PWC MYANMAR WEEKLY BUSINESS INTELLIGENCE - ISSUE NO. 222 - 19 JULY 2020
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PwC Myanmar Weekly Business Intelligence Issue No. 222 19 July 2020
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
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19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 2
PwC Myanmar Weekly Business Intelligence
MIC
Financial and Policy and Tender Upcoming
Issue - 222, 19 Jul 2020 Business
Infrastructure
Regulation Opportunities
Permitted
Events
Projects
Infrastructure
Infrastructure
Highlights
• “A tax amnesty for Myanmar citizens with unassessed sources of income introduced under the
Transport
2019 Union Tax Law will be repealed in fiscal 2020-21, which commences on October 1, U Maung
Maung Win, deputy minister of Planning, Finance and Industry” • Elevated expressway tenders’ deadline – September 1
• “The final stage of the tender selection process for the Yangon Elevated Expressway will be • Myanmar Military Chief Affirms Support for China’s BRI Projects
finalised on September 1, according to the committee responsible for the expressway at the • Over $480m loan to be sought from ADB to build Bago-Kyaikhto Expressway
Ministry of Construction.”
Energy
• “Myanmar’s competition watchdog says it does not intend to challenge the government’s
controversial solar plant tender despite protests by foreign governments and business associations • Competition watchdog rejects protests over solar tender
that conditions imposed during the COVID-19 pandemic effectively excluded many outside • Off-grid areas in Myanmar to enjoy solar power
bidders.”
• MPE opens gas stations for household consumption in Yangon
Real Estate
Financial and Business • 'The Govt Must Handle It Decisively': Myanmar MP on Controversial China-Backed
Development in Karen State
• Steeper growth decline than expected in Myanmar this year: Govt • More paper shuffling than progress?
• Myanmar borrowing set to grow as fiscal deficit widens • Property Guru Awards to attract overseas investors
• Govt expects kyat depreciation, higher exchange rate in Myanmar Waste and Water
• Myanmar’s Garment Sector Facing Implosion as Orders Slump with COVID-19 • ASEAN’s largest dam resumes distributing water in Sagaing
• Robust second quarter for Southeast Asian startups but speed bump ahead
Other Infra
• Myanmar, China to Promote Cross-Border e-Commerce Systems
Policy and Regulation
• Myanmar to spend $215M on healthcare in conflict areas
• Myanmar to reinstate 30% tax rate on unassessed income • Myanmar govt channels funds to support fisheries sector
• Central bank releases basic regulations for NBFIs
• EU envoy pledges support for Myanmar economy amid COVID-19
• NLD will keep fighting for charter change
19 July 2020
• With int’l flights still on hold, Myanmar shifts focus to domestic tourism
PwC 3
Financial and Business
19 July 2020
4
Financial and Business
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Steeper growth decline than expected in Myanmar this Myanmar aviation sector expected to become
year: Govt profitable, but more pain ahead first
15 Jul 2020 27 Jan 2020
The Myanmar economy is likely to have Myanmar’s aviation industry is betting on a more tourist attractions in the future,” U Kyaw Nyein.
expanded by just 4.3 percent during fiscal 2019- profitable future with the number of airlines now Air KBZ has also been expanding. Last year, it
20 compared to the government's initial forecast reduced to half compared to 2017 and demand upgraded its fleet of planes and announced new
of 7pc as a result of COVID-19, said U Maung for domestic air travel expected to catch up with destinations to Dawei , Kaw Thaung , Myeik,
Maung Win, deputy minister of Planning, Finance supply. However, they will have to swallow more Sittwe, Kyaingtong, Hkamti and Loikaw. its sister
and Industry, at the Pyidaungsu Hluttaw on July losses in the short term before things get better. airline, Myanmar Airways International, added a
13. There are currently five airlines in Myanmar, new Airbus A319 to its fleet, expanding its
The pandemic offset GDP growth of 6pc during down from ten three years ago. But even though capacity by 144 passengers.
the first six months of the fiscal year, resulting in there are fewer players now in the market, the Tanes Kumar, commercial director for Air KBZ,
total output of just K74.5 trillion between October volume of passengers flying domestic remains said even though the new routes are not yet
2019 and March 2020, which is around 63pc of below three million, according to government profitable, the main aim of adding new
the original forecast of K119 trillion for the period, data. destinations is to expand the airline’s network
said U Maung Maung Win. At those levels, demand is not sufficient to cover and connectivity. “This gives passengers more
During the Hluttaw session, U Set Aung, deputy the industry’s losses, U Kyaw Nyein, CEO of options and allows employees to learn new skills
minister of the Ministry of Planning, Finance and Golden Myanmar Airlines (GMA), told The for more expansion in the future,” he said.
Industry, reported that around K2.8 trillion in Myanmar Times in a recent interview.
state funds and international loans was deployed But profitability is possible in the years ahead,
in the execution of the COVID-19 Economic making it a good time for the remaining airlines to Source: Myanmar Times
Relief Plan in fiscal 2019-20. accelerate their plans for expansion to capitalise
https://www.mmtimes.com/news/myanma
He said the funds were used to provide low- on future demand, according to a 2019 report by
r-aviation-sector-expected-become-
interest loans to struggling businesses, improve the Centre for Asia Pacific Aviation.
the healthcare system, provide cash and food Last year, GMA took delivery of a new aircraft, profitable-more-pain-ahead-first.html
supplies to needy households and support the taking its current fleet of ATR-72s to three. “With
agriculture and livestock sector. the additional seats, we can now fly daily
Source: Myanmar Times compared to alternate days before. We will also
https://www.mmtimes.com/news/steeper-growth- extend our destinations to include more flights to
decline-expected-myanmar-year-govt.html Dawei and Kaw Thaung, which could be potential
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 5
Financial and Business
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Myanmar borrowing set to grow as fiscal deficit widens Govt expects kyat depreciation, higher exchange rate in
Myanmar
15 Jul 2020 15 Jul 2020
Daw Aung San Suu Kyi’s government says it tourism industry and slowing FDI inflows. The Myanmar kyat is expected to depreciate in
expects the fiscal deficit to widen substantially Myanmar has secured about half of its annual value against the dollar in fiscal 2020-21, U
because of increased spending and falling quota of financing and Nay Pyi Taw has Maung Maung Win, deputy minister of Planning,
revenues. It will also require up to US$3 billion in expressed interest in using it all. Finance and Industry told Pyidaungsu Hluttaw.
extra borrowing by September 2021. The letter also warns that economic disruption The exchange rate should rise as a result of the
“Due to the sudden COVID-19 pandemic, we are will weigh on the country’s fiscal position. reduction in interest rates, wider budget deficit
experiencing urgent balance of payments and “With the COVID-19 pandemic, we expect a and higher inflation, he said.
fiscal financing needs over the next 18 months,” shortfall in revenues as households and firms are Inflation is forecast to average 7.9 percent in
the government said in a letter to IMF Managing hit by the growth slowdown, and gas revenues fiscal 2020-21 compared to 6.7pc in fiscal 2019-
Director Kristalina Georgieva last month decline due to the global energy price shock. 20.
requesting IMF emergency financing of US$350 “At the same time, we will need to urgently On June 24, the central bank’s reference
million. increase spending to support our intended policy exchange rate was K1391.4 per dollar. However,
The letter, seen by The Myanmar Times, was measures, including on social spending targeted the exchange rate has been fixed at K1520 per
signed by Finance Minister U Soe Win and to the most vulnerable groups,” it said. dollar for government departments and
Central Bank Governor U Kyaw Kyaw Maung. The government estimates that the fiscal deficit organisations for the coming year.
The funds from IMF, approved in late June, is would widen by about 2 percentage points of The country’s economy will be negatively
intended as a low-conditionality emergency loan GDP over the next two years, and it would face a affected by COVID-19 so state revenue is
for governments facing temporary balance of financing gap of US$2-3 billion over the fiscal expected to decline on the back of lower tax
payments crises due to external shocks. year 2019-20 and 2020-21. revenues and earnings from major exports such
U Soe Win and U Kyaw Kyaw Maung expect The IMF notes that weaker economic activity, tax as oil and gas. To maintain growth, a wider fiscal
Myanmar’s balance of payments shortfall to relief measures and falling gas prices will lower deficit is to be expected, he said.
reach US$2-3 billion for the two years ending government revenues by nearly 1.5pc of GDP. The fiscal deficit is expected to widen further to
September 30, 2021. They attribute the financing K6.8 trillion in the coming fiscal year compared to
gap to a series of COVID-19 economic impacts, K6.7 trillion in fiscal 2019-20. At those levels, the Source: Myanmar Times
notably a sharp decline in garment and gas Source: Myanmar Times deficit to GDP ratio will likely be around 5.4pc in https://www.mmtimes.com/news/govt-expects-
exports, a rise in medical supply imports, a fall in https://www.mmtimes.com/news/myanmar- the coming year. kyat-depreciation-higher-exchange-rate-
remittance inflows by 10 percent, a devastated borrowing-set-grow-fiscal-deficit-widens.html myanmar.html
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 6
Financial and Business
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Myanmar’s Garment Sector Facing Implosion as Robust second quarter for Southeast Asian startups but
Orders Slump with COVID-19 speed bump ahead
15 Jul 2020 15 Jul 2020
Myanmar’s CMP (cut, make and pack) garment Employees can’t make a living without a salary Southeast Asia’s startups raised at least $2.8 The appetite to invest in seed-stage startups
factories are struggling due to the lack of orders and employers can’t pay them without orders and billion in the second quarter of this year, only remained strong in Q2 as investors continued to
from the European Union, the major market. income,” said factory owner U Myint Soe. slightly lower than the $2.9 billion in the previous diversify their portfolios. E-commerce, edtech
In January, the majority of clothing factories were Employers have suggested that the Ministry of quarter, shows DealStreetAsia Research and and fintech – sectors which saw greater traction
forced to stop running overtime due to dwindling Labor provide financial assistance to prevent the Analytics’s latest report. in the wake of the pandemic as consumers were
stocks. Around 90 percent of supplies came from factories from shutting down. According to Southeast Asia Deal Review: Q2 compelled to move online – drove the surge in
China, which were blocked because of International closures have removed 50 percent 2020, the quarter saw at least 184 deals, up 26 dealmaking.
coronavirus, and the rest came from Indonesia, of market demand for Myanmar’s clothing, per cent over Q1, and 63 per cent over the As the largest consumer market in the region,
Vietnam, Thailand and South Korea. handbags and footwear, according to the MGMA. second quarter of last year. Indonesia remained the top investment
Many factories have reduced working hours and Garment exports are mainly shipped to the EU, Since startups can take anywhere between six destination in the second quarter, while
cut jobs, while some have permanently or Japan and South Korea and the country earned months to ten months to close a funding round, Singapore’s share of the investment pie shrunk.
temporarily shut down. Some factories have not over US$4.5 billion (6.2 trillion kyats) from the deal activity in the first two quarters is reflective Vietnam, the first country in the region to lift
received orders or even price enquiries since sector from Oct 1 to July, according to the of negotiations that predated COVID-19. The social and economic lockdowns, witnessed a
March, according to the Myanmar Garment Commerce Ministry. pandemic may have delayed closing of some of significant pickup in fundraising activities by way
Manufacturers’ Association (MGMA). Export revenues are down $65 million (90 billion these rounds, which may explain the deal volume of deal count and value.
“After the last orders were delivered in August, kyats) compared to the same period a year surge in Q2. Startup investments showed an uptick in
there have been no new orders. [The factories] earlier, mainly due to COVID-19. “Deal value is a lagging indicator of the initial Myanmar and the Philippines, driven by
haven’t received new orders since COVID-19 Over 500,000 are estimated to be employed in reaction to COVID-19,” said Insignia Ventures significant investments in fintech-focused
broke out,” said the MGMA president U Myint the garment industry. There are around 420 Partners founding managing partner Yinglan companies such as Wave Money (Myanmar) and
Soe, who also owns a factory. factories, of which 236 are Chinese-owned, 67 Tan. “Dealmaking will continue to be affected as Voyager Innovations (the Philippines).
Many clothing shops across Europe have closed are owned by South Korean firms, 20 have investor timelines slow down.” Despite indications of resilience in the second
and the demand from Japan has declined by Japanese owners and 92 are owned The largest transactions recorded in the second quarter, it remains unclear how startup
almost half, he said. Without new orders, many domestically by members of the MGMA. quarter were Temasek’s $500 million investment investments will fare in the coming quarters
factories will be forced to reduce their workforce Source: The Irrawaddy in Tokopedia; Facebook and PayPal’s
and working hours, and close either temporarily https://www.irrawaddy.com/news/burma/myanma investment in Gojek, which is estimated at $300 Source: Deal Street Asia
or permanently. rs-garment-sector-facing-implosion-orders- million; and Ninja Van’s $279 million Series D https://www.dealstreetasia.com/stories/startup-
“Paying salaries will become a problem. slump-covid-19.html round. fundraising-q2-196797/
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 7
Infrastructure
19 July 2020
8
Infrastructure Transport
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Elevated expressway tenders’ deadline – September 1 Myanmar aviation sector expected to become
profitable, but more pain ahead first
14 Jul 2020 27 Jan 2020
The final stage of the tender selection process the Yangon Region Government under a Public Myanmar’s aviation industry is betting on a more tourist attractions in the future,” U Kyaw Nyein.
for the Yangon Elevated Expressway will be Private Partnership (PPP). The expressway will profitable future with the number of airlines now Air KBZ has also been expanding. Last year, it
finalised on September 1, according to the pass through eight townships – Mingalar Taung reduced to half compared to 2017 and demand upgraded its fleet of planes and announced new
committee responsible for the expressway at the Nyunt, Tamwe, Thingangyun, South Okkalapa, for domestic air travel expected to catch up with destinations to Dawei , Kaw Thaung , Myeik,
Ministry of Construction. North Okkalapa, Mayangone, Mingaladon and supply. However, they will have to swallow more Sittwe, Kyaingtong, Hkamti and Loikaw. its sister
“September 1 is the deadline for the tender Insein. losses in the short term before things get better. airline, Myanmar Airways International, added a
submissions. If airlines are still grounded by that When completed it will be 27.5 km in length, 8 to There are currently five airlines in Myanmar, new Airbus A319 to its fleet, expanding its
time, applicants will have to submit their 19.5 meters high, and comprise four lanes. The down from ten three years ago. But even though capacity by 144 passengers.
proposals from where they currently are located,” project is valued at about US$900 million. there are fewer players now in the market, the Tanes Kumar, commercial director for Air KBZ,
U Kyi Zaw Mying, deputy director general of the Proposals for the project were first invited in May volume of passengers flying domestic remains said even though the new routes are not yet
Roads Department, said. 2018 and 53 companies expressed interest. below three million, according to government profitable, the main aim of adding new
“The process has already been delayed as Twelve consortium groups submitted proposals data. destinations is to expand the airline’s network
airlines have suspended their services due to the in November 2018. At those levels, demand is not sufficient to cover and connectivity. “This gives passengers more
COVID-19 pandemic. Many applicants will have A list of ten companies that met the criteria were the industry’s losses, U Kyaw Nyein, CEO of options and allows employees to learn new skills
to submit their applications online, rather than at announced in December 2018. These companies Golden Myanmar Airlines (GMA), told The for more expansion in the future,” he said.
our offices. From the ten applicants we will chose are expected to participate in the tender process Myanmar Times in a recent interview.
one,” he added. this coming July and August. But profitability is possible in the years ahead,
The first public meeting regarding the Yangon making it a good time for the remaining airlines to Source: Myanmar Times
Elevated Expressway was held from February 15 accelerate their plans for expansion to capitalise https://www.mmtimes.com/news/myanmar-
to March 1, and a second will be scheduled the on future demand, according to a 2019 report by aviation-sector-expected-become-profitable-
tender selection has been made. “The the Centre for Asia Pacific Aviation. more-pain-ahead-first.html
companies that will be selected at the final stage Last year, GMA took delivery of a new aircraft,
are foreign companies, from Europe and Asia – taking its current fleet of ATR-72s to three. “With
including companies from China, Japan, Korea, the additional seats, we can now fly daily
Singapore and Thailand,” he said. Source: Myanmar Times compared to alternate days before. We will also
The Yangon Elevated Expressway will be https://www.mmtimes.com/news/elevated- extend our destinations to include more flights to
implemented by the Ministry of Construction and expressway-tenders-deadline-september-1.html Dawei and Kaw Thaung, which could be potential
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 9Infrastructure Transport
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Myanmar Military Chief Affirms Support for China’s Over $480m loan to be sought from ADB to build
BRI Projects Bago-Kyaikhto Expressway
17 Jul 2020 18 Jul 2020
Myanmar military chief Senior General Min Aung Malacca, between peninsular Malaysia and the The Ministry of Construction has submitted a
Hlaing has assured China that the armed forces Indonesian island of Sumatra. The CMEC also proposal to Union parliament seeking a loan of
will continue to guarantee the implementation of serves Beijing’s goal of developing landlocked US$483.8 million from Asian Development Bank
China’s Belt and Road Initiative (BRI) in the Yunnan. (ADB) to implement the project of Bago-Kyaikhto
country, saying he believes it will support the China is promoting the CMEC as a “Road for Expressway.
peace process and national development. Peace and Road for Development” that would Deputy Minister Dr Kyaw Lin submitted the
During a meeting with Chinese Ambassador seek to strike a balance between revamping proposal during a meeting of Union parliament
Chen Hai on Thursday, Snr-Gen Min Aung Myanmar’s economic engines and targeting held in Nay Pyi Taw on July 17.
Hlaing said the Myanmar military (or Tatmadaw) poverty reduction. It says the resulting economic “Bago-Kyaikhto Expressway project is part of the
supports the establishment of the BRI, China’s development would bring peace and stability economic corridor of Greater Mekong. In the
ambitious grand infrastructure plan, and the along the corridor, particularly to Myanmar’s East-West Economic Corridor, the road will
China-Myanmar Economic Corridor (CMEC) one conflict-torn states. connect Darn Port in Vietnam and Thilawa Port
of its local components, according to a press Ambassador Hai said China is willing to push in Yangon by passing through Laos and
release from the Chinese Embassy. ahead with implementation of the three pillars of Thailand,” said the deputy minister.
In 2018, Myanmar agreed with China to establish the project, the Kyaukphyu deep seaport, cross- He said thanks to the project, there will be
the CMEC, which will stretch for 1,700 km, border economic cooperation zones, and the balanced development in the eastern parts of
starting in China’s Yunnan Province and going New Yangon City project, and to promote Yangon such as Thanlyin, Thilawa, Thonegwa,
through Myanmar’s major economic cities— Myanmar’s electricity, transportation and Kayan, Thanetpin and Bago road contributing to
Mandalay in central Myanmar and the agriculture sectors. socio-economic progress of Myanmar citizens.
commercial capital of Yangon—before reaching These projects were branded the three pillars of The four-lane Bago-Kyaihto Expressway will of
the Bay of Bengal coast at the Kyaukphyu the CMEC during Chinese President Xi Jinping’s asphalt road with 62 kilometers in length.
Special Economic Zone (SEZ) in Rakhine State. trip to Myanmar early this year.
Under the CMEC, Myanmar has also signed a
framework agreement for the Kyaukphyu deep Source: The Irrawaddy Source: Eleven Myanmar
seaport, a planned hub for Chinese trade that https://www.irrawaddy.com/news/burma/myanma https://elevenmyanmar.com/news/over-480m-
would give direct access to the Indian Ocean and r-military-chief-affirms-support-chinas-bri- loan-to-be-sought-from-adb-to-build-bago-
allow China’s oil imports to bypass the Strait of projects.html kyaikhto-expressway
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 10Infrastructure Energy
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Competition watchdog rejects protests over solar Grab says it pumped $100M into Myanmar in
tender four years
18 Jul 2020 12 Feb 2020
Myanmar’s competition watchdog says it does quarantine measures for visitors and other Ride-sharing company Grab has invested over across the country this year, Toh said. GrabFood
not intend to challenge the government’s COVID-19 constraints, the tender needed to be US$100 million (K143.5 billion) in Myanmar in will be launched for local restaurants and
controversial solar plant tender despite protests extended by at least nine months in order to the past four years to strengthen its position on transportation partners in Mandalay this year.
by foreign governments and business accommodate the requirements on land the local taxi market, a senior company official “Although food delivery is increasing locally, it
associations that conditions imposed during the acquisition evidence and project financing. said Tuesday. still lags behind other countries. We have many
COVID-19 pandemic effectively excluded many Last year investors in the energy industry were Cindy Toh, country manager for Grab, said the opportunities,” said U Myat Kaung Min, head of
outside bidders. dismayed by the government’s rushing through company will continue investing to further GrabFood Myanmar.
Responding to questions from The Myanmar of an emergency power tender, which also gave improve the quality of its service in Myanmar. Grab For Good will be launched in Myanmar
Times, the Competition Commission said the bidders around a month to bid for five energy “Grab will emphasise service quality and safety, soon.
solar tender requirements set by the Ministry of projects totalling 1GW with tough conditions not only technology,” she told a briefing. “We will In 2018, Grab launched its Grab Thone Bane
Electricity and Energy (MOEE) were not attached. All five were won by Chinese private continue investing in expansion and partnerships (three-wheeler) service in Bagan and Mandalay
designed to be anti-competitive and that the firms and state firms. to better the platform and expand the city, and Grab TaxiPlus service.
applying were not involved in anti-competitive The written response to The Myanmar Times ecosystem.” More than 166 million people in 339 cities in
practices. was signed by U Min Aung Aye, director of the Grab launched its service in Myanmar in July Myanmar, Vietnam, the Philippines, Thailand,
"The Competition Commission also concludes Commission office. He said the law on tenders 2017, and has since introduced Grab Taxi Call Cambodia, Malaysia, Singapore and Indonesia
that this [tender] does not fall under the area of stated that “no one is able to draw and set a service, Premium Rentals (Beat), and Grab have downloaded the Grab app on their mobile
the Competition Law and is not in violation of tender or bid which controls and restricts Food. phones. – Translated
said law,” it said. competition.” The company’s taxi service is popular and
The tender, issued on May 18, is for the However he acknowledged that in this case experiencing an increase of 10 percent in daily
construction of 30 ground-mounted solar plants “there could be difficulties for those applying for rides in 2019 from the previous year, and adding
capable of generating 1060MW of power in total the tender”. more than 196,000 more precise location points
under a 20-year build, operate and own basis. in the Grab application.
The deadline was extended from June 17 to July The number of businesses using Grab for
17 after a backlash among the local and Business doubled in 2019, and the most popular Source: Myanmar Times
international business community as well as the Source: Myanmar Times destinations for rides were Myanmar Plaza, https://www.mmtimes.com/news/myanmar-
European Union and the US. https://www.mmtimes.com/news/competition- Junction City, and Yangon Airport. aviation-sector-expected-become-profitable-
They argued that with travel restrictions, watchdog-rejects-protests-over-solar-tender.html Grab will expand its services to other key cities more-pain-ahead-first.html
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 11Infrastructure Energy
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Off-grid areas in Myanmar to enjoy solar power MPE opens gas stations for household consumption in
Yangon
14 Jul 2020 16 Jul 2020
A total of 450,000 people in rural Myanmar can Myanmar Petrochemical Enterprise (MPE) under gas and mixed propane and butane gas. Among
expect to receive access to electricity following the Ministry of Electricity and Energy has opened them, butane gas is more suitable for use in
an agreement between the government and four gas stations in townships of Yangon Region household kitchens. Although Myanmar is one of
World Bank. in cooperation with Yadanar Su Company limited the natural gas producer countries, only a few
The two parties have agreed to channel US$3.5 in efforts to reduce household electricity people are using gas. So, we are providing
million in funds towards generating solar energy consumption and to mitigate environmental awareness talks for the people to use the gas
in off-grid areas of the country. “Getting electricity impact. widely.
with solar technology in off-grid areas is “Around 30,000 households are using the gas in
important for improving the livelihoods and living Yangon Region. Our ministry will open four gas
standards of the rural people,” said Mariam stations as a joint venture business for the
Sherman, World Bank Country Director for people to save power consumption. Then, we will
Myanmar, Cambodia and Lao PDR. sell the gas at an affordable price,” said U Aung
Currently, over half of Myanmar’s population Lwin Oo, the officer in charge of the South
does not have access to the national grid and Okkalapa Township gas station, MPE. In Yangon
over two thirds of households in rural areas Region, MPE opened the gas stations as a joint
where most of the population resides have to venture in South Okkalapa, Insein, North Dagon
depend on candles, kerosene, batteries and and Hmawbi townships. These four gas stations
diesel generators for power. are distributing the gas across the Yangon
The funds will flow from companies to retailers to Region. The gas is carried from the Nyaungdon
consumers and will help manufacturing, gas field by boxer trucks and distributed to the
distribution and sales of quality rural products, public via these four gas stations.
the World Bank said. To save the money during coronavirus
prevention and control period, the MPE is selling
the gas for K800 per kg. There are two types of Source: The Global New Light of Myanmar
Source: Myanmar Times the gas cylinder such as 48kg and 15kg. The gas https://www.globalnewlightofmyanmar.com/mpe-
https://www.mmtimes.com/news/grid-areas- is distributed to households by car. There are opens-gas-stations-for-household-consumption-
myanmar-enjoy-solar-power.html three types of LPG such as Propane gas, Butane in-yangon/
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 12Infrastructure Real Estate
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
'The Govt Must Handle It Decisively': Myanmar MP on Grab says it pumped $100M into Myanmar in
Controversial China-Backed Development in Karen four years
State 15 Jul 2020 12 Feb 2020
In recent months, the Myanmar government nearly 30,000 acres, cost $15 billion and involve Ride-sharing company Grab has invested over across the country this year, Toh said. GrabFood
formed a tribunal to investigate irregularities in a luxury housing, condominiums, hotels, shopping US$100 million (K143.5 billion) in Myanmar in will be launched for local restaurants and
controversial China-backed city development centers, golf courses, casinos, gambling venues the past four years to strengthen its position on transportation partners in Mandalay this year.
project near the Thai border in Karen State. The and entertainment, tourism, cultural and the local taxi market, a senior company official “Although food delivery is increasing locally, it
project area is under the control of the Karen agricultural sites. A promotional video from Yatai said Tuesday. still lags behind other countries. We have many
State Border Guard Force, a Myanmar military- International advertised the project as the “only Cindy Toh, country manager for Grab, said the opportunities,” said U Myat Kaung Min, head of
backed armed group led by Colonel Chit Thu and area in Shwe Kokko that is authorized to operate company will continue investing to further GrabFood Myanmar.
formerly known as the Democratic Karen casinos.” Its business plan identifies casinos as improve the quality of its service in Myanmar. Grab For Good will be launched in Myanmar
Buddhist Army (DKBA). Dubbed the Shwe Kokko the top source of revenue. “Grab will emphasise service quality and safety, soon.
New City, the project is a collaboration between A report by the Karen Peace Support Network not only technology,” she told a briefing. “We will In 2018, Grab launched its Grab Thone Bane
a Hong Kong-based company, Yatai International (KPSN) in March said several casinos had begun continue investing in expansion and partnerships (three-wheeler) service in Bagan and Mandalay
Holding Group (IHG), and Col. Chit Thu. operating in the newly constructed area since to better the platform and expand the city, and Grab TaxiPlus service.
However, the project has sparked concerns due mid-2019, including online gambling casinos. ecosystem.” More than 166 million people in 339 cities in
to the reportedly shady backgrounds—including However, the company has denied any activities Grab launched its service in Myanmar in July Myanmar, Vietnam, the Philippines, Thailand,
links to criminal networks and illicit activities—of relating to the casinos. 2017, and has since introduced Grab Taxi Call Cambodia, Malaysia, Singapore and Indonesia
the Chinese enterprises involved. Meanwhile, the project has sparked criticism due service, Premium Rentals (Beat), and Grab have downloaded the Grab app on their mobile
In 2018, the Myanmar Investment Commission to a lack of transparency, land confiscations, Food. phones. – Translated
(MIC) approved US$22.5 million (about 31 billion confusion over the scale of construction and the The company’s taxi service is popular and
kyats) in investment for the Shwe Kokko urban growing influx of Chinese as well as suspected experiencing an increase of 10 percent in daily
development project, including for the illicit activity and locals’ concerns about the social rides in 2019 from the previous year, and adding
construction of 59 villas, within three years on impacts of casino businesses. more than 196,000 more precise location points
10.3 hectares of land in Myawaddy Township. in the Grab application.
Last year, the project was temporarily suspended Source: The Irrawaddy The number of businesses using Grab for
for breaching investment regulations following https://www.irrawaddy.com/in- Business doubled in 2019, and the most popular Source: Myanmar Times
on-site investigations by Karen State authorities. person/interview/govt-must-handle-decisively- destinations for rides were Myanmar Plaza, https://www.mmtimes.com/news/myanmar-
Yatai International Holding Group revealed on its myanmar-mp-controversial-china-backed- Junction City, and Yangon Airport. aviation-sector-expected-become-profitable-
website that the entire development would cover development-karen-state.html Grab will expand its services to other key cities more-pain-ahead-first.html
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 13Infrastructure Real Estate
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
More paper shuffling than progress? Property Guru Awards to attract overseas investors
17 Jul 2020 16 Jul 2020
The Industrial Zone Law was enacted in May decrepit infrastructure, build bigger and better Among the many ways the local real estate Win.
2020 to revamp the operations and regulatory industrial estates and find a way to improve the sector may recover in the post-COVID-19 period The panel of judges includes senior executives
procedures of existing and future, industrial existing but inefficient estates. is to promote local brands internationally, from BDO Myanmar, including Joe Yew Chi Jee,
estates in Myanmar in the hopes of catching its Improvements to Myanmar’s industrial sector are Property Guru Asia Property Awards & Events Ma Nang Hnin Thet Htwe and Hong Shi Yin.
more industrialised neighbours. critical given the rapidly changing global Managing Director Jules Kay said. This year will feature the following new award
To do so, clear and well thought out policy is socioeconomic landscape resulting from Covid- "Our real estate awards will identify the very best categories: Best Luxury Condo, Most Affordable
essential to fix and improve Myanmar’s industrial 19. Future economic growth is far from assured projects in Myanmar, which will help to promote Condo and Best Commercial Interior Design.
parks that are beset by opaque land ownership with many big economies tipping into recession. the sector to overseas buyers and investors. It's To celebrate Myanmar’s rich colonial
and speculation, squatters, poor electrical and A post-COVID-19 world is certain to be a a very useful means of making our brands architecture, an award for the Best Maintained
transport infrastructure and usually a lack of markedly different place and manufacturing and distinct during the crisis,” Kay said. Building and the Best Old Architectural
waste water treatment plants. supply chain trends may be accelerated or Category winners in the Property Guru awards Maintenance will be presented.
Instead, the new law puts a heavy focus on perhaps blown off course. will receive an approval seal from veteran judge The sixth largest real estate awards will be
forming seemingly endless committees at There are already serious rumblings around the Richard Emerson of Emerson Real Estate. They sponsored by Hitachi Company, with Shwe
national, then state/regional level, without world of a sharp pivot away from the China Plus will also be awarded with an attractive marketing Property as an associate partner.
creating a centralised and full-time bureau – as is One industrial policy, which was to build package, to help promote their properties both Applications can be made via online registration
common within the region – with the power to manufacturing in China and one other nation to here and overseas. no later than August 28.
grant subsidies, streamline procedures (including access cheap wages, tax incentives and tap into This year's Property Guru Awards will be held at
customs or port clearances)and regulate the the enormous domestic market of China. the Sule Shangri-La Hotel in Yangon on October
sector. The law presently reinforces the concerns Already companies were rethinking the policy as 23, 2020.
stated in a recent IFC Report “Creating Markets the incentives to do business in China lessened Asia’s leading Real Estate Technology Company
in Myanmar”, which states that the country is “still courtesy of rising wages and the reduction or Property Guru and Myanmar’s Shwe Property
burdened by red tape and lengthy process that shifting of subsidies. will co-host the event.
can be linked to controlling transactions rather “It is a good opportunity to reach out into the
than facilitating firm’s growth”. international market. We are currently accepting
In order to emulate the rapid industrialisation Source: Myanmar Times applications, and many interested participants Source: Myanmar Times
enacted by South Korea, Thailand and Vietnam, https://www.mmtimes.com/news/more-paper- have already contacted us,” said Shwe https://mmbiztoday.com/state-counsellor-urges-
significant investments are required to upgrade shuffling-progress.html Property’s founder and Director U Kaung Thu fishery-sector-to-enter-global-market/
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 14Infrastructure Waste and Water
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
ASEAN’s largest dam resumes distributing water in Grab says it pumped $100M into Myanmar in
Sagaing four years
14 Jul 2020 12 Feb 2020
Thapanseik dam, the largest in Southeast Asia, Ride-sharing company Grab has invested over across the country this year, Toh said. GrabFood
has resumed distributing water to irrigate rice US$100 million (K143.5 billion) in Myanmar in will be launched for local restaurants and
fields in Sagaing Region, seven months after the past four years to strengthen its position on transportation partners in Mandalay this year.
ceasing operation due to low water levels. the local taxi market, a senior company official “Although food delivery is increasing locally, it
The dam distributed water to 1.7 million hectares said Tuesday. still lags behind other countries. We have many
of rice fields in Sagaing on July 7, officials said, Cindy Toh, country manager for Grab, said the opportunities,” said U Myat Kaung Min, head of
the first time it released water since November company will continue investing to further GrabFood Myanmar.
30. improve the quality of its service in Myanmar. Grab For Good will be launched in Myanmar
The dam usually provides water to 121,400 “Grab will emphasise service quality and safety, soon.
hectares of summer rice and 202,300 hectares of not only technology,” she told a briefing. “We will In 2018, Grab launched its Grab Thone Bane
monsoon rice every year. continue investing in expansion and partnerships (three-wheeler) service in Bagan and Mandalay
Officials said that on July 7, the dam distributed to better the platform and expand the city, and Grab TaxiPlus service.
water via its Kin Tat diversion weir to Kar Boe ecosystem.” More than 166 million people in 339 cities in
dam, Shwe Bo channel, and Yay Oo channel. Grab launched its service in Myanmar in July Myanmar, Vietnam, the Philippines, Thailand,
Thapanseik dam is 108 feet high, 22,587 feet 2017, and has since introduced Grab Taxi Call Cambodia, Malaysia, Singapore and Indonesia
long and stores 2.79 billion acre feet of water, service, Premium Rentals (Beat), and Grab have downloaded the Grab app on their mobile
which benefits about 1 million people in ten Food. phones. – Translated
townships of Sagaing. The company’s taxi service is popular and
The dam’s water level declined for the first time experiencing an increase of 10 percent in daily
in 20 years in 2019, and the ancient city of Ko rides in 2019 from the previous year, and adding
Htet Nay Chi Thit emerged. more than 196,000 more precise location points
in the Grab application.
The number of businesses using Grab for
Business doubled in 2019, and the most popular Source: Myanmar Times
Source: Myanmar Times destinations for rides were Myanmar Plaza, https://www.mmtimes.com/news/myanmar-
https://www.mmtimes.com/news/aseans-largest- Junction City, and Yangon Airport. aviation-sector-expected-become-profitable-
dam-resumes-distributing-water-sagaing.html Grab will expand its services to other key cities more-pain-ahead-first.html
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 15Infrastructure Other Infra
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Myanmar, China to Promote Cross-Border e- Grab says it pumped $100M into Myanmar in
Commerce Systems four years
13 Jul 2020 12 Feb 2020
Myanmar and China plan to promote cooperation use of digital platforms and drive economic Ride-sharing company Grab has invested over across the country this year, Toh said. GrabFood
on digital economy and cross-border e- growth. Myanmar’s COVID-19 Economic Relief US$100 million (K143.5 billion) in Myanmar in will be launched for local restaurants and
commerce systems to allow trade and economic Plan (CERP) also includes commitments to the past four years to strengthen its position on transportation partners in Mandalay this year.
activity to proceed smoothly during times of promote e-commerce as well as the use of digital the local taxi market, a senior company official “Although food delivery is increasing locally, it
pandemic. and mobile platforms for payments and retail said Tuesday. still lags behind other countries. We have many
An online meeting was held on Thursday trade. Cindy Toh, country manager for Grab, said the opportunities,” said U Myat Kaung Min, head of
between the Mandalay Region government, the The meeting was attended by Union Minister for company will continue investing to further GrabFood Myanmar.
Myanmar Ministry of Commerce, the Commerce Dr. Than Myint, Mandalay Chief improve the quality of its service in Myanmar. Grab For Good will be launched in Myanmar
International Liaison Department of the Central Minister Dr. Zaw Myint Maung, Director Song “Grab will emphasise service quality and safety, soon.
Committee of the Communist Party of China Tao of the IDCPC, Vice Minister Guo Yezhou, not only technology,” she told a briefing. “We will In 2018, Grab launched its Grab Thone Bane
(IDCPC) and the government of China’s Yunnan Chinese Ambassador Chen Hai and officials from continue investing in expansion and partnerships (three-wheeler) service in Bagan and Mandalay
province. The meeting aimed to promote Alibaba Group, the biggest Chinese multinational to better the platform and expand the city, and Grab TaxiPlus service.
collaboration between Mandalay Region and technology company specializing in e-commerce, ecosystem.” More than 166 million people in 339 cities in
Yunnan province in implementing bilateral retail, Internet related technologies. Grab launched its service in Myanmar in July Myanmar, Vietnam, the Philippines, Thailand,
agreements between the two countries, The press release said the two sides also agreed 2017, and has since introduced Grab Taxi Call Cambodia, Malaysia, Singapore and Indonesia
especially the promotion of digital economy and to enhance the exchange of ideas and practical service, Premium Rentals (Beat), and Grab have downloaded the Grab app on their mobile
e-commerce. cooperation, such as strengthening agriculture Food. phones. – Translated
According to a press release from the Chinese through e-commerce, and the speedy The company’s taxi service is popular and
Embassy, Yunnan province will provide the implementation of relevant cooperation on experiencing an increase of 10 percent in daily
training for cross-border e-commerce operators agreements between Yunnan and Mandalay, and rides in 2019 from the previous year, and adding
from Mandalay region to help export agricultural supporting the socioeconomic recovery of the more than 196,000 more precise location points
products such as rice, beef, bananas and two countries. in the Grab application.
pineapples to Yunnan, or to China’s domestic The number of businesses using Grab for
market through Yunnan. Source: The Irrawaddy Business doubled in 2019, and the most popular Source: Myanmar Times
In May, the Myanmar government said it would https://www.irrawaddy.com/news/burma/myanma destinations for rides were Myanmar Plaza, https://www.mmtimes.com/news/myanmar-
launch a central e-commerce website before the r-china-promote-cross-border-e-commerce- Junction City, and Yangon Airport. aviation-sector-expected-become-profitable-
end of this year as part of its plan to promote the systems.html Grab will expand its services to other key cities more-pain-ahead-first.html
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 16Infrastructure Other Infra
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Myanmar to spend $215M on healthcare in conflict Myanmar govt channels funds to support fisheries
areas sector
14 Jul 2020 14 Jul 2020
The Health and Sports Ministry on July 13 said it government, the first democratically elected one Calls for support from the fisheries sector are been negatively affected by COVID-19. Earlier
will spend US$215 million dollars (K293 billion) to since 1962, is faced with the herculean task of now being heeded by the government with the this year, the Myanmar Fisheries Federation
support healthcare projects in conflict zones in improving basic services and finding solutions to latest move involving a sum of K6 billion reported that exports had ground to a halt after
the next five years. the decades-old conflicts that beset the country. earmarked for fish breeders. international orders were cancelled as a result of
The money will come from the Access to Health The government, with the support of the usually The funds are being distributed as subsidies for the pandemic. The EU and other western
Fund, which is funded by Switzerland, Sweden, antagonistic military and unsympathetic ethnic breeders to develop fish ponds across 150,000 countries accounts for about 45pc of Myanmar’s
the United Kingdom and the United States, to armed groups, has been able to prevent the acres of land, said U Ye Tun Win, Director fisheries exports, while China and Thailand
support Myanmar’s health sector until 2023. spread of the COVID-19 pandemic in the country General of the Livestock and Veterinary account for the remaining 55pc.
Health and Sports Minister U Myint Htwe met despite having few resources. Department. The impact has cascaded down the fisheries
with Oren Ginzburg, the fund’s director, and U “The work to subsidise fishery businesses value chain, leading to delays in transport and
Aye Yu Soe, programme head of the fund, in Nay impacted by COVID-19 will be complete in logistics and large quantities of spoilage.
Pyi Taw to discuss the project. September,” he said during a video conference Meanwhile, the government is also raising efforts
The projects supported by the fund include those with State Counsellor Daw Aung San Suu Kyi. to lure investments in the sector to support
aimed at reducing the death rates of mothers, He added that cold storage facilities will also be growth. Last week, the Myanmar Investment
infants and children, reducing unintended built in Yangon, Bago and Ayeyarwaddy, where a Commission approved the development of a
pregnancies and abortion, reducing human larger density of fisheries businesses are $115 million prawn farm across 828 acres of land
immune deficiency virus and sexually transmitted located. This will be set up with a US$4 million at Kyar Gyi Aw Island in Myeik, Tanintharyi
diseases, reducing cases of tuberculosis and loan from the World Bank, U Ye Tun Win said. Region.
malaria, and reducing the burden of diseases on A sum of K1.4 billion has also been allocated to The project will be led by a Singapore-Myanmar
families and unequal access to health. support training and technology for breeders joint venture company called South Asia Win Co.
Emerging from over 50 years of military rule and under the government's COVID-19 Economic Singapore Qi Chang Group will hold a 70pc
isolation, Myanmar’s basic services Recovery Plan. The funds will be distributed by stake in the JV while Phyo Myat Aung Co will
infrastructure, such as health and education, is in September. In total, the government has hold the remaining 30pc.
disrepair. Dozens of ethnic armed conflicts allocated up to K91.5 billion to support the
ravage the countryside, displacing tens of Source: Myanmar Times agriculture and livestock sector. Source: Myanmar Times
thousands of people, who live in abject poverty. https://www.mmtimes.com/news/myanmar- According to research, 40 percent of some 4900 https://www.mmtimes.com/news/myanmar-govt-
The National League for Democracy (NLD) spend-215m-healthcare-conflict-areas.html livestock and fisheries breeding businesses have channels-funds-support-fisheries-sector.html
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 17Policy and Regulation
19 July 2020
18Policy and Regulation
Financial and Business Infrastructure Policy and Regulation Tender Opportunities MIC Permitted Projects Upcoming Events
Myanmar to reinstate 30% tax rate on unassessed Myanmar aviation sector expected to become
income profitable, but more pain ahead first
15 Jul 2020 27 Jan 2020
A tax amnesty for Myanmar citizens with introduction of the 2019 Union Tax Law, Myanmar’s aviation industry is betting on a more tourist attractions in the future,” U Kyaw Nyein.
unassessed sources of income introduced under unassessed sources of income were taxed profitable future with the number of airlines now Air KBZ has also been expanding. Last year, it
the 2019 Union Tax Law will be repealed in fiscal between 15pc and 30pc. reduced to half compared to 2017 and demand upgraded its fleet of planes and announced new
2020-21, which commences on October 1, U The tax is payable by citizens who cannot show for domestic air travel expected to catch up with destinations to Dawei , Kaw Thaung , Myeik,
Maung Maung Win, deputy minister of Planning, the source of their income that was used for supply. However, they will have to swallow more Sittwe, Kyaingtong, Hkamti and Loikaw. its sister
Finance and Industry, said at the Pyidaungsu buying, constructing, or obtaining any assets, losses in the short term before things get better. airline, Myanmar Airways International, added a
Hluttaw on July 13, upon submitting the Union and establishing a new business, according to an There are currently five airlines in Myanmar, new Airbus A319 to its fleet, expanding its
Taxation Law Bill for the new fiscal year. October 2019 note from law firm DFDL. down from ten three years ago. But even though capacity by 144 passengers.
A 30 percent tax rate on all unassessed sources "The Internal Revenue Department uses this there are fewer players now in the market, the Tanes Kumar, commercial director for Air KBZ,
of income will be reinstated during the new fiscal measure to ensure that the money used by its volume of passengers flying domestic remains said even though the new routes are not yet
period, he said. The move is expected to boost citizens for purchasing an immovable property or below three million, according to government profitable, the main aim of adding new
government coffers by up to K280 billion to material purchases came from a properly- data. destinations is to expand the airline’s network
around K2.8 trillion in fiscal 2020-21. declared source, and such money has been At those levels, demand is not sufficient to cover and connectivity. “This gives passengers more
U Maung Maung Win said international properly subjected to tax," DFDL explains. the industry’s losses, U Kyaw Nyein, CEO of options and allows employees to learn new skills
organisations claimed the tax relief on Golden Myanmar Airlines (GMA), told The for more expansion in the future,” he said.
unassessed income can encourage money Myanmar Times in a recent interview.
laundering. As a member of the Asia-Pacific But profitability is possible in the years ahead,
Group on Money Laundering, Myanmar will offer making it a good time for the remaining airlines to Source: Myanmar Times
the tax amnesty for just the one year to avoid accelerate their plans for expansion to capitalise
https://www.mmtimes.com/news/myanma
that risk. on future demand, according to a 2019 report by
r-aviation-sector-expected-become-
The existing 2019 Union Tax Law provides that the Centre for Asia Pacific Aviation.
tax rates will be as low as 3pc for unassessed Last year, GMA took delivery of a new aircraft, profitable-more-pain-ahead-first.html
income up to K100 million, 5pc for income taking its current fleet of ATR-72s to three. “With
between K100 million to K300 million, 10pc for the additional seats, we can now fly daily
income between K300 million to K1 billion, 15pc Source: Myanmar Times compared to alternate days before. We will also
of income between K1 billion to K3 billion, and https://www.mmtimes.com/news/myanmar- extend our destinations to include more flights to
30pc for income exceeding K3 billion. Prior to the reinstate-30-tax-rate-unassessed-income.html Dawei and Kaw Thaung, which could be potential
19 July 2020
PwC PwC Myanmar Weekly Business Intelligence 19You can also read
