Myanmar Land of Opportunities and Challenges

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Loraine Fisher
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1 Myanmar Land of Opportunities and Challenges 2016

2 What are the associations? U.S.A U.K. Aung San Suu Kyi China Myanmar 2

3 Where is Myanmar?

4 Myanmar s Vital Statistics Population -Male -Female Area mln % % 676,577 sq. km GDP Usd bln ( ) GDP annual growth rate 7.6% (as of March 2013) Number of household 11.1 mln (2013) Working population (age 15 & above) Youth population (age 15-24) 31 mln (2013) 20 mln (2013) Tourist arrivals Over 2 mln (2014) Local system Common law SME size 126,237 (99.4%) Source: The World Bank/Myanmar Government

5 5 Myanmar s Exports & Imports In US Dollar in Million No TOP 10 Exports Value 1 Natural Gas 2, Jade 2, Matpe ( Black Gram Bean ) Garment Fish Rubber Teak Log Green Mung Bean Hardwood Log Rice In US$ Million No TOP 10 IMPORTS Value 1 Petroleum Products 1, Machinery & Spare Parts Iron & Steel Construction materials Plastic Raw Materials Palm Oil Vehicles & Spare Parts Pharmaceuticals Ships, Boats Cement Fertilizers

Myanmar s Foreign Investments FDI in Myanmar by Sector, as of 31/10/2014 Permitted Enterprises Sector Particulars Approved Amount Number (in Usd mln) % 1 Power 8 19,324.54 38.

6 Myanmar s Foreign Investments FDI in Myanmar by Sector, as of 31/10/2014 Permitted Enterprises Sector Particulars Approved Amount Number (in Usd mln) % 1 Power 8 19, Oil and gas , Manufacturing 416 4, Mining 69 2, Transport & communication 27 2, Hotel & tourism 57 2, Real estate 28 2, Livestock & fisheries Agriculture Industrial estate Other services Construction , Source: HKMCC

7 Myanmar s Priorities - in regard to itself Rural development and poverty reduction Agriculture development and industrialization Energy sector development Telecommunication development Micro-finance for rural people and SMEs Education and health sector development Human resource development Infrastructure development

8 China s Priorities - in regard to Myanmar Building the Bangladesh-China-India-Myanmar land bridge Counting Myanmar in building smooth, secure and efficient ocean routes to connect the major sea ports along the ROAD Including Myanmar in strengthening infrastructural connection, trade, investment, resource exploration, finance, ecology, culture, maritime development Maintaining the Ruili (Yunnan) Kyaukpyu (Myanmar) oil and gas pipeline,

9 MCL s Priorities - in regard to Myanmar 9

10 Opportunities

11 Myanmar s Market Development - relative to other Asean countries High value merchanise Malaysia Thailand Daily necessities Indonesia Philippines Vietnam Low value merchandise Laos Cambodia Myanmar 11

12 Myanmar s Minimum Wage Level - relative to other Asean countries Myanmar : Usd100 Cambodia : Usd140 Vietnam : Usd156 12

13 Myanmar s Import Sourcing - general merchandise Yiwu in Zhejiang Guangzhou in Guangdong

14 Myanmar s Other Opportunities 14

15 Other Import Logistics Opportunities Myanmar Plaza Myanmar Parkson City Mart Holding 15

16 Yangon - Thilawa - MTT MITT MITT is about 25km from city area 16

17 Yangon Thilawa - MITT SEZ - 2,400 hectares MITT 17

18 Foreign Investment Law 1 2 A citizen or concerned Government organisation 100% foreign owned Joint venture 3 Any system Included in the Mutually Agreed Contract 18

19 Starting Up Business - MMCL Documents requirements Business Permit Company Registration Capital requirement Min. USD50,000 19

20 MMCL Team in Yangon 20

21 Myanmar s Transport and Logistics Physical Distribution Logistics Concepts Supply Chain Management Finance Product Development Customer Development Supply Chain Integration 1960s 1970s 1980s

22 Logistics Plus Logistics services LCL FCL Land, Air, Ocean Freight Break Bulk Out of Gauge 22

23 CFS / Warehouse Logistics Plus 23

24 Logistics Plus Value added services (import to Myanmar) Supply Sourcing PO Management Cargo Inspection LCL Consolidation FCL Landside Delivery Inspection/Quarantee Customs Clearance

25 MMCL s Overseas Network Italy Japan & Korea China & Hong Kong ASEAN Australia & New Zealand

26 Challenges

27 Congested Roads & Terminals Yangon Down Town Yangon Inner Port 27

28 Yangon Inner Harbour Terminals & ICDs HTD (Hteedan) AWPT International wharves o Yangon Port 17 wharves o Thilawa Port 6 wharves Total 23 wharves ICD 3 Depots MIP SPW NANTHIDA BSW ICD 1 & 2 Monkey Point 28

29 Competition - general merchandise logistics Competition from existing agents in China

30 Competition - FMCG logistics Resources? 30

31 Myanmar s Business Transaction - still cash based 31

32 Myanmese People and Culture

33 Government Effectiveness 33

34 Putting into perspective

35 SWOT Analysis - Myanmar Strengths 1. Strategic geo-political & commercial location 2. Opening up for business & investment 3. Pragmatic leadership 4. Peaceful foreign policy 5. Large and young population 6. Rich in natural resources Opportunities 1. On the Maritime Road 2. Last frontier in ASEAN 3. Connectivity with end-markets 4. Strategic interest to China & USA 5. Investment in infrastructure, tourism, trade & commerce, education & ecology (the green vision) Weakness 1. Complex bureaucratic regulations & legal issues 2. Rudimentary financial market 3. Inadequate infrastructures 4. Limited industrial diversification 5. Lack of international exposure 6. Insufficiency of skilled labour Threat 1. Risks associated with reforms economic, social, and political 2. Negative impact on environment resulting from massive industrialization 3. Inflationary pressure resulting from rapid economic expansion 4. Conflict with ethnic minorities 5. External political forces impacting internal political, social and economic stability 35

36 On balance Put a Marker on this Land of Opportunities 36

37 Communication Shenzhen Shunde Yangon 37

38 To follow up

39 Myanmar Star 39

40 A New Chapter in Myanmar 40 40

41 One Belt One Road G (Government) G (Government) P (People) P (People) B (Business) 2 B (Business)

42 Questions & Comments 42

Zaw Min Win President

Zaw Min Win President The Republic of the Union of Myanmar Federation of Chamber of Commerce and Industry (2-2-2017) Rome, Italy Outline 1 Myanmar at a Glance 2 Major Economic Reform : in 2011-2015 3 Economic