Myanmar to join Asian Infrastructure Investment Bank

Myanmar has agreed to participate in the Beijing-backed Asian Infrastructure Investment Bank (AIIB).  Myanmar will contribute US$264.5 million to the Asian Infrastructure Investment Bank in 10 instalments over 10 years. The Asian Infrastructure Investment Bank is expected to have US$100 billion in initial capital and over 50 members. According to the AIIB’s articles of incorporation, China will contribute US$30 billion of the institution’s initial capital of US$100 billion, giving Beijing a 25-30 % share of voting rights.  The Asian Infrastructure Investment Bank, which is expected to be operational before the end of 2015, has been viewed by some as a rival to the World Bank and the Asian Development Bank. The United States led a high-profile, and ultimately unsuccessful, attempt to dissuade allies from taking part in the bank. Similarly, Japan will not participate. (Source: http://www.mmtimes.com/index.php/business/14982-parliament-votes-to-join-and-contribute-to-asian-bank.html, 11 June 2015)

Myanmar Central Bank urges Government to reduce dollar use

The Myanmar Central  Bank (CBM) has urged Government departments and associated bodies to conduct on Kyat only transactions to reduce demand for US dollars and prevent the ‘dollarization’ of Myanmar’s economy. The Foreign Exchange Management Department of the Myanmar Central  Bank announced that only Kyats should be used in domestic payments made by national, regional and state-level organisations.  Separately the Myanmar Central Bank has limited US dollar withdrawals from domestic bank accounts to US$10,000 a week for all people or institutions except for specific organisations such as international NGOs, embassies and United Nations organisations. According to the official CBM exchange rate, the Kyat has fallen approximately 6% against the dollar so far in 2015. The rate of depreciation is closer to 10% when benchmarked against the black-market exchange rate. The number of dollar transactions has declined since 2011, however many hotels, restaurants and jewellery shops, particularly those in tourist areas, still list their prices in US dollars and prefer payment in dollars. A number of Government departments still insist on payments in US dollars. The Myanmar Customs Department still require car importers to pay import and customs duty in US dollars rather than Kyat. (Source: http://www.bangkokpost.com/business/world/581399/myanmar-central-bank-urges-govt-to-reduce-dollar-use, 3 June 2015)

Sompo Japan Nipponkoa received approval to provide insurance in Thilawa SEZ

Japanese insurer Sompo Japan Nipponkoa Co. Ltd (Sompo) has become the first foreign company to receive Government approval in relation to the provision of insurance services to companies in the Thilawa Special Economic Zone (Thilawa SEZ).  Sompo proposes to initially offer ‘Contractors All Risk’ insurance products to companies constructing factories, warehouses and office buildings in the Thilawa SEZ. When construction has completed, Sompo plans to offer fire, marine cargo, liability and accident insurance to companies establishing in the Thilawa SEZ. Foreign participation in Myanmar’s insurance sector was not permitted until 2014 when the Government announced proposals to relax restrictions on foreign insurers allowing them to operate in Special Economic Zones under development throughout Myanmar (SEZ Scheme). The Government has not yet indicated if it is prepared to expand the SEZ Scheme throughout the rest of Myanmar. As part of the requirements of the SEZ Scheme, foreign insurance companies must operate in two other Southeast Asian countries and should have already established a representative office in Myanmar. (Source: http://www.thuraswiss.com/update/myanmar-news-database, 4 June 2015)

UPS to expand Myanmar operations

United Parcel Service (UPS) has announced it plans to expand its Myanmar operations. UPS commenced air and ocean freight operations in Myanmar in August 2014 and has since expanded its services to include in-house customs clearance and guaranteed door-to-door delivery to over 200 countries and territories from Myanmar. UPS stated it hopes the availability of its services will help Myanmar SMEs grow their businesses. (Source: http://www.thuraswiss.com/update/myanmar-news-database, 28 May 2015)

Marubeni Co., Eden Group and Petroleum Authority of Thailand to develop gas-fired power plant to service Thilawa SEZ

Japan’s Marubeni Corporation (Marubeni) has entered into an agreement with Myanmar conglomerate the Eden Group and the Petroleum Authority of Thailand (PTT) to develop a gas-fired power plant in Thanlyin Township on the outskirts of Yangon. The plant will provide power to the nearby Thilawa Special Economic Zone. The project is expected to cost approximately US$325 million to develop. Construction is expected to commence in 2016 and be completed in 2019. (Source: http://www.thuraswiss.com/update/myanmar-news-database, 28 May 2015)

Yoma Strategic Holdings and Education Index Management to establish international school in Yangon

Yoma Strategic Holdings Ltd (Yoma) have executed an agreement with Education Index Management Ltd (EIM) to design, build and operate a new international school to be part of Yoma’s Thanlyin Star City (Star City) development in Yangon. The school, to be known as British College Yangon (BCY), is scheduled to be completed in time for the start of the 2016-17 academic year.  British College Yangon will provide a British based curriculum for both Myanmar and foreign students between 2 – 18 years of age. The school building and facilities will be developed by Yoma and leased to EIM who will be responsible for the academic and operational management of the school. EIM is a subsidiary of Dulwich College International (Dulwich).  Dulwich will provide advisory services to British College Yangon. Yoma has estimated the cost of the project, excluding the cost of property, to be approximately US$40 million. The campus will occupy approximately 8.3 hectares of land within Star City. The British College Yangon project has already received the requisite permits and planning permission. (Source: http://www.mmbiztoday.com/articles/yoma-finalises-40-m-british-college-yangon-deal, 28 May 2015)

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