France to Help Urbanise Mandalay

France will help in the urbanisation process of Myanmar’s second largest city Mandalay through infrastructural development assistance.
Under an agreement signed between Mandalay City Development Committee (MCDC) and France’s will provide assistance in the city’s urban development projects such as garbage disposal, transportation services and water supply at a cost of $1.3 million.
The Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA) have also been providing financial assistance and technical skills for the same projects.
Currently, a central business district project called Mingala-Mandalay is being jointly implemented in the city by MCDC, New Star Light and CAD Construction since September 2012.
The project includes building underground sewage system up to international standard.

Source from Myanmar Business Today,24-30July,2014

KHG’s Launches Luxury Condominium in Myanmar

KHG Development broke ground of its residential luxury condominium following the opening of its sales gallery last month, the Singapore-based conglomerate said.
The development, INFINITY, is located on the edge of Golden Valley in Kabar Aye Pagoda road in Yangon.
According to KHG, INFINITY Sky Terrace which is an entire floor dedicated to resident leisure facilities. Complete with these pools, a well equipped gym,childre’s play area, an outdoor exercise area, barbecue area and function room – this floor has 360-degree views of the cityscape. KHG says every floor offers panoramas of Shwedagon Pagoda, Kandawgyi Lake and Inya Lake.
This is the first in a series of real estate offerings that KHG Development is rooling out. Later in the year three will be the launch of a low-rise, luxury boutique-style,development is rolling out.Later in the year there will be the launch of a low-rise, luxury boutique-style, development in another prime location, KHG said.
KHG Holdings’ chairman Kyi Soe said, “I have always held firm to the philosophy of mutually rewarding experiences for all parties, a fact applicable to all KHG’s business ventures. Real estate development of the highest standards is an exciting new chapter in our company’s history.
Mary Thein, KHG Development’s executive director of sales and marketing, outlined the company’s strategy, saying, “Creating and communicating value to all our stakeholders through our quality products, services and brand ambassadors is vital to building longterm customer relationships. KHG is investing heavily in this.”
The firm also gaves a presentation of its property website - – at the launch event.

KBZ Bank to Launch Online Banking Services

Myanmar’s largest private bank, Kanbawza Bank, will launch online and mobile banking services soon, the bank said.
US-based information security company, RSA, will provide protection to its  customers from online fraud and cyber threats, it sdid. RSA is the security division of EMC, which is an American multinational corporation.
The bank started with an initial capital of K477 milion(about $500,000) in 1999 and has expanded its capital to K113 billion($117 million) in 2014, according to the bank’s finnacial statement.
Early this year, another private bank, the Cooperatives Bank (CB), has introduced mobile banking system services in the country on a trial basis.
There are more than 20 private banks and three state-owned banks
in Myanmar.
The Central Bank of Myanmar recently announced that it would grant foreign banks to operate banking business in the country by September and at least five to 10 foreign banks will be given permission.

Source from Myanmar Business Today,24-30July,2014

Myanmar’s Legal Framework and Immigation

In this week’s case study, our client,XYZ B.V., asked us if it is possible to send an executive employee to Yangon to conduct market research before their new company has been approved and registered for operation. In our case study last week, we already advised them to set up a MIC company. MIC approval will take approximately 3 months; however, the company wants to start research activities right away. In this particular case we do not recommend sending staff or an executive researcher to Yangon on a tourist visit visa.
A tourist visa is only valid for a single entry, which is granted for a period of 28 days, and does not allow the holder to engage in any sort of commercial activities in Myanmar. Because leasing an apartment is prohibited to individuals holding a tourist visa, staff from XYZ B.V. is only allowed to stay at a hotel that has been pre-approved by the Ministry of Tourism. Therefore, staff wishing to conduct market research should enter Myanmar with a valid business visa, issued upon arrival at either Yangon or Mandalay International Airports or by a Myanmar consulate abroad. To obtain a business visa, the staff member needs an invitation letter from a Myanmar company as well as a copy of the company’s official registration certificate. But, is it possible to obtain these official documents? Yes.
XYZ B.V. wants to promptly begin field research especially given their competitors are also attempting to enter the market. Therefore, it is vital to send an executive employee immediately to Myanmar with a valid business visa. In this case, one of our clients, a 100 percent Myanmar company, is ready to assist by issuing the required documents for a small fee. However, it is important for the business activity to stand firm on legal ground. Our Myanmar client company is also able to officially employ XYZ B.V.’s market research staff and pay their salaries after reimbursement. Personnel leasing and recruitment services are legal in Myanmar and also provide full payroll services and employment-related tax advice.
Given this situation, we advised XYZ B.V. to send details about their staff to the local company so it can issue official visa documents that enable its employees to obtain their business visa, make arrangements for employment, payment of salaries and other legal requirements. During this process, the foreign staff will remain under the control and supervision of XYZ B.V.
Later, after MIC has granted XYZ B.V. its company registration, it can apply for a work permit at the Directorate of Labour under the Ministry of Labour, and a stay permit and visa to the Immigration and National Registration Department from the Ministry of Immigration and   Population. Once these permits are approved, XYZ B.V. can issue invitation letters and other required documents needed for their staff to obtain a business visa.
In the nest case study we will advise the XYZ B.V. about renting
real estate.
Strohal Legal Group (SLG), founded by Dr Theodar Strohal in 1979, is a law firm offering highly personalized services specializing in international and cross border business. SLG enjoys a well-established reputation across Europe, Southeast Asia and the Middle East. In Myanmar, SLG provides services under the name U Min Sein & Strohal Associates Law Firm.
The views and opinions expressed here are the author’s own and
don’t necessarily reflect Myanmar Bussiness Today’s editorial opinion.

Source from Myanmar Business Today,24-30July,2014

Scotch Whisky Gets Special Legal Protection in Myanmar

Scotch Whisky has been granted better protection by Myanmar
authorities as a collective trademark in a move that is expected to help protect Scotland’s national drink against fakes in the growing Southeast Asian market.
Scotch Whisky exports to Myanmar jumped 65 percent to £2 million
last year from £888,734 in 2012, according to the Scotch Whisky Association.
The move will provide added protection to both consumers and the industry, the association said.
Alan Park, Scotch Whisky Association legal adviser, said: “This will allow us to protect Scotch Whisky against products illegally being sold or passed off as Scotch.
“Products suspected of misleading consumers and damaging the legitimate trade are already under investigation and may become the subject of legal action using the protection now given to Scotch Whisky in Burma.”
The changes mirror those introduced in Australia earlier this year,a country which was said to have a “serious problem” with fakes.The trademark gives similar protection to Scotch in Burma already enjoyed by products such as Parma ham and Champagne which are subject to a geographic indicator (GI) — a protection offered to a range of geographically unique products.
British Ambassador to Myanmar Andrew Patrick said: “Scotch Whisky is recognised worldwide as a distinctive and high quality British product and I am delighted that the Burmese authorities have taken steps to recognise and protect this.
“A robust legal framework is of great importance to foreign investors in any market and the British Embassy is supportive of the Burmese Government’s efforts to develop this.”
In 2012, Chelsea FC agreed a two-year sponsorship deal with local whisky Grand Royal — Myanmar’s best-selling brand — which boasts an unnamed Scottish master blender on its label, but, in accordance with Scotch whisky rules, does not claim to be Scotch.
Earlier this month, a German scientist living in Scotland announced a new technique to tackle counterfeit Scotch whisky by determining whether the water used to make it comes from Scotland.
The Spirit Drinks Verification Scheme, launched earlier this year, ensures that every part of the Scotch whisky supply chain is mapped by the industry, registered with the UK government and inspected to ensure it complies fully with all the rules on the production of Scotch.
All firms involved in the production of Scotch whisky must register with Her Majesty’s Revenue & Customs by listing their sites within and outside Scotland, including distilleries, maturation facilities, blending and bottling plants. Foreign bottlers will also be subject to controls.
In addition, the spirit is already protected through the European Union GI scheme, meaning it can only be produced in Scotland according to UK rules.

Source from Myanmar Business Today,24-30July,2014

Microeconomic Objectives Surpass Target; Trade Deficit $2.08 Billion in 2013-14 H2

Myanmar recorded a trade deficit of K2.08 trillion ($2.08 billion) in the second half of 2013-14 fiscal year, Daw Le Le Thein, deputy minister for national planning and economic development, told a recent parliament session.
Exports earned K5.93 trillion ($5.93 billion) and import volume reached K8.01 trillion ($8.01 billion) during this period, she said while presenting a report on National Economic Plan, released by the Ministry of National Planning and Economic Development.
The report outlined the government’s progress in the second half of the 2013-14FY.
Fulfillment of micro-economic objectives surpassed the target and reached 125 percent of the planned goals, an improvement in performance of 7.5 percent compared to the same period last year, the report said.
According to the report, agriculture accounted for 31.9 percent of the total economy,compared with the previous estimation of 29.9 percent. The industrial sector accounted for 32.7 percent, which is lower than the sector’s estimation of 33.8 percent. The service sector accounted for 35.4 percent which was also lower that its estimated 36.3 percent.
The period coincided with the harvest season, which produced over K9.17 trillion ($9.17billion) in the agriculture sector.
A total of 35 local enterprises were approved under the Myanmar National Investment Law,which amounted to an investment volume of almost K1 trillion ($1 billion), while 68 foreign companies were approved under the 2012 Foreign Investment Law accounting for K2.37 trillion ($2.37 billion) in investment, according to the report.
The financial services sector during the second half of the 2013-14 fiscal year saw the expanding of bank branches, which increased by 210 to 695, while 470 private money exchange counters have been approved during the period.
The report said 82.5 percent of the planned objectives have been completed in the energy sector,while 99.5 percent were completed in the mining and mineral sector during the period.
The government has increased electricity supply in many states and regions thus reducing the private usage of diesel to run generators for household or commercial purposes.

Source from Myanmar Business Today,24-30 July,2014

Banking Conference Focuses on Local Banks’ HR, Capacity Dearth

The 2nd annual Myanmar Banking and Business Development Conference, hosted by Sphere Conferences and Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry, was held on July 15 – 17 in Yangon at the Sule Shangri-La Hotel.
Day one of the conference focused on the strategic aspects and the future of the banking and finance sector in Myanmar as it moves towards increased global integration, while day two emphasised the use of technology.
Dr Aung Thura, CEO of Thura Swiss, moderated a panel discussing the impact of impending foreign bank licences. During the panel discussion, Dr Sein Maung, chairman of First Private Bank, shared his surprise that the government was so quickly willing to allow foreign banks to operate in Myanmar saying that while the government has good intentions, the decision is a bit “premature.”
“Why rush? The legal base is not ready yet. Additionally, there is a big gap between capitalisation, skills and technology.
“We are in the process of building a house, in the process of building institutions. We should not rush this process.
“My advice to move step-by-step in a pragmatic fashion,” Dr Sein Maung told the panel.
Kittiya Todhanakasem, a senior executive vice president and managing director at Krung Thai Bank, acknowledged Dr Sein Maung’s concerns and added that in an overseas market the market leader must be domestic.
She further emphasised that Thai banks will focus on financing and promoting trade of Thai corporations, which is a likely scenario for any foreign bank granted one of the coveted foreign banking licences.
Kim Chawsu Gyi, deputy managing director and head of transformation at KBZ Bank, added that foreign banks are vital to financing huge infrastructure projects, which local banks cannot currently accommodate with their limited capitalisation.
Also discussed at the conference is the reality of the immense challenges Myanmar’s financial system faces in terms of the lack of skilled workers and technological improvements.
Kim Chawsu Gyi, who is responsible for the development of human resource capacity for Myanmar’s largest bank KBZ, said, “We must recruit individuals with the right skills and talent, but it is equally important for these individuals to learn soft skills such as teamwork, how to provide excellent customer service, and how to work in a professional office environment.”
Dr Sein Maung acknowledged the critical need to upgrade the technology of Myanmar’s banks.
However, upgrading technology is not as easy of a task as many might think.
“Upgrading technology is very expensive. On top of that, lots of vendors come to sell software without the proper sales support and local support staff,” Dr Sein Maung said.
He confirmed the need for intensive and quick action in addressing human resources deficiencies, suggesting advancements in basic education, university and certificate courses should be emphasised.
U Set Aung, deputy governor of the Central Bank, spoke about the country’s commercial and business climate and touted Myanmar’s potential for business development and trade saying, “The Ministry of Commerce has focused on four main areas that include trade promotion, facilitation, liberalisation, and education.
“As a result, Myanmar’s trade volume significantly increased during the last three years.”
According to data presented at the conference, Myanmar’s trade volume has increased from $15.27 billion in the 2010-11 fiscal year, to an expected $24.87 million in the 2013-14 fiscal year.
U Set Aung said Myanmar’s current prospects for growth lie in the country’s many “untapped
natural and human resources, its strategic location and ability to become a major regional trading hub, and increasing south-south and global trading opportunities.”

Source from Myanmar Business Today,24-30July,2014

Myanma Railways to Invite Tender to Build Dry Ports

State-run Myanma Railways will invite local and international businesses in August for an open tender to construct dry ports for the development of the local logistics sector.
The project is expected to be finished in the current 2014-15 fiscal year, which will ensure access to dry ports and containerisation for rail transport, boosting connectivity for industries engaged in import-export.
“We plan to invite tenders from local and international business in August with construction set to start in September,” told U Aung Myo Myint, deputy general manager of cargo for Myanma Railways.
Construction for dry ports are expected to be completed by May 2015, which will be followed by a planned upgrade to the railroad infrastructure in June of next year that will help accommodate container trains that run from inland depots to seaports, as well as other industrial zones.
The short-term schemes aim to develop dry ports in Yangon and Mandalay, Myanmar’s major commercial cities.
The project is drafted to include six sites that include Kwae Ma, Ywarthargyi, Tanyingone,Myohaung, Myitnge, Palate stations. The potential project sites will be assessed before implementation with only two sites so far being confirmed, Ywarthargyi in Yangon and Myitnge in Mandalay.

Source from Myanmar Business Today,24-30July,2014

Labour Requirements Growing Throughout Myanmar

Experts have released a report confirming Myanmar is facing a shortage of trained and capable labour in a range of industrial sectors that could threaten the nation’s development prospects.
The country’s demand for skilled workers is expected to reach a level equal to almost half the population by 2015.
Myanmar Arts and Science Academics Association Vice President Dr Thet Lwin and Yangon University of Economics Vice Rector Dr Tun Aung prepared the report forecasting Myanmar’s future employment needs.
The document estimated Myanmar will need 32 million more workers in job areas including agriculture, forestry, energy, mining, industry, electrical, construction, social, management and trading by next year.
Yangon University of Economics Rector Dr Tin Win said the report used mathematical calculations to determine where the skilled worker shortages were most prominent throughout Myanmar.
If Myanmar is unable to increase education and training to help citizens improve their employability then the country’s labour needs could reach over 34.6 million by 2020, while demand for skilled workers stood at 29.7 million people in 2010, according to the report.
The report said the country’s agriculture sector will have the highest labour requirement while the industrial and trading sectors will also have employment demands of over 3 million labourers.
Dr Thet Lwin and Dr Tun Aung, the report’s authors, said the agriculture, industrial engineering and information and media industries should be prioritised for local employment expansion.
Last month the IMF forecast it expects Myanmar’s economic growth to rise to a rate of 8.5 percent by March 2015. The report suggests increased shortages in skilled labour could stall the country’s economic progress.
Myanmar is facing skills shortages in many sectors central to the country’s infrastructure development. The civil administration and service sectors are expected to require 2 million further skilled workers by next year.
Estimates also forecast ,S employment demands for the tourism industry to reach 930,000 workers in 2015. Myanmar’s tourism industry is expected to contribute over $1 billion in 2014, increased from $926 million in 2013 and $534 million in 2012.
However, a lack of trained and capable labour could undercut further revenue increases in the tourism industry.
The experts said skill shortages in Myanmar’s foreign language and medical and healthcare services were also likely to become prominent.

Source from Myanmar Business Today, 24-30 July,2014

Insurers Struggle to Get Grip on Burgeoning Cyber Risk Market

Insurers are eagerly eyeing exponential growth in the tiny cyber coverage market but their lack of experience and skills handling hackers and data breaches may keep their ambitions in check.
High profile cases of hackers seizing sensitive customer data from companies, such U.S. retailer Target Corp or e-commerce company eBay Inc, have executives checking their insurance policies.
Increasingly, coporate risk managers are seeing insurance against cyber crime as necessary budget spending rather than just nice to have.
The insurance broking arm of Marsh & McLennan Companies estimates the U.S cyber insurance market was worth $1 billion last year in gross written premiums and could reach as much as $2 billion this year. The European market is currently a fraction of that, at around $150 million, but is growing by 50 to 100 percent annually, according to Marsh.
Those numbers represent a silver of the overall insurance market, which is growing at a far more sluggish rate. Premiums are set to grow only 2.8 percent this year in inflation-adjusted terms, according to Munich Re, the world’s biggest reinsurer.
The European cyber coverage market could get a big boost from draft EU data protection rules in the works that would force companies to disclose breaches of customer data to them.
“Companies have become aware that the risk of being hacked is unavoidable,” said Andreas Schlayer, responsible for cyber risk insurance at Munich Re. “People are now more aware that hackers can attack and do great damage to central infrastructure, for example in the energy sector.”
Insurers, which have more experience handling risks like hurricanes and fires, are now rushing to gain expertise in cyber technology.
“It is a difficult risk to price by traditional insurance methods as there currently is not statistically significant actuarial data available,” said Robert Parisi, head of cyber products at insurance brokers Marsh.
Andrew Braunbergon, research director at U.S. cybersecurity advisory company NSS labs, said that some energy companies have trouble persuading insurers to provide them with cyber coverage as the industry is vulnerable to hacking attacks that could trigger disasters like an explosion in a worst-case scenario.
Pricing on policies for retailers has climbed in the wake of recent high-profile breaches at Target,Neiman Marcus, and other merchants, he added.
A Necessary Cost
Though still very much in its infancy, the market’s potential is vast with cyber crime costing the global economy about $445 billion every year, according to an estimate last month from the Washington-based Center for Strategic and International Studies.
While many companies have in the past counted on their general commercial liability policies for coverage, they are increasingly taking out standalone contracts.
One reason for the change in attitude is a New York state court ruling in February against Sony Corp. The company which has appealed the decision, had sought to force providers of its general commercial liability insurance to foot the bill for class action lawsuits following a major 2011 cyber attack on Sony Play Station Network.
“This issue with Sony is that it did not have a standalone cyber product,” said Peter Beshar, general counsel at the Marsh & McLennan Companies.
Target was better protected when some 40 million payment card numbers were stolen last year. It had $100 million in cyber insurance, according to the trade publication Business Insurance.
With low interest rates limiting revenues from insurer’s vast bond portfolios, the extra underwriting income from the fast growing new market is all the more welcome.
The cost of cyber insurance varies depending, but on average $1 million in protection ranges from about $20,000 to $25,000 according to Beshar.
German insurance giant Allianz says its premiums for 10-50 million euros in protection run about 50,000-90,000 euros in annual premiums. For protection of over 50 million euros, companies can get coverage up to 300 million euros through coinsurance policies involving multiple underwriters.
Whether insurers are offering coverage at prices commensurate with the risks is anyone’s guess as long as underwriters have scant experience with hackers.
Growing Pains
AXA, Europe’s second biggest insurer, is making a big push into the cyber insurance market, but has so far not paid out a single business claim.
“I would like to see a successful claim, because that would be an experiences,” said Philippe Derieux, deputy CEO of AXA’s global property and causality business.
AXA is hiring computer experts and engineers to build up a centralized cyber team, but Derieux said there is a shortage of qualified talent.
“It is hard for insurers and brokers to find people able to handle the product,” Munich Re’s Schlayer said.