOEE to provide 3,600 MW of additional power in four years | Myanmar Times

Figure 22: Yearly Growth of FDI in Power Sector (1988-2018)

Power Total Approved Amount US$ 21.08 billion

9.00 8.22 8.00 7.00 6.02 6.00

5.00 4.34 4.00 3.00 2.00 0.91 1.00 0.36 0.41 0.05 0.04 0.36 0.09 0.00

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

2018 (4 to 9)

1988-89 to 2005-2006 Source: Directorate of Investment and Company Administration

FDI in power sector accounts for 27 percent of the total FDI value with over US$202018-2019 billion (As of from 31 October 1988 2018) to 2018.

Renewable Energy

Renewable energy sources include solar, wind, mini/micro hydropower, biomass, bio fuel and bio gas. Hydropower is the only resource that is being produced abundantly in Myanmar, although there is much potential for wind and solar power. In 2016, the MoEE and Three Gorges Corporation from China signed a MoU to develop a wind turbine project in Ayeyarwady Region. According to the ministry, the project is expected to generate 30 MW of electricity.

As the middle parts of the country have abundant sunshine, they are assessed as regions with the ideal climate requirements for solar energy solutions. The estimated potential production of solar power is 51,973 terawatt-hours per year.71 Currently, there is no commercial production potential for biomass. In the case of biofuel, there are five bio fuel plants that can produce 19.5 million gallons per year.72

71 Energy Guide 2018 | Eurocham Myanmar

Page | 70 . Mining

In 2016, the mining sector in Myanmar was halted owing to environmental concerns and issues around legal frameworks.73 Since then, the ministry has conducted inspections on 519 mining sites and introduced many reforms.74 In July 2018, the MONREC made an official announcement that local and foreign investment will be permitted under the new Myanmar Mining Rule enacted in February 2018.75 Since then, online applications have been accepted. Furthermore, lease for large-scale production was increased from 15 years to 50 while medium-scale production was increased to 15 years.76

With the new legislation, land size for large-scale sites were expanded to more than 500,000 acres (202,000 hectares) while land size for medium-scale sites was increased to 247.1 acres. In July 2018, an Australian firm, PanAust, formed a JV with Myanmar Energy Resources and was granted licenses for three explorations in Sagaing Region. According to Department of Mines, seven other foreign companies from countries such as Japan, South Korea, China and Australia are also attempting to do site inspection across regions in Myanmar.77 According to MONREC, investments will be allowed in small-scale production sites for the exploration of gold and other metals of up to four acres, up to 10 acres for other metals, and up to 20 acres for other industrial materials and precious stones.78

Table 38: Production of Minerals

2005- 2010- 2012- 2013- 2014- 2015- 2016- Mineral Unit 2006 2011 2013 2014 2015 2016 2017 Precious Mineral (000) Jade Kilogram 19945 44406 18363 15047 16672 35979 34655 (000) Gems Carat 23810 9207 10103 13894 11039 13483 10147 Troy Refined silver (000)oz 40 ------Refined gold Troy oz 3151 5516 25296 28695 42281 54400 46482 Metal and ore Copper matte M. Ton 34 ------Nickel speiss M. Ton 47 ------Antimonial lead M. Ton ------Refined lead M. Ton 576 ------Zinc concentrates M. Ton 280 - 318 957 382 758 754 Tin concentrates M. Ton 737 653 886 681 536 451 405 Tungsten concentrates M. Ton 7 1 2 - 5 10 3 Mixed tin, tungsten and scheelite M. Ton 921 1204 938 1059 1101 627 826 a. Tin/tungsten mixed M. Ton 91 468 339 439 487 385 519

72 Energy Guide 2018 | Eurocham Myanmar 73 Myanmar permits local and foreign investment in mining | Mining Technology 74 Foreign investment permitted in mining sector under new govt regulations | Myanmar Times 75 Foreign investment permitted in mining sector under new govt regulations | Myanmar Times 76 Myanmar’s mining sector reopens investors | Oxford Business Group 77 Myanmar’s mining sector reopens investors | Oxford Business Group 78 Growth in mining industry expected as investments rise | Myanmar Times

Page | 71 b. Tin/tungsten/scheelite M. Ton 830 736 599 620 614 242 297 Mineral fuel 20183 47102 38027 38873 41986 54983 Coal M. Ton 0 2395 2 2 2 2 8 Industrial raw material 23952 Baryte M. Ton 2205 7 15339 31295 23060 2836 3215 42773 66699 17594 34279 60022 Limestone M. Ton 20093 14346 3 0 93 09 41 Fire clay M. Ton 30 939 - - - - 3000 Bentonite M. Ton 602 - - - - 700 600 10499 33848 Gypsum M. Ton 69735 546 64079 1552 4 99859 9 Dolomite M. Ton 4400 77617 170 60510 2200 2200 2200 Fire clay powder M. Ton 97 2350 - 400 - - - Source: Statistical Yearbook 2017

Table 39: Mines by State and Region

States and Regions Type 2005* 2010* 2012* 2013* 2014* 2015* 2016* Kachin State Metal 37 324 167 132 135 - 64 Non-metal 2 1 2 4 - - 20 Kayah State Metal 4 5 12 27 18 - 17 Non-metal - - - - 3 - - Kayin State Metal 1 208 56 101 53 35 23 Non-metal 1 - 2 17 9 3 23 Sagaing Region Metal 34 402 196 31 218 10 194 Non-metal 1 8 22 47 33 - 35 Tanintharyi Region Metal - 86 109 138 68 - 38 Non-metal 1 1 9 12 8 - 17 Bago Region Metal 19 67 15 9 4 - 2 Non-metal - - - 5 - - - Magway Region Metal - - 1 3 3 - 2 Non-metal - - 13 55 33 - 38 Mandalay Region Metal 18 669 212 38 216 1880 232 Non-metal 1 14 30 184 163 878 90 Mon State Metal 1 6 21 29 11 8 13 Non-metal - 1 6 17 12 16 18 Shan State Metal 1 73 235 497 376 110 180 Non-metal 3 11 72 135 77 3 93 Chin State Metal 3 - 11 14 4 - - Non-metal ------Ayeyarwady Region Metal - - 3 5 5 - - Non-metal - 1 4 4 - 2 Rakhine State Metal ------

Page | 72 Non-metal - 1 5 1 - 1 Nay Pyi Taw Metal ------Non-metal - - - - - 3 Total Metal 118 1840 1038 1024 1111 2043 765 Non-metal 9 36 158 485 343 900 340 Source: Statistical Yearbook 2017

*include private sector

There are several barriers for mining sector in Myanmar to overcome to reach the state of responsible mining. According to the report on Sector Wide Impact Assessment by Myanmar Centre for Responsible Business (MCRB) and Institute for Human Rights and Business (IHRB), challenges include 1) lack of clarity in policies, laws and regulations to establish a responsible investment; 2) absence of monitoring to address environmental, social and human rights impacts of mining particularly because of lack of technical capacity and human resources; 3) local communities having to bear the cost of mining operations; 4) problems arising among mining in conflict-affected areas; 5) presence of informality in the mining sector for example operating in EAOs controlled areas.79

2.2.5. Tourism

The tourism industry in Myanmar has grown rapidly since reforms began in 2011, with Ministry of Hotels and Tourism figures showing that the total number of foreign arrivals with visa has soared from 0.39 million in 2011 to 1.36 million in 2017. Tourism is also one of the eight promoted sectors in Myanmar.80

Figure 23: Annual Foreign Tourist Arrival

In Million

Annual Foreign Tourist Arrival

1.36 1.30 1.27 1.13 0.90 0.96

1 2 3 4 5 6

Source: Ministry of Hotel and Tourism

79 Myanmar mining sector wide assessment | Myanmar Centre for Responsible Business (MCRB) and Institute for Human Rights and Business (IHRB) 80 Myanmar investment guide 2018 | DICA

Page | 73 The rate of travelers from eastern and western Europe, the Middle East, North America and other parts of the Americas are falling, especially with the UK market down by 40 percent, mainly affected by the Rakhine issue. Meanwhile, in 2017, within Asia, Thailand topped tourist sourcing with 20 percent, followed by China (16 percent), Japan (7 percent), South Korea, and Singapore with 5 percent each. According to statistics from the Ministry of Hotel and Tourism, more than 150,000 Chinese tourists, including both tourist visas and arrivals from border gates, visited the country from January to July, reflecting a 34 percent increase compared to the same period in 2017. Stakeholders in the tourism industry are shifting their targets toward the Asian market. Since October 2018, visa exemptions to Japan, South Korea and China have been introduced, and visa exemptions for visitors from selected European countries are also expected in the near future.

Figure 24: Tourist Arrival by Nationality, 2017

Tourist Arrival by Nationality

70%

18% 6% 3% 1% 1% 0.48% 0.43% Asia West Europe North Oceania East Europe Other Middle East Africa America Americas

Source: Ministry of Hotel and Tourism

According to the DICA, Myanmar’s top tourist destinations are

. Yangon – As one of Myanmar’s busiest and most exciting cities, Yangon is full of interesting activities. The city boasts several attractive sites rich in culture and history such as the Shwedagon Pagoda and British colonial buildings. . Bagan – The capital of the first Myanmar Empire, Bagan is one of the richest archaeological sites in Southeast Asia. The ancient city is filled with ancient temples, buildings and artifacts whose origins date back almost 1,500 years. . Mandalay – The cultural capital of Myanmar and once a royal city, Mandalay’s sites include the royal palace, Mandalay Hill, Shwenandaw Monastery and U Bein Bridge. . Inle Lake – Located in picturesque Shan State, Inle Lake is renowned for its mix of hill tribes and the unique customs of the Hintha people, who live on the lake. . Chaung Tha, Ngwe Saung and Ngapali beaches – The three most popular beaches in Myanmar, these places are ideal for several activities such as snorkeling, kayaking, cycling and seafood dining.

Table 40: Distribution of Available Capacity of Hotels, Motels and Inns/Guesthouses(2016-17)

State/Region No. of Hotels, Motels and Inns No. of Rooms Yangon Region 363 18200

Page | 74 Mandalay Region 426 17784 Bago Region 58 1420 Sagaing Region 27 1098 Tanintharyi Region 36 1451 Ayeyarwady Region 69 2770 Magway Region 30 739 Kachin Region 27 751 Kayah Region 15 313 Kayin Region 20 720 Chin Region 5 127 Mon Region 49 1577 Rakhine Region 49 1538 Shan Region 305 9761 TOTAL 1479 58249 Source: Ministry of Hotels and Tourism

Currently, the country has around 60,000 hotel rooms with more than 5,000 tour guides and 2,300 tour companies.81 However, the tourism industry in Myanmar continues to suffer from excess supply – hotel rooms, tour companies, tour guides and domestic airlines. Until mid-2018, the country had 11 airlines supplying a market of around three million passengers per year. However, in July, the country saw the suspension of the three domestic airlines – Air Bagan, Apex Air and First Myanmar International (FMI).82

Table 41: List of Main Myanmar Domestic Airlines

No. Name of Airline 1 Air Mandalay 2 Air KBZ 3 Mann Yadanapon Airlines 4 Yangon Airways 5 Asian Wings Airways 6 Myanmar Airways International (MAI) 7 Golden Myanmar Airline 8 Myanmar National Airline Source: https://www.myanmartour.com/myanmar

The government has recommended promoting community-based tourism, as this would enable tourists to learn more about the country’s culture and traditions, as well as boost the livelihoods of people living in rural areas. Currently, there are about 13-community-based tourism destinations in the different regions and states. In addition, according to MIC, investment is encouraged in eco-tourism and new destinations that offer high potential. Major challenges of tourism industry are a lack of skilled labor, and infrastructure development. The government, in coordination with sector associations such as Myanmar Tourism Federation, Union of Myanmar Travel Association (UMTA), are implementing tourism promotion activities. A Tourism Master Plan has been developed setting guidelines with the vision to expand the tourism industry from a baseline of US$534 million in 2012 to US$10.8 billion by 2020.83

81 Myanmar’s tourism industry faces challenges | Global New Light of Myanmar 82 Suspension of three domestic airlines in Myanmar | Baolau 83 Myanmar reveals tourism Master Plan | Myanmar Times

Page | 75 2.2.6. Services The service sector is highly significant in Myanmar’s economy, contributing 42.2 percent of the GDP. As a result of the influx of international companies into Myanmar, the market for services has rapidly expanded as such companies require certain services to settle their businesses on the ground in Myanmar. Over the past few years, there has been limited number of services activities that were allowed to private as well as foreign entities. However, with the liberalisation of the economy, there has been active involvement of these players in the market.

Myanmar businesses in general are deprived of knowledge, skills and expertise across different areas. In addition, they are also constrained by limitations when it comes to access to services, finances, markets, networks and opportunities. Service businesses intend to fill those gaps through capacity building, enterprise development services, business development services and access promotion services.

Service businesses cater to both individual as well as corporate clients and are not always in the structure of companies, with some existing as NGOs with specific intentions of promoting certain businesses or particular sectors.

Over the years, there have been an increasing number of service businesses entering the market, and their entry has been made with foreign businesses entering the market and using their services to establish a footprint in the market in a country where processes are complicated and information is scarce. Technology developments have also made significant impact on the service industry, with these businesses using technology to deliver solutions in the market. Some of the examples are platform businesses, apps and e-commerce.

The following are some of the service businesses that are present in the local context: . Advisory/ Consultancy firms (They can be sector specific as well such as agricultural techniques advisory company.) . Architects . Delivery express services . Distribution companies . Education and capacity development partners . Event planning services . Finance related companies (eg. Finance companies, Money mobile providers) . Government processes related agents (Clearance agents, License application agents, etc) . IT companies . Telecom companies . Legal and advisory firms . Marketing and advertising agencies . Real estate agents . Recruitment services . Travel and tourism agencies . Entrepreneurial support service providers.

2.2.7. Telecom The telecoms sector can be seen as the industry that has undergone the most rapid changes in Myanmar in recent years. From a state-monopolised industry, it has been liberalised to a free market with powerful players that are a mix of foreign, local and JV companies. Liberalisations started in 2013 with the granting

Page | 76 of telecom licenses to two foreign players, Telenor and Ooredoo. With the addition of Mytel to the market, the market now has four operators, including the state-owned MPT. This liberalisation has paved the way for significant improvements within the industry:

. Reduction of sim card prices from US$2,000 to US$1 . Reduced prices for calls and data usage . Reinforcement and expansion of telecom infrastructure . Introduction of new services and packages . Better connectivity and stability.

Out of all these, mobile penetration is the most significant improvement. GSMA Intelligence Report in 2018 showed that the country has 52.8 million mobile connections, with MPT holding the largest market share of 47 percent and the new comer Mytel occupying the smallest share of 3.6 percent since its entry in early 2018. Foreign operators Telenor and Ooredoo hold 32.3 percent and 17.1 percent respectively.

The liberalisation of the telecom market in Myanmar serves as an important economic stimulus for the country and is expected to help increase GDP growth. Increased mobile penetration has paved the way for the emergence of other platform businesses that could be integrated into mobile services, such as digital payment services, which ultimately enhance the population’s access to financial services.

2.2.8. Consumer Goods Myanmar has a large consumer base of approximately 53 million people and the demand for consumer goods has been on an upsurge over the years with rapid urbanisation, increased affordability, availability of better choices, etc. On the other hand, consumer goods supply has also increased over the years with the entry of foreign brands, expansion of local players, emergence of modern retail chains, etc. The retail industry is predicted to see even higher growth as the government recently allowed foreign retail chains to operate in the country.

On the demand side, income levels of consumers have risen, although these are somewhat offset by inflation. The rise in income levels has triggered increased spending of consumers. A consumer survey by Deloitte in early 2016 found that 62 percent of consumers surveyed in Yangon and Mandalay indicated that they felt optimistic about the current economy, with 54 percent stating that they expected to increase their household income.

Figure 25: Average Monthly Household Expenditure

Average Monthly Household Expenditure

Page | 77 Source – Deloitte, Myanmar Consumer Survey 2016

Figure 26: Breakdown of Monthly Expenditures

Breakdown of Monthly Expenditures

Source – Deloitte, Myanmar Consumer Survey 2016

Yangon’s retail market has undergone rapid change in recent years, with the development of modern shopping centres to keep up with the robust demand. Over the past few years, big international brands have also entered the market to serve the growing demand. According to a study by Nielsen Emerging Markets Research, Myanmar’s retail industry is valued at between US$10 and 12 billion, which is derived from about 250,000 retail outlets in the country in which grocery, convenience, fabric, pharmacy and fashion retail stores account for 45 percent. The study also claimed that the fast-moving consumer goods (FMCG) sector grew by 15 percent over the period of 2010 to 2014.

Page | 78 Despite heavy reliance on imports for consumer goods, Myanmar’s manufacturing sector has been progressing at a fast pace. It has been reported that many major consumer goods companies have plans for significant expansion over the next few years. Such expansion plans have been well-illustrated by the increasing number and the wide acceptance of convenience stores in the market.

2.3. Currency and Finances

The official currency of the country is the Myanmar Kyat (K).

Figure 27: Exchange Rates (Kyats per US dollars)

US$ Exchange Rate Trend 1600 1439 1400 1361 1241 1200 1170 986 US$ 1000 939 800 600 Kyats per 400 200 0 Year 1 2013 2014 2015 2016 2017 2018

Source: Central Bank of Myanmar, www.exchangerates.org

2.3.1. Exchange Rate Regime Starting from 1st April 2012, the Central Bank of Myanmar replaced the previous 35 years fixed exchange rate with a managed floating system, in an attempt to unify the multiple exchange rates and weaken the domination of the black market. The managed float policy is expected to help solve problems involving the circulation and transfer of money, which the government hopes will pave the way for a more efficient financial and updated banking system in the future. In late 2012, Myanmar’s kyat currency was convertible directly to US dollars, Euro and Singapore dollars only.

After the introduction of the floating rate program, the exchange rate for 1 US$ has fluctuated significantly and has varied from time to time. The fluctuation depends greatly on the inflation, trade balance, appreciation of US$ in the world, government policy changes, and political stability among others. The Myanmar kyat has depreciated significantly 2018, achieving a record height exchange rate against the US Dollar.

2.3.2. Balance of Payments and International Reserves The table below shows Myanmar’s balance of payments and international reserves.

Table 42: Balance of Payments and International Reserves

Page | 79 Sr. 2016-17 2017-18 Particular 2014-15 2015-16 No. (P.A) (P) 1. Exports (f.o.b) 10,384.9 9,498.2 9,471.1 10,468.3 (% change) 5.5 -8.5 -0.3 10.5 2. Imports (f.o.b) 12,243.6 13,546.2 13,865.3 15,148.5 (% change) 12.0 10.6 2.4 9.3 3. Trade Balance -1,858.7 -4,048.0 -4,394.2 -4,680.2 4. Services, net 1,299.7 1,077.5 1,192.7 1,071.8 Receipts 3,601.7 3,678.2 3,638.3 4,168.1 Payments 2,302.0 2,600.7 2,445.6 3,096.3

5. Primary Income, net -2,630.6 -1,986.2 -1,603.5 -1,986.6 Receipts 706.9 984.4 944.7 1,246.1 Payments 3,337.5 2,970.6 2,548.2 3,232.7

6. Secondary Income, net 1,311.6 1,867.0 2,083.7 2,490.5 Receipts 2,050.8 2,387.5 2,456.6 2,738.7 Payments 739.2 520.6 372.9 248.2 7. Current Account -1,878.0 -3,089.7 -2,721.2 -3,104.5

8. Capital Account 0.0 0.0 1.0 0.6 Receipts 0.0 0.0 1.0 0.6 Payments 0.0 0.0 0.0 0.0

9. Financial Account -2,682.7 -3,897.3 -4,532.1 -4,633.7 1. Assets (+= net increase / - = net decrease) 148.1 -177.4 -1,478.1 -250.9 Of which: Currency & Deposits (assets) 143.6 -182.6 -1,479.9 -359.9

2. Liabilities (+= net income / -= net decrease) 2,830.8 3,719.9 3,054.0 4,382.8 Of which: Direct investment (liabilities) 2,915.8 3.443.0 3,260.2 3,588.7 Other investment (liabilities) -101.3 277.0 -243.4 792.2

Currency & Deposits (liabilities) 139.3 -329.0 -419.6 121.6 Loan (liabilities) -152.6 705.9 316.2 673.1 Of which: Government loan (liabilities) 314.9 444.5 -35.0 224.7

Disbursements 539.4 786.1 366.1 681.5 Repayments 224.5 341.6 401.1 456.9 Allocation of SDRs 0.0 0.0 0.0 0.0

10. Net errors & omissions 276.2 -1,226.9 -1,432.8 -1,326.3 11. Overall Balance 1,081.0 -419.4 379.1 203.4 12. Gross Reserves (- increase) -1,081.0 419.4 -379.1 -203.4

Source: Central Bank of Myanmar

Figure 28: Total International Reserves

Page | 80 Total International Reserves 10 8.8 9 8 7 6 5.2 4.6 4.9 5 4.5 billion 4 US$ 3 2 1 0 2013 2014 2015 2016 2017 Year

Value

Source: www.knoema.com

2.3.3. Banking System

The Union Bank of Burma was established on 3rd April 1948, by the Act of Union Bank of Burma (1947), and took over the functions of the Yangon branches of the Reserve Bank of India, which prevailed during the British colonial era. After Myanmar adopted a socialist economic system in 1962, all banks were nationalised. After 1988, the Myanmar economic system was transformed from central economic planning to a market-oriented system. After Myanmar joined ASEAN in July 1997, the country had to integrate its systems in accordance with its partners within the association. The Central Bank of Myanmar has monetary and Financial Cooperation with ASEAN and ASEAN+3 Countries.

The banking system in Myanmar has been undergoing a series of reforms and liberations over the past few years. The following figure shows the amount of total assets managed by Myanmar’s financial sector.

Figure 29: Percentage of Total Assets Managed by the Financial Sector

Page | 81 % of Total Assets Managed by the Financial Sector

Domestic Banks Foreign Banks 5.60% 4%1.20%2.20% Securities Insurance Others (Finance Companies, MFI)

87%

Source: www.knoema.com

2.3.4. Major Reforms of the Financial and Banking System

Realising the importance of the financial and banking system for attracting foreign investors and enhancing the investment climate in general, the government has been undertaking a series of reforms. The following are some of the reforms undertaken by the government and the Central Bank of Myanmar in an attempt to promote the financial and banking system of Myanmar.

. Allowed private banks while ensuring a level playing field between private and state-owned banks.

The banking sector was previously monopolised by a handful of state-owned banks. As part of the economic reforms undertaken, the government has granted commercial banking licenses to private entities and there are currently 25 private banks in Myanmar. The table below shows the list of state- owned and private banks in Myanmar.

. Five specialist banks were approved for targeted lending to sector-specific businesses.

With the intention of promoting selected sectors, the government has been establishing specialist banks that are dedicated to serving the stakeholders of the selected industries – microfinance, construction and housing, rural and urban development and agriculture. As of now, five banks have been approved for targeted lending to sector-specific businesses.

Table 43: List of Banks in Myanmar

Page | 82 State-owned Banks Private Banks Sector Specialist Banks 1. Myanmar Foreign Trade 1. Myanmar Citizens Bank 1. Myanmar Microfinance Bank 2. First Private Bank Bank 2. Myanma Investment and 3. Cooperative Bank 2. Construction and Housing Commercial Bank 4. Yadanabon Bank Development Bank 3. Myanma Economic 5. Myawaddy Bank 3. Shwe Rural and Urban Bank 6. Yangon City Bank Development Bank 4. Myanma Agriculture and 7. Yoma Bank 4. Ayeyarwaddy Farmers Development Bank 8. Myanmar Oriental Bank Development Bank 9. Asia Yangon Bank 5. Glory Farmer Development 10. Tun Foundation Bank Bank 11. Kanbawza Bank 12. Small & Medium Industrial Development Bank 13. Global Treasure Bank 14. Rural Development Bank 15. Innwa Bank 16. Asia Green Development Bank 17. Ayeyarwady Bank 18. United Amara Bank 19. Myanmar Apex Bank 20. Nay Pyi Taw Sibin Bank

The banking sector has also been undergoing a series of improvements after liberalisation with the installation of ATMs and POS, the introduction of credit cards and the launch of electronic banking services. Trade banking services were also improved as private banks were allowed to provide Letter of Credit (LC) and various remittance services.

. Allowed foreign banks to execute limited activities in Myanmar.

Until a few months ago, foreign banks were only permitted to operate as representative offices. With the most recent notifications, foreign banks are now allowed to lend to local businesses and also set their own foreign currency loan interest rate.

. Launched the country’s first ever stock exchange.

The country’s first ever stock exchange was launched in 2015 and there are currently five companies listed. Although there is still a long way for the capital market to gain momentum, this was a much- welcomed attempt by the government towards building a stronger financial system. A recent released notification allowed foreigners to engage in trading activities on the Yangon Stock Exchange.

. Granted a license for first ever Credit Bureau in Myanmar.

Page | 83 Financial services providers were greatly challenged by the lack of a credit bureau and thus, carried high risk in lending. In May 2018, the Central Bank gave approval to Myanmar Credit Bureau Limited to establish the much-needed Credit Bureau.

. Liberalized insurance sector by allowing private insurance providers while allowing foreign insurers to operate under some conditions

In 2013, private insurance companies were given the go-ahead to be active in the insurance industry, which was monopolised by the state-owned Myanma Insurance for years. As a further step, in December 2018 the government announced that foreign companies wishing to operate businesses offering life and non-life insurance services in Myanmar can submit their expression of interest.

. Allowed other non-bank financial institutions.

Starting in 2013, the government also allowed non-bank financial institutions such as microfinance institutions, finance companies, mobile money players and platform financial services providers to take part in lifting Myanmar’s underdeveloped financial sector.

. Encouraged SME lending through strategic plans.

The government has also been making strategic moves to promote SME lending in the country. SMEs in Myanmar face a significant challenges when it comes to financing, with many SMEs lacking access to finance and therefore relying a lot on informal financing. The government has been enabling different financing tools for micro enterprises and SMEs through bank loans, micro loans, grants, and so on.

3. Overview of Myanmar’s Foreign Trade

3.1. Recent Developments and General Considerations

Throughout the past four years, Myanmar has been suffering from trade deficit fueled by still highly import-dependent economy. Myanmar trade has been on the rise in 2018 and recorded higher by 15% in trade value compared to the 2016-17 FY. The current trade deficit narrowed slightly on strong export growth observed in 2018. Major export items include garments, agriculture produce, minerals, cattle, fisheries and forestry products. According to Ministry of Commerce, during the Oct-Dec 2018, compared to 2017, export value has increased by more than 26% contributed particularly by garment exports to Europe. According to the World Bank, the trade deficit narrowed from 8.5% of GDP in 2017 to 5.7% of GDP in 2018.84

Table 44: Myanmar – Trade with the World

Export and Import ($ billion)

84 Trade deficit narrows in Oct-Dec on higher exports | Myanmar Times

Page | 84 Annual 2017-18 Value 2016-17 Value Variation (%) Changes Export 14.85 Export 11.95 2.90 24.26 Import 18.69 Import 17.21 1.48 8.58 2015-16 Value 2014-15 Value Variation (%) Export 10.07 Export 11.05 -0.98 -8.83 Import 15.10 Import 15.11 -0.02 -0.1 Source: Central Statistical Organization

3.2. Trade with Major Countries

Table 45: Trade Comparison Globally (2017-18)

Export and Import with major countries ($ million) Export deficit/surplus ($ Variation Import surplus/deficit ($ Variation Country million) (%) million) (%) Belgium 73.6 94.88 -3.74 -10.82 France 33.58 80.66 50.86 37.73 Germany 160.32 72.96 81.87 66.9 Italy 54.91 107.43 25.77 30.08 Netherland s 84.04 91.59 -13.91 -28 Spain 86.59 104.97 -5.52 -20.61 UK 177.19 132.15 16.34 49.28 US 94.66 49.29 -66.91 -13.42 Source: Central Statistical Organization

Table 46: Trade Comparison Regionally (2017-18)

Export and Import with major countries ($ million) Export deficit/surplus ($ Variation Import surplus/deficit ($ Variation Country million) (%) million) (%) Brunei -0.37 -63.79 -0.15 -53.57 Cambodia 0.69 26.04 1.37 441.94 Indonesia -1.14 -0.91 199.21 28.37 Laos 0.04 100 1.05 256.1 Malaysia 63.54 39.96 45.86 5.58 Philippines -21.06 -51.39 17.01 109.74 Singapore 280.66 59.36 590.35 23.67 Thailand 644.17 29.25 142.49 6.83 Vietnam 39.26 44.49 181.52 44.73 China 643.21 12.72 337.41 5.87 South Korea -39.17 -11.44 -28.47 -5.44 Japan 171.77 21.9 -280.86 -22.51 Hong Kong 158.88 77.82 -12.71 -36.01 India -335.76 -35.59 -138.74 -13.88 Banglades 146.05 608.54 2.29 11.47

Page | 85 h Source: Central Statistical Organization

3.3. Annual Comparison of Myanmar Import of Principal Commodities

Table 47: Capital Good

In US$ Billion

Import (Normal trade + Border trade) 2014-15 2015-16 2016-17 2017-18 Capital Goods 6.86 7.83 6.93 6.56 Cement 0.26 0.28 0.18 0.08 Fish net 0.01 0.01 0.01 0.01 Rail materials 0.01 0.03 0.02 0.13 Aircraft materials 0.00 0.07 0.08 0.20 Automobile car parts 1.63 1.63 1.87 1.37 Ship and composite materials 0.21 1.12 0.26 0.12 Farming equipment 0.42 0.17 0.26 0.18 Electrical machinery and apparatus 2.18 2.19 2.17 2.26 Construction materials (Glass and metals) 0.21 0.21 0.18 0.16 Construction materials 1.08 1.10 1.05 1.01 Wire 0.09 0.06 0.08 0.08 Motor Bike 0.28 0.30 0.43 0.42 Filming and chemical equipment 0.11 0.13 0.13 0.18 Others 0.37 0.52 0.25 0.35 Source: Central Statistical Organization

Table 48: Intermediate Goods

In US$ Billion

Import (Normal trade + Border trade) 2014-15 2015-16 2016-17 2017-18 Intermediate Goods 4.51 4.39 6.27 6.88 Wheat flour 0.00 0.00 0.01 0.02 Crude oil 0.00 0.00 0.00 0.00 Oil produce 2.33 1.56 2.44 3.58 Inedible oils 0.18 0.13 0.10 0.02 Dying, tanning and coloring materials 0.22 0.25 0.29 0.32 Fertilizers 0.23 0.22 0.30 0.33 Plastic products 0.30 0.29 0.34 0.38

Page | 86 Leather and fabricated leather products 0.03 0.04 0.05 0.07 Rubber manufactures 0.01 0.01 0.01 0.02 Paper 0.15 0.16 0.19 0.22 Fabrics of mixed and or blended materials 0.04 0.03 0.06 0.13 Metal and metal roof 0.38 0.39 0.37 0.31 Tires 0.14 0.11 0.12 0.12 Others 0.51 1.18 2.00 1.38 Source: Central Statistical Organization

Table 49: Consumer Goods

In US$ Billion

Import (Normal trade + Border trade) 2014-15 2015-16 2016-17 2017-18 Consumer Goods 3.26 2.88 4.00 5.25 Sewing machine 0.05 0.03 0.04 0.06 Battery 0.08 0.08 0.09 0.11 Light bulbs 0.03 0.03 0.05 0.04 Condensed milk 0.06 0.05 0.02 0.00 Milk powder 0.02 0.03 0.04 0.04 Spices 0.00 0.00 0.00 0.01 MSG powder 0.04 0.05 0.04 0.04 Refined palm oil 0.32 0.39 0.52 0.59 Cotton fabric 0.02 0.04 0.06 0.10 Cotton thread 0.01 0.01 0.01 0.05 Pharmaceutical products 0.27 0.26 0.42 0.53 Soap 0.05 0.05 0.06 0.07 Toothpaste 0.02 0.02 0.02 0.02 Furniture 0.04 0.03 0.06 0.07 Beverages 0.00 0.00 0.01 0.01 Cosmetics 0.08 0.10 0.12 0.13 Sports equipment 0.01 0.01 0.01 0.01 Coffee and tea powder 0.00 0.00 0.00 0.00 Tobacco products 0.04 0.05 0.06 0.06 Lace fabric 0.03 0.03 0.11 0.20 Clothes 0.05 0.03 0.10 0.09 Kitchen utensils 0.24 0.17 0.29 0.36 Eye wears 0.01 0.02 0.02 0.08 Others 2.26 1.40 1.86 2.57 Source: Central Statistical Organization Table 50: Import Variation

In US$ Billion

2015- Variation 2016- Variation 2017- Variation

Page | 87 16 % 17 % 18 % Capital Goods 7.83 14% 6.93 -11% 6.56 -5.36% Intermediate 4.39 -3% 6.27 43% 6.88 10% Goods Consumer Goods 2.88 -12% 4.00 28% 5.25 24% Source: Central Statistical Organization

3.4. Myanmar’s Trade Balance

Figure 30: Myanmar’s Balance of Trade

Trade deficit ($ billion)

3.84 2017-18

5.26 2016-17

5.02 2015-16

4.06 2014-15

Source: Central Statistical Organization

3.5. Origin and Destination of Trade

Figure 31: Myanmar Major Export Partners

In US$ Billion

Page | 88 Major Export Partners (From Mar '17 to Oct '18) Total value - $20.16 billion

44%

23%

9% 5% 5% 3% 3% 3% 3% 2%

CHINA JAPAN INDIA THAILAND GERMANY MALAYSIA SINGAPORE South Korea

UNITED KINGDOM

UNITED STATES OF AMERICA

Source: Ministry of Commerce

Figure 32: Myanmar Major Import Partners In US$ Billion

Major Import Partners (From Mar '17 to Oct '18) Total value - $26.61 billion

36%

20% 14%

6% 5% 5% 5% 3% 3% 2%

CHINA INDIA JAPAN MALAYSIA VIET NAM SINGAPORE THAILAND INDONESIA

KOREA, REPUBLIC OF

UNITED STATES OF AMERICA Source: Ministry of Commerce

3.6. Composition by Products

Page | 89 Myanmar mainly imports value-added products such as transport equipment, cement and construction materials, machinery, food products and edible oil. Meanwhile, Myanmar’s export items include natural gas, pulses and beans, rice, clothing, jade and gems, fish and wood products.

Table 51: Composition of Imports In US$ Billion

2014-15 2015-16 2016-17 2017-18 Capital Goods 6.86 7.83 6.93 6.56 Intermediate 4.51 4.39 6.27 6.88 Goods Consumer 3.26 2.88 4.00 5.25 Goods Source: Central Statistical Organization

Table 52: Composition of Exports (Normal Trade + Border Trade)

In US$ Billion

Unit 2014-15 2015-16 2016-17 2017-18 Agricultural products $ 2.41 2.35 2.94 3.10 Rice and rice products $ 0.59 0.50 0.55 1.14 MT 1647.60 1414.70 1727.80 3579.50 Maize $ 0.36 0.29 0.25 0.29 1225.10 1125.90 1288.70 1436.90 Pulses and beans $ 0.81 0.96 1.28 0.81 MT 1035.10 998.90 1308.20 1247.70 Sesame $ 0.17 0.13 0.15 0.16 MT 87.50 99.30 115.60 131.30 Cotton $ 0.03 0.01 0.01 0.01 MT 13.30 2.70 4.10 4.30 Oilcake $ 0.00 0.00 0.00 0.00 MT 0.40 3.60 3.50 6.20 Rice bran 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other animal feed 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Raw rubber $ 0.10 0.10 0.20 0.19 MT 64.50 82.80 143.10 150.00 Other agricultural products $ 0.35 0.38 0.50 0.49

Animal products $ 0.01 0.01 0.01 0.06

Raw leather and refined leather $ 0.00 0.00 0.00 0.01 MT 4.40 6.30 6.90 13.30 Other animal products $ 0.01 0.00 0.00 0.05

Page | 90 Fishery products $ 0.38 0.42 0.58 0.70

Fish $ 0.21 0.24 0.32 0.38 MT 192.80 236.00 305.10 385.40 Prawn $ 0.04 0.04 0.06 0.06 MT 14.50 13.90 16.00 17.60 Other fishery products $ 0.13 0.14 0.21 0.26

Minerals $ 1.38 0.94 0.96 1.77

Jade $ 1.00 0.57 0.45 0.76

Gemstones $ 0.37 0.34 0.48 0.92 MT 87.10 136.80 217.20 Gems $ 0.01 0.02 0.01 0.00

Other gems and jewelry $ 0.00 0.01 0.02 0.08

Timber 0.08 0.19 0.24 0.21

Teak $ 0.03 0.07 0.08 0.06 Cubic tonnes 14.20 39.10 36.10 35.10 Hardwood $ 0.01 0.02 0.04 0.02 Cubic tonnes 9.80 22.00 31.50 25.00 Veneer and plywood $ 0.03 0.07 0.10 0.09

Other wood products $ 0.02 0.02 0.02 0.03

Industrial product $ 5.73 5.03 5.63 6.43

Sugar $ 0.01 0.28 0.70 0.26 MT 20.40 477.90 1234.00 404.00 Clothes $ 0.98 0.68 1.88 2.59 207926.0 146644.7 422557.9 493178.1 Units 0 0 0 0 Accessories $ 0.01 0.02 0.03 0.03

Natural gas $ 0.00 0.15 0.00 1.86 million cubic 232948.5 0.00 26938.20 0.00 feet 0 $ 4.72 3.90 2.96 1.64 kg 11501230 11093694 11819495 5844536 Others $ 0.04 0.03

Page | 91 Others $ 1.06 1.13 1.57 2.58 Source: Central Statistical Organization

4. Economic Relations Between Brazil and Myanmar

There is no bilateral agreement between Brazil and Myanmar in terms of investment and trade, however, bilateral trade transactions have existed for years between the two countries.

4.1. Bilateral Trade

Table 53: Myanmar’s Trade with Brazil

In US$ million

No. Description 2014-15 2015-16 2016-17 2017-18 1 Export 4.31 2.11 9.37 2.92 2 Import 14.02 34.31 150.69 202.88 3 Total trade 18.33 36.42 160.06 205.8 4 Trade balance -9.71 -32.2 -141.32 -199.96 Source: Central Statistical Organization

Table 54: Myanmar’s Export to Brazil by Principal Commodity

In US$ million

No. Commodity Unit 2014-15 2015-16 2016-17 2017-18 Qty Value Qty Value Qty Value Qty Value 1 Footwear NMB - - - - - 72320 0.89 2 Garment MT 71051 1.02 34073 0.08 1968485 6.8 22575 0.27 3 Fish Cu-Ton 901 1.31 607 0.84 398 0.41 75 0.1 4 Rattan wear MT 10592 0.02 - 0.13 3927 0.01 - 0.03 5 Prawn - - - ** * - - ** * 6 Timber MT - - - - 105 0.29 - - 7 Pulses MT 820 0.77 384 0.57 42 0.06 - - 8 Broken rice - 2125 0.62 500 0.14 - - - 9 Jade NMB - 0.09 - - - - - 1.63 10 Other 0.48 0.35 - 1.8 - - Total 4.31 2.11 9.37 2.92 Source: Central Statistical Organization *less than US$0.005 million **less than 1 unit

Table 55: Myanmar’s Import from Brazil by Principal Commodity

In US$ million

Page | 92 No. Commodity 2014-15 2015-16 2016-17 2017-18 1 Transport equipment 0.01 0.02 0.12 10.05 2 Pharmaceutical products 0.41 0.59 3.07 2.95 3 Machinery and mechanical appliance - 0.16 0.86 2.09 4 Rubber manufactures 0.01 2.38 0.18 1.24 5 Plastic and articles thereof * 0.03 0.41 0.46 6 Scientific instruments 0.01 - 0.06 0.34 7 Electrical machinery and apparatus 0.21 0.14 0.09 0.15 8 Spices 0.06 - 0.03 0.14 9 Paper, paperboard and manufactures 0.03 0.48 0.12 0.05 10 Base metals and manufactures * 0.02 0.06 0.05 11 Chemical elements and compounds - 0.04 - * 12 Glass and glassware - - - * 13 Fertilizer 0.41 - 0.41 - 14 Edible oil (vegetables and others) - 0.13 0.09 - 15 Mineral fuel and oil - 0.9 0.07 - 16 Dairy product - - 0.04 - 17 Soap and similar articles - - * - 18 Dying, tanning and coloring materials - - * - 19 Woven & special woven fabrics - - - - 20 Cotton fabric - - - - 21 Fabrics of artificial and synthetic fabrics - - - - 22 Wheat flour - - - - 23 Cements - - - - 24 Others 12.87 29.42 145.08 185.36 Total 14.02 34.31 150.69 202.88 Source: Central Statistical Organization *less than US$0.005 million

Table 56: Growth Rate of Trade with Brazil

In US$ million

FY Export Growth rate (%) Import Growth rate (%) Total trade Growth rate (%) 2014-15 4.31 457.74 14.02 38.95 18.33 68.78 2015-16 2.11 -51.04 34.31 144.72 36.42 98.69 2016-17 9.37 344.08 150.69 339.2 160.06 339.48 2017-18 2.92 -68.84 202.88 34.63 205.8 28.58 Source: Central Statistical Organization

Table 57: Share of Brazil in Total Trade

In US$ million

FY Export Import Total trade value

Page | 93 Export Export to Import Import from Total trade Brazil trade % % % value Brazil value Brazil value value 2014 12523.7 0. 16632.6 0. 0. -15 1 4.31 03 3 14.02 08 29156.34 18.33 06 2015 11136.8 0. 16577.9 0. 0. -16 8 2.11 02 4 34.31 21 27714.82 36.42 13 2016 11951.6 0. 17211.0 0. 0. -17 4 9.37 08 7 150.69 88 29162.71 160.06 55 2017 14836.9 0. 18673.8 1. 0. -18 1 2.92 02 9 202.88 09 33510.8 205.8 61 Source: Central Statistical Organization

4.2. Bilateral Investment

Although there has been some investment from Brazil in Myanmar, the amount is very insignificant. According to DICA, such information will soon be available online in the new company registration system of Myanmar, MyCO.

4.3. Principal Economic Agreements with Brazil

There is no principal economic agreements with Brazil.

4.4. Lines of Credit from Brazilian Banks

Information is not available.

4.5. Opportunities

Myanmar’s geographical location means that trade opportunities are available with southwestern China. Providing that Brazil wants to explore this opportunity, transit trades are available with properly placed trade rules and regulations. Clearly, Myanmar is in a disadvantaged position when it comes to expertise and market access. Hence, there are plenty of opportunities for joint ventures and partnering with small to medium local enterprises and they are very much welcomed by the government.

However, if Myanmar is only to be taken as a transit destination and Brazil is targeting the Chinese market, then Myanmar will be a direct competitor.

Regarding corn, as mentioned below, there is a supply shortage within the country from time to time, especially during the off-season, as a result of increasing demand at local feed mills and breweries. Reportedly, in the year 2014-15, Myanmar imported a significant amount of corn from Argentina as there was a huge shortage of corn for domestic use. In the coming years, Myanmar could see its domestic demand rise significantly.

At the moment, the import value accounts for up to 99 percent of total trade value between the two countries. Myanmar’s import value with Brazil in on the rise – compared to the trade value three years ago in 2015-16 FY, it has jumped by more than US$100 million in 2017-18 FY.

Page | 94 Recently, the government has released a series of trade exemptions and now, trade policies have been adapted to establish a better investment climate. It is recommended that interested business partners or owners should go through different routes such as trade and investment fairs to have a better knowledge on trade opportunities with Myanmar.

5. Market Access

5.1. Tariff System

Myanmar is a member of the WTO, but the international tariff standards cover only to some extent of its good and services. Myanmar generally levies tariffs that are comparable or lower than that of other countries in Southeast Asia. Myanmar customs tariff rates generally range from 0 percent to 35 percent, depending on the type of commodity. In addition, as a member of the ASEAN Free Trade Area (AFTA), Myanmar has committed the Common Effective Preferential Tariff Scheme (CEPT) to reduce intra- ASEAN import tariffs for all tariff lines by 2018.

The government levies the following taxes and fees on imports and some selected exports. 1. Customs duty 2. Commercial tax 3. License fees

5.1.1. Myanmar Customs Department The Myanmar Customs Department (MCD), under the Ministry of Planning and Finance, is in charge of the clearance of goods and levying tariffs on exported and imported goods. MCD is based in all 14 checkpoints including border posts, establishing the valuation for imports on the costs, insurance and freight (CIF) value. For some commodities, the MCD uses its own reference guide to determine the value of imports and exports. According to the Myanmar Customs Tariff issued in 2017, customs tariff is based on the amendments of the World Customs Organization (WCO) ‘s H.S 2017 and combined with the ASEAN Harmonized Tariff Nomenclature 2017. The importing/exporting companies have to pay customs duty and commercial tax according to the rate or prices mentioned in the Myanmar Customs Tariff 2017.

5.1.2. Myanmar Automated Cargo Clearance System The MCD used to operate with a manual system at all ports and border stations for the clearance of goods. After 2016, the MCD, with the help of JICA, launched its own electronic cargo clearance system called Myanmar Automated Cargo Clearance System (MACCS) to facilitate a more efficient cargo clearance process. It was first implemented at 11 international industrial ports in Yangon, commodity check gates at Yangon International Airport, at Thilawa Special Economic Zones and by the Customs Department. In 2018, the system was also practiced at the Myawaddy Border Station and will be extended to other ports and border checkpoints in the future. MACCS allows private and public sectors stakeholders to undertake cargo clearance process with full efficiency while minimizing paperwork, physical visits, manual processes and human interaction. It also allows better synchronization between MCD and other related government agencies that are involved in the cargo clearance process by taking charge of the quality inspection of the goods in transaction.

Page | 95 The following is the list of agencies and ports where MACCS has been adopted. All the checkpoints in Yangon are operating with MACCS whereas Myawaddy, being the border checkpoint that accounts for high transaction of goods, is the only border checkpoint that is using MACCS so far.

1. Myanmar Customs Department (Headquarter) 2. Airport Warehouse (Import) 3. Airport Warehouse (Export) 4. Htee Dan Port 5. Asia World Port Terminal 6. Myanmar Industrial Port 7. Ahlone International Port Terminal 8. No. (5), Sule Wharf 9. Bo Aung Kyaw Port 10. No. (2), Inland Container Depot 11. Myanmar Integrated Port Limited 12. Myanmar International Terminal Thilawa 13. Myanmar Customs Department Training 14. Thilawa Special Economic Zone Logistic Centre 15. Myawaddy Border Trade Station

Other government ministries and agencies that are currently working on the MACCS System are:

1. Ministry of Commerce 2. Myanma Port Authority 3. Department of Food and Drug Administration, Ministry of Health and Sports 4. Plant Protection Division (Plant Quarantine), Ministry of Agriculture, Livestock and Irrigation 5. Livestock, Breeding and Veterinary Department (Animal Quarantine), Ministry of Agriculture, Livestock and Irrigation 6. Department of Fisheries, Ministry of Agriculture, Livestock and Irrigation 7. Myanma Economic Bank (that is only connected with Myanmar Customs Department)

There are certain government agencies that undertake inspections at the checkpoints, however, are not yet on the MACCS system, but rather working manually.

Services available under the MACCS are:

1. Import Declaration Sea Container Cargo (Released as Container) 2. Import Declaration Sea In-bulk Cargo 3. Import Declaration Air Normal Cargo 4. Import Declaration Air Consolidated Cargo 5. Declaration (Preliminary Declaration) 6. Import, Export, etc. Amended Declaration 7. Import, Export, etc. Single Window (Usage of License & License Balance) 8. Import Single Window (OGA TEST After Declaration) 9. Import Single Window (OGA TEST Before Declaration) 10. Import Single Window (OGA TEST After Release Order) 11. Bonded Transportation 12. Transit Declaration (Arrival by Vessel – Departure by Vehicle)

Page | 96 Types of taxes and fees which can be paid using the MACCS are:

1. Customs Duty 2. Commercial Tax 3. Security Free (for X-ray) 4. Redemption Deposit (RD) or Post Value Revenue Deposit (PVRD) 5. Specific Tariff 6. Transit Duty 7. Advanced Income Tax 8. MACCS Service Fee 9. Redemption Find/ Direct Penalty (DP) 10. Import/Export License Fee

Classification of Commodities

Myanmar adopts the Harmonized System (H.S) for classifying the commodities. According to Myanmar Customs Tariffs 2017, the system comprises 97 chapters that are arranged in 21 Sections. A section is a grouping together of a number of chapters which codify a particular class of goods. E.g. Section I – Live animals and animal products, Section II – Products of the Chemical or Allied Industries, etc. A chapter consists of chapter notes and brief description of commodities. E.g. Chapter 01 – Live animals, Chapter 22 – Beverages, Spirits and vinegar, etc. Further information regarding H.S code are available at the Myanmar Customs Department’s website – www.myanmarcustoms.gov.mm or Customs Tariff of Myanmar (Sixth Edition) published by the Myanmar Customs Department in 2017.

5.2. Regulation of Foreign Trade Activities

5.2.1. General Regulations

As one of the WTO’s members since 1995, Myanmar is committed to developing international trade through bilateral and multilateral arrangements: . Regional Free Trade Agreements (FTAs) signed under the auspices of ASEAN with the following economies, China, Hong Kong, Japan, Korea, India, Australia and New Zealand. . Twelve bilateral investment treaties with US, Korea, Israel, Indonesia, Japan, India, Thailand, Kuwait, Laos, China, Vietnam and Philippines.

5.2.2. Types of Entities That Can Carry Out Trading Transactions Types of entities that can carry out trading activities are described below.

1. The following individuals/enterprises are able to carry out export/import businesses . A citizen, associate citizen or naturalized citizen if the applicant is a sole proprietor . Partnership firms

Page | 97 2. The following enterprises registered under the Myanmar Companies Act and the Special Company Act of 1950 . Limited Companies (inclusive of foreign companies’ branches) . Joint Venture Corporation

3. Co-operative societies registered under the Co-operative Societies Law

5.2.3. Exporter/Importer Licensing

As the Ministry of Commerce controls all foreign trade in Myanmar, only a company that holds an import/export license issued by the Ministry of Commerce is legalized to perform the import/export business. There are two types of licenses that exporters and importers need for the trading of commodities, and they both have to be applied for at the Directorate of Trade of Ministry of Commerce.

. Before entering into any transactions, the importing/exporting company has to register its import/export license at the Department of Trade under the Ministry of Commerce. The importing/exporting company can be registered by means of both semi-online and fully online based on the categories of the commodities. Application for 138 tariff lines of product can be made fully online and the rest of the tariff lines that require further approval or recommendations from respective government agencies must be made semi-online as they require more scrutiny and/or judgment. An exporter/importer has to register for each of the tariff lines, i.e., an importer has to register for all the 10 product lines it wants to import.

. Once an exporter/importer is registered, it comes to the process of export/import license application for each of the trade transactions. This can also be applied online through www.myanmartradenet.com or manually. As the online licensing system is not fully operational yet, applicants are required to pay physical visits to Ministry of Commerce and respective government agencies for application.

5.2.4. Import/ Export License Procedure Ministry of Commerce has published HS codes that require licenses when exporting/importing. Commodities are categorized as below. . There are 3,345 tariff lines in Export Negative List which require to apply for import/export license from the Ministry of Commerce. . There are 1,079 tariff lines in Export Positive List which are license exempted. . There are 4,818 tariff lines in Import Negative List which require import license from the Ministry of Commerce.

Export/Import License process used to be a lengthy and complicated process requiring applicants to make multiple visits and paperwork. With the intention to enhancing trade facilitation, the government has taken several initiatives to optimize the current export/import license processes. Thus, the license process has been shortened from three weeks to a maximum of five days for ordinary cases.

The procedures to obtain the import/export license are as follows.

Figure 33: Import/Export License Application Process

Page | 98 Page | 99 Page | 100 Table 58: Import/Export License Application Process

No. Description 1 Applicant makes application for Import/Export License (IEL) 1a. Applicant logs-on to TradeNet to prepare License application and submit directly. Alternatively, Applicant comes to DOT office with documents, and either 1b. Uses public computers to prepare IEL application (MMK 300); or 1c. Hands documents to DOT staff to prepare on Applicant’s behalf (MMK 1000) [Payments for 1b and 1c are presumed to be made in cash at MOC offices] 2 Applicant makes payment of Online Application Fee After submission of license application, Applicant is notified to make payment of Application Fee. (MMK 2,500) Payment can be made at MOC cashier, either cash but POS payment is preferred, or through debit of deposit account held by Bank. IELPS updated as “PAID” and processing proceeds. 3 Applicant submits application with attached documents Submit application and supporting documents (hardcopies) at Export-Import Division “Receiving desk” Staff checks for completeness of application and documents, if OK accepts. Register application and sample in manual register. 4 License Approval (Internal Process) Department internal procedure to process application approval begins. 5 Applicant pays License fees After approval of the License, the Applicant is notified and requested to make payment of License fee. (MMK 50,000) Payment can be made at bank or at MOC by POS payment (with MPU cards). IELPS updated as “PAID” and processing proceeds. 6 DOT Issue draft License While fees are being paid the draft license is printed from IELPS. 7 Applicant checks draft license Applicant is notified of license being issued and is requested to check details. If details are correct Applicant proceeds to receive, step 9. If errors found, Applicant informs of correction requires and returns copy. 8 License corrected and reprint The License data is corrected and new license printed. Process continues at step 6. 9 Applicant receives License Applicant signs and keeps copy of license, signs register to record receipt.

5.2.5. Prohibited Items for Import and Export

Page | 101 WTO’s GATT, Article XX and XXI, permit WTO members to prohibit the importation of certain articles that endanger public morals, threaten human, plant or animal life, involve the importation of gold and silver, arms and ammunition and similar items. The Department of Trade of the Ministry of Commerce has exercised its rights under the GATT provisions to prohibit the following from being imported:

1. Counterfeit currency and coins 2. Pornographic material 3. All kinds of narcotic drugs and psychotropic substances 4. Playing cards 5. Goods bearing the emblem of Buddha and pagodas of Myanmar 6. Arms and ammunition 7. Antiques and archeologically valuable items 8. Wildlife endangered species 9. Other prohibited commodities in accord with existing law

5.2.6. International Courier Services Operating in Myanmar

. DHL Global Forwarding (Logistics) La Pyae Wun Plaza, Unit 710, No. 37, Alan Pya Pagoda Road, Yangon, Myanmar Tel: +95-1-371375, +95-1-255975 Website: www.dhl.com

. EMS International 361, Pyay Road, San Chaung Township, Yangon, Myanmar Tel: +95-1-515151 Fax: +95-1-500500, +95-1-504504 E-mail: [email protected] Website: www.ems.com.mm

. MGL Co., Ltd No. (46/47), Myaing Hay Wun Housing, Kyaik Waing Pagoda Road, 8 Mile, Mayangone Township, Yangon, Myanmar Tel: +95-1-9669586 ~ 88, +95-1-651627, +95-9-421143321 E-mail: [email protected] Website: www.mglexpress.com

. JET8 Cargo Global Cool Chain 388, Room 7, 1st Floor, No. (1), Industrial Road, Bahan Township, Yangon, Myanmar Tel: +95-9-250190556 E-mail: [email protected] Website: www.jet8myanmar.com

. Royal Express 1243, Wayzayandar Road, Between Thitsar and Parami Road, (6) Ward, South Okkalarpa Township, Yangon, Myanmar Tel: +95-1-8500856 ~ 860

Page | 102 Email: [email protected] Website: www.royalx.net

. SBS Express No. 65, Kyaung Gyi Street, Kyimyindine Township, Yangon, Myanmar Tel: +95-9-442442113, +95-9-442442114 E-mail: [email protected], [email protected] Website: www.sbs-myanmar.com

5.2.7. Specific Regulations

. Technical Regulations

Based on the types of importing commodities, different technical documents are required from different government agencies. Before an import/export license can be obtained, the relevant government agencies have to approve the certain products and issue documents to apply for an import/export license. As an example, for importing food and drugs, the importer/exporter must receive technical documents issued by the Food and Drug Administration Department (FDA) for to-be imported/exported product first. Only after receiving the technical documents from the FDA, can the trader apply for an import/export license for the specific product. The processing timeline for the approval of a technical document varies among different government agencies.

. Packaging and Labelling

In Myanmar, there is no definite labelling law, however, the FDA issued new labelling guidelines for all kinds of food in 2018. For the labelling of prepackaged foods, the FDA follows the Codex Alimentarius Commission (CAC) Standards, the ASEAN Common Principles and Requirements. All food, including imported products, must have the labels identifying the name and address of the local importer/distributor and the country of origin. Certain images such as those that display a Buddha image or the national flag, cannot be used on labels or trademarks.

. Trademark and Patents

There are no specific laws and protections for trademarks and patents in Myanmar at present, however, the Office of the Attorney-General is drafting the bills on Intellectual Property (IP) laws in compliance with the TRIPS Agreement. In this interim period before existence of the specific law, the declaration of ownership of the trademark and patent has to be registered at the Office of Registration of Deeds under Section 18 (f) of the Registration Act and Registration Direction 13. The necessary fee for registration and stamp duty must be paid at the Office of Registration of Deeds and subsequently, a trademark caution notice has to be filed in a leading newspaper in Myanmar. A local lawyer can draft a caution notice for each mark covering all the classes for the foods that need protection, for publication in Myanmar on behalf of foreign companies.

5.3. Documentation and Requirements

Page | 103 Necessary Documents for the application of registration of Exporter/Importer are as follows.

. The original Memorandum of Association and Articles of Association . Application form with Company Letter Head . Exporter/Importer Registration Form . The copy of the letter of Company Registration Office for the issuing of Certificate of Origin . Two copies of the Certificate of Company Registration . The certified copy of Form 26 which is recognized by the Company Registration Office . The copies of National Registration Card (or) Citizenship Scrutiny Card, Photo and Specimen Signature of Board of Directors . Certificate of the Membership of the Union of Myanmar Federation of Chambers of Commerce and Industry

Exporting companies need to supply the following documents to the importing company: . Import Declaration (ID) . Cargo insurance . Bill of lading/ Delivery Order . Invoice . Packing list . Sale contract . Import License/ Import Permit (if non-license, Company Registration, Form VI, XXVI are required)

Information that should be in the pro forma invoice are:

. Seller/shipper company’s name and letter head with full address . Buyer/consignee company’s name and address . Pro forma invoice number and date . Type of goods . Quantity and packages . Unit price . Total amount . Port of loading/ Country of Origin . Port of discharge/ Destination . Terms of payment . Mode of transport . Shipper bank details . Duration of shipment

Information that should be in a letter of Credit is this model of payment is used:

. Full name and address of seller/exporter . Amount of credit . Quantity and unit price . Indicate if freight has to be paid . Destination . Latest date for shipment . Date and place when credit expires

Page | 104 5.4. Special Customs Regimes For exemption related issues, businesses have to apply directly to the Customs Department with supporting documents from DICA, MIC and Ministry of Planning and Finance (MoPF).

5.4.1. Customs Transit Declaration All commodities for transit trade are required to provide the prescribed from which is Customs Declaration Form (CUSDEC) – 3 attached with the following documents:

. Bill of Lading/ Airway Bill/ Truck Note . Transit Trade License or permit issued by the Ministry of Trade . Commercial Invoice . Sales Contract between seller and buyer or Contract between seller and authorized agent . Guarantee bond, undertaken in strict compliance with regulations: failure to export will be dealt according to the existing law

5.4.2. Drawback Under the Myanmar Sea Customs Act, 87.5 percent of the customs duty paid on imported goods will be refunded when such goods are exported out of the country. However, the customs drawback facility is subject to the following conditions:

. The exported goods must be identical to those imported at the time the import duty was paid. . Two years must not have elapsed since their importation, where the port for the export is the same as that of the import. This period may be extended to three years on application. . The exported goods must not be included in the article declared to be incapable of being identified. . The goods must not be exported to a port to which shipment under claim for drawback is prohibited. . The goods exported must not be less valuable than the amount of drawback claimed. . The claim for drawback should not ordinarily be less than K 5 in respect of any single shipment. . The goods must not be included among the articles declared to be prohibited or restricted.

Required documents that are to be attached with Drawback application are:

. Import Items Information (types of commodity, value, weight, etc.) . Importing Period . Invoice (Original) . Packing List (Original) . Bill of Lading/ Airway Bill/ Truck Note . Drawback License . Guarantee bond, undertaken in strict compliance with regulations: failure to export will be dealt with according to the existing law

6. Transport Infrastructure

Page | 105 6.1. Domestic Infrastructure

With the aim of achieving inclusive and sustainable economic growth, Myanmar needs large-scale investment in infrastructure projects covering road, bridge, railway, airport, and telecommunications, among others. The ADB stated that Myanmar’s infrastructure gap between now and 2030 is worth US$120 billion. Thus, the government is accelerating its implementation of infrastructure and welcomes investors to invest in infrastructure projects under Build-Operate-Transfer (BOT) or Public Private Partnership (PPP) agreements. The main projects for transportation infrastructure are:

. Building new roads and highways . Repairing and widening roads . Constructing flyovers . Building new train tracks for high speed trains . Upgrading train tracks . Constructing new airports . Upgrading existing airports . Building new deep-sea ports . Upgrading existing sea ports  Promoting special economic zones, and  Building a subway/sky train system in Yangon.

6.1.1. Road Network The infrastructure deficit is one major constraint of the development of Myanmar, especially its economy. According to ADB, Myanmar needs an investment of between US$45 and US$60 billion in transport infrastructure. To reduce this estimated amount, the government welcomes both local and foreign investors to develop connectivity between cities and rural areas and to upgrade existing road infrastructure with their Framework for Economic and Social Reforms. As shown in the following table, Myanmar’s road network is only 24 percent paved road. Therefore, there is significant potentials to modernize Myanmar’s road networks, to expand roads through elevated highways, and to improve access to cities via bridges. Some information concerned with road transport are described in the following table from the fiscal years 2013 – 2017.

Table 59: Road Transport

No Description Unit 2013 2014 2015 2016 2017 . Road transport A. infrastructure 1. Total road and length kilometre 164,969 165,723 147,822 164,028 164,377 2. Length of paved road kilometre 39,076 38,423 37,119 37,663 39,497 Ratio of paved road to 3. percent 23.7% 23.1% 25.1% 22.9% 24.0% total road length Total length of 4. kilometre 587.00 589.62 589.62 589.62 589.62 expressways Road transport B. equipment 5. Total number of Thousand 4,017 4,908 5,385 6,126 6,801.0

Page | 106 registered road motor 0 vehicles Number of registered 6. Thousand 360 411 448 489 - passenger cars Number of taxis or 7. Thousand 56.0 75.7 90.2 97.3 113.00 taxicabs Number of registered 8. Thousand 110.7 168.9 238.7 295.8 - trucks Total number of 9. Thousand 21.0 24.0 25.4 26.9 - registered buses Number of public 10. Thousand 24.0 83.1 29.2 32.5 33.00 buses Total number of 11. registered Thousand 3,419 4,162 4,505 5,123 - motorcycles

Source: AJTP Information centre

Table 60: Length of Road Network in States and Regions

No. State/Region Concrete Bituminou Metal Gravel Earth Mule Total s (kilometre) 1. Kachin 25.347 587.820 541.947 970.737 967.417 693.4 3786.694 26 2. Kayah - 472.040 60.452 99.980 329.111 961.583 3. Kayin 831.830 87.609 176.223 723.502 26.55 1845.718 4 4. Chin 555.626 528.267 861.603 1945.496 5. Sagaing 32.186 2091.544 519.920 715.957 1124.228 4483.835 6. Tanintharyi 744.724 323.277 206.600 81.875 1356.476 7. Bago 263.328 1467.823 199.559 122.310 158.118 2211.937

8. Magwe 2586.317 341.382 352.347 260.714 3540.76 9. Mandalay 202.978 1861.609 98.773 12.171 23.134 2198.665

10. Mon 729.838 2.414 65.380 82.278 0.604 880.514 11. Rakhine 36.411 991.356 439.351 182.258 215.853 1865.229 12. Yangon 97.365 787.372 87.408 12.070 59.948 1044.163 13. Shan 65.983 4902.866 1236.177 2142.138 2606.534 10953.698 14. Ayeyarwaddy 19.312 1592.245 158.823 488.637 361.801 2620.818 15. Nay Pyi Taw 191.511 223.699 18.507 433.717

Total 934.421 20426.709 4625.359 5546.808 7874.623 720.5 40128.504 (kilometre) 84

Source: Myanmar Infrastructure Summit 2018

Page | 107 In Myanmar, some projects have been implemented jointly with other Asian countries. According to Myanmar Infrastructure Summit 2018, some major roads linked to neighbouring countries are as follows.

. Asian Highways . ASEAN Highways . Greater Mekong Subregion, GMS-Highways . India – Myanmar – Thai Tripartite Highways . Ayeyarwady – Kyaukphayar – Mekong Highways . Bimstec Highways . Paletwa Border Road Projects and Highways for Various Development of Kaladan River . Rid – Tiddim Highways . Myanmar and China Bilateral Road Projects

6.1.2. Rail Network The railway network in Myanmar is solely operated by the state-owned Myanma Railways (MR). The core railway infrastructure, locomotives and coaches have been operated with slow speed and no rail links are connected to any other countries at the moment. The status of planned cross-border rail connections to China, India and Thailand remains uncertain as well. Due to these reasons, Myanmar’s current railway network needs investment in its basic infrastructure such as track renewal replacement of sleepers, and upgrading of signalling and communication systems. According to the Myanmar Investment Guide Book (2018), foreign investment in railway construction can be implemented through PPP and the construction of underground railways requires the satisfactory completion of an environmental and social impact study.

Some figures regarding railway transport are as follows from the fiscal years 2013 – 2017.

Table 61: Railway Transport

No Description Unit 2013 2014 2015 2016 2017 . Railway transport A. infrastructure Total railway route 1. kilometre 5,959 6,110 6,110 6,077 6,112 length Double-track railway 2. kilometre 701.00 705.19 705.19 705.99 705.99 route length Urban railway route 3. kilometre 83 83 83 94 94 length Railway transport B. equipment Number of railway 4. locomotives ready for Count 246 231 220 232 235 operation Number of passenger 5. Count 1,307 1,349 1,385 1,405 1,405 coaches Number of freight 6. Count 3,416 3,377 3,395 3,449 3,449 wagons

Source: AJTP Information centre

Page | 108 The railway network in Myanmar is divided into 11 administrative regions. In Lower Myanmar, the main line starts in Yangon and ends at Dawei, Tanintharyi Region, and freight can only be transported to Mawlamyine Region due to the mountains. In Upper Myanmar, the main line runs from Yangon via Nay Pyi Taw to Myitkyina, Kachin State. Private transporters prefer using the Myitkyina line for freight due to its low cost compared to road transport.

The railway lines running in Lower Myanmar with its routes are described below.

Table 62: Railway Transport in Lower Myanmar

No Line Route . 1. Yangon – Mandalay Yangon – Bago – Nay Pyi Taw - Mandalay 2. Yangon – Dawei Yangon – Bago – Mawlamyine – Dawei 3. Yangon – Bagan Yangon – Letpadan – Taungdwinggyi – Bagan 4. Yangon – Pathein Yangon – Letpadan – Pathein

Source: Digital Logistics Capacity Assessments

The railway lines running in Upper Myanmar with its routes are as described as below.

Table 63: Railway Transport in Upper Myanmar

No Line Route . 1. Mandalay – Myitkyina Mandalay – Khin U – Indaw – Myitkyina 2. Mandalay – Lashio Mandalay – Lashio and Namtu 3. Mandalay – Taunggyi Mandalay – Thazi – Taunggyi 4. Mandalay – Kale Mandalay – Sagaing – Monywa – Pakokku – Kale 5. Pakokku – Thazi Pakokku – Taungtha – Meiktila – Thazi 6. Sittwe – Mrauk U Sittwe – Mrauk U

Source: Digital Logistics Capacity Assessments

6.1.3. Water Network Water transport is the main mode of transport for heavy products and there are 9 international ports along the western and southeastern coast of the country. These are:

. Yangon Ports, Yangon Region . Sittwe Port, Rakhine Region . Kyauk Phyu Port, Rakhine Region . Thandwe Port, Rakhine Region . Pathein Port, Ayeyarwaddy Region . Mawlamyine Port, Mon State . Kawthaung Port, Tanintharyi Region . Myeik Port, Tanintharyi Region . Dawei Port, Tanintharyi Region.

Page | 109 All the ports are governed by the Myanmar Port Authority Law (2015) and the Myanmar Port Authority Rules (2016) which outline the handling of international ports and port services. Some information regarding water transport in Myanmar is as follows:

Table 64: Water Transport

No Description Unit 2013 2014 2015 2016 2017 . Maritime transport A. infrastructure Number of domestic 1. Count 22 22 22 22 22 ports Number of 2. Count 9 9 9 9 9 international ports Maritime transport B. equipment Number of domestic 3. Count 14 14 6 8 15 passenger fleet Number of domestic 4. Count 176 102 111 72 149 cargo fleet Gross tonnage of Thousand 5. domestic passenger 11.95 5.89 2.72 3.43 2.792 Ton fleet Gross tonnage of Thousand 6. domestic merchant 196.31 12.82 19.35 10.66 22.177 Ton fleet Number of 7. international merchant Count 19 10 12 10 10 fleet Number of 8. international container Count 1 1 1 1 1 vessel fleet Gross tonnage of Thousand 9. international merchant 112.70 79.42 99.09 84.41 93.00 Ton fleet Gross tonnage of Thousand 10. international container 9 6 6 6 6.522 Ton vessel fleet River transport C. infrastructure 11. Number of river ports Count 235 235 235 235 235 Total waterway route 12. Kilometre 11,473 6,680 2,844 3,313 2,818 length River transport D. equipment Number of passenger 13. river fleet (domestic/ Count 138 132 118 99 101 international)

Page | 110 Number of cargo river 14. fleet (domestic/ Count 79 73 58 182 158 international)

Source: AJTP Information centre

According to Myanmar Infrastructure Summit 2018, there are four potential areas to be developed as deepsea ports.

. Dawei Special Economic Zone together with Deep Seaport at Tanintharyi Region in the South coast. . Kyauk Phyu Deep Sea Port at Rakhine State in the West coast. . Kalagauk Deep Sea Port, between Mawlamyine and Ye Townships at the South coast. . Westport Deep Sea Port at Ngayoke Bay, Ayeyarwaddy Region.

With Myanmar’s geostrategic location, there are opportunities for foreign entrepreneurs to invest in the development of inland ports and seaports. Moreover, international cargo traffic has rose alongside with the liberalisation of foreign direct investment. Under the new Myanmar Investment Law, foreign investment in the construction of warehousing facilities at ports can be carried out as part of a PPP.

6.1.4. Air Navigation Network As of 2017, Myanmar had 34 airports, of which three are international airports, namely Yangon, Mandalay and Nay Pyi Taw. The operation of airports is solely controlled by Myanmar’s Department of Civil Aviation. The government is planning to upgrade more domestic airports to international airports in order to keep the increasing number of investors and further promote tourism. Although foreign investment is prohibited in air navigation services, it is allowed in domestic and international air transport services in a joint venture with Myanmar nationals under the approval from the Union Government. Some areas permitted to invest for foreigners are construction and operation of airports, aviation training, aircraft repair and maintenance, air transport services, marketing air ticketing services, aircraft leasing, air cargo services, airline catering and fuelling services, airport passenger services and airport hotels.

Table 65: Air Transport

No Description Unit 2013 2014 2015 2016 2017 . Air transport A. infrastructure Total number of 1. Count 33 33 33 34 34 airports Number of 2. Count 3 3 3 3 3 international airports Number of domestic 3. Count 30 30 30 31 31 airports Air transport B. equipment Commercial aircraft 4. Count 45 42 49 42 46 fleet C. Others (enterprises,

Page | 111 logistics) Number of airlines 5. Count 8 9 11 11 10 companies Number of customs 6. Place 3 3 3 3 3 clearance points Total import cargo by Thousand 7. 10.66 14.98 17.93 21.41 29.75 air Ton Total export cargo by Thousand 8. 8.33 9.48 8.36 13.21 25.17 air Ton

Source: AJTP Information centre

6.2. Import/Export Infrastructure

6.2.1. Maritime Ports and Connections Principal route from Brazil: As a major hub in sea transport, Singapore may be the best route to ship goods from Brazil into Myanmar.

Freight costs from/ to Brazil: Approximately US$ 3,000-3,500 (20’) and US$ 5,000-5,500 (40’)

Yangon Port is the premier port of Myanmar, and handles about 90 percent of the country’s import and export. It is located at Latitude 16º47' N and Longitude 96º15' E on the Yangon River and about 32 km inland from Elephant Point on the Gulf of Martaban. For vessels calling at Yangon Port, pilotage is compulsory if they are over 200 GRT. Navigation from the Pilot Station, which is further 32 km seaward from Elephant Point, to the Yangon harbour is generally on flood tides and has to be timed to cross both Inner Bar and Outer Bar near high tide to ensure sufficient depths.

There are two restricted bars along the approached channel: 1. Inner Bar (near Yangon Port at Monkey Point) and 2. Outer Bar (at the mouth of the river)

Yangon Port is accessible to vessels of 167 m LOA, 9m Draft, 15000 DWT and Thilawa Port is accessible up to vessels of 200 m LOA, 9m Draft, 20000 DWT. The Port of Yangon is the premier port of Myanmar and handles about 90 percent of the country's exports and imports.

6.2.2. Airports and International Connections No direct flights from Brazil to Myanmar are available. The best routes would be through Doha, Dubai, Bangkok and Singapore.

6.2.3. Domestic and International Airlines in Myanmar Domestic and International Airlines

1 Myanmar National Airlines

Page | 112 2 Myanma Airways 3 Air Bagan 5 Thai Airways International 6 Silk Air 7 Thai Air Asia 8 Bangkok Airways 9 Air China 1 China Southern Airlines 0 1 Mandarin Airlines 1 Table 66: Domestic Flight Routes

From To From To Bagan Heho Myeik Dawei Mandalay Kawthaung Yangon Yangon Bhamo Mandalay Myitkyina Bhamo Dawei Myeik Mandalay Yangon Putao Heho Bagan Yangon Kyaingtong Nay Pyi Taw Yangon Mandalay Putao Mandalay Tachileik Myitkyina Yangon Yangon Homalin Monywa Sittwe Kyaukphyu Kalaymyo Mandalay Thandwe Myitkyina Yangon Putao Tachileik Bhamo Yangon Heho Kawthaung Dawei Kyaingtong Myeik Lashio Yangon Mandalay Kyaingtong Heho Myitkyina Mandalay Yangon Yangon Thandwe Sittwe Kyaukphyu Yangon Yangon Lashio Mandalay Yangon Bagan Tachileik Dawei Yangon Heho Mandalay Bagan Kalaymyo Bhamo Kawthaung Heho Kyaingtong Kalaymyo Kyaukphyu Kyaingtong Lashio Lashio Mandalay Monywa Myeik Myitkyina Myitkyina

Page | 113 Putao Nay Pyi Taw Tachileik Putao Yangon Sittwe Monywa Homalin Tachileik Mandalay Thandwe Source: Yangon International Airport

Table 67: International Flights and Connections

Airlines Flights From/ To/ From To Air Asia (FD & AK) Yangon Kuala Lumpur Yangon Bangkok Mandala Don Mueng y Air China (CA) Yangon Beijing Yangon Kunming Air KBZ (K7) Yangon Chiang Mai All Nippon Airways – ANA (NH) Yangon Narita Bangkok Airways (PG) Yangon Bangkok Yangon Chiang Mai Cathay Dragon Yangon Hong Kong China Eastern Yangon Nanning Yangon Kunming China Southern Yangon Guangzhou Yangon Haikou via Guangzhou Emirates Yangon Phnom Penh Yangon Dubai Korea Airlines (KE) Yangon Seoul Malindo Yangon Kuala Lumpur Myanmar Airways International (8M) Yangon Singapore Yangon Kuala Lumpur Yangon Guangzhou Yangon Bangkok Yangon Gaya Yangon Kolkata Singapore Airlines (SQ) Yangon Singapore Silk Air (MI) Yangon Singapore Thai Lion Air Yangon Bangkok Vietnam Airlines (VN) Yangon Ho Chin Min City Yangon Hanoi Air India (AI) Yangon Kolkata Yangon Gaya Biman Bangladesh (BG) Yangon Dhaka

Page | 114 China Airlines (CI) Yangon Taipei Jet Star (3K) Yangon Singapore Malaysia Airlines (MH) Yangon Kuala Lumpur Myanmar National Airline (UB) Yangon Singapore Yangon Hong Kong Yangon Bangkok Yangon Chiang Mai Nokair (DD) Yangon Bangkok Yangon Mao Sot Qatar Airways (QR) Yangon Doha Thai Airways (TG) Yangon Bangkok Mandala Bangkok y Thai Smile (WE) Yangon Bangkok Vetjet (VJ) Yangon Ho Chi Min Yangon Hanoi Source: Yangon International Airport

Table 68: Domestic Airport with Code

No Airport No Airport Airport Name Airport Name . Code . Code 1 BSX Bassein 21 MOG Monghsat 2 BMO Bhamo 22 MGZ Myeik 3 TVY Dawe 23 MYT Myitkyina 4 GAW Gangaw 24 NMS Namsang 5 GWA Gwa 25 NMT Namtu 6 HEH Heho 26 NYU Nyaung-U 7 HEB Henzada 27 NYT Nay Pyi Taw 8 HOX Homalin 28 PAA Pa-An 9 KMV Kalemyo 29 PKK Pakokku 10 KAW Kawthaung 30 PPU Papun 11 KET Kengtung 31 PAU Pauk 12 KHM Khamti 32 PRU Prome 13 KYP Kyaukpyu 33 PBU Putao 14 KYT Kyauktaw 34 AKY Sittwe Civil 15 LSH Lashio 35 THL Tachilek 16 LIW Loikaw 36 SNW Thandwe 17 MWQ Magwe 37 TIO Tilin Mandalay Yangon 18 MDL 38 RGN Annisaton Mingaladon MNU Mawlamyine XYE Ye 19 39 20 MOE Momeik Source: Myanma Aviation

Page | 115 7. Sales and Marketing Structure

7.1. Distribution Channels

7.1.1. General Considerations The product distribution system has been evolving, but has not yet reached its full potential due to several challenges, of which logistics and internal connectivity are some of the biggest. Triggered by heavy reliance on imports, product distribution channels in Myanmar often start with exporting countries. There are a few experienced distribution companies operating in Myanmar, such as Diethelm, Mega, Pahtama Group, yet coverage is still very limited to urban areas. While imported brands outsource distribution work to experienced distribution companies, the majority of local brands build up their distribution capability and take charge of distribution on their own. Product distribution systems vary by product type, with some products having a relatively high distribution hierarchy while some products have a flat and modest distribution channel.

The following are some of the distribution channels that are being adopted in Myanmar for the distribution of different types of products.

Figure 34: Distribution Channels A B C D

Exporter

Importer/Distributor

Wholesaler

Retailer

Customer

Channel A – This type of distribution channel is mostly used for high volume product transactions such as consumer goods, pharmaceutical products, agricultural inputs, and so on. Such products are widely consumed by mass customers across a wide geographic coverage. For reaching a wide geographic coverage, distribution channels need to be extensive to ensure that products are reached to a large number of end users. Thus, in this distribution channel, there are several layers involved with different stakeholders.

Page | 116 Channel B – This type of distribution channel is used for commercial products, such as construction and industrial products, home and electrical appliances, and so on. Wholesalers import by themselves, thus eliminating a layer of importer/distributor.

Channel C – This structure is used by big players such as home marts and retail chains for the import of construction and industrial materials as well as retail products.

Channel D – This type of distribution structure is used for industrial raw materials which are imported for the making of end products while at the same time for construction materials imported by the developer for construction work. Such products are not consumed or used directly as finished products, rather as the inputs for the making of another product.

Margins are different from one another in each distribution channel, depending greatly on the product type.

Products are imported in a conventional way through shipping, as well as through trucks via border trade routes. Imported products are stored at warehouses or distribution centers of importers or distributors before being distributed.

Importer : An importer can be either the owner of a particular brand or licensed trading company that acts as an agent purely for the import of particular products. In the case of a pure importer, products are distributed through distribution companies. In some cases, an entity can serve as an importer-distributor, bearing the responsibility of both importation and distribution.

Distributor : Distribution companies have the most extensive distribution coverage across the country. In the majority of cases, they represent imported brands of consumer goods and pharmaceutical products. There are foreign distributors like Diethelm, DKSH while local players such as Pahtama, CDSG and MDG also play major roles.

Wholesaler : Wholesale organizations have mostly traditionally grown from a small base and are efficient in their own specific sectors, most have a regional function, with some operating nationwide. With the opening up of the country, international wholesaling chains such as Metro from Germany have set up their footprints locally. It was also announced in May 2018 that foreign companies are now allowed to invest in Myanmar’s retailers and wholesalers, under certain conditions.

Retailer : Until recently consisting of mainly small family operations, retail business is growing in Myanmar, with local entrepreneurs developing more modern business concepts, leading to vertical and horizontal expansion.

New Sales Channels : Direct online sales are growing alongside existing retail companies and newly opened companies specializing in online sales. Along with the take up of the e-commerce, there has been an emergence of platform businesses catering specifically to the dynamic population residing in the urban areas.

Recommended Channels: It will not be practical to recommend a distribution channel without knowing further details. Thus, the following are a few considerations to make in defining a distribution strategy.

Page | 117 . Think of the product type. Is it something to cater to a mass market or specific segments? Does it need wide coverage? . Assess different distribution channels – in-house, outsource and online. Assess based on capability, resources, reach, cost, delivery time, and so on. . Assess different distribution companies on the basis of their reach, reliability, product areas where they are specifically strong at, etc.

7.2. Marketing Channels

Marketing channels are also different from one product type to another with varying customer segments. In the past years, there used to be only a few traditional marketing channels such as TV advertisements, printed media, and billboards. With the developments over the years, marketing channels have also evolved from traditional to modern channels and tools. It has been observed that companies having been putting in more effort in marketing their products and services, resulting from underlying factors such as increased competition, the availability of more alternatives, and consumers becoming better informed and more demanding. Triggered by the increasing demand, an increasing amount of professional marketing agencies have appeared to fulfill the demand and many multinational corporations based in Myanmar tend to use them.

7.2.1. Marketing Channels . Digital Marketing With the take up of e-commerce over the years with increased internet and mobile penetration, digital marketing has become a strong tool. Facebook has gained wide popularity in Myanmar in recent years with the majority of the online population having at least one Facebook profile. Facebook has reached another level beyond digital marketing – to e-commerce with a lot of small, medium and even large businesses making online sales. So far, there is no attempt by the government to regulate digital marketing and e-commerce transactions taking place online. Key digital marketing channels are Facebook, messenger and SMS marketing, website and digital platform businesses. Even for businesses which do not make direct sales online, they have a Facebook page to maintain close interactions with their customers or audience base. Celebrity endorsements have become a popular method of reaching a broader audience base.

. Traditional Channels Traditional channels are still significantly important for the more extensive reach it ensures compared to online channels. TV channels, radio stations and print media are the traditional tools that still prove effective in reaching out to the target segments.

TV Channels : There are both free and subscription-based channels. Free channels are MRTV, MRTV 3, MRTV 4, Channel 7, MWD Subscription-based channels - Sky Net, 5Plus, Canal+

Radio Stations : City FM, Nay Pyi Taw FM, Padamya FM, Mandalay FM, Cherry FM, Shwe FM, Pyinsawadi FM, Thazin FM. All are free channels.

Page | 118 Printed Media : There are a few state-owned newspapers and many private newspapers, journals and magazines. Some of the private newspapers and journals have digital versions which can be considered for digital market.

7.2.2. Promotions Promotions in Myanmar can be seen in many forms depending on the products – discounts, free coupons, product trials, giveaways, and so on. Large international companies that work in Myanmar would normally bear the costs of marketing and promotion campaigns and provide promotion materials to their local partner.

7.2.3. Selling Sales transactions can take place both offline and online. Offline : Stores, Personal selling, Trade fairs, Expos, Exhibitions Online : E-commerce platforms, Social media

7.2.4. Publicity Programs Publicity is also extremely important. Myanmar people are very much group-oriented and trust plays an important role in every context. Thus, referrals are important as they help raise customers’ confidence in a particular product or service. Advertorials can be effective in this sense. In addition to that, it is also important to build a good impression in the local context. Myanmar people are very generous, and the country stood top in World’s Giving Index. As a predominately Buddhist country, giving (or donating) is very much influenced by religious beliefs as well. For this reason, a lot of businesses, even international companies, engage in Corporate Social Responsibility (CSR) and philanthropic activities in many forms such as donations, and volunteer works, are used to gain a good impression in the eyes of customers and potential customers. Sponsorships is mainly practiced by large local conglomerates and international companies in sponsoring events, programs, and games.

7.2.5. Partnerships Partnerships can also be seen in the area of marketing and sales. Some products can be marketed or sold as a package with the other products or using the platform of other products. For example, consumer goods can be sold on an e-commerce platform developed by a third-party.

7.2.6. E-commerce As the payment mechanism has gained momentum with card services, mobile banking, POS and other platform payment services, it is now easier to settle payments for e-commerce transactions. Compared to the past few years, consumers have begun to shop online and regarding this opportunity, many businesses have been adding the e-commerce function for the sale of their products and services.

7.3. Trade & Business Practices

7.3.1. Import Negotiations and Agreements

Page | 119 It is highly recommended visiting Myanmar and meeting with potential business partners face to face, before doing business and closing deals.

Exporters will have to send original documents (BL and insurance papers) by courier to partner in Myanmar, as the importing company will need these documents for releasing shipments.

Prices can be quoted on ex-factory, FOB or CIF base. Commonly used currency is the US Dollar; however parties can agree to settle in a different currency. Payment is normally done by L/C or TT.

7.3.2. Cultural Aspects of Doing Business Cultural aspects play an important role in doing business in Myanmar. Because of the long period of relative isolation, the Myanmar culture has shown relatively little change over the past 50 years. However, in the last three to five years changes have been faster and more noticeable.

It will be useful for Brazilian businesspeople to have some understanding of cultural aspects before doing business in Myanmar:

. Internal management structure: Aspects like seniority, qualifications and age have to be taken into account. This is relevant in a traditionally Myanmar, strongly hierarchical organisation, although things are changing slowly and becoming less strict. . Religion: As Myanmar is mainly a Buddhist country, some foreign companies that open offices in Myanmar sometimes decide to follow some of the traditions related to Buddhism, such as having a Buddhist shrine for donations in the office or making a donation to a local monastery. . Trade relations (dealing with supplier): As in most Asian countries, personal feelings are important and people are not comfortable with losing face, especially in public. Therefore foreign business people should try to respect local views and value relations in order to build trust with local partners. . Leadership style: In general, there is a traditional top-down leadership style; however, as the country is changing, there is growing participation or inputs from junior staff in decision making. Notwithstanding, talented and ambitious young people seem to prefer to work for international companies where they can develop their skills and be recognised. The organisational culture reflects the combination of the values of the business owner and local staff. . Reward and punishment (motivation): Rewards can be shown by giving promotion, salary raises and authority related to higher positions. Punishment is normally expressed by cutting salaries, taking back responsibilities or avoiding promotions. . Time: Time management is weak in Myanmar and it is generally not considered important to be on time for appointments, although attitudes are changing. Work timeframes and deadlines are also frequently overlooked, as Myanmar managers are not used to looking to medium and long- term commitments and tend to prioritise more immediate tasks. . Gender: Myanmar businesses and Government are mainly male-dominated, but there are exceptions in some industrial sectors, where females are taking leadership roles. . Problem solving: Myanmar people generally avoid confrontation, and compromising is a more common way of solving the conflicting ideas. They aim to keep relations and avoid hurting people. . Group vs. individual: In contrast to most Western cultures, which are more individual-oriented, Myanmar is relatively group-oriented; whatever one does, it affects the group (organisation, company, family). Work bosses and colleagues are seen as an extended family, especially because people derive their identities from their social groups. People within a group tend to

Page | 120 avoid confrontation, as harmony has to be protected. The relations can be labelled as family ones and personal relationships are considered important. Mistakes lead to a loss of face to individuals and the group. . Communication: Cultural intelligence is essential for business communication in Myanmar, when often different aspects of the culture are touched.

Some examples of cultural aspects in advertising or an introduction of products: . Language: Coca-Cola recently started advertising in Myanmar and used the written Myanmar language for billboards. Although many Myanmar people would generally understand English, this gesture was appreciated by local people. . Religion: religious holidays could be used as occasions for sale. . Colours: Like in other countries, Myanmar people have preferences for certain colours. For example, black and especially a combination of red and black should be avoided. . Group Culture: as Myanmar are a group oriented-people, companies often tend to use celebrities, who function as a role model/leader for a group, in their advertising campaigns. . Local taste: due to differences in food taste, food producers should reduce their risks by having taste sessions prior to launching in Myanmar. Global companies such as KFC have conducted taste sessions with local target groups to fine tune the taste of their products before launching. . Traditional songs/music: to penetrate into deeper rural areas, Myanmar music is helpful. A global toothpaste manufacturer uses a popular Myanmar song in its advertising to get an advantage over a local brand in rural areas.

7.3.3. Market Entry Strategy For exporters from Brazil, the choices to enter the Myanmar market are: . Appointing an agent . Opening a representative office . Setting up a Joint Venture with a local partner

. Appointing an agent An exporting company can appoint an agent for distributing its goods or services and this can be done with an agency agreement. The local partner needs to have an officially registered trading company, including a bank account. Credential checking of the potential partners may be done through the Embassy, lawyers or the Chamber of Commerce. It is recommended to hire a reputable local lawyer, to check the background of the potential partner and to prepare agreements so as to avoid future problems.

. Opening a representative office This is a more serious step; thus, more homework has to be done. Information on legal structures on possible partnership or 100 percent foreign ownership is important and a reputable lawyer is recommended. Investment with 100 percent foreign ownership is permitted on the vast majority of business activities, including telecommunications, power generation, services, infrastructure projects, agriculture, hospitality and non-food manufacturing.

. Setting up a joint venture On 31st January 2013, the Ministry of National Planning and Economic Development released the new detailed regulations under the 2012 Myanmar Foreign Investment law that give more details on which business activities are allowed for foreigners and which and which activities foreigners can only undertake in a joint venture with Myanmar partners. According to Notification 11/2013, such joint ventures cannot

Page | 121 give the foreign participants more than 80 percent of the company’s equity. It is advisable to contact a reputable local lawyer to obtain legal advice on those issues.

Preparation: Before making a choice regarding the way to enter the Myanmar market, the exporting company should consider the readiness of its organisation and its goals in entering the market, taken into account the extraordinary situation in Myanmar. Other key considerations include: . Brand building and getting first mover advantage. . Long term thinking: Because of the complications and the total new development, it might take some time before things smooth out, so the foreign company needs to be able to have a long- term plan. . Segmentation: Also because of the culturally complex situation, a marketing approach might have to be targeted to one market segment. . Consider local partner: Due to the circumstances in Myanmar, it may be advisable to choose a reliable local partner who can help the foreign company in their dealings in Myanmar.

7.3.4. Selection of Business Partner There are different ways for a foreign company to look for a business partner in Myanmar: 1. Through personal contacts. 2. Through business matching events. 3. Through business consultants. 4. Through branch organisations. 5. Through advertisements.

Working through branch organisations requires involvement from the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), which has sub organisations for different sectors. More details on the UMFCCI are provided in Annex I.

7.3.5. Shipping Insurance There is no specific insurance requirement at the moment and the common practice is to arrange a shipping insurance in Singapore, since most of the shipments have to be transhipped there.

7.3.6. Trade Disputes and Arbitration In July 2013, Myanmar signed the New York Convention on the Recognition of Enforcement of Foreign Arbitral Awards 1958; however, Parliament still needs to promulgate domestic legislation to implement the Convention. Therefore, it is recommended that foreign companies take proper legal cautions before entering into agreements in Myanmar.

8. Recommendations to Brazilian Companies

Page | 122 8.1. Summary of Customs and Industry Practices in Trading

8.1.1. Relationship is Key. Relationships play a key role in many different contexts in Myanmar. It has become a norm to build good and strong relationships even in the business context, especially when dealing with government. This is the reason why many local businesses establish good connections and ties with respective government agencies and associations. However, there needs to be a fine line between building close ties and corruption, as there have been incidences where businesses use bribery as a tool to get close to government officials and get special treatment. Relationships are built in many different forms such as donations, offering assistance, becoming part of sector associations, engaging in sector promotion activities, etc.

8.1.2. Initiatives to Enhance the Current Trading Ecosystem and Environment It may seem from the report that trading procedures and practices as well as the regulatory framework governing are very complicated, which is undeniably true. However, the government has been making initiatives to optimize the current trading system with the intention of simplifying the procedures for better efficiency for both public and private sectors.

. Exemption of trading licenses for certain commodities

Ministry of Commerce has exempted some of the commodities from trading licenses to allow traders to freely export and import without having to apply for export/import licenses.

. Customs Clearance

In recent years, the Customs Department has introduced MACCS with the assistance from JICA. MACCS is being run only in limited border points for now, but further expansions have been planned. In addition

. Myanmar National Single Window on its way

In an attempt to enhance trade facilitation, Customs Department has been taking the lead to implement a National Single Window in collaboration with Ministry of Commerce and several related government agencies involved in the trading processes. Once completed, the Single Window will serve as single submission for the application and granting of trading licenses and other related certificates, licenses and permits. The Single Window will enable improved synchronization between several government agencies, reduce paperwork and physical visits, more efficient payment system, less lead and turnaround time for the issuance of permits and licenses, more scrutiny on the quality of the goods and most importantly an automated cargo clearance system.

8.1.3. Complications Everywhere In Myanmar, complications are not unusual. Actual practices can be very different from standard procedures even in government settings. For the trading of specific commodities, traders are required to apply for relevant certifications and permits from specific government agencies in addition to the trade license process at the Ministry of Commerce. In that sense, an importer will have to apply for certificates, licenses or permits at several different government agencies and the processes can vary from one

Page | 123 another to some extent. Thus, it is important to fully understand the on the ground practices for each of the processes and also to know the tips and tricks to get them done with full efficiency and effectiveness. For example, in some complicated processes, it is beneficial to use agents who know the best ways to deal with a particular process.

8.2. Recommendations

8.2.1. Work with Agents. Given the complicated procedures and complex issues that could potentially arise, it is beneficial to appoint agents to avoid complications. Agents are needed especially in government related procedures as actual practices can vary a lot from standard practices, and policies can change very often. Even local businesses use agents in trade license applications and customs clearance processes given the complicated level of processes, and because agents tend to have better knowledge of these procedures. They know when and how problems can arise and the ways to deal with them. Being in the industry for a long period of time, they have established contacts that they could leverage on and also know tips and tricks as well as the ins and outs.

8.2.2. Establish A Local Presence. One important aspect of doing business in Myanmar is to establish a strong local presence, which can be in many forms depending on the type of business and the sector in which the businesses operate in. Investors can choose between opening a representative office while having an appointed local distributor, setting up a joint venture with a strong and trustworthy local partner or setting up a wholly owned subsidiary. The choices will depend on the level of engagement the business would need in the local context as well as what the regulatory framework allows.

8.2.3. Conduct Due Diligence Prior to Making Commitment. Before making commitment with any party, it is important to conduct some due diligence exercises on the business, shareholders and management. While this may sound not relevant to some investors, it might be relevant for those who have close ties or business connections with Western counterparts. There have been incidences where local businesses that have connections to the military or sanctioned individuals or those that are owned by sanctioned businesses or individuals have been declined for partnership by foreign firms especially Western businesses. There are some due diligence companies and legal advisory firms in the market that can help businesses with this.

8.2.4. Establish Good Connections with Government Agencies. It is also important to establish good connections with government agencies; however, this should not be intended as special treatment or privilege. Investors are advised to position themselves well in the eyes of government agencies and to remain updated with the changes or plans. Brazilian businesses can consider making contributions for the growth of specific sectors that they are interested in, through providing technical assistance, knowledge sharing, and so on.

8.2.5. Stay Updated with Frequently Changing Regulations.

Page | 124 Frequent regulatory and policy changes are not uncommon in Myanmar. It is crucial that businesses stay ahead of the changes and make plans. While having good connections with government agencies might help businesses know the plans or changes, it is also beneficial for businesses to follow legal and advisory firms that publish news updates or announcements.

8.2.6. Be Part of Associations. Myanmar has a lot of sector specific associations that work on promoting the sectors while acting as a bridge between the public and private sectors. Becoming part of the associations, businesses have the advantage of taking a collective approach to the ultimate objectives of the sectors. As a group, businesses can have stronger reach to the government by voicing the needs of the improvement of certain sectors. Businesses will also be able to do advocacy work better. In Myanmar, businesses is also about connections you make, and becoming part of the associations, businesses will also have easier access to the other stakeholders in the industry and stay updated about the latest news in an industry. Most importantly, businesses can also take part in sector specific business development activities such as expos, events, and conferences.

8.2.7. Stay Alert for New Opportunities. It is also important that businesses always look out for new opportunities that can arise from big announcements or talks at dinner tables. Not all the opportunities go public, as transparency is not everywhere yet. It is important to know key players and the ways to hunt for the news. Networking also plays a key role in the Myanmar context.

8.2.8. Participate in Trade Fairs and Expos. This may sound like a very general recommendation; however, it is key in Myanmar. Participating in trade fairs and expos is a chance for the businesses to exhibit their capabilities and also to make new connections which could potential turn into new collaborations.

8.2.9. Be Aware of Cultural Aspects. Being a country dominated by its religion and culture, these aspects have a lot of impact on business and non-business settings. It is important that businesses be aware of and adapt to tradition and cultural aspects in doing business in the country. There are some of the cultural aspects which are worth noting for foreign businesses in dealing with local businesses so that they can manage expectations. Things take time in Myanmar and punctuality is also a rare practice. Businesses are very relationship and group- oriented, while people tend to avoid direct or frank words or comments as these are often perceived to be rude. A lot of businesses are family-owned and run, with a lack of proper corporate governance or structure within the company. It is important that businesses take into consideration of cultural, traditional and religion aspects in their offerings, from designing the products and services to marketing them.

8.2.10. Myanmar Can Be a Gateway. There is also potential for Brazilian businesses to leverage Myanmar in making businesses out of Myanmar. Myanmar is in a strategic position sitting between the two large economies of China and India. China in particular is the largest trading partner, standing top in both exports and imports. At the moment, cargo shipments are made all the way from Brazil to China and vice versa, which is a lengthy and costly option. With the development of deep-sea ports and special economic zones taking place, Brazilian

Page | 125 companies can take advantage of this opportunity to consider Myanmar as a corridor to China for bilateral trade between the two countries. Brazilian businesses can base their manufacturing or processing facilities in Myanmar and transport their goods to China and other Asian markets via in-land routes or shipping. This way, Myanmar can be a gateway for Brazilian companies to tap lucrative opportunities within and outside the country as well.

8.2.11. Barter Opportunity Exists. There is also potential for barter or exchange opportunities between Brazilian and Myanmar businesses in many forms. In the agricultural sector, Brazilian businesses could barter agrochemicals and farm advisory in exchange for agricultural produce from local farms. Brazilian businesses can also potentially consider bartering meat in exchange for corn. In doing this, it might be rather more practical for companies to engage directly with companies or associations rather than engaging with smallholder and medium sized farmers. Similar set ups could be applied in the coffee and livestock and poultry sectors as well; as these sectors are knowledge deprived in general and Brazilian businesses will be of value to them by bringing in know-how for something in return. This is a way to enhance collaboration between the two economies while enabling win-win situations.

8.2.12. Advocate for G to G Collaborations. Government support and policy is of crucial importance in promoting economic partnership between the two countries. Advocacy from governments to develop and implement frameworks that will first initiate and gradually boost partnership between the two countries is much needed. Businesses and associations could also scale up in promoting and backing the governments’ programs as well. Both economies share many things in common; from richness in natural resources and heavy reliance on agriculture as the main source of income to being significant trading partners with China. If the two governments can make it work to bring about beneficial collaborations, that will be a huge bonus for both countries. One of the many forms of initiatives that the governments could consider is an exchange program.

8.3. Major Sectors of Opportunity for Brazilian Investors

8.3.1. Coffee

Brief Overview of the Sector

Dating back to the British colonial period, missionaries started coffee plantations in 1885, introducing Arabica coffee in northern and southern Shan State and Pyin Oo Lwin in Mandalay Region, and commercial coffee has been produced in these regions to this day. The coffee export market has been present since around 1930 between India and the UK. In the late 1980s, the government introduced new varieties from Costa Rica. With an effort to eliminate poppy growing in the regions, the government expanded coffee plantation areas and in 2003-2004, the total production area reached 35,485 acres of which 15,351 acres were actual production area.85

85 Arabica coffee manual for Myanmar | FAO

Page | 126 In recent years, Myanmar coffee has grown in popularity and is gaining interest among the international market. In Myanmar, coffee is a crop that has been neglected for several years but nowadays, both the government and planters have come to see it as a potentially important crop for dollar earnings. According to local industry experts, in terms of taste and quality, Myanmar coffee ranks first after African coffee. Myanmar’s coffee scored 80 marks in international coffee quality tests and is now branded as a specialty coffee. Reportedly, Myanmar coffee was featured at an event held in Washington, D.C in 2016.86

Globally, coffee consumption is growing at an annual rate of 2 percent on average since 201187 and is the world’s second most tradable commodity after oil. Coffee demand is booming within the country as well fueled by the growing coffee culture around the world.

Table 69: Arabica Coffee Varieties Grown in Myanmar

1) S-795 2) Blue Mountain 3) H 420 4) Amarella 5) C 1669 6) H 528 7) Caturra (Red & Yellow) 8) LC 1662 9) SL 4 10) T 5175 11) P 86 12) SL 6 13) T 8667 14) P 88 15) SL 28 16) Catuai 17) P 90 18) SL 34 19) Catimor 20) H 306 21) SanRamon Source: Myanmar Coffee Association

Table 70: Coffee Grown Locations in Myanmar

Coffee Type Location High Land Arabica Northern and southern Shan State Chin State Kachin State Kayah State Sagaing Region Mandalay Region Low Land Robusta Bago Region Ayeyarwady Region Kayin State Source: Myanmar Coffee Association

Figure 35: Areas of Coffee Plantation in Myanmar

86 Boosting coffee plantation in Myanmar | Global New Light of Myanmar 87 Myanmar moves to jump start coffee cultivation | Myanmar Times

Page | 127 Source: Myanmar Coffee Association

Currently, coffee is grown on a manageable scale in Myanmar. Industry sources estimate that Myanmar’s total Arabica production is about 5,953 MTs a year including those from commercial production and small

Page | 128 holder farms88. Myanmar’s coffee production is very small compared to Vietnam with 1.5 million tonnes a year.89 Myanmar coffee beans are mainly planted in highland areas in Shan State, Mandalay Region, Kachin State, Kayin State and Chin State as well as in Mandalay Region. The estimated coffee plantation area is 30,000 acres with the largest yield coming from Pyin Oo Lwin and Ywar Ngan Townships in Mandalay Region and Shan State. Ywar Ngan coffee is of a high quality and is exported to the international market. Known as the best coffee in Myanmar, Ywar Ngan coffee is reported to have scored 83 marks.90 Lower grade Robusta coffee is mainly grown in Kayin State, and Bago and Tanintharyi Regions, while Arabica coffee is mainly seen in Shan and Chin states.91 According to Myanmar Coffee Association (MCA), potentials for commercial scale production are present in Kaw Thaung, Kayah State and Kayin State (Than Taung Gyi).

Market Structure, Value Chain and Key Players Figure 36: Value Chain of Coffee

Stage Key participants

Production Smallholder farmers Estate farms Vertically integrated companies

Processing Broker Local trader Estate farms Vertically (Pulping, Hulling, integrated Drying, Sorting) companies

Production Exporter/ Roaster/ Estate farms Vertically Trader Distributor integrated companies

Exporting Exporter/ Roaster/ Estate farms Vertically Trader Distributor integrated companies

End market Border trade Oversea Domestic Vertically exports consumption integrated companies

Source: Coffee Value Chain | USAID & WINROCK International

Input suppliers, banks in Myanmar and coffee seed research department take the support roles.

88 www.winrock.org 89 Out with opium, in with coffee as Myanmar targets specialty market | South China Morning Post 90 A New Light for Myanmar’s coffee industry to shine in foreign market | Myanmar Insider 91 Boosting coffee plantation | Global New Light of Myanmar

Page | 129 The growing period starts from March or April, while the harvesting period is from December to March. Wet processing takes place from December to March whereas dry processing takes place from April to November, and fields can produce crops for up to 25 years. When the coffee plants have reached three years , they start producing berries, and at five years, they produce coffee bean. As soon as they hit the age of four, they are ready for commercial production. About 1,000 coffee plants can be planted in one acre of land.92

After 25 years, the yield gradually decreases. This is usually when the rejuvenation process is started. Myanmar has an advantage in that those highland areas have favorable weather and rich soil. Coffee is grown under shade in Myanmar method is sustainable over long periods with even low inputs. Seeds used (Brazilian seeds and Costa Rica seeds) have been here for 30 years since 1988 when it was first introduced.

Industry sources estimate that Myanmar’s annual coffee production is approximately 8000 tonnes. Myanmar’s coffee is being exported to US, Germany, Switzerland and Japan, while new markets are emerging in Japan, South Korea, Canada, Belgium and New Zealand. Since 2016, the U.S market has become the largest foreign market for Myanmar coffee. In 2017, 36 tonnes of special-grade coffee beans were exported to the US whilst 18 tonnes of premium beans were exported to Switzerland.93 Myanmar imports coffee mainly from Vietnam and China for instant coffee production. Myanmar instant coffee – 3 in 1 and 2 plus 1 – are sold domestically, and an estimated 90 percent of imported coffee powder is used in instant coffee production. Low quality coffee imported mainly from China are used for 3 in 1 instant coffee production while those from Vietnam are used for 2 plus 1 coffee production. According to the Myanmar Coffee Association, in 2018, Myanmar imported 2,000 tonnes from Vietnam. Coffee import from Brazil is minuscule with less than 20 tonnes in 2018.

Table 71: Key Players in B2B Coffee Business

No. Coffee Brand Export Import 1 Sithar Yes Yes 2 Shwe Yin Mar Yes Yes 3 Element Yes Yes 4 Nan Myaing Yes Yes 5 Han Kee No 100% import 6 Golden Brown No 100% import 7 Aroma Yes Yes 8 Café Za No 100% import Source: Myanmar Coffee Association

Table 72: Key Players in B2C Coffee Business

No. Coffee Brand 1 Shwe Pu Zun 2 Genius 3 Ever Win

92 Myanmar coffee exports to begin on larger scale | Myanmar Business Today 93 Declining price of coffee beans ‘no cause for alarm’ | Myanmar Times

Page | 130 4 Golden Triangle 5 Shwe La Wun 6 May Myo Fresh 7 Pop Pop Source: Myanmar Coffee Association

Recent Developments

In 2014, Winrock International started a five-year value chain program funded by the U.S. Agency for International Development (USAID) and is worth US$27 million. Winrock International has partnered with the Coffee Quality Institute (CQI) and trained over 3,000 coffee farmers on subject matters such as upgrading quality and penetrating the international market.94 There are also local partners such as Sithar Coffee and Pann Taw Win that are doing CSR activities and collaborating together with the aforementioned organizations – USAID, Winrock International and the CQI. These organizations are providing financial support, know-how technology and access to markets through barista trainings and agronomy workshops with the aim to bring international attention to Myanmar coffee. Finally, the Myanmar Coffee Association (MCA), a non-profit organization, was formed with the purpose of building a unity among coffee planters and serves as an industry advocate.

Challenges

Challenges observed in coffee production industry according to Value Chains for Rural Development project (VC-RD), the USAID-funded Value Chains are as follows:

. Low productivity – coffee farmers currently do not have awareness on Good Agricultural Practices (GAP) and consequently, they suffer from low yield. . Poor harvesting and drying methods – coffee farmers do not know proper harvesting methods and the quality has to suffer as a consequence. . Lack of proper drying – coffee farmers do not have access to dryers or other modern drying methods and consequently, the quality of coffee deteriorates during processing. . Traditional de-hulling methods – coffee farmers are still adopting traditional methods which can greatly lower the quality of coffee.

Future Potential

Being a neglected crop for years, challenges mainly arise from a lack of government support. As for emerging specialty coffee market, low yields are a major issue. To cover the seemingly high cost of production, companies have no solution but to raise the product price, making Myanmar coffee price higher compared to others in the region. Another threat is the robust growth of the coffee industry in China, while other issues include a lack of access to capital and skilled labor, lack of enlarged land permit space to realize commercial production, no action against fake land permits, infrastructure and electricity, experts and technology.

Myanmar coffee planters are in need of reliable business partners that could bring market access, connections, capital and technology. Coffee businesses believe Myanmar should reduce the import quantity of low-grade coffee and upgrade the quality of instant coffee produced in the country. It is

94 www.winrock.org

Page | 131 important for farmers to have access to high quality seed of well-adapted varieties. With this mind, the current coffee beans research department should be supported to continue their works.

8.3.2. Corn

Brief Overview of the Sector

In Myanmar, corn, which can be used as food for humans, livestock feed and bio-fuel, is the third largest planted crop after wheat and rice.95 Currently in Myanmar, corn as food for humans is solely for local consumption, and does not have international buyers. Meanwhile, Myanmar is importing sweetcorn, popcorn, white corn and yellow dent corn from Thailand for production of snacks and salads. Global food chains in Myanmar such as KFC and many confectioneries are major importers with the rise in popularity of snacks such as popcorn and corn soup.

On the subject of corn for feed, Myanmar is among the 163-corn producing and exporting countries in the world and the product is a significant contributor to foreign currency.96 Rapid population growth in the country has resulted in growing demand for food, particularly meat and fish. Consequently, from time to time, there is corn deficit for local use fueled by higher demand in feed, limited seasonal production and large export market to China. Corn prices have been on the rise in recent years. Since 2010, China’s demand for corn has surged, making it the world’s second largest consumer of corn. In 2018, fluctuations in corn prices have been intensified by the trade war between the United States and China. In Myanmar, corn prices are mainly affected by population growth, weather patterns which can be unpredictable, demand levels and trade policy from China.

Market Structure and Value Chain, Key Players

In 2008, Thai-based CP firm and the Union of Myanmar Economic Holding Limited (UMEHL), started growing corn in northern Shan State. With financial aid from World Bank, the United Nations Office on Drugs and Crime (UNODC) initiated the plan to grow corn as a substitute crop for poppy. There is a quota system with Chinese and Thai governments – a significant amount of corn produce is exported to two countries regularly with a good price. Essentially, corn is sold to fish feed mill, chicken feed mill in the country as well as breweries as a cheap alternative to rice and broken rice.

While corn is a major industrial crop and there is a growing importance, it is not prioritized and receives less technical and financial support such as good quality seeds, fertilizers, agricultural technology and loans from the government compared to major crops such as rice, beans and pulses. However, trade sources reported that despite the lack of support from the government, the corn cultivation area has gradually increased owing to lower cost of production and better profitability compared to other crops such as potato and garlic.97 Corn is mainly grown in hilly and mountainous zones, namely northern Shan State and Mandalay Region with over 50 percent while the delta and coastal regions such as Ayeyarwaddy Region and dry parts of the country such as Magwe and Sagaing Regions take up the smaller production area.

95 Roadmap of MCFA | EU Office of Myanmar 96 Maize Myanmar | FAO and Ministry of Agriculture, Livestock and Irrigation 97 Corn production supply and demand update 2016

Page | 132 Figure 37: Value Chain of Corn

Stage Key participants

Production Commercial corn farmers Smallholder farmers

Processing (drying, Commercial corn farmers Smallholder farmers screening)

Exporting Brokers/dealers Profit-oriented wholesalers

End market Animal feed Liquor & snack Export via Border trade (30%) (10%) shipping (55%) (5%)

Source: In-depth interview

Table 73: Seasonal Timeline of Myanmar Corn Value Chain

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Off Season Growing Season Harvest Season Producers Receive inputs Receive inputs and micro Sell grain financing Repay debt for inputs (deduct from sales) Sub Dealers Receive and provide Receive and provide Buy grain inputs inputs Re-sell grain Dealers Receive and provide Receive and provide Buy grain inputs inputs Re-sell some grain Sell stored grain Sell stored grain Repay debt for inputs Store grain Receive working capital Input providers Receive working capital Receive working capital Receive payment for Provide inputs Provide inputs inputs Repay working capital Buyers Buy grain Buy grain Buy grain

Page | 133 Source: Myanmar corn value chain | Mekong Business Initiative (MBI)

Trade sources estimate that about 30 percent of Myanmar’s domestic corn supply is used in animal feed, while around 10 percent is used for seed, food processing and alcohol production. The bulk of Myanmar’s corn production is exported to China. Domestic demand for corn mainly comes from the livestock sector. Twenty to thirty percent of the corn for animal feed goes to feed mills for fish, pigs, cows and chickens. In the future, the prospects are bright for the export market as globally there is an increased consumption of meat with middle class expansion and changing lifestyles in developing countries.98 Corn is likely to replace broken rice as a major ingredient in animal feed as its production cost is cheaper.

About 90 percent of Myanmar’s corn is grown in rain-fed areas. Whilst corn is mainly grown in rainy season from May to June and harvested from September to October, the dry-season corn is grown from November to December and harvested from February to March.99

Currently, products are exported only in raw form. There is much potential for value-added products such as corn flour, corn oil and corn sugar. However, first, better technology, GAP system and smart fertilization schemes need to be realized. Myanmar had corn trade history with neighboring countries such as Bangladesh, Malaysia and Philippines and other ASEAN countries in the past. But nowadays, a vast majority (95 to 97 percent) of Myanmar’s corn exports are taking place along the Myanmar-China border with China whereas the rest is via ports.

Inputs such as seeds, fertilizers and agrochemicals are supplied by both local and foreign companies – CP, Myanma Awba, Armo, Supreme Bio. An estimated 90 percent of Myanmar farmers use hybrid seeds either purchased from commercial seed producers or the government.100 The government seeds are known as Yezin varieties and are sold at a cheaper price. Farmers also sow with seeds from previous harvested crops. According to industry sources, the Myanmar CP Livestock Co. holds about 60 percent to 70 percent whereas the government holds about 8 percent101 of the Myanmar corn seed market. In comparison, the potential yield for CP corn varieties is about 5 metric tons per hectare, while the yield for Yezin varieties is about 4.5 metric ton per hectare.102There is also a presence of black market along borders with Thailand, India and China, importing farming inputs illegally.

Figure 38: Annual Corn Production

In Metric Ton

98 Maize Myanmar | FAO and Ministry of Agriculture, Livestock and Irrigation 99 Corn production supply and demand update 2016 100 Myanmar corn production forecast to increase | Global New Light of Myanmar 101 Corn production supply and demand update 2016 102 Corn production supply and demand update 2016

Page | 134 Annual Corn Production 3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Source: Department of Agriculture

According to a corn expert, Myanmar’s corn production peaked in 2018 and currently accounts for up to 1 percent of the global production. Major buyers of Myanmar corn are Thai-based CP firm, De Heus (the Netherlands), Green Feed (Vietnam), Jeffe (Indonesia) and local beer manufacturer ABC group. As well, there is a regular demand from small and medium scale feed mills within the country.

According to 2018 data from Department of Agriculture, the total cultivation area of corn is 1,246,541 acres, production is 77,760,591 tins (about 2.64 million MT) with productivity rate of 62.86 tin per acre. According to a corn expert, export quantity to international buyers accounts for around 60 percent of total production whilst the remaining 40 percent is for local feed mills and breweries. Currently, there are 73 private companies exporting Myanmar corn to China through border gate.103

Legal and Regulatory Matters

Investors in corn are not regulated by a separate law, but are instead governed by the Agriculture-related rules and regulations as with other agricultural products in Myanmar.

Recent Developments

Collaborating with World Bank, IMF, ADB and Livelihood Food Security Fund (LIFT), the Department of Agriculture is developing Myanmar Agriculture Development Strategy (ADS) 2018-2023 starting from June 2018. The ADS have three pillars: governance, productivity, market linkages and competitiveness,104 and it is going to serve as a guide book for inclusive development of agriculture in Myanmar and cooperation between government, farmers and private businesses.105 According to Myanmar Pulses, Beans & Sesame Seeds Merchants Association, the role of corn has grown greatly and is expected to be listed as an industrial crop in the near future. Partnering with World Bank, Australian Aid, UK Aid, Enhanced Integrated Framework (EIF), the Ministry of Commerce is also implementing Mid-Term Program (MTP). The program is being implemented with the aim to clarify the priorities set out in a Diagnostic Trade Integration Study (DTIS) Action Matrix (AM) and other existing plans with a strategic and medium-term approach.106

103 www.mpbsma.org/products/maize 104 Myanmar’s agricultural development strategy is officially launched | Livelihoods and Food Security Fund (LIFT) 105 Myanmar’s agricultural development strategy is officially launched | Livelihoods and Food Security Fund (LIFT)

Page | 135 LIFT is the largest INGO opening office in Myanmar with the main focus for Myanmar’s agriculture development whilst FAO is the second largest organization. More than 150 INGOs and other Large Non- Government Organizations such as Green Terra (the Netherlands), UK aid, US aid, Meda Group (Canada), ICCO, Mekong Institute, World Wildlife Fund (WWF), MCRB are helping Myanmar’s agriculture sector with funding and technical support. However, there is still a lot of room for improvement, particularly farming knowledge and SMART fertilization and that the impact so far is much less than attainable.

Challenges and Future Potential

. Challenges

 Quality Control

As with the other agricultural products, in Myanmar, local corn producers do not guarantee the quality of their crop. As there is no national standard for food grade identified by the government, a certificate granting that the quality conforms to the established standard has not been realized yet. As a result, there is increased bargaining power of buyers. Since there is no ceiling price, from time to time, Myanmar traders feel there is no choice but to sell by reduced prices – the price Chinese buyers are willing to pay. Here, price decisions are only made from the China side and either device usage such as grain moisture meter or grain grade standard index is not involved in the quality measuring process.

Nowadays, border market trade with China has become an unofficial market resulting from the Chinese government’s decision to protect their local farmers by restricting and reducing imports from other countries. However, trade is still present at the border as Chinese traders do not want to stop buying Myanmar’s corn, which is easier to transport, cheaper, good quality and available in small quantities. Clearly, transactions are not made with legally binding contracts and tax is not applied. Myanmar is on the losing end with little control over the trade between the two countries. Local producers are still very weak in quality consistency and control, and as a result corn farmers in Myanmar need to be trained in Good Agricultural Practices (GAP) standards for a higher yield, better quality and minimized waste.

 Infrastructure

Upgrades of existing irrigation, processing plants, water treatment plants, new irrigation system, roads and ports upgrades are much needed.

 Land Ownership Issue

Land ownership issues are mostly found in the agriculture, fishery and mining sectors in Myanmar. There are land problems including land confiscations and forced evictions, land ownership permits to owners who do not grow any crop, as well as the presence of illegal tenants and squatters.

 Loan

106 Medium-term Program Report | Ministry of Commerce

Page | 136 Any financial assistance such as loans, grants, low interest rates, incentives, or low or tax exceptions from the Myanmar government, or potential financial proprietors and investors through the government, is needed.

 Research and Development

Global warming has affected several regions in Myanmar and as a result a research center to develop and test new seeds that can better adapt to regional weather changes is needed.

 Techniques, Awareness and Training Programs

Programs to deliver the awareness on topics such as the importance of technology, waste minimization, risk management, smart fertilizer usage and storage and packaging techniques to ensure a moisture- resistant and mold-free storage are needed.

 Major Challenges with Contract Farming in Myanmar

Starting from 2015, the government has encouraged investments for contract farms from China, Thailand, Bangladesh, Kuwait and other high-end private businesses.107 In the early 1990s, CP Group from Thailand implemented a contract farming scheme for poppy farmers in upland rural Shan State, targeting China’s domestic chicken-feed market.108 The Myanmar CP Livestock Co. is producing hybrid corn seeds through contract farming with local growers, especially in southern Shan State.109

Once the contract is signed, farmers can withdraw money in advance and invest in crop production – buying farming inputs and paying fees for services. Farmers can freely choose the CF service company they want to contract with. As soon as the CF service company receives crops, it will transfer the excess money to the farmers into their bank account.110

 Contracting processes are complicated and there is a lot of work for the contractor as Myanmar currently does not have a big corporation formed to represent clusters of associations. Instead, Myanmar has an abundance of smallholder farmers.  A weak legal system that fully protects farmers and businesses to participate in CF.  Infrastructure and technology deprivation – modern growing techniques and irrigation system, risk management scheme expecting the occurrence of natural disasters, regular access to water, water treatment plants, roads and ports upgrades are needed.

Future Potential

Although there are several associations, most of them are not active but rather known for their existence. Capital requirements are huge to realize an agricultural turnaround in Myanmar, and FDI is required for improved technology, financing and management. Noticeably, the government is encouraging FDIs with new legislation developments for an easier investment process. However, it is not easy enough to make it work considering Myanmar will only offer the current platform – small-sized holders with small landholdings scattered all over the place. Dealing with several farmers working individually means a lot of

107 Roadmap of MCFA | EU Office of Myanmar 108 Roadmap of MCFA | EU Office of Myanmar 109 Myanmar corn production forecast to increase | Global New Light of Myanmar 110 Roadmap of MCFA | EU Office of Myanmar

Page | 137 work for both investors and the government, and it is complicated and difficult to reach agreement when proposing for change.

With this in mind, it is important to realize a properly formed corporation that is big enough to represent the voices of clusters of associations and local companies. At the moment, there is no precise policy for border trade. So far, the government has not reached any bilateral trade agreement - G to G agreement - with China to protect Myanmar’s farmers and avoid frequent trade disruptions along the border.111 In addition, the government should realize a Free Trade Agreement (FTA) and ensure sound and appropriate corporate tax and bank interest rates are in place. Assuming FTA is on the agenda, the government should have a proper national standard of exported corn ensuring Myanmar’s corn conforms to the established standard agreed by both parties. Finally, roads and ports are in need of upgrade for a more efficient movement of cargo in large quantity.

8.3.3. Livestock Sector

Brief Overview of the Sector

According to the World Bank (2014), the agriculture sector including livestock and fisheries, contributes 38 percent of the national GDP; accounting for 23 percent of total export earnings and employing 70 percent of the labor force. The livestock sector is considered as one of the most important as it occupies 3.4 percent of the national GDP and 20 percent of the agricultural GDP.

Major species in the Myanmar’s livestock sector are poultry, pork, beef, cattle, buffalo, sheep, duck and goat and those species are raised mainly for local consumption. The livestock sector widely practices the livestock-crop farming system as most farms are owned by smallholder farmers across Myanmar. Smallholders commonly borrow funds to buy livestock, and landless and poor households in rural villages raise livestock to use as household capital for emergency use. As the majority of the local consumption are chicken and pork, chickens and pigs are commercially raised in large farms. As beef consumption is not common in Myanmar due to cultural and religious beliefs, commercial beef cattle farming is almost non-existent and very few dairy cattle farms are found in upper Myanmar for the production of milk and milk products. Duck is only raised by smallholders for local consumption and the demand for duck is way lower compared to that for chicken and pork. Sheep and goat make use of low-quality residues and crop by-products in farming systems.

Figure 39: Poultry Value Chain

111 Myanmar at losing end in border trade disagreements: leaders | Myanmar Times

Page | 138 Poultry Value Chain

Breeder Farms Hatchery Distributors

Farms

Processing Dealers Live Bird Plant M k t

Wet Market Modern Trade Retail Retail

In Myanmar, the poultry sector is mainly dominated by integrators, particularly CP and Japfa. The breeding business is mainly under the integrated companies that import breeds either Grand Parent (GP) or Parent Stock (PS) from Thailand, India, Germany and the Netherlands. They distribute Day Old Chick (DOC) and feed via dealers or direct into independent farms and also grow chicken through their own farms and contract farms. Broiler cycles last approximately 45 days and when they are due, dealers from wet markets come to catch the birds at various farms. Retail players from the different areas purchase slaughtered or live birds in the wholesale market before they sell them back in the wet or street markets. Only a very small portion of chicken goes into processing and distribution via modern trade at the moment.

Pig Value Chain Figure 40: Pig Value Chain

Poultry Value Chain

Farmers Traders Slaughterhouse Consumers

The major markets for pork are Yangon and Mandalay. As mentioned above, 90 percent of swine production is controlled by are smallholder farmers whereas only the remaining 10 percent is controlled by large commercial farms located in Yangon. Commercial farmers import high pig genes from Thailand, conduct cross breeding and sell their pigs mostly to the slaughterhouses and only to very few traders. Village pig farmers sell their swine either to traders, slaughterers or directly to consumers, while smallholders usually sell their pigs in other villages or districts. Traders collect fattened pigs from farmers and then sell them to larger traders or slaughterhouses. Slaughterhouses in Myanmar are privately

Page | 139 owned and only licensees are allowed to slaughter pigs. Generally, most of them are traders, wholesalers and retailers themselves.

Several initiatives have been taken by the public and private sectors to enhance and promote Myanmar’s livestock, especially poultry sector. There is also assistance from international parties through a number of projects such as the Dutch government sponsored programs called Poultry Sector Cooperation between the Netherlands and Myanmar and the Food Safety Project 2019, MLF has also been active in sector promotion activities in collaboration with several local and international stakeholders. Individual private sector players are also making their own initiatives to further bring their businesses to the next level. According to MLF, some cattle farmers are now trying to get connection with Brazilian farmers for technology assistance to initiate commercial cattle farming system within next two years.

Legal and Regulatory Matters In Myanmar, there is no specific law set for livestock sector, however, the Animal Health and Development Law (1993) covers some aspects of the livestock sector.

Recent Developments In February, 2016, the government agreed with private construction companies upon the construction of a standardised wholesale market which cost US$ 62 million. The construction of 64.54 acre project began in Insein Township, Yangon for 500 retail shops in 2016.

On September 2016, De Heus, a Netherland based company invested 10 million euro to build a plant in a greenfield production facility in order to enhance the production and distribution of animal feed in Myanmar.

Poultry and pork are the major subsectors with high local consumption and breed commercially.

. Poultry Subsector

Poultry production constitutes 51 percent of the total meat production in 2016 according to official statistics from Livestock, Breeding and Veterinary Department of the Ministry of Agriculture, Livestock and Irrigation. As of 2016, it was estimated that there were approximately 130 million broilers and 10 million layers in Myanmar. Ninety-five percent of birds are held at smallholder farms with average of less than 10,000 birds per farm location, kept in multiple houses. However, there are also a number of integrated poultry businesses present in Myanmar including top players such as CP from Thailand and Japfa from Indonesia. Those integrated companies control the breeding business and distribute day old chick (DOC) and/or feed from their feed mills to dealers or directly to independent farms. They also engage in the farming business by operating their own farms or working on contract farming basis.

. Pork Subsector

Pig production constitutes 29 percent of total meat production and pig farming in majority is in backyard through scavenging system. Thus, pig production is dominated by relatively smallholders usually found in urban and peri-urban areas, and commercial farms only share a small portion of total pig production. According to Myanmar Swine Federation, approximately 90 percent of pig farmers are smallholders and the minority 10 percent belongs to large scale commercial swine breeders. Myanmar’s typical breed of pigs have been on the decline due to discriminate breeding with imported breeds. Most native pigs are black, small headed and characterized by slow growth, thick fat and hardiness. According to Myanmar Swine Federation, the productivity of pig has increased in the last decade due to extensive cross

Page | 140 breeding between local pigs and exotic pigs such as Landrace, Duroc and Berkshire. As these high genetic pigs take nearly four months to be ready for sale, the meat output is fresher and leaner than that of the other pigs in the market. As there is no legal way to import such high genes into Myanmar, commercial swine farmers are still trying to get the legal statement for importation as it is a way to solve the issue of insufficient supply locally.

. Cattle Subsector Cattle production occupies only 12 percent of the total meat production. Beef cattle farming is still at the initial stage and cattle are more concentrated in the central part of Myanmar according to Livestock, Breeding and Veterinary Department (2014). In Myanmar, cattle and buffaloes are mainly raised by smallholder farmers for draught purposes in mixed crop-livestock system although a mechanized farming system is encouraged. Regarding the cattle market, the government only focuses on restrictions on slaughtering below 12 years of age and exports of live cattle is not yet allowed.

However, thousands of live cattle have been exported to China unofficially in recent years and the numbers have been increasing due to a growing demand from China and Vietnam. According to Myanmar Livestock Federation (MLF), about 5,000 live cattle are being exported to China illegally every month since 2017. Thus, in late 2018, Myanmar government and China’s Yunnan province were planning to finalize an agreement to start official exporting of live cattle from Myanmar to China. Once the agreement is approved, Myanmar will become a major supplier for exporting live cattle not only to China but also to other Asian countries such as Thailand and Bangladesh. Moreover, dairy cattle farming also has the potential to be developed due to the increasing demand of milk and milk products for urban population.

. Animal Feed Subsector Feed market for livestock sector exclusively belongs to the private sector. It is estimated that the total animal feed market is 2.2 million tons in 2015 contributing 50 percent to poultry sector, 15 percent to pork, 10 percent to aquaculture and 25 percent for other species. The animal feed industry is mainly dominated by international companies such as CP, Japfa and some local companies such as Crystal Diamond and Kaung Htet.

Although smallholders did not generally purchase commercial feed for their livestock in the past several years, since 2000, they started using commercial feed at their farms due to its quality, protein and necessary nutrients. This shows that the animal feed market has high potential for investment. Nonetheless, with the recent entry of several new players such as New Hope, De Heus and Sunjin into the market, competition is getting intense in this sector.

. Animal Vaccine Subsector Animal health services delivered to farmers include vaccination of livestock against infectious diseases and treatment of sick animals usually at the request of the animal owner. Front-line services are mostly supplied by the Community Animal Health Workers (CAHWs) to farmers. Animal vaccines and medicines are also available at small shops so farmers can purchase and manage by themselves.

In Myanmar, smallholders mostly count on CAHWs for emergency needs of vaccines and medicines, and related government support functions. For commercial farmers, they mainly rely on the private sector to supply medicines, vaccines and services on one hand. On the other hand, they also actively participate in government support functions such as occasional laboratory support and emergency disease control such as in the case of HPAI in poultry and Porcine Reproductive and Respiratory Syndrome (PRRS) in swine animals.

Page | 141 According to Myanmar Statistical Year Book (2016), the absolute number of livestock production (in thousand viss) is increasing onwards since 2011 as described in the following table.

Figure 41: Production of Selected Meat in Myanmar

In Thousand Viss

Production of Selected Meat in Myanmar (in thousand viss) 1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Beef Mutton Pork Fowl Duck

Private sector associations also play key roles in the livestock sector as they serve as champions representing the private sector stakeholders. MLF, a non-governmental association is the main champion, leading 10 other subsector associations described below.

 Myanmar Livestock Feed Association  Animal Health Products and Equipment Importers Association  Mythum Farmers Association (Chin State)  Myanmar Diary Association  Pig farmers & Processors Association  Myanmar Apiculture Association  Pet Breeders Association  Myanmar Poultry Association  Myanmar Cattle, Sheep & Goat Farmers and Animal Products Import and Export Association; and  Myanmar Livestock Resources Development (MLRD) Association.

Page | 142 Challenges and Future Potential . Challenges

 Lack of proper Farm Management In Myanmar, livestock farmers face high mortality rates due to inappropriate water supply and house temperatures. Most livestock houses in Myanmar are wooden houses made of bamboo slates with open water systems and non-optimal temperature condition. Due to this, disease can easily occur and spread among the flock especially through an open water system. In order to control the spread of disease, farmers use unnecessarily high quantity of antibiotics or chemicals, which contributes to resistance of both livestock and farmers. They have very limited awareness and knowledge of proper farm management and also lack the right tools and support for that.

 Lack of Professional Slaughtering Methods At present in Myanmar, most farmers, including operators and managers of slaughterhouses, are not aware of proper slaughtering methods, which can lead to food safety issues, a low level of product quality and environmental problems. Moreover, slaughtering residuals such as blood, feathers and intestines are directly dumped into nearby rivers. In order to properly handle such issues, new professional slaughter methods should be demonstrated to farmers, operators and managers of slaughterhouses through training programs. Nonetheless, there has been very minimal initiative taken for the sharing of proper slaughtering methods and improving slaughtering conditions in general.

 Limited Access to Land In Myanmar’s livestock industry, land access is one of the major challenges faced by livestock farmers due to increased urbanization. As animal farms need to be a certain distance away from human surroundings, farm owners are asked to move away. In addition to that, with escalating land prices, it makes it hard for farmers to own land or expand their farm area. Thus, land access still remains as a major constraint for the development of the industry.

 Limited Equipment Supplies The majority of farmers are smallholders and thus, they face difficulties in buying expensive tractors due to financial issues. Sometimes, they require upfront payment for purchasing expensive equipment and they often cannot afford to buy one without instalment. There is also limited financial sources that will allow them the access to such equipment.

 Illicit Trade With regulatory barriers in place, not all livestock products can be officially traded. Such restrictions pave the way for large volumes of illicit trade. High genetic pigs, live birds and frozen meat are illegally imported from China and Thailand, whereas live cattle are exported to China through illegal channels. According to some experts, a significant amount of livestock from China and lesser amounts from Thailand are smuggled into Myanmar via Mandalay and Mawlamyine. As no proper border inspection is applied on the imported products, it carries high risk with the likely occurrence of diseases and viral infections. Illicit trade has been growing gradually over the years and in response to this, the government recently legalized the exportation of live cattle with the aim of ending illicit trade.

 Limited Knowledge of Breeder and Hatchery Management in Poultry Subsector Currently, most breeders have limited knowledge about breeder and hatchery management and thus, they face high volatility in the rate of Day-Old Chick production. Moreover, hatchery information concerned with hatching egg quality, storage and incubation conditions, managing fertility and uniformity,

Page | 143 hatching egg transport and post hatch performance need to be shared with farmers and breeders in Myanmar. Therefore, poultry farms need support from government or any other organizations in order to control the hatchery management and processes.

 Limited Supply in Dairy Cow Farm for Milk Production in Cattle Subsector Myanmar produces 981 million viss (1 viss is 1.6 kg) of milk per year, however, it does not meet the increasing local demand. The local consumption relies more on imported milk products as the country lacks a commercial dairy cow farm, which can produce vast amounts of quality milk. Moreover, dairy cow farmers in Myanmar still inseminate cows with bulls rather than artificial insemination (AI) in order to reduce the costs. However, it leads to low quality milk production and dilutes the breed in the long run. Thus, the industry needs access to land, water availability, electricity, feed supply and technology for dairy farming in order to improve domestic milk production.

. Future Potential At the moment in Myanmar, the supply of meat, milk and milk products do not meet its demand due to low productivity. Thus, the local suppliers prioritize fulfilling the local demand before exporting to Asian countries and the international market. However, as local demand for beef is lesser than for other meat, it has the highest potential to export beef and live cattle to big markets such as China and Asian countries.

The following are some of the opportunities that could potentially be of interest for foreign companies to consider in respect to the livestock sector.

 Livestock breeding (Buffaloes, cows, etc.)  Livestock breeding (Sheep, goat, chicken & pig, etc.)  Dairy farming  Manufacturing of milk and dairy products  Meat butchering (Modern slaughter house)  Animal and meat processing  Day old chick breeder farming and  Gayal (Ox) farming.

Page | 144 Annex I – Contacts and Addresses

The lists below are presented in order to help potential Brazilian companies interested in Myanmar’s market. No responsibility will be accepted by the Brazilian Embassy in Yangon for the competence or probity of any firms on this list nor for the consequence of any legal action initiated or advice given.

In Myanmar

Embassy of Brazil in Yangon

Ambassador of Brazil: H.E. Mr. Antonio J.M. de Souza e Silva No. 42, Pyidaungsu Yeiktha Road, Dagon Township, Yangon, Myanmar. Tel: + 95-1-230 2394 + 95-1-230 2395 + 95-1-221 268 Fax: + 95-1-230 2393 Email: [email protected] Website: http://yangon.itamaraty.gov.br Facebook: www.facebook.com/embassy.brazil.yangon/ Business hours: Monday to Friday, from 9 a.m. to 5 p.m.

Official Local Bodies of Interest to Brazilian Businessmen and Executives

1. Ministry of Office of the President www.president-office.gov.mm

2. Ministry of Foreign Affairs www.mofa.gov.mm

3. Ministry of Home Affairs www.myanmarmoha.org

4. Ministry of Defence www.mod.gov.mm

5. Ministry of Broder Affairs www.mba.gov.mm

6. Ministry of Information www.moi.gov.mm

7. Ministry of Religious Affairs and Culture www.mora.gov.mm

8. Ministry of Agriculture, Livestock and Irrigation www.moali.gov.mm

Page | 145 9. Ministry of Transport and Communications www.mcit.gov.mm

10. Ministry of Natural Resources and Environmental Conservation www.moecaf.gov.mm

11. Ministry of Electricity and Energy www.moee.gov.mm

12. Ministry of Labour, Immigration and Population www.dop.gov.mm

13. Ministry of Industry www.moi.gov.mm

14. Ministry of Commerce www.commerce.gov.mm

15. Ministry of Education www.moe.gov.mm

16. Ministry of Health and Sports www.moh.gov.mm

17. Ministry of Planning and Finance www.mopf.gov.mm

19. Ministry of Investment and Foreign Economic Relations www.dica.gov.mm

20. Ministry of Construction www.construction.gov.mm

21. Ministry of Social Welfare, Relief and Resettlement www.mswrr.gov.mm

22. Ministry of Hotels and Tourism www.myanmartourism.org

23. Ministry of Ethnic Affairs www.drdmyanmar.org

Page | 146 In Brazil

Myanmar Embassy in Brasilia, Brazil Ambassador of Myanmar: H.E. U Myo Tint SHIS-QI 05, Conjunto 20, Casa 20, Lago Sul, 71660-250, Brasilia-DF, Brazil Tel: + 55-61-3554 2374 + 55-61-3248 3747 Email: [email protected] www.myanmarbsb.org

Useful Contacts in Brazil Divisão de Informação Comercial- DIC Ministério das Relações Exteriores 70.170-900 Brasília –DF Telephone: (61)3411.8932 Email: [email protected]

Divisão de Operações de Promoção Commercial –DOC Ministério das Relações Exteriores 70.170-900 Brasília –DF Telephone: (61)3411.8932 Email: [email protected]

Departmento de Operações de Comércio Exterior – DECEX Ministério do Desenvolvimento, Indústria e Comércio Exterior Esplanada dos Ministérios, Bloco “J”, sala 918 70053-900 Brasília –DF Telephone: (61)2027.7000 E-mail: [email protected]

Brazilian Companies There are no Brazilian companies with representation in Myanmar.

Chambers of Commerce In Myanmar The Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI)

Figure 27: UMFCCI

Page | 147 1919 - Burmese Chamber of Commerce (BCC) was founded during the British Colonial Period. 1948-62 - After independence, BCC developed into Union of Burma Chamber of Commerce & Industry (UBCCI). 1962-88 - During the Socialist Regime, UBCCI become defunct. 1989 - After adoption of market oriented economy, UBCCI was reconstituted in the name of The Union of Myanmar Chambers of Commerce & Industry (UMCCI). 1999 - UMCCI was upgraded as The Union of Myanmar Federation of Chambers of Commerce & Industry (UMFCCI). 2011 to Present – The name of the organization changed to Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) with the vital task of contributing to the development of the four economic objectives of the State.

UMFCCI, Yangon No.29, Min Ye Kyaw Swa Road, Lanmadaw Township, Yangon, Myanmar.

Page | 148 Tel: + 95-1-231 4344, 231 4345, 231 4346, 231 4347, 231 4348, 231 4349 Email: [email protected] Website: www.umfcci.com.mm

UMFCCI, Nay Pyi Taw Kaying Tone Street, Zawon Theihti Quarter, Oattara Thiri Township, Nay Pyi Taw, Myanmar. Tel: + 95-67-417 071, +95-9-420 762 223 Email: [email protected] Website: www.umfcci.com.mm

In Brazil There are no chambers of commerce with specific connections to Myanmar.

Key Local Trade Associations in Myanmar Trade Associations Affiliated with UMFCCI 1. Myanmar Rice Millers Association – [email protected], [email protected] 2. Myanmar Pulses, Beans& Sesame Seeds Merchants Association - [email protected] 3. Myanmar Rice and Paddy Traders Association – [email protected] 4. Myanmar Edible Oil Dealers’ Association – [email protected] 5. Myanmar Industries Association – [email protected] 6. Myanmar Fisheries Federation – [email protected] 7. Myanmar Printers & Publishers Association – [email protected] 8. Customs Cleaning Agents Association of Myanmar – [email protected] 9. Myanmar Livestock Federation – [email protected] 10. Myanmar Woman Entrepreneurs Association – [email protected] 11. Myanmar Pharmaceuticals & Medical Equipment Entrepreneurs Association – [email protected] 12. Myanmar Gold Entrepreneurs Association – [email protected] 13. Myanmar International Freight Forwarders’ Association – [email protected] 14. Myanmar Mercantile Marine Development Association – [email protected] 15. Myanmar Paddy producer Association – [email protected] 16. Myanmar Plastic Industries Association – [email protected] 17. Myanmar Marine Engineers Association – [email protected] 18. Myanmar Garment Manufacturers Association – [email protected] 19. Myanmar Computer Industry Association – [email protected], [email protected] 20. Myanmar Fruit, Flower and Vegetable Producer and Exporter Association – [email protected] 21. Myanmar Food Processors and Exporters Association – [email protected] 22. Myanmar Onion, Garlic and Culinary Crops Production and Exporting Association – [email protected] 23. Myanmar Rubber Planters and Producers’ Association – [email protected] 24. Myanmar Sugar & Cane Related Products Association – [email protected] 25. Myanmar Gems & Jewellery Entrepreneurs Association – [email protected], [email protected] 26. Myanmar Travel Association – [email protected] 27. Myanmar Petroleum Trade Association – [email protected] 28. Myanmar Rice Federation – [email protected] 29. Myanmar Construction Entrepreneurs Association – [email protected] 30. Myanmar Hotelier Association – [email protected]

Page | 149 31. The Myanmar Highway Freight Transportation Services Association – [email protected] 32. Myanmar Real Estate Services Association – [email protected] 33. Myanmar Publishers & Booksellers Association – [email protected] 34. Myanmar Seafarer Employment Services Federation – [email protected] 35. Myanmar Container Trucks Association (MCTA) – [email protected] 36. Myanmar Fertilizer Seed and Pesticides Entrepreneurs Association – [email protected] 37. Myanmar Young Entrepreneurs Association – [email protected] 38. Myanmar Federation of Mining Association – [email protected] 39. Myanmar Automobile Manufacturer and Distributor Association – [email protected] 40. Myanmar Oil Palm Producers’ Association – [email protected] 41. Myanmar Retailers Association – [email protected] 42. Myanmar Tourism Federation – [email protected] 43. Myanmar Wheat Association – [email protected] 44. Myanmar Pulp and Paper Industry Association (MPPIA) – [email protected] 45. Myanmar Salt Industry Association – [email protected] 46. Myanmar Fishery Products, Processors & Exporters Association – [email protected] 47. Myanmar Arts & Crafts Association – [email protected] 48. Myanmar Liquor Association – [email protected] 49. Myanmar Cosmetics Association – [email protected], [email protected] 50. Myanmar Edible Oil Millers Association – [email protected] 51. Myanmar Rattan and Bamboo Entrepreneurs Association – [email protected]

Main Banks

Table 61: State-Owned Banks Name of Bank Head-Office Address 1. Myanma Foreign Trade Bank No. 80/86 Maharbandoola Park Street, Yangon 2. Myanma Investment and N0 170/176, Corner of Merchant Road and Bo Aung Kyaw Commercial Bank Street, Botahtaung Township, Yangon 3. Myanma Economic Bank No. 26, Thiri Kyaw Swar Street, Bank Zone, Nay Pyi Taw 4. Myanma Agricultural Development No-26/42, Pansodan Street, Yangon Bank

Table 62: Private Banks Name of Bank Date of Licence Head-Office Address Issued 1 Myanmar Citizens Bank Ltd 25.5.1992 No-383/Mahabandoola

Page | 150 Road,Kyuktada Township, Yangon 2 First Private Bank Ltd 25.5.1992 No-619/621 Merchant Road , Pabedan Township,Yangon 3 Co-operative Bank Ltd 3.8.1992 No-334/336, Corner of Strand Road and 23rd Street, Latha Township, Yangon 4 Yadanabon Bank Ltd 27.8.1992 No-58(A) 26 Bayintnaung Street Between 84*85 Street, Aung Myay Tharzan Township, Mandalay 5 Myawaddy Bank Ltd 1.1.1993 Plot B-1 Near Thiriyadana Super Market, Hotel Zone, Nay Pyi Taw 6 Yangon City Bank Ltd 19.3.1993 Coner of the Settyon Street & Banyerdala Street Mingalar Taung Nyunt Township,Yangon 7 Yoma Bank Ltd 26.7.1993 No-1, Kungyan street Mingalar Taung Nyunt Township,Yangon 8 Myanmar Oriental Bank Ltd 26.7.1993 No-166/168 Pansodan Road Kyauktada Township, Yangon 9 Asia Yangon Bank Ltd 17.3.1994 No-319/321 Mahabandoola Road Botadaung Township Yangon 10 Tun Foundation Bank Ltd 8.6.1994 No-165/167 Bo Aung Kyaw Road(Middle), Kyauktada Township Yangon 11 Kanbawza Bank Ltd 8.6.1994 Plot No-1, Oktayathiri Quarter, Nay Pyi Taw 12 Small & Medium Industrial 12.1.1996 Plot No-2, Oktayathiri Quarter, Development Bank Ltd Nay Pyi Taw 13 Global Treasure Bank Ltd 9.2.1996 No-654/666, Merchant Road Pabedan Township, Yangon 14 Rual Development Bank Ltd 26.6.1996 Plot-2, Compound of Thiriyadanar Super Market, Nay Pyi Taw 15 Innwa Bank Ltd 15.5.1997 No-550/552 Corner of Merchant Road and 35th Street Kyuktada Township, Yangon 16 Asia Green Development Bank 2.7.2010 No-168, Thiri Yatanar Shopping Ltd Complex, Zabu Thiri Township, Nay Pyi Taw 17 Ayeyarwaddy Bank Ltd 2.7.2010 Block (111, 112), High Grade Market, Datkhina Thiri Township, Nay Pyi Taw 18 United Amara Bank Ltd 2.7.2010 Block (2), Asint Myint Zay, Yaza Thingaha Road, Oattara Thiri Township, Nay Pyi Taw 19 Myanma Apex Bank Ltd 2.7.2010 Block (10), Asint Myint Zay, Yaza Thingaha Road, Oattara Thiri Township, Nay Pyi Taw

Page | 151 20 Nay Pyi Taw Sibin Bank Limited 28.2.2013 Shopping Complex No. (25/26), Yazathingaha Road, Oaktarathiri Township, Nay Pyi Taw 21 Myanmar Microfinance Bank 2.7.2013 Sayar San Plaza, Corner of New Limited University Avenue & Sayar San Road, Bahan Township, Yangon 22 Construction and Housing 12.7.2013 No. 60, Shwedagon Pagoda Devleopment Bank Limited Road, Dagon Township, Yangon 23 Shwe Rural and Urban 28.7.2014 No. 420, Merchant Road, Development Bank Limited Botahtaung Township, Yangon 24 Ayeyarwaddy Farmers 17.11.2015 No. 33, Corner of Mahar Development Bank Limited (A Bandoola Road and Myaing Bank) Haymar Road, Ward (3), Pathein Township, Ayeyarwaddy 25 Glory Farmer Development Bank 8.6.2018 No. 149, Corner of Bogyoke Road Limited (G Bank) & Circular Street, South Monywa Quarter, Monywa Township, Sagaing

Table 63: List of Foreign Banks Branches Date of Licence Date of Name of Bank Issued Commencement 1. MUFG Bank, Ltd. 2.4.2015 22.4.2015 2. Oversea-Chinese Banking Corporation Ltd 2.4.2015 23.4.2015 3. Sumitomo Mitsui Banking Corporation 2.4.2015 23.4.2015 4. United Overseas Bank Limited 30.4.2015 4.5.2015 5. Bangkok Bank Public Company Limited 26.5.2015 2.6.2015 6. Industrial and Commercial Bank of China 26.5.2015 1.7.2015 7. Malayan Banking Berhad (Maybank) 27.7.2015 3.8.2015 8. Mizuho Bank Limited 27.7.2015 3.8.2015 9. Australia and New Zealand Banking Group Limited 29.9.2015 2.10.2015 The Joint Stock Commercial Bank for Investment and 10. 30.6.2016 1.7.2016 Development of Vietnam (BIDV) 11. Shinhan Bank 15.9.2016 20.9.2016 12. E.Sun Commercial Bank Limited 27.9.2016 3.10.2016 13. State Bank of India 27.9.2016 3.10.2016

Media

Leading newspapers

State-run

Page | 152 1. Kyemon (The Mirror Daily) Newspaper (Myanmar version) 2. Myawaddy Daily Newspaper (Myanmar version) 3. Myanma Alin Daily (The Light of Myanmar) Newspaper (Myanmar version) 4. New Light of Myanmar (English) 5. Yadanabon Daily Newspaper

Private Newspaper and Journals

1. The Myanmar Times 2. 7 Day News Weekly Newspaper 3. D-wave 4. Daily Eleven 5. Weekly Eleven 6. Democracy 7. Empire Daily 8. The Messenger Daily 9. Myanmar Business Today 10. The Standard Time Daily 11. The Straits Times Myanmar Edition 12. The Union Daily 13. The Voice Daily 14. The Yangon Times Daily 15. Mizzima

TV Channels: MRTV, MITV, MNTV, MRTV-4, Channel-7, MWD, Sky Net, 4EDU, 5 Plus, Buddha, Channel 9, Channel K, Hluttaw, Mahar Bawdi, MRTV Entertainment, MWD Documentary, Myanmar Movie and NRC

Radio Stations: Yangon City FM, Nay Pyi Taw FM, Myanmar Radio, Padamyar FM, Mandalay FM, Cherry FM, Shwe FM, Pyinsawadi FM, Thazin FM, Teen Radio, MRTV, Thit Sar Parami, Tine Yin Thar

Main Marketing and Advertising Agencies

1. Media Lane (58/B, Myanma Gone Yaung Housing, Than Thu Mar Rd., Tammawe Tsp., Ph: 430897, 0973016986, 553918). www.medialane.com.au , account@[email protected]

2. MRTV-4 (Rm 1402/1403, 14th Flr, Olympic Tower 1, Mahar Bandoola Rd., Corner of Bo Aung Kyaw St., Kyauktada Tsp., Ph: 204013, 204107, 256726)

3. Myanmar Apple (4A, Sel Myaung St., 81/2 Mile, Mayangone Tsp., Ph: 094515013, 660199), [email protected]

4. Myint Media & Advertising (56/58, Ywar Ma Kyaung Rd., Hlaing Tsp., Ph: 514989), 5005003, 095018491), [email protected]

Page | 153 5. Pennant (594, Dhama Yone St., 61/2 Mile, Hlaing Tsp., Ph: 535080, 095119821), [email protected], www.pennantmedia.net.mm

6. Performer Area Services Co., Ltd (Rm 25, Build 7, Yangon-Insien Rd., Thamaing Junction, Mayangone Tsp., Ph: 665836, 663435, 651134), [email protected]

7. Sky Net (139/A,171/A, May Housing Compound, Corner of May Yu St., Lower Puzudaung Rd., Botahtaung Tsp., Ph:292679, 292571), www.skynetmediagroup.com , [email protected]

8. XENON (60/62, 45th St., Lower Block, Botahtaung Tsp., Ph: 297606, 297045)

9. Zomia Media Co.,Ltd (219, 4th Flr, Bo Myat Htun Rd., Botahtaung Tsp., Ph: 295515, 397192)

10. Dream Boat Games & Entertainment (424, Banyar Dala Rd., Byine Kwet Thit Ward, Tamwe Tsp., Ph: 556186, 095155680), [email protected] , [email protected]

11. Forever Group Co., Ltd (225/227, Rm 1402/1403, 14th Flr, Bo Aung Kyaw St., Olympic Tower, Kyauktada Tsp., Ph: 204013, 204107, 256726)

12. Laser Media (177/377, Ground Flr, 33rd St., Kyauktada Tsp., Ph: 241116, 387797), [email protected]

13. Laser World Co., Ltd (166, 1st Flr, 34th St., Upper Block, Kyauktada Tsp., Ph: 387453, 527017, 375257), [email protected] , www.laserworldfamily.com

14. Multimedia Group Ltd., (4/6, Rm 203/204, Kyaikkasan Rd., Kan Taw Gyi Tower, Ma U Gone Ward, Tammawe Tsp., Ph: 554960, 554243, 201295), [email protected]

15. Myanmar Online Co., Ltd (225/227, Rm 1402/1403, 14th Flr, Bo Aung Kyaw St., Olympic Tower, Kyauktada Tsp., Ph: 204013, 204107, 256726), [email protected]

16. Mango Marketing Services Co., Ltd (No. 51 C, Golden Valley Street, Golden Valley Ward 2, Bahan Tsp., Ph: 523 338, 512 884, 09450030034), www.mangomyanmargroup.com

17. Liquid Branding Agency (Mimosa Building, Floor 1, Shwe Gon Taing 5th Street, Bahan Tsp., Ph: 09786732085), www.liquid-branding.com

18. Phibious Myanmar Co., Ltd (No. 99, Condo, Floor 5-D, Dhammazedi Road, Kamayut Tsp., Ph: 537547), www.phibious.com

19. Amara Digital Marketing Agency (No. 198/200, 8A, 50th Street (Upper), Botahtaung Tsp., Ph: 09252003311), www.amaradigitalagency.com

Main E-Commerce Companies

. Omyanmar Online Shopping Mall - www.omyanmar.com . IBiz Service Provider Co.,Ltd - [email protected]

Page | 154 . iHome Co., Ltd - [email protected] . Shwe 99 - [email protected], www.shwe99.com . Myanmar Online Store - [email protected], www.myanmaronlinestore.net . Yangon Online Store – www.yangononlinestore.com . Myanmar Online Shopping Mall - www.myanmaronlineshoppingmall.com . ZawGyi Mart – www.zawgyimart.com . Red Dot Network – www.reddotnetwork.com . Kite Media – www.kitemediagroup.com . Via Myanmar – www.viamyanmarmarket.com

Consulting and Business Advisory Firms

. MMRD Research Services – www.mmrdrs.com 6-9th Floor, Building C, New Mingalar Market, Corner of Set Yoen Road (Mill Road) & Banyardala Road, Mingalar Taung Nyunt Tsp, Yangon, Myanmar. Tel: +95-1-200 326, 200 846 Fax: +95-1-202 425 Email: [email protected], [email protected], [email protected]

. Exera - www.exera.co.uk No.65/70, apt 1106, Thanthumar road, Tamwe Township, Yangon, Myanmar. Tel: +95-1-430078/87 ext 1116, Mobile: +95-9-401 5949 31 Email: [email protected]

. VDB Loi - www.vdb-loi.com 1704 Sakura Tower 339 Bogyoke Aung San Road Kyauktada Township, Yangon, Myanmar Email: [email protected]

. Win Consulting Limited - www.winthin-associates.com 2-D, Rose Condominium, No. 182/194, 1st Fl., Botataung Pagoda Road, Pazundaung Township, Yangon, Myanmar. Tel: +95-1-901034343, 245671 Fax: +95-1-371607 Email: [email protected], [email protected]

. PwC PricewaterhouseCoopers Myanmar Co., Ltd. Room 6A, 6th Floor, Centrepoint Towers, No. 65, Corner of Sule Pagoda Road and Merchant Road Kyauktada Township, Yangon, Myanmar. Email: [email protected]

. KPMG Advisory (Myanmar) Ltd - www.kpmg.com/mm No.32 Pyay Road First Floor, 6 1/2 Mile, Hlaing Township, Yangon, Myanmar. Email: [email protected]

. Thura Swiss Ltd. – www.thuraswiss.com Shwe Hintar B 307, 6 ½ Miles Pyay Road, 11 Qtr. Hlaing Township, Yangon, Myanmar. Tel: +95-1-654 730, 654 733 Email: [email protected]

Page | 155 . Universal Link Service Co., Ltd - www.universal-link.com.mm Room (1004), 9th Floor, RUMFCCI Tower, No. 29, Min Ye Kyawswar Road, Lanmadaw Township, Yangon, Myanmar, Myanmar. Tel: +95-1-218405, Fax: +95-1-218406. Email: [email protected] / [email protected]

. Vriens and Partners - www.vrienspartners.com 103 First Floor, Sule Pagoda Road, Kyauktada Township,Yangon. Tel: +95-9-73234240 Email: [email protected]

Law Firms International and Regional Law Firms with representatives in Myanmar . Allen & Overy (Thailand) Co., Ltd - www.allenovery.com 22nd Fl., Sidhorn Building Tower III, 130-132 Wireless Road, Lumpini Pathumwan Bangkok 10330, Thailand. Tel: +66 2 263 7600, Fax: +66 2 263 7699. Email: [email protected], [email protected] Contact: Simon Makinson, Partner (Bangkok); Kathryn Thornton, Senior Associate (based in Rangoon)

. Herbert Smith Freehills LLP - www.herbertsmithfreehills.com 50 Raffles Place, #24-01 Singapore Land Tower, Singapore 048623. Tel: +65 6868 8000 Fax: +65 6868 8001. Email: [email protected], [email protected]

. Kelvin Chia Yangon, Myanmar Ltd. - www.kcpartnership.com 1509,15th Flr, Sakura Tower, No.339, Bogyoke Aung San Rd, Kyauktada Tsp., Yangon, Myanmar. Tel: +95 1 255411, 255399 Fax: +95 1 242 800 Email: [email protected], [email protected]

. DFDL Legal and Tax - www.dfdl.com/locations/myanmar № 134/A, Than Lwin Road, Golden Valley Ward (1), Bahan Township (GPO Box 729), Yangon, Myanmar. Tel: +95 1 526 180, Fax: +95 1 548 835. E-mail: [email protected]

Local Law Firms . Polastri, Wint & Partners - www.pwplegal.com Unit 104, Royal Yaw Min Gyi Condo, No. 52, Yaw Min Gyi Street, Yangon, Myanmar Tel: +95 (09) 420003004. Email: [email protected]

. U Kyi Win, B.Sc, B.L. Branches in law in which he specialises: Criminal. Civil & Corporate 50 Bank Road, E 9 2& 3 1/f, Kyauktada Township, Yangon, Myanmar. Tel: +95 1 273661/ 283973.

Page | 156 . U Nyein Kyaw, B.Sc, Dip in Engineering/Registered Lawyer (Post Graduate)/Advocate of the Supreme Court Branches in law in which he specialises: Company, Commercial, Finance & Security, Property Ground floor, Inya Lake Hotel, Yangon, Myanmar. Tel: +95 1 662866 Ext 1702/1703, Tel: +95 9 8614270, Mobile: +95 9 5000119. Email: [email protected]

. U Ohn Maung, B.Sc, B.L Branches in law in which he specialises: Commercial, Civil Law, Trade Mark Attorney No 3, 34th Street, Yangon, Myanmar. Tel: +95 1 276984.

. Daw Tin Ohn Mar Tun Branches in law in which she specialises: Marine Law 5A, Thukhawaddy Road, Yankin Township, Yangon, Myanmar. Tel: +95 1 723043 / +95 1 578940. Fax: +95 1 248108 Email: [email protected]

. Daw Khin Cho Kyi, B.A., LLB., LLM. Branches in law in which she specialises: General International Business Law Practises International Business Centre, Suite 106, 88 Pyay Road, 6 ½ miles, Hlaing Township, Yangon, Myanmar. Tel: +95 1 650740, Fax: +95 1 650466. Email: [email protected]

Page | 157 Annex II – Freight and Communications with Brazil

Freight Information

Maritime For specific and updated maritime freight information, interested Brazilian executives should submit their inquiries in Brazil to the maritime transport companies listed below.

Ground Average rail freight (current, US dollars) by principal weight/volume ranges. Not applicable in Myanmar Water transport freight: USD 3,000-3,500 for 20’ and USD 5,000-5,500 for 40’

Air Average air freight (current, US dollars), according to principal weight ranges (minimum up to 45kg and above 45/100/300/500 kg per kilogram). To obtain updated information, executives should submit their inquiries to the cargo sections of the air transportation companies listed below.

Shipping Agents

Table 64: Shipping Agents (from the total of 207 agents) No Company Name Address Telephone Email . 1 Amarapura 422/426, #04-03, FJVCC Bldg, 202992, Alice.amarapuram Maritime Services Strand St, Botahtung Tsp 202101 Ext: [email protected] Co.,Ltd 173 m 2 CSSA 62, Rm 903, MahaBandoola 397160, [email protected] Housing Complex (B), PZDG 203399, m.mm 294805 3 Elan Logistics Ltd Rm B 1001-1002, 10th Fl. 377946, admin@elanholdin Myawaddy Condo 377947 gs.com 4 Gold Shipping n.790, Rm 501-502, Danna 210674 [email protected] Agencies Services Thiha Condo, Lanmadaw Tsp. Ext:501 om.mm Co. Ltd 5 Interasia Lines 37, Alan Pya Pagoda Rd,08- 370840,371 aung@fortuneship 11, La Pyae Wun Plaza, DGN 381, 388088 pingltd.com 6 Maritime Support 95-E, Waizayandar Rd, Ward 561900, goldenpentagonm Services Shipping 3-B, SOKA 578645,701 [email protected] Co. Ltd 108 7 MGMC Services 44, 44th St, Ward 6,BTHG 2,962,635,1 myanmargmc@g 96,435 mail.com 8 Miraco Marine 338, Yin Mar Mg St, Ward 572094 Miracomarine.ygn Services 23,Thuwunna,TGGN @gmail.com 9 Ocean Express S-1, Aung San Stadum North 252651, khinelay@oceane Wing, MTNT 073045226 xpresslogistics.co

Page | 158 m 10 Pack Zone 11/B, Kyaung St, Myaynigone, 073090248 Packzone.ygn@g SCHG mail.com 11 MRS Room 10A,, 10B, 10C, Corner 375098 reliance@myanm of Bo Aung Kyaw Street & ar.com.mm Bogyoke Street, City Shine Tower 12 Phee Group of Rm-903, M.M.G Tower, #44- 383531 nbcs@ovclmyanm Companies 56, Kannar St, Bet 41st & ar.com 42nd St, Botataung, Yangon, Myanmar 13 Win Pacific #06, Room 04/05/06, Olympic 256845, general.winpacyg Tower. Corner of 256846, [email protected]. Mahabandoola Road and Bo 256847 mm Aung Kyaw Road, Kyauktada www.webcsm.com Township, Yangon 14 Aquamarine Room 8D, Penthouse,Bldg 542725 customerservice@ Shipping Co.,Ltd No.24/26,Race Course aquamarineshippi (Hapag-Lloyd) Condo,South Race Course ng.com Street. Tamwe Tsp,Yangon www.hapag- lloyd.com 15 Maersk Line 5th Floor, Olympic Tower. 371576, wintrade@myanm Corner of Mahabandoola 245617, ar.com.mm Road and Bo Aung Kyaw 245712, Road, Kyauktada Township, 204048. Yangon 16 Ever Flow River Mahabandoola Housing 202510, 1chawchaw.efr@g (E.F.R) Complex B, Room No. 1001, 900668, m2ail.com 10th Floor,Tawataintha Street, 900669 thid3a.efr@gmail. Pazundaung Township, com Yangon 4www.efrglink.co m5

Air Cargo Table 65: Air Cargo Company No. Address Telephone Email Name DPEX Co., [email protected] 1 104, 1st Flr, 40th St, KTDA 251832 Ltd LMSL Co., 9, Rm A-4,3rd Flr, Kyaung 523653, shipping@legendarymyanmar. 2 Ltd St, Myaynigone 095123049 com.mm 87/A, MyaKanTha St, [email protected] MICS Co., 3 SawBwarGyiGone Quarter, 656360 [email protected] Ltd ISN 4 Unlimited 69(Rm 1003), Shwe Gon 558660 www.uecgroup.com Express Daing (West) Rd., Corner

Page | 159 [Myanmar] of Kaba Aye Pagoda Rd., Co., Yuzana Condo Tower, Ltd(UEC) Shwe Gon Daing (West) Ward, BHN

Rm#01-03, Bldg.190-192, Care Freight Dagon Tower, [email protected] Services Shwegondaing Rd., Bahan 543198, [email protected] 5 Ltd. Township, Yangon 544138 m.mm

Telecom Rates in Myanmar Telephone

The international dialling code for Myanmar is: +95.

How to make an international call to Brazil when in Myanmar: 00 55 + number. Rates are USD 0.9 per minute for the first minute and USD 0.092 per minute for every single continuous minute.

Page | 160 Annex III – Additional Information

Local Holidays

1st January New Year Day 4th January Independence Day 6th January Kayin New Year Day 12th February Union Day 2nd March Peasants' Day 20th March Full Moon Day of Tabaung 27th March Armed Forces Day 13th -17th April Myanmar New Year Days (Thingyan Water Festival) 1st May Labour Day 18th May Full Moon Day of Kason 16th July Full Moon Day of Waso 19th July Martyrs' Day 12th – 14th October Full Moon Day of Thadingyut 10th – 11th November Tazaungdaing Holiday 21st November National Day 25th December Christmas Day 26th December Kayin New Year Day 31st December New Year’s Eve Eid Dipavali

Time Zone Myanmar is 9:30 hours ahead of Brasília.

Regular Business Hours Government agencies, offices: 8:30-16:30 (Monday-Friday) Commercial establishments: 9:00-18:00 (Monday-Saturday) Banks: 9:30-15:00 (Monday-Friday)

Electric Voltage 220V

Periods Recommended for Travel September to April

Page | 161 Entry Visa Brazilian national business travellers can apply visa on arrival whereas tourists are entitled for e-visa. Visa exemption of 30 days is granted for diplomatic and official passport holders. Below is the procedure for e-visa. . Fill in the secure online visa form . Confirm and pay . Get approval letter within 3 days . Get visa stamped upon arrival

Health Recommendations Atualmente não há risco de febre amarela no país, mas para outras doenças recomeda-se cuidado especial. A seguir, lista de doenças para as quais há risco em Myanmar em geral (ressalte-se que, em Yangon, devido à urbanização, o risco é considerado baixo): cólera, difteria, hepatite A, hepatite B, encefalite japonesa, polio, raiva, tétano, tuberculose, febre tifóide, malária. Nos últimos 3 anos, nota-se o aumento da incidencia de casos de dengue no país, inclusive na cidade de Yangon. Recomenda-se o uso constante de repelentes e/ou outros artigos que reduzam a incidência de picadas de mosquitos.

Page | 162 Table 66: Hotels in Yangon (Prices for Reference)

No. Hotels in Yangon Price(US$) SGL DBL 1 The Strand Hotel 350 350 Tel: +(95-1)243377 No. 92, Strand Road Email: [email protected]

2 The Governor's Residence 480 480 Tel: +(95-1)2302092 35, Taw Win Road, Dagon Township Email: [email protected]

3 Park Royal Hotel 250 250 Tel: +(95-1)250388, 250399 33, Alan Pya Phaya Road, Dagon Township Email: [email protected]

4 Sedona Hotel 280 280 Tel: +(95-1)666900 No. 1, Kaba Aye Pagoda Road ,Yankin Tsp Email: [email protected] Website: www.sedonahotels.com.sg

5 Sule Shangri-La Hotel 260 260 Tel: +(95-1)242828 223, Sule Pagoda Road Email: [email protected]

6 Chatrium Hotel 250 250 Tel: +(95-1)544500 40, Natmauk Road, Tamwe Township Email: [email protected]

7 Savoy Hotel 295 295 Tel: +(95-1)526289 129, Dhammazedi Road,Yangon Email: [email protected]

8 Inya Lake Hotel 100 100 Tel: +(95-1)662866 37, Kaba Aye Pagoda Road Email: [email protected]

9 Thamada Hotel 112 112 Tel: +(95-1)243640 Page | 163 5, Signal Pagoda Road, Dagon Township 10 Central Hotel 90 90 Tel: +(95-1)241007 335/357, Bogyoke Aung San Road, Pabedan Township Email: [email protected]

11 Panorama Hotel 100 100 Tel: +(95-1)253007, 251984 No.294-300, Pansodan Street,Kyauktada Township Email: [email protected] Website: www.panoramaygn.com 12 Yuzana Hotel 80 80 Tel: +(95-1)549600, 543367 No.130, Shwegonedine Road,Bahan Tsp Email: [email protected] Website: www.yuzanahotels.com

13 Novotel Yangon Max 200 200 Tel: +(95-1)2305858 No. 459, Pyay Road, Kamayut Tsp Email: [email protected] Website: www.maxhotelsgroup.com

14 Melia Yangon 350 350 Tel: +(95-1)934 5002 No. 192, Kaba Aye Pagoda Road ,Yankin Tsp Email: [email protected] Website: www.melia.com

15 Pan Pacific Hotel Yangon 130 130 Tel: +(95-1)925 3810 Corner of Bogyoke Aung San Road and Shwedagon Pagoda Road Email: [email protected] Website: www.panpacific.com

16 Summit Parkview Hotel 75 75 Tel: +(95-1) 211888 No. 350, Ahlone Road Email: [email protected] Website: www.summityangon.com

17 LOTTE Hotel & Resorts 120 120 Tel: +(95-1) 935 1000 No. 82, Sin Phyu Shin Avenue, Pyay Road, 6.5

Page | 164 miles, Ward 11, Hlaing Tsp. Email: [email protected] Website: www.lottehotel.com

18 Mercure Yangon Kabaraye 127 127 Tel: +(95-1) 650 933 No. 17, Kabar Aye Pagoda Road Email: [email protected] Website: www.mercureyangonkabaaye.com

19 Rose Garden Hotel Yangon 210 210 Tel: +(95-1) 371 992 No. 171, Upper Pansodan Road Email: [email protected] Website: www.theroseyangon.com

20 Sky Star Hotel 70 70 Tel: +(95-1) 860 4224 No. 51/B/1, East Horse Race Road Email: [email protected] Website: www.skystarhotel.com

21 Hotel Parami 166 166 Tel: +(95-1) 658118 No. 2, Parami Road, Mayangone Tsp. Email: [email protected] Website: www.hotelparamiyangon.com

22 Esperado Lake View Hotel 75 75 Tel: +(95-1) 8619486 No. 23, Kan Yeik Thar Road, Mingalar Taung Nyunt Tsp. Website: www.esperadolakeview.com

23 Taw Win Garden Hotel 160 160 Tel: +(95-1) 860 0080 No. 45, Pyay Road. Email: [email protected] Website: www.tawwingardenhotel.com

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