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U.S. Commercial Guide to Burma (Dep
- Subject: U.S. Commercial Guide to Burma (Dep
- From: freeburma@xxxxxxx
- Date: Thu, 29 Feb 1996 21:17:00
Subject: U.S. Commercial Guide to Burma (Dept. of State)
U.S. Department of State
Burma Country Commercial Guide
Office of the Coordinator for Business Affairs
COUNTRY COMMERCIAL GUIDE
Burma (Myanmar)
JUNE 1995
Prepared by U.S. Embassy
Rangoon, Burma (Yangon, Myanmar)
This Country Commercial Guide (CCG) presents a comprehensive look at
Burma's commercial environment through economic, political and market
analyses.
The CCGs were established by recommendation of the Trade
Promotion Coordinating Committee (TPCC), a multi-agency task
force, to consolidate various reporting documents prepared for
the U.S. business community. Country Commercial Guides are
prepared annualy at U.S. Embassies through the combined efforts
of several U.S. governement agencies.
Table of Contents
I. Executive Summary
II. Economic Trends and Outlook
-Major Trends and Outlook
-Government Role in the Economy
-Economic Outlook
-1994/95 Economic Performance
-Principal Growth Sectors
-- Agriculture
-- Fisheries
-- Forestry
-Fiscal and Monetary Developments
-Balance of Payments
-Infrastructure Situation
-Major Infrastructure Projects Underway
III. Political Environment
-Nature of Bilateral Relationship with the United States
-Major Political Issues Affecting Business Climate
-Brief Synopsis of Political System
IV. Marketing U.S. Products and Services
-Use of Agents/Distributors; Finding a Partner
-Joint Ventures
-Steps to Establishing an Office: Registering as a Company
-Advertising
--List of Newspapers
--List of Economic Journals and Magazines
--Advertising Agencies and Services
-Selling to the
-Protecting Your Property from IPR Infringement
-Legal System
-Taxes
-Trade Fairs
V. Leading Trade Prospects for U.S. Business
-Telecommunications
-Petroleum and Natural Gas; Electricity Generation; Fertilizer; Methanol
-Construction
-Agriculture and Agro-Industry
-Mining
-Industrial Inputs
-Computer and Related Industries; Service and Maintenance
-Inputs to the Fisheries Industry
-Health
-Automobiles
-Aviation, Shipping, Rail Transport
-Hydroelectric Power
-Wood-based Industries
-Consumer Goods
-Travel Industry
-Insurance
-Other Opportunities for U.S. Firms
VI. Trade Regulations and Standards
-Barriers to Trade and Investment
-Trade Regulations
-Tariffs and Import Taxes
-Customs Valuation
-Import Licenses
-Prohibited Imports
-Export Controls
-Import/Export Documentation
-Temporary Entry
-Labeling, Marketing Requirements
-Free Trade Zones
-Membership in Free Trade Arrangements
VII. Investment Climate
-Openness to Foreign Investment
--Government Attitude
--Foreign Investment Law
--Screening of Foreign Investment
--Investment Incentives
--Discrimination
-Conversion and Transfer Policies
--Non-Convertible and Overvalued Currency
--Remittances
-Expropriation and Compensation
-Dispute Settlement
-Political Violence
-Performance Requirements/Incentives
-Right to Private Ownership and Establishment
-Protection of Property Rights
-Regulatory System
-OPIC and Other Investment Insurance Programs
-Efficient Capital Markets and Portfolio Investment
-Bilateral Investment Agreements
-Labor
-Foreign Trade Zones/Free Ports
-Capital Outflow Policy
-Foreign Direct Investment
--Type of Investment
--Investment Flows
--Major Foreign Investors
VIII. Trade and Project Financing
-Description of Banking System
-Foreign Exchange Controls Affecting Trade
-How to Finance Exports/Methods of Payment
-General Financing Availability
-List of Banks with Correspondent
--U.S. Banking Arrangements
IX. Business Travel
-Business Customs
-- Obtaining Appointments Government Officials
-International Connections
-Foreign Exchange Controls/Procedures
-Hotels
-Ground Transportation
-Health and Food
-Holidays
APPENDICES
-Country Data
--Profile
--Domestic Economy
--Trade
--Total Approved Foreign Investment
--Government Budget as published in the
"Review of the Financial, Economic and Social Conditions"
-- Balance of Payments
Annex A: How to Register as a Company
Annex B: List of Travel Agencies (Selected)
Annex C: List of Hotels (Selected)
Annex D: Select List of Lawyers, Business Consultants,
Business Associations, Shipping Lines/Agents,
Local Business Contacts, Trade-Related
Publications, Government Agencies
I. EXECUTIVE SUMMARY
The flood of consumer goods into Burma and nearly 400 percent increase
in personal cars in six years attest to growing purchasing power among
the Burmese. New construction abounds in Rangoon, Mandalay and cities
and towns that have benefited from the border trade boom with China and
Thailand. Although severely constrained by a lack of foreign exchange
and access to multilateral financing, the government has launched
ambitious programs to re-build Burma's crumbling infrastructure. These
programs include modernizing the telecommunications system, and building
roads, bridges, international airports, irrigation and hydroelectric
dams. Burma's rapidly expanding private sector also provides
opportunities for U.S. exports. Growing opportunities have brought a
steady stream of trade and investment delegations, especially from Asia,
but also from Europe. U.S. companies are also increasingly travelling
to Burma to investigate opportunities.
Traditionally, major U.S. exports have been specialized machinery and
parts, and heavy construction equipment, mostly for the oil and gas
sector. Multi-national firms have made major finds of offshore natural
gas, development of which will include building at least one pipeline to
Thailand and an investment estimated at USD 1 billion. Growing foreign
investment in fisheries, mining, manufacturing, construction, hotels and
other areas also provides potential customers for U.S. exporters.
Burma's main imports are industrial raw materials, machinery, spare
parts and implements, construction materials, heavy equipment, capital
equipment for industry, transport equipment, motor vehicles, electrical
appliances and consumer goods including foodstuffs, electronics,
textiles, medicines and pharmaceuticals. Border trade brings in the
full range of consumer items and small inputs for private industry.
Many imports, including U.S. products, come via Singapore. Officially
registered imports in the 1994/95 fiscal year (April-March) were USD 1.6
billion. This figure, however, counts only a portion of the imports
entering through border trade. Most imports come from Japan, China,
Thailand, Singapore, Malaysia, India, Hong Kong and South Korea.
According to U.S. data, officially registered imports directly from the
United States were USD 11 million in 1994.
Foreign entrepreneurs say it has become easier to do business in Burma
over the past two years as the government has streamlined commercial
procedures somewhat, confirmed letters of credit have become an accepted
way of doing business and private and government agencies have more
foreign exchange to spend. Although commercial regulations have been
streamlined, many cumbersome restrictions remain including permits
required for imports, exports and most other business activities. Since
the economy is in transition from a centrally planned to a market
system, rules and regulations are subject to amendment with little or no
advance notice, causing considerable confusion in the business
community. Corruption among public officials is a growing problem for
businesses. Domestic and foreign firms tied to government officials
through joint ventures, shareholdings, personal connections or other
means receive preferential access to scarce materials and are able to
bypass government procedures that tie up commerce for other private
sector firms. Poor infrastructure is a major impediment to distribution
of goods and services. Due to the inadequacy of its narcotics
suppression efforts and serious abuse of human rights, Burma has been
unable to obtain multilateral financial assistance and receives only
limited bilateral aid. The U.S. EXIM bank does not have an active loan
program for Burma.
Ad hoc economic reforms have expanded the private sector and brought
economic growth, but have been insufficient to stabilize the economy and
provide a firm basis for sustained economic development. The lack of
popular backing for the military dictatorship that seized power after
violently crushing pro-democracy demonstrations poses difficulties for
sustained economic development, at least so long as the military fails
to initiate genuine political reform and dialogue with its opponents.
Although local private investment continues to expand, it is limited by
lack of capital, overregulation of commerce and continued government
intrusiveness into the lives of its citizens.
The government claims Gross Domestic Product (GDP) rose 6.8 percent in
1994/95. Inflation was 32 percent. Officially registered exports were
USD 816 million, but this does not include large amounts of minerals,
timber, and other exports smuggled over Burma's lengthy and poorly-
controlled borders. The major exports are beans and pulses, rice, teak,
hardwood and wood-based products, rubber, gems, jade, base metals and
ores, textiles and handicrafts.
Burma's wealth of natural resources was largely untapped during 25 years
of isolationist economic policies prior to 1988. Burma has fertile
farmland, vast stands of teak and tropical hardwoods and other timber,
freshwater and marine fisheries, recent large finds of natural gas, some
oil and significant mineral resources. Most mineral resources have not
been fully exploited or even explored.
Country Commercial Guides are available on the National Trade Data Bank
on CD-ROM or through the Internet. Please contact STAT-USA at 1-800-
STAT-USA for more information. To locate Country Commercial Guides via
the Internet, please use the following World Wide WEB address: WWW.STAT-
USA.GOV. CCGs can also be ordered in hard copy or on diskette from the
National Technical Information Service (NTIS) at 1-800-553-NTIS.
Chapter II. ECONOMIC TRENDS AND OUTLOOK
Major Trends and Outlook
(NOTE: Official statistics are unreliable and may give a misleading
picture. For example, GDP statistics do not cover the extensive
informal market economy, and the highly overvalued official exchange
rate exaggerates dollar values. Moreover, official data for 1993/94
through 1995/96 are preliminary and subject to substantial later
revision. Except where otherwise stated, the following figures are
based on a fiscal year ending March 31.)
A. Government Role in the Economy
>From 1962-88, Burma had a centrally-planned economy with little foreign
trade and investment. Burma began opening its economy in September
1988, when the military government that seized power after violently
crushing pro-democracy demonstrations proclaimed a market-oriented
economic policy, invited foreign investment and began an ad hoc series
of economic reforms. Reforms to date have included:
Allowing the private sector to engage in most economic activities;
Legalizing border trade and allowing it to be conducted at market
exchange rates;
Signing border trade agreements with India, Thailand, China and
Bangladesh to normalize and expand border trade;
Streamlining trading procedures;
Permitting exporters to retain their earnings in foreign currency, use
the bulk of them for imports, and exchange these earnings among account
holders at state-owned banks;
Introducing a parallel currency (foreign exchange certificates or FECs)
to help circumvent the overvalued official exchange rate;
Vastly reducing the areas of the economy doing business at the official
exchange rate;
Allowing citizens receiving foreign exchange income to keep 90 percent
of it in officially approved banks without having to convert it into
kyats (the remaining 10 percent is paid as tax);
Privatizing some state-owned enterprises;
Allowing farmers to sell around 80 percent of their rice crop on the
free market and permitting most agricultural crops other than rice to be
exported by the private sector;
Permitting private sector banks;
Allowing four private banks tied to the government to handle foreign
exchange;
Implementing a foreign investment law allowing foreign investment in
most sectors of the economy, and permitting 100 percent foreign
ownership in some sectors;
Adopting an open official attitude to foreign investment, where the
government will consider any reasonable proposal and modify its laws to
allow proposals deemed in the interest of the state;
Promulgating a domestic investment law;
Implementing a new mining law; and
Easing procedures for issuing business and tourist visas.
By 1994/95, the private sector accounted for 76.4 percent of Gross
Domestic Product (GDP). Although the private sector has grown and
market forces are playing a greater role in the economy, lack of
capital, uncertainty about the political and economic situation, and
continued government intrusiveness into the lives of its citizens limit
local private investors' involvement in large-scale, long-term
operations.
B. Economic Outlook
Despite some substantial reforms among the government's ad hoc measures,
the regime's overriding concern to maintain political stability has
prevented it from making significant progress on badly needed basic
reforms such as imposing hard budget constraints on state economic
enterprises and the military, reducing deficit spending, lowering
inflation, modernizing the financial system, realigning the currency and
accelerating privatization. The economy has not been stabilized.
Inflation has been between 21-59 percent over the past five years.
While incomes have risen, most have not kept pace with inflation.
Income disparity has widened, both within the cities and between urban
and rural areas. Imports continue to rise well ahead of recorded export
earnings (although an inflow of grants and direct foreign investment
moved the balance of payments to a surplus in 1994/95). The lack of
political reform has left Burma cut off from multilateral financing and
most foreign aid since 1988. As the fundamental underpinnings of the
economy remain weak, Burma has not yet established the preconditions for
sustained long-term economic growth.
Things look somewhat brighter over the medium term. The recent doubling
of foreign investment is an encouraging sign, although Burma has so far
attracted less foreign investment than most South East Asian nations.
Government officials have said that in two to three years they will have
sufficient foreign exchange reserves to realign the currency. They note
that hard currency revenue from natural gas sales to Thailand will begin
in mid-1998 and continue for 30 years. If investments currently under
discussion in mining, energy, and export-oriented manufacturing come to
fruition, Burma could gain substantial foreign exchange inflows. The
key will be whether the government uses these opportunities to implement
badly needed economic reforms and sufficient political reforms to
convince the donor community to restore multilateral financing and
foreign aid.
1994/95 Performance
In 1994/95, continued economic liberalization, a doubling of foreign
investment and increased agricultural production helped bring a third
straight year of economic growth. The actual amount of growth is
difficult to assess because government numbers are inflated. The
government claims GDP grew 6.8 percent in 1994/95 and 5.6 percent in
1993/94. Per capita GDP grew 4.8 percent in 1994/95 and 4.0 percent in
1993/94.
Principal Growth Sectors
Agriculture
According to government data, agriculture accounted for about 38 percent
of GDP and 65 percent of employment in 1994/95. The government claims
the agricultural sector grew 7.2 percent. Production of major crops
increased in response to expansion of the cultivated area and government
support, especially expanded irrigation. Pulses and beans production
grew 37 percent, corn production by 25 percent, cotton production by 144
percent, while sugar cane production fell 16 percent. The winter oil
seed crop was reduced by the early withdrawal of the 1994 monsoon. The
government claims total oilseed production grew 14 percent in 1994/95.
Shortages in the domestic market caused cooking oil prices to spark
upward. The Embassy estimates that cooking oil prices rose about 60
percent in 1994. They have risen 43 percent from January to June 1995
compared to the same period last year.
Although rice production increased, it failed to reach government
predictions of 19 million metric tons due to floods during the early
monsoon period in some parts of Burma, problems in government irrigation
programs and the early withdrawal of the monsoon in all parts of Burma,
which affected late maturing varieties of rice. The government
estimates that rice production was 18 million metric tons. The Embassy
estimates that total rice production was 16 million metric tons, which
is still higher than our estimate for last year's production of 15
million metric tons. One of the main reasons for differing Embassy and
Burmese government predictions is that the government claims it expanded
cultivation of the dry season rice crop to 4 million acres. The Embassy
believes only 2.5 million acres were seeded with dry season rice.
The government claims it met its official target of exporting 1 million
metric tons of rice, twice the amount the Embassy believes was exported
in 1993/94. The Embassy believes rice exports were somewhat less than 1
million metric tons in 1994/95, and that the export level achieved was
likely met at a cost of running down government reserves, which had been
at record levels in 1993/94. There have been some signs of shortfalls
in government rice stocks in 1995. The government has taken measures to
reduce upward pressure on domestic rice prices. In late 1994, it ended
the practice begun last year of allowing the Agricultural Ministry to
export rice in order to pay for imported inputs. The government feared
that, given pressures on supply, Agricultural Ministry competition with
the Trade Ministry to produce rice would push up prices. The government
also removed several long-standing barriers to domestic trade in rice.
Because government rice reserves were reduced to reach the 1994/95
export target, the May 1995 monsoon was late in arriving, and government
irrigation and other programs to support dry season rice are not as
successful as claimed, the Embassy believes rice exports will fall in
1995/96.
The Embassy estimates that consumer prices for the low-quality type of
rice consumed by the majority of the population rose only 4 percent in
1994. From January to June 1995, consumer prices for this dietary
staple had risen 13 percent compared to the same period last year. The
price for the higher quality rice consumed by higher income people rose
10 percent from January to June 1995 compared to the same period in
1994. The Embassy expects that rice prices will continue to rise until
October 1995 because there will be shortages until the monsoon harvest.
The Embassy expects the government will continue to give top priority to
keeping rice prices down, however, so the amount of the increases will
be moderate.
Fisheries
Fisheries production grew only 4.6 percent in 1994/95. The government
hopes its full privatization of Myanma Fisheries Enterprise will bring
increased production in 1995/96. Foreign investment grew markedly in
1994/95, and helped Burma begin producing high quality frozen shrimp for
export to the United States, Europe, Australia and Japan.
Forestry
Burma's forestry production is experiencing a change in both policy and
scope, as government officials try to combat deforestation and ensure
that Burma's forests continue to yield economic wealth for years to
come. The forestry sector declined 14 percent in 1994/95, as the ending
of private sector timber concessions, shortages of mechanical power and
abrupt policy changes in the domestic sector restrained output.
Roundwood (includes all logs, firewood, and an Embassy estimate for the
number of posts and poles) production during 1994/95 was about 28
million cubic meters (CUM), down 3.4 from the previous year's
production. Preliminary official figures indicate production of tropical
hardwood logs fell 30 percent in 1994/95 to 2 million CUM. Teak logs
production also fell to 368,000 CUM, a decrease of 22 percent. Teak
logs and timber exports earned an estimated USD 218.5 million, an
increase of 19 percent over the previous year's income. The State
sector constituted 80.5 percent of total timber export earnings, while
the private sector's share was 19.5 percent.
Given the strong interest of foreign investors in this sector, growth
should rise in 1995/96 if the government adheres to a consistent set of
policies.
Manufacturing
According to government figures, manufacturing accounted for only 9.4
percent of GDP and 8.2 percent of employment. Outside observers believe
industry is responsible for 14.4 percent of GDP. Many manufacturing
activities relate to processing agricultural and other natural
resources, such as oil refining and urea production. Growth in small
cottage industries, particularly food and beverage production, helped
boost industrial output by 8.9 percent in 1994/95. Burma has thousands
of small, highly labor intensive, cottage industries. Most large
factories are owned by the state. Their output has grown slightly due
to some rationalization of production and management and increased
cooperation with private industry, but they continue to suffer from lack
of access to foreign exchange for spare parts and other essential
inputs, poor management, heavy reliance on government subsidies, lack of
responsiveness to market forces and an excess number of employees. Their
chronically low rate of capacity utilization is estimated at 10 to 40
percent.
Energy and Mining
With strict fuel rationing, most fuel in the country is available only
on the black market. Foreign firms and others with dollars or foreign
exchange certificates (FECs) are now able to purchase fuel through
state-owned Myanmar Petroleum Products Enterprise.
Frequent power outages force most private and state factories to operate
far below capacity. Many private factories use generators, despite
shortages of diesel fuel, which is diverted almost entirely to a black
market. The electricity supply improved somewhat in 1994/95, due mainly
to additional use of hydropower. Electric power generation rose 115
million kilowatt hours (KhW) to 3500 million KhW. Total installed
electric power capacity rose 68 megawatts to 1212, but old equipment
kept power losses high at 37 percent of total generation.
The power picture in Rangoon should brighten in 1995 as the government
brings natural gas on line from the Aphauk field being developed by
state-owned Myanmar Oil and Gas Enterprise (MOGE). Currently, power
outrages in Rangoon are still common. Overall, natural gas production
rose 42 percent in 1994/95 to 51,090 million cubic feet. Crude oil
production rose 10 percent to 5.7 million barrels in 1994/95.
Most of the foreign firms exploring onshore have now pulled out. A few
found oil onshore, but the amounts were small and expensive to recover.
MOGE and two Australian firms are continuing to explore onshore.
Results have been better offshore, where there have been some
significant finds of natural gas, including about 6 trillion cubic feet
found by the French firm Total. Some foreign firms are currently
engaged in negotiations with MOGE for oil and gas exploration/production
contracts, so the amount of foreign investment in the Energy sector may
increase in 1995.
Official statistics on the mining sector are particularly difficult to
assess given the large amount of minerals smuggled to China and
Thailand. Production figures for most minerals have often been revised
sharply downward from initial reports. The government claims the mining
sector grew 12.6 percent in 1994/95, helped by allowing the domestic
private sector to prospect, and introducing modern technology. Official
sales of gems and jade were USD 29.1 million in 1994/95. Although
government pricing policies ensure that most gems are smuggled out of
Burma, the government hopes to increase legal sales by increasing the
role of the private sector by allowing joint ventures and private sales
of gems, jade and jewelry for export. Sales have been modest, because
merchants must pay a 15-20 percent tax on sales to the state-owned
Myanmar Gems Enterprise.
Fiscal and Monetary Developments
NOTE: The Embassy's assessment of the budget is based on official
Burmese government figures for the original and supplementary budgets.
The government also publishes a single, consolidated budget in its
annual economic report. This latter budget understates spending and
overstates government revenue.
Burma's budget is divided into 3 parts: Central Government; State
Economic Enterprises; and Rangoon, Mandalay and Township Development
Committees. The central government budget includes the budget for
Ministries and a small budget for "other," most of which goes to the
State Law and Order Restoration Council (SLORC). In 1994/95, only 32
percent of total public sector spending went to central government
Ministries (45,154 million kyat). State Economic Enterprises received
68 percent (95,356 million kyat).
As it has done every year since seizing power in 1988, the SLORC issued
a "supplementary budget" at the end of the 1994/95 fiscal year with
additional spending. This year's supplementary budget was for 36,898
million kyat, or 36 percent of originally planned spending. 67 percent
of this "unplanned" spending went to bail out State Economic
Enterprises. The Construction Ministry got 9 percent, Defense got 8
percent, Agriculture got 5 percent, while Finance and Revenue got 4
percent. All other Ministries received token amounts, except for the
Ministries of Light Industry, Heavy Industry and Tourism, which received
no additional funds.
Central government spending fell 6 percent in real terms, once the
government-estimated inflation rate is factored in (24.5 percent for
Calendar Year 1994). Although announced funding for the Defense Ministry
fell 12 percent in real terms, the Ministry still had the largest share
of the Central Government budget, 33 percent, down from 37 percent in
1993/94. The Construction Ministry got the second largest share, 14
percent. This Ministry carries out most of what the government
considers "development" work i.e. constructing roads, bridges, schools,
hospitals and other buildings. The share going to the Education
Ministry continued to decline, falling from 18 percent in 1992/93 to 16
percent last year and 13 percent in 1994/95. The Finance and Revenue
Ministry, which includes funding for government pensions, got 11 percent
of this year's Ministerial budget. The other Ministry to get a major
share of the budget was Agriculture, which got 10 percent. By contrast,
the share of funding for the Health Ministry continued to drop from 8
percent in 1992/93 to 5 percent in 1993/94 and 4 percent in 1994/95.
The Ministry of Home Affairs, which includes funding for the police
force, got 5 percent of the budget, while the remaining Ministries got 2
percent or less.
Public Sector funding to city governments (Town and City Development
Committees) plummeted from 1610 million kyat in 1993/94 to 13 million
kyat in 1994/95, because these committees are now relying on their own
sources of financing.
Efforts to constrain central government and municipal spending were
overwhelmed by spending on State Economic Enterprises, which grew 19
percent in real terms. Total Public Sector spending rose 13 percent in
real terms to 140.523 million kyat. Total Public Sector spending also
rose as a share of GDP, from 29 percent in 1993/94 to 32 percent in
1994/95.
Although public sector receipts grew 10 percent in real terms, it was
not enough to make up for the rise in total public sector spending. The
public sector budget deficit continued to grow, reaching 50,364 million
kyat or 11.5 percent of GDP.
It should be noted that the budget as published in the government's
annual economic report includes the "Financial Account" and gives a more
positive picture of government fiscal policies. (See Table in
appendix). Even in this annual report, however, the total public sector
deficit grew from 4.3 percent of GDP in 1993/94 to 5.6 percent in
1994/95. In this annual report, the government says it will reduce the
budget deficit to 3.6 percent of GDP in 1995/96, but this claim does not
consider the inevitable supplementary budget and that tax receipts and
other government revenue consistently fail to meet government estimates.
The government says it will continue to run large budget deficits until
it finishes building needed infrastructure. The government continues to
finance the deficit through borrowing from the state banking system and,
ultimately, printing more currency, but in 1993 began to finance it
through issuing treasury bonds as well. As of March 31, 1995, 100
million kyat of bonds had been sold. The rate of monetary expansion
fell from 34.6 percent in 1992/93 to 19.8 percent in 1993/94, but rose
to 35.4 percent in 1994/95. This increase was due largely to increased
lending to the private and especially to the state sector. The
government is trying to dampen the inflationary impact by mobilizing
savings. Savings rose from 23,339 millions kyat in 1993/94 to 30,240
million kyat in 1994/95.
The government estimates that inflation was 24.5 percent in 1994, down
from 31.8 percent in 1993. The Embassy estimates that inflation fell to
38 percent in 1994, down from 39 percent in 1993. The inflation was
fueled by sharp increases in fuel, electricity and transport charges in
August and September 1994. According to the Embassy's estimate, overall
food prices rose 19 percent in 1994. Inflation widened income disparity,
hitting people on fixed incomes, including civil servants, especially
hard. Wages for urban day laborers generally rose about 15 percent in
1994, keeping pace with the overall level of rising food prices. During
1994, the Embassy estimates that cooking oil prices rose 60 percent,
while prices for meat and fish rose 32 percent and 27 percent
respectively. Such price increases have forced lower income Burmese to
change their diets.
Despite inflation, the kyat has been stable and even appreciated on the
unofficial market since October 1993. While some observers believe the
inflow of dollars from the drug trade helps to prop up the kyat, others
say that the main cause is the inflow of dollars from investors.
Because the official exchange rate is overvalued by nearly 20 times,
investors cannot afford to exchange the dollars they bring in at the
official rate. Investment projects in various sectors have been delayed
while investors holding dollars seek someone who will exchange them for
kyat at a market rate (usually in order to buy imports.)
The resulting stability of the kyat on the unofficial market has made
the government confident enough to allow the FEC and the market exchange
rate to spread throughout the economy. Today, the official exchange
rate is used only for government-linked transactions, and not even for
all such transactions.
Balance of Payments
NOTE: This analysis of the Balance of Payments uses the official
exchange rate.
The private sector now accounts for some 83.7 percent of legal imports
and exports. While this is a positive sign of development toward a
market economy, an unwanted side effect is a growing shift from capital
to consumer imports. In an attempt to control the use of scarce foreign
exchange, the government has experimented with various schemes to
require importers to import a certain portion of "essential" goods.
Currently, import/export companies must use 25 percent of their export
earnings for "essential imports." Such programs continued to have some
success in 1994/95 in pushing imports toward cooking oil, cement,
construction materials, industrial raw materials and spare parts.
Officially recorded imports rose 15 percent to 9117 million kyat (USD
1.5 billion). Officially recorded exports rose 13 percent to 4773
million kyat or USD 796 million. The resulting trade deficit grew 91
percent to 4344 million kyat, or USD 724 million.
The majority of Burma's imports are industrial raw materials, machinery,
spare parts and implements, construction materials, heavy equipment,
capital equipment for industry, motor vehicles, electrical appliances
and consumer goods including foodstuffs, electronics, medicines and
pharmaceuticals. Border trade brings in the full range of consumer
items and small inputs for private industry, i.e. inks, paper, dyes,
plastic pellets and medicines.
1994/95 export earnings from forestry products (mainly logs) fell 21
percent. Earnings from exports of agricultural goods, mainly beans and
pulses, grew 47 percent to over USD 332 million. Exports of beans and
pulses have been growing ever since the government turned most
agricultural production over to the private sector. In 1994/95, 456,634
metric tons of beans and pulses were exported. Fisheries exports rose
87 percent, mainly in exports of shrimp and fish. This sharp increase
was largely due to the government's allowing the private sector to
export directly from the ports of Meik, Mawlamyaing (South Burma) and
Pathein (Delta) instead of only from Rangoon.
Burma's chief export markets were Singapore, Thailand, India, China and
Hong Kong, while its most important import sources were Japan, China,
Thailand and Singapore.
Although official statistics capture some of the previously illegal
border trade, much of Burma's imports and exports are not recorded
because it does not flow through official crossing points, or is
deliberately under-reported by people seeking to evade duties and taxes.
Illegal exports of narcotics, live animals, gems, and jade, and minerals
are also substantial. (Burma is the world's leading producer of opium.)
As unofficial trade flows are usually balanced, however, the official
figures for the trade deficit are likely a good approximation.
Thanks to net services income of 2305 million kyat (USD 394 million) and
1836 million kyat in private services and transfers (USD 314 million),
the current account deficit was only 1762 million kyat (USD 301
million).
On the capital account, direct investment was 1441 million kyat (USD 246
million). Other sources of capital amounted to a net of 880 million
kyat (USD 150 million), of which 977 million kyat was in grants and (-)
94 million kyat was for loan repayments. Burma had a deficit in short-
term financing of 32 million kyat (USD 5 million).
Overall, the balance of payments improved markedly, rising from a
deficit of 214 million kyat in 1993/94 to a surplus of 527 million kyat
(USD 90 million) in 1994/95. Direct foreign investment and grant
inflows overwhelmed the current account deficit. (See appendix for
balance of payments figures.)
Although official figures have not been made public, Burma's total
foreign debt is estimated at over USD 5.5 billion. While most of the
debt is on highly concessionary terms, Burma's weak trade position makes
debt servicing difficult. Arrears began to build up in 1988 and may now
top USD 1 billion. Foreign exchange reserves as of March 1995 were USD
533.9 million. Saddled with a large and growing trade deficit with
scant foreign aid inflows in sight, Burma continues to have a weak
external financial position. Foreign exchange reserves should improve
after mid-1998, if the Total natural gas project begins sales to
Thailand as expected.
Infrastructure
Although there has been some development in infrastructure, it remains
extremely poor and a major impediment to economic expansion and
distribution of goods and services. State and private enterprises
operate far below capacity due to chronic shortages of electricity.
Private and foreign companies often rely on costly, diesel-fueled
generators. Many roads, except for the major north-south artery between
Rangoon and the central city of Mandalay, are poor and not passable year
round. Rail service is poor, although more rail connections have been
added and some passenger and freight forwarding services on the main
routes have been upgraded. Ports are severely congested. A number of
navigable rivers give access to more remote regions.
Telephone facilities are inadequate. Even calls within a city can be
difficult to complete. International fax and phone calls to and from
Burma are highly expensive and problematic. The government's
telecommunications modernization program has had some success, despite
the shortage of hard currency for importing equipment.
Major Infrastructure Projects Underway
The Ministry of Construction (Public Works Department) has issued
international tenders for the building of six major bridges. The
Ministry for Border Area Development is overseeing an ambitious
infrastructure development program, focusing on building roads,
railroads, hospitals and schools. Chinese firms are providing technical
assistance in road and bridge building for some of these projects.
The Rail Ministry is adding new lines and upgrading existing lines in
several parts of the country. State-owned Myanmar Railways has signed
contracts with 3 Chinese companies, USD 40 million for the purchase of
engines, coaches, and spare parts, and 10 million for steel bridge beams
for the Chindwin River Project.
The Transport Ministry is working to improve the management of various
inland waterways, including river ports and canal maintenance. The
Ministry is also building new international airports for Rangoon (near
Bago) and Mandalay and upgrading other airports (including Rangoon's
international airport.) In June 1995, the government signed a
Memorandum of Understanding with Singapore Technologies Construction for
design and building of the Mandalay International Airport. A Chinese
firm has started providing technical assistance on the construction of
the runway. The government has announced plans to build a new sea port
at "Thilawa", a few miles from Thanyin (Syriam), for Rangoon, and a deep
sea port in Arakan (Rakhine) State in the "Kyaukpyu" region. The
government is also upgrading Rangoon's port. In May 1995, Mitsui
Engineering and Shipbuilding signed a Memorandum of Understanding to
upgrade Rangoon's shipyards to enable them to dock vessels up to 8,000
tons, cooperation in building bridges, jetties, barges, buildings and
sluice gates and implementation of the Thilawa port. To improve domestic
transportation, the government has bought additional used Fokker planes
for Myanma Airways and upgraded the aviation and railroad services by
allowing private sector participation.
The Agricultural Ministry's Irrigation Department has been building 30
dams simultaneously, ranging from small irrigation dams to hydroelectric
dams.
The Energy Ministry is involved in the building/installation of natural
gas pipelines, natural gas generators, and a few new electrical lines to
make use of recently discovered resources. The largest project involves
foreign investment to build a natural gas pipeline to Thailand.
Given the shortage of funding for infrastructure development, the
government has traditionally used forced labor on many infrastructure
projects. (See Chapter III.)
Chapter III. POLITICAL ENVIRONMENT
Nature of Political Relationship with the United States
Any improvement in bilateral relations depends on the Burmese
Government's introducing political reform and taking positive action to
improve its human rights and narcotics control records. Official
relations between the United States and Burma have been cool since the
1988 military coup, after which the United States and other major donor
countries suspended most foreign assistance. Because of its inadequate
narcotics suppression efforts, serious violations of human rights and
lack of progress toward initiating domestic reform, Burma is ineligible
for U.S. aid and the United States and other countries oppose loans and
financial assistance to Burma by multilateral financial institutions.
Burma has been suspended from the U.S. Generalized System of Preferences
(GSP) program for worker rights violations and is ineligible for OPIC
insurance.
Moreover, the U.S. EXIM bank does not have an active loan program for
Burma. The U.S. Government will not approve licenses for the export of
military and military-related products to Burma. In compliance with a
provision of the 1990 Customs and Trade Act, the United States declined
to renew a bilateral textile agreement with Burma that expired in
December 1990. Although Burma's textile exports to the United States
are not embargoed, the absence of an agreement allows the United States
unilaterally to impose import quotas. Currently two textile categories
(340/640: Men's and Boy's Cotton and Man-made Fiber Woven Shirts;
342/642: Cotton and Man-made Fiber Skirt); are subject to quotas.
Major Political Issues Affecting Business Climate
Democratic elections in 1990 were overwhelmingly won by the opposition
National League for Democracy. Since that time, the SLORC has refused
to turn over power to the winners of that election. The lack of popular
backing for the current government poses difficulties for sustained
economic development, at least so long as the military leaders fail to
initiate genuine political reform and dialogue with their opponents.
Tight controls over economic activities run parallel to the extremely
high levels of government involvement in all activities in Burma.
Authorities in Burma consider themselves as acting in the interest of
the state, and are not always careful about legal niceties.
Consequently, while most foreign firms currently appear to be enjoying
kid glove treatment, anyone doing business in Burma -- local or
foreigner -- faces the potential for arbitrary and capricious treatment
by the government.
The U.S. Government has an official policy of neither encouraging or
discouraging trade and investment in Burma. Some large U.S. companies
doing business in Burma have encountered criticism from human rights
groups and some shareholders because of the Burmese government's serious
human rights abuses, and the continued detention of political prisoners,
including Nobel laureate Aung San Suu Kyi. Burmese leaders met with
Aung San Suu Kyi in September and October 1994 raising hopes that a
dialogue might begin, but there have been no further discussions. Aung
San Suu Kyi's official term of detention expires in July 1995, but in
the past the government has repeatedly extended her detention. Should
she be released, most observers believe the climate for business could
improve significantly.
Burma's use of forced labor has come under strong international
criticism. Hard pressed to fund badly-needed infrastructure
development, the government has often used corvee and prison labor.
Typically, villagers who happen to be in an area where central planners
decide to place a road, railroad or dam are forced to contribute money
or a set amount of labor. Although the money collected from the
villagers is used to pay some laborers, and the government sometimes
pays workers, most people are not paid and face imprisonment if they
refuse to make their "voluntary contribution." The government has
also seized some people off the street, even in Rangoon, and forced them
to break rocks for roadbuilding. Some workers on forced labor projects,
both conscripts and ordinary citizens, have died from harsh treatment.
Around 6,000 common prisoners were released in 1995 after earning
reductions in their sentences through participation in public works
projects. The military also impresses civilians and prisoners alike to
serve as porters to bear heavy loads in active combat zones where roads
are scarce. Impressed porters have been underfed, abused and left to
die if wounded. Some of the prisoners taken as forced laborers or
military porters have been recently arrested and awaiting trial for
their alleged crimes. Military units have also used the fear of forced
porterage to extort money from civilians.
Brief Synopsis of the Political System
Burma is ruled by a military dictatorship that operates through a 21-man
military council called the State Law and Order Restoration Council
(SLORC). There is no parliament, political activity is tightly
controlled and the press is strictly censored. Almost all opposition
parties have been banned. The military is currently stage-managing a
convention of mostly government-selected delegates charged with drawing
up guidelines for a new constitution. There will likely be a drafting
stage once the guidelines have been drawn up. Observers believe that a
constitution, which is intended to guarantee a continued military hold
on ultimate power, will not be completed before 1996, if not later.
Chapter IV. MARKETING U.S. PRODUCTS AND SERVICES
Use of Agents/Distributors; Finding a Partner
The Burmese economy is in a transitional phase from a socialist to a
market-oriented economy. Consequently, the government is still in the
process of issuing new rules and regulations governing commerce. These
notifications and orders are subject to frequent amendment, leading to
considerable confusion and uncertainty in the business community.
Therefore, companies interested in doing business in Burma are well
advised to employ good local contacts to keep up-to-date on changing
conditions. Moreover, patience is a key factor in dealing with the
complex business environment. Good local contacts are also important
because personal connections and earning the trust of government
officials are key to doing business in Burma. (U.S. firms interested in
a local agent or representative may contact their nearest U.S.
Department of Commerce District Office.)
Joint Ventures
Foreign investors' experiences in joint ventures with the state vary
depending on the ministry involved. Investors report that their
government "partners" see their role more as to ensure that the private
investor obeys government regulations, than to make the
venture profitable. Civil servants working in joint ventures can be as
intensely legalistic as other officials regulating commerce and seek to
hold investors strictly to the terms of their contracts. Many investors
report that working in joint ventures gets easier as government
employees are trained and educated in business practices. Although most
investors report no significant problems, some find working with
government agencies so exasperating that they recommend avoiding joint
ventures whenever possible.
Steps to Establishing an Office; Registering as a Company
Foreign companies are not required to register in order to sell their
products in Burma if they sell through a local agent, representative or
distributor. Burmese citizens, however, must register with their
government in order to have any import/export or other business dealings
with foreign firms. Many foreign companies establish a formal presence
in Burma in order to facilitate business, including obtaining
import/export and other permits. A company can establish a presence by
hiring a local agent, distributor or representative. The local
agent/distributor/representative handles all the required documentation
with the Trade Ministry.
If a foreign individual or company sells directly to the end user on a
regular basis, it must register and obtain a Permit to Trade. Foreign
companies and individuals engaged in import/export must register with
and obtain their Permit to Trade from the Ministry of Trade.
Those engaged in other business, including establishing 100 percent
foreign-owned companies or limited companies, must register and obtain
permits from the Ministry of National Planning and Economic Development.
If a foreign individual or company forms a partnership with a local
firm, registration is not compulsory, but the lack of registration
prevents the foreign firm from seeking legal recourse if needed. The
requirement for a Permit to Trade is waived for joint ventures with
state entities, but these companies generally acquire the permit. Fees
ranges from kyat 500 to 10,000 for registration, license/permit and
annual renewal, depending upon the line of business. Foreign companies
must pay in hard currency at the official exchange rate. Foreign
companies can register either as a foreign branch of a company
incorporated outside Burma, or as a foreign company incorporated in
Burma (See annex). These companies are required to bring foreign
exchange in the form of "head office foreign capital" in the case of a
branch or "issued and paid-up capital" in the case of an incorporated
company. (The capital need not be brought in as a lump sum.) The
amounts range from roughly 500,000 to 1,000,000 kyat. If the foreign
branch or company is registered under the name of a Burmese citizen,
these charges can be paid in kyat. If registration is in the name of a
foreign citizen, these fees must be paid in hard currency at the
official exchange rate. Branches are treated as "Non-Resident" for
taxation purposes; incorporated companies as "Resident".
Advertising
-- List of Newspapers
The following state-owned newspapers are published by the News and
Periodicals Enterprise of the Ministry of Information.
1. The New Light of Myanmar
The New Light of Myanmar Press, 22/30 Strand Road, 43rd Street,
(P.O. Box 43) Yangon, Myanmar.
2. Myanma Alin
Myanma Alin Press, 212 Theinphyu Road, Botataung Township,(P.O.
Box 40) Yangon, Myanmar.
3. Kyemon (The Mirror)
Kyemon Press, 77 52nd Street, Pazundaung Township, (P.O. Box
1188) Yangon, Myanmar.
4. City News
Third Floor, City Central Plaza, Shwedagon Pagoda Road, Yangon,
Myanmar.
-- List of Economic Journals and Magazines (select)
1. Dana
Dana Economic Magazine, 189-B, 33rd Street, Kyauktada Township,
Yangon, Myanmar.
2. Myanma Dana
Myanma Dana Economic Magazine, Bldg. 7 Room 8, Lanthit Yeiktha
Road, Yangon, Myanmar.
3. Kyi-Pwa-Ye
Office of the Board of Editors, 296 Bo Sun Pat Street, Pabedan
Township, Yangon, Myanmar.
4. Myanma Economic Journal
1 Kinwun Mingyi Road, Dagon Township, Yangon, Myanmar.
5. Oksa Dana Journal
Seven Dragon Myanma Enterprise Co. Ltd., 37A U Tun Myat Road,
Tamwe Township, Yangon, Myanmar.
6. Ka Naung
Ministry of Industry (1), 192 Kaba Aye Pagoda Road, Yangon,
Myanmar.
7. Yadana Thit
Ministry of Forestry, Thiri Mingala Lane, Kaba Aye Pagoda Road,
Yangon, Myanmar.
8. Style Thit
70 Aung Myita Lane, Ward (1), Hlaing Township, Yangon, Myanmar.
9. Myat Kyemon
147 Theinbyu Road, Mingala Taung Nyunt Township, Yangon,
Myanmar.
10. Phu Thit Wai
Room 18 Bldg. 74/76 Anawrahta Street, Pazundaung Township,
Yangon, Myanmar.
-- Advertising Agencies and Services
1. Ad Grand Advertising Pte. Ltd., 73 Pyay Road, Dagon P.O., Yangon
2. Bates Myanmar, 46 A Inya Myaing Road, Bahan P.O., Yangon
3. International Advertising Service, 82A Saya San Road, BahanP.O.,
Yangon
4. MacComm PR Advertising, 259 Canal Street, Lanmadaw P.O., Yangon
5. MMI Marketing, 73 Pyay Road, Dagon, Yangon
6. Sann Aung Imaging Ltd., 132 Seikkantha Street, Kyauktada P.O.,
Yangon
Selling to the Government
With few exceptions, Ministries have considerable autonomy to make their
own business decisions. Most decisions within each Ministry are sent to
the Minister. Even requests by foreign firms for meetings with lower-
ranking officials are usually sent to the Minister for approval.
Burmese government agencies and state enterprises usually purchase goods
from abroad by international tender but several Ministries send tender
invitations only to a select group of companies known to the Ministry.
Tender deadlines are usually extremely short. The Embassy reports
tenders to the Commerce Department and Commercial Sections of Embassies
in Bangkok, Singapore, Hong Kong and New Delhi. Those tenders meeting
the Commerce Department's guidelines for advance notice are published by
the Commerce Department in the "Economic Bulletin Board" and "Commerce
Business Daily." Instructions for acquiring bid documents are
contained in these announcements. Commerce Department District offices
also keep leads on file for the general public. The government had been
decreasing its use of international tenders due to lack of foreign
exchange. The number of tenders noticeably dropped in 1993, but
rebounded in 1994, especially in the construction and textile sector.
In April-June 1995, the number of government issued international
tenders suddenly soared, especially for inputs to textile and other
manufacturing. When a state agency gets an influx of foreign exchange,
it will sometimes issue a spurt of international tenders. The current
spurt may be due to the start of the new fiscal year.
Some state agencies make arrangements with private local companies that
have foreign exchange to buy goods from abroad. Other agencies invite
domestic tenders for foreign goods and buy in kyat. Private local
companies are unable to invite international tenders. They buy from
their own sources abroad, and have on occasion used price lists and
catalogs that U.S. companies have sent the Embassy commercial section.
A local person who has close contact with a governmental organization is
likely to be the main supplier of foreign goods to that organization.
Experienced local businessmen advise potential U.S. exporters to
establish contact with such individuals and relevant ministries,
directly or through local representatives.
Protecting Your Property from IPR Infringement
There is no effective protection of patents, copyrights, trademarks or
any other intellectual property in Burma. A Patents and Design Act was
introduced in 1945, but never brought into force. Consequently, the
Indian Patents and Designs Act of 1911, which was enacted when India and
Burma were jointly administered under British colonial rule, continues
to govern the registration of patents and designs. Pirating of books,
software, designs, etc. is rampant. Many firms place a trademark
caution notice in the local newspaper, warning that trademark infringers
will be dealt with according to the law. Once this trademark caution
notice has been published in the newspaper, legal action (in the form of
a civil suit) can be taken against trademark infringers. Trademark
registration is possible, but in the absence of a trademarks law, is not
compulsory. Title to a trademark depends on use of the trademark in
connection with goods sold in Burma. Civil action can be taken against
misuse of a trademark, but is cumbersome and costly. Burma does not
belong to any international conventions on patents, trademarks or
copyrights. Protection of intellectual property may improve as Burma
adjusts its legislation to the needs of a market economy, and the
obligations of the Uruguay Round GATT TRIPS agreement.
Legal System
Many foreign businessmen say Burma's legal system based on British legal
tradition gives it an advantage in attracting foreign firms. While
Memoranda of Understanding may be subjected to repeated revision,
contracts are generally respected. In fact, Burmese tend to take a
legalistic view of a contract, holding themselves and foreign
businessmen strictly to its terms. Unfortunately, there have been some
notable exceptions to this general rule, including the Ministry of
Agriculture and state-owned timber enterprise, which have refused to
deliver goods at the contracted price. There have also been questions
about how well Rangoon's City Government, the Yangon City Development
Committee, honors contracts. Although Burma is in the process of
revising its legislation in line with the needs of a market economy,
laws and regulations governing property and contractual rights are
outdated -- many were enacted during colonial rule -- and consequently
are ineffective. The Government readily and thoroughly interferes in
any case deemed politically sensitive, which could include business
disputes involving state agencies or members of the military elite.
Taxes
There are fifteen types of taxes and duties under four main categories -
taxes levied on:- (1) domestic production and public consumption; (2)
income and ownership; (3) custom duties; and (4) utilities of State-
owned properties. Several of these taxes and duties are applicable to
foreign businesses. Taxation issues in Burma are complex. Foreign
companies are advised to seek assistance from local tax experts.
Foreigners who reside in Burma for 183 days or more are considered
residents for tax purposes. Foreigners staying in Burma less than 183
days, and foreign company branches or representative offices, are
considered non-resident. Resident citizens and foreigners are subject
to tax on all income, even if that income comes from sources outside
Burma. Businesses operating under a foreign investment permit from the
Myanmar Investment Commission are subject to tax only on income from
sources within Burma. Non-resident foreigners or business are subject
to tax only on income from within Burma.
The individual income tax rate for foreign currency income is 10
percent, for both foreigners and Burmese citizens. This tax must be
paid in hard currency, and is usually deducted automatically when the
income passes through state banks. The 10 percent tax must be paid,
regardless of whether the person receives his wages in hard currency or
Burmese-government issued Foreign Exchange Certificates (FEC's)
The individual income tax rate for kyat income varies from 3 to 50 per
cent. The rate for a resident foreigner who owns the company, is
between 3 to 50 percent; for an employee who is a resident foreigner the
tax rate is 3 to 30 percent; for an investor operating under a permit
issued by the Myanmar Investment Commission, a foreign firm working
under the approval of a Ministry, or a resident company, the tax is a
flat rate of 30 percent on total net income; and the tax for kyat income
for non-resident foreigners is 35 percent, or at graduated rates from 3
to 50 percent, whichever yields the greater tax liability. There are
some personal allowances for taxes on individual kyat income.
The tax rate for profits over kyat 150,000 (about USD 25,000 at the
official exchange rate) is 50 percent. If the non-resident company is
operating under the Myanmar Investment Commission permit, the tax rate
drops to 30 percent.
In calculating net profits, all expenses related to earning profits,
together with allowable depreciation, may be deducted, but expenses
either not relevant or not appropriate to earning income may not be
deducted. Dividends can only be paid from net profits, and these are
tax-free in the hands of the recipient.
The rate for capital gains tax is 10 percent for residents and 40
percent for non-resident foreigners. Capital gains tax is payable on
the sale of any capital asset, including land, vehicles or other
business assets. Aside from capital gains tax on land and buildings,
there is no property tax.
A commercial tax is levied on transactions of goods and services,
whether produced in Burma or imported. Basic foodstuffs and raw
materials are exempt, while the commercial tax rate for hotel and
restaurant services is 10%, and the rate on other items varies from 5 to
25 per cent or higher on luxury items. Tax incentives are available
only to local and foreign companies approved by the Myanmar Investment
Commission. (See Chapter VII).
Trade Fairs
Foreign exporters exhibited their products at the March 1995 Myanmar
Trade Fair, sponsored by the Trade Ministry. The Fair also attracted a
wide array of local companies exhibiting local and foreign products,
including from the United States. The next nation-wide Trade Fair will
be in January 1996. Throughout 1995, a Singaporean Firm, Applied
Investments (Asia) Pte. Ltd. is hosting a series of trade fairs for
foreign exporters. Distributors of U.S. products have participated in
these fairs. U.S. firms are invited to contact the U.S. Embassy for
information on trade fairs.
1995 Trade Fairs:
October 1995
Mid Year Gems Emporium
The followings exhibitions are organized by Applied Investments
(Asia) Pte. Ltd. and Conference & Exhibition Management Services Pte.
Ltd., Singapore 1995/96
June 21 - June 24, 1995
Myanmar Computer, Telecom & Consumer Electronics Expo'95
Myanmar Building Materials & Construction machinery Expo'95
Myanmar Garment & Textile Machinery & Accessories Expo'95
October 11 - October 14, 1995
Myanmar Food & Hotel Equipment Expo'95
Myanmar Food Processing & Packaging Expo'95
December 6 - December 9, 1995
Myanmar Energy & Power Equipment Expo'95
Myanmar Oil & Gas Equipment Expo'95
Myanmar Transport & Motor Accessories Expo'95
Myanmar Pumps & Valves Expo'95
1996 Trade Fairs:
January 1996
Myanma International Trade Fair
March 1996
33rd Annual Gems and Jade Emporium
October 1996
Mid-year Gems and Jade Emporium
Chapter V. LEADING TRADE PROSPECTS FOR U.S. BUSINESS
Telecommunications (ITA Industry Code: TEL; TES)
The telecommunications sector is potentially one of the most attractive
sectors for U.S. exports. Current Burmese law does not allow foreign
investment, but the government has received investment proposals from
several countries. The government has been considering modifying the
law to allow foreign investment but is reluctant to allow foreign
operation of its telecommunications system. The state
telecommunications agency, Myanmar Posts and Telecommunications (MPT),
is upgrading Burma's rudimentary telecommunications infrastructure. To
do so will require exchange facilities, PABX systems, switching,
distribution networks, subscriber equipment, cables, telephone sets,
long distance facilities, etc. As of June 1994, there were over 120,000
phone lines for all of Burma, 400 exchanges (all but 50 of which are
manual), and no direct dial to the United States. This situation will
likely improve somewhat during the next year given recent and planned
MPT efforts. MPT is building telecommunications infrastructure on a
piece-meal basis. It usually finances purchase of IDD lines, cellular
phones, phone exchanges and similar items by requiring people desiring
such services to pay (sometimes up-front) in U.S. dollars or kyat at the
market rate. Prices have ranged from USD 1200-5000, with the additional
income used to finance other telecommunications projects. While this
method of self-financing provides foreign exchange to pay for
telecommunications imports, it requires that purchases be made in small
allotments. A typical tender is for 1,000-2,000 lines or less.
Several communities across the country are also raising their own funds
to install telecommunications, including their own telephone exchange
facilities. This could represent a market for used U.S. telephone
equipment.
Although MPT does not issue open tenders, its officials say they welcome
participation by U.S. firms and invite interested U.S. firms to contact
MPT. When MPT sends out tenders, however, it usually sends them only to
the corporate headquarters of major firms, rather than smaller
telecommunications companies. As a result, U.S. firms miss export
opportunities.
MPT has bought some U.S. equipment, mostly through Singapore. In 1994/95
a U.S. firm, InterDigital Corporation, successfully sold
telecommunications equipment for several Burmese cities/towns.
Canadian, Israeli and Japanese firms have also recently won
telecommunications deals. Under the contract with MPT, Sumitomo
Corporation (Japan) will construct new digital microwave channels
between several towns in Upper Burma; install cable lines in several
towns including Rangoon; and install optical fibre PMC system between
exchanges in Rangoon. Previously, almost all telecom contracts had gone
to non-U.S. firms, including Ericsson, Siemens, Chinese, and South
Korean Companies. The British Firm, Cable and Wireless, and other
foreign firms are aggressively pursuing business in the
telecommunications sector.
Petroleum and Natural Gas; Electricity Generation; Fertilizer; Methanol
(ITA Industry Codes: ACE, CON, OGM, OGS, OMS, PVC, ELP)
Market potential for oil and gas equipment, pipeline construction,
machinery and spare parts is significant for U.S. firms. Local
representatives have often been useful in U.S. sales of oil and gas
equipment to the Burmese government, usually procured through
internationally advertised tenders. Most foreign oil companies that
came to explore onshore for oil left between 1991-94, but new
opportunities for seismic support, drilling services and sales of U.S.
oil and gas related equipment have opened up. The French company Total
(and its U.S. partner Unocal) are developing a large gas reserve in the
Gulf of Martaban, 90 miles off the southern coast. The field is
estimated to hold six trillion cubic feet. Survey work has begun for
the building of a gas pipeline to Thailand. The estimated total
investment is USD one billion over the 30 year life of the project.
Production is expected to begin in mid-1998. Estimates of revenue for
the Burmese government from the gas sale vary greatly. Most estimates
fall between USD 75 -350 million a year once full production is reached.
By some estimates, the Burmese government will not be receiving this
revenue until the year 2001. In the initial stages of production, much
of the government's share will be used to repay development costs. In
1995, Texaco signed an exploration production contract on the adjacent
block. In the Yetagun Field, an offshore gas find by Texaco (and its
partners Premier of the United Kingdom and Nippon of Japan) is also
promising. The Australian firms Kailis and Australian Southern Pacific
are preparing to drill one or two long-delayed exploratory wells in
Rakhine State, while the Australian firm, Empire Oil Company, signed to
explore in another onshore block in Rakhine State.
Energy exploration companies from the U.S. and other countries continue
to visit Burma to explore opportunities, but to date no further
exploration/production contracts have been announced. In May 1995,
Indonesian firms met with Burmese officials to discuss the laying of a
natural gas pipeline to Indonesia from the Yetagun field, but building
another pipeline to Thailand or using the gas within Burma are also
being considered.
State-owned Myanmar Oil and Gas Enterprise (MOGE) continues its own oil
and gas exploration and production activities. It has discovered
natural gas in the Aphauk Field, which is estimated to be able to
produce 80-200 million cubic feet of gas per day.
State-owned Myanmar Electric and Power enterprise (MEPE) has been
purchasing natural gas turbine plants. GEC Alstrom International has
completed two 33-megawatt capacity gas turbine plants, and is completing
a 33- and 100- megawatt plant. To address a critical shortage of
electricity, the government is encouraging foreign investors to join
together to finance mini-power plants to supply factories and hotels.
So far, no such projects have been announced, but MEPE has formed a
joint venture with the Malaysian firm Unimusro Sdn Bnd (UMC) and the
Australian firm Transfield to build a USD 40 million 30 megawatt power
station to supply downtown Rangoon. The targeted customers are hotels
and other users in downtown Rangoon, who would pay in dollars. The
project is planned to be completed by the end of 1995.
The government is keenly interested in acquiring urea and fertilizer
plants. Current fertilizer production of 300,000 tons/yr. is
insufficient to meet domestic needs. The government also wants to
acquire methanol plants in order to export methanol.
Construction (ITA Industry Codes: ACE, ACR, BLD, CON, IRN, APG, HTL)
U.S. engineering and heavy equipment supply companies are competitive in
Burma's market. Moreover, Burma produces few construction materials.
Many are imported via the Chinese and Thai borders, as well as from
Singapore and Japan. In addition, foreign companies from Singapore,
Malaysia, Hong Kong, Japan, Macao, Indonesia, Thailand and other
countries have undertaken numerous construction projects, including
hotels, shopping malls, office buildings and residential developments.
The private construction industry has been booming since the early
1990's. The government's lack of foreign exchange and access to
development assistance severely limits the number of large public works
contracts, however. Although government agencies buy equipment through
international tenders, private Burmese have also been buying U.S. and
other construction equipment and heavy machinery on behalf of Burmese
government ministries.
Major public works projects planned or underway include the building of
two international airports, modernizing the Rangoon and other airports,
building six major bridges, building a new port for Rangoon, developing
an industrial and residential zone south of Rangoon, building irrigation
and hydroelectric dams, railroad and road building, and various projects
planned for Kachin, Shan and Chin States as part of the government's
border area development program. The Ministry of Transport has been
negotiating with foreign companies to supply improved equipment for
Rangoon's port. In late 1994, the Ministry of Transport said the best
prospect for U.S. firms may be a dry-dock to be built at the new port
site south of Rangoon (Thilawa) to handle 15,000 dead weight ton
vessels. He said his Ministry has been talking to Chinese and
Singaporean firms about this project. (See Chapter II for more
information).
Agriculture and Agro Industry (ITA Industry Codes: AGC; AGM)
Burma's economy is heavily agricultural, still operating with
traditional, primitive, labor intensive cultivation methods. The
government has given priority to the agricultural sector, seeking
increased exports of rice, pulses, beans and some industrial crops, to
become self sufficient in cooking oil, boost production of cotton,
chicken, shrimp and fish farming, increase the use of irrigation and
significantly expand the cultivated area. The government encourages use
of mechanization, fertilizer, irrigation, high yield strains and other
inputs.
For the 1994/95 growing season, the government has significantly
expanded the second rice crop, increasing the need for irrigation,
fertilizer, high-quality seeds, pesticides, machinery and other inputs.
To promote such imports, the government has removed duties on most
agricultural inputs. There is a growing need for simple farm machinery
and implements. Farmers have more disposable income to spend on
improving output as rice prices are high and beans and pulses have
become major exports. As the private sector begins to invest in
agriculture, demand for such U.S. products as fertilizers, chemicals,
animal breeding technology, etc. will increase. Most imported
agricultural machinery has come from China and South Korea.
Agro-business investment opportunities have opened up with the new
policy allowing private and foreign companies to lease fallow and virgin
lands for 30 years extendible every 10 years. One Thai company has
formed a joint-venture with a state-owned agency by leasing over 2000
acres of land for horticulture and livestock breeding. Among the 51
state enterprises that were offered to private investors in January 1995
were a sheep and goat farm, an all-purpose farm and a canning factory.
The fertile soils and wide-ranging climatic conditions provide nearly
endless possibilities for production of highly marketable fruits,
vegetables, livestock, fish and shrimp. The potential for food
processing industries is extremely good.
Mining (ITA Industry Codes: MIN; OGS; USD)
U.S. firms have successfully competed for sales of mining equipment to
the Burmese government, usually through internationally advertised
tenders. Such firms have found having a local representative invaluable
for obtaining advance information and meeting the frequently very short
deadlines for bid submission. As the government reduces its use of
tenders, local representatives are playing an even greater role in
helping U.S. companies in the mining sector. The mining sector is being
opened to domestic and foreign investors. The Ministry of Mines has
signed hundreds of production sharing contracts with local investors for
jade, gems, gold, tin, tungsten, zinc and other minerals. The
government is working to attract foreign investors (on a production-
sharing basis for new deposits and a profit-sharing basis for old
deposits), to help renovate or develop copper, gold, tin/tungsten, zinc
and other types of mines. Following issuance of a new Mining Law in
September 1994, the Mining Ministry began to offer foreign investors
more reasonable terms. The government says it will soon announce the
signing of contracts with foreign investors for 11 of the 16 blocks
offered for gold, copper or platinum exploration, exploitation etc., in
late 1994. Two of these contracts (both for gold mining) have been
announced with Sam Cheong Resources Pte Ltd. of Singapore and Pacific
Arc Exploration of Australia. In April 1994, the Canadian Firm, Ivanhoe
signed for a two-year feasibility study of a copper mine. In 1992, a
U.S. firm began mining granite. Thai and Chinese firms are mining tin
and tungsten, coal and other minerals. Large amounts of minerals are
also smuggled into Thailand and China. Thai companies have submitted a
proposal to develop a zinc deposit in Wali, near the Thai/Burmese
border. A Japanese firm, Niino International, has signed a production
sharing contract for the culture and marketing of pearls.
Industrial Inputs (ITA industry Codes: YAR, TXF, TXM, FPP, GIE, ICH,
MTL, PCI, PVC, PKG, BUS, CPT, EIP, ELP, USD)
Inputs to industry have long been one of the major U.S. exports to
Burma, despite the fact that manufacturing accounted for only 9.4
percent of GDP in 1994/95. State-owned Myanmar Heavy Industries (MHI)
produces cars, trucks, machine tools, tires, agricultural machinery,
electrical machinery and other products. The Mining Ministry produces
iron and steel products. State factories also produce textiles,
foodstuffs, beverages, toiletries, cement, pharmaceuticals, enamel ware,
aluminum ware, rubber goods, marble, porcelain, pulp and paper products,
paints and jute carpets. The German firm Fritz Werner imports capital
equipment and spare parts for machines and cars, and handles re-exports.
Most of its exports and imports are done on behalf of MHI, the Ministry
of Heavy Industry and a military-owned private company named Myanmar
Economic Holdings Ltd.
U.S. exports of industrial inputs could quickly expand now that foreign
investment may be starting to shift to industrial projects. The
government has been trying to attract foreign investment to "industrial
zones" being developed throughout the country, especially near Rangoon.
The Myanmar Investment Commission (MIC) has already approved 46
manufacturing ventures, mostly for textiles, food and beverage
production. Mazda has been upgrading production at its plant, which has
long been making jeeps and trucks for the local market in a joint
venture with the government. Daewoo has signed a long-term deal with
the government that will eventually entail assembling cars in Burma.
Daewoo is assembling televisions and radio cassette players, and
exporting circuit boards, TV components, wires and connecting cables.
Singaporean, Japanese and South Korean investors have signed MOU's or
made formal investment proposals for several large-scale industrial
projects, including electronics components and roofing materials. The
Embassy has sent lists of recently approved ventures to the Commerce
Department for inclusion in the National Trade Data Bank. A few local
investors are also building new factories, although they are constrained
by a severe lack of capital.
Although it has gotten off to a tepid start, the government program to
privatize state factories could lead to a further expansion of industry
in Burma. Several factories have been privatized on an ad hoc basis
through a variety of measures including leasing to private investors and
buy-back arrangements where the investor supplies raw materials in
exchange for finished product. In January 1995, the government
announced the formation of 2 inter-ministerial committees to oversee
privatization, and announced 51 enterprises being offered to investors,
including 8 textile plants, 3 machine tool plants, 2 rice bran oil
factories and factories producing biscuits, noodles, condensed milk,
monosodium glutamate, leather goods, matches, paint, dry cell batteries
and a canning factory. It was not until May 1995, however, that the
government agreed on the necessary procedures to allow investors to
submit proposals to take over these plants. The poor condition of many
of these plants and their outdated equipment makes them less attractive
to investors. The fact that the government committees have overvalued
the plants will also slow privatization. The government promises more
privatization, however, and has signed a Memorandum of Understanding
with Daiwa of Japan to assist in this effort. The government has said
foreign investors are welcome to submit proposals for 100 percent
foreign-owned ventures, joint ventures or contracting arrangements with
existing state factories.
Computers and Related Industries, Service and Maintenance (ITA Industry
Codes: CPT, CSF, CSV)
Burma's rapidly expanding private sector and the increasing number of
foreign firms opening offices in Burma creates strong possibilities for
U.S. sales of computers and related items and services. Computers are
also being used in industries, including computer-driven sawmills.
Foreign firms have been doing well providing office automation to banks,
government offices and private firms. Burma's growing advertising and
private printing and publishing industries rely heavily on desktop
publishing. Private computer training schools have sprung up throughout
the country. Most computers sold in Burma are imported via Singapore.
Taiwan-made computers, including IBM clones are popular, as are Apple,
Compaq, AST and other brands. Many computer firms seeking to promote
their products donate equipment to schools, hospitals and other
institutions. Frequent power outages and electrical surges make it
especially challenging to operate computers in Burma.
Inputs to the Fisheries Industry (ITA Industry Codes: CFE, FPP)
In 1994 the government privatized the fisheries industry through leasing
and selling facilities to local and foreign investors. Foreign
investors have been required to develop onshore facilities in order to
get fishing rights. As a result, investors from China, Thailand,
Singapore, Hong Kong and the United States have been building onshore
ice factories, cold storage and processing facilities, as well as fish
and shrimp farms.
Health (ITA Industry Codes; MED; DRG; LAB; DNT)
Burma's need for hospital and dental equipment and supplies, as well as
pharmaceuticals, is enormous, but foreign exchange available for these
purposes has been very limited. The construction of new hospitals,
especially in the very underdeveloped border areas, will likely expand
the market. Rising purchasing power is also expanding the market. In
September 1994, a shopping center opened in Rangoon selling a variety of
pharmaceuticals, medical and surgical equipment 24 hours a day. The
British Firm Glaxo is aggressively pursuing opportunities in the
pharmaceutical market. Many firms rely on local agents/distributors for
pharmaceuticals sales. Pharmaceutical production is currently limited
to one state-owned plant, but the government is seeking foreign
investment for a second plant. Five private pharmaceutical companies
supply the one existing state plant with raw materials in exchange for
finished products.
Automobiles (ITA Industry Codes: APS; AUT; TRK)
Private firms, especially in the tourism sector, have increasingly been
importing cars and buses. The rapidly growing market for trucks and
vehicles (including four-wheel drive) is currently dominated by non-U.S.
suppliers. China is a major supplier of trucks and buses. Used
Japanese cars are highly popular. Germany has begun to sell second-hand
Mercedes Benzes. In May 1995, Daewoo and State-owned Myanmar Heavy
Industries (MHI) signed a Joint Venture to import new cars during the
first stage and manufacture cars in Burma during the second stage.
Local manufacture is limited to a government plant assembling an older,
basic model of Mazda jeeps, but the two sides recently signed an
agreement to produce newer model Jeeps. The government began selling
some newer model jeeps in December 1994. The demand for left-hand drive
vehicles should increase if the government enforces its ban on imports
of right-hand drive vehicles. In September 1993, the government
announced the ban, but loosened it in February 1994, allowing imports of
right-hand drive 24-seat buses, two-ton trucks and pick up trucks.
Moreover, private companies continue to receive licenses for imports of
right-hand drive cars, despite the ban. The 400 percent increase in the
number of personal cars over the last five years has expanded the market
for auto parts.
Aviation, Shipping and Rail Transport (ITA Industry Codes: RRE; TRN;
PRT; AVS; CVR)
As the government gears up for an influx of tourists in "Visit Myanmar
Year 1996"' it is buying equipment for its airlines. In 1994, it formed
a joint venture with a Singaporean Firm Hisonics to launch Myanmar
Airways International, which is currently leasing two Boeing planes to
fly international routes. Also in 1994, the government formed a joint
venture with the Singaporean firm Techmat to launch Air Mandalay a
domestic carrier using two French ATR's. State-owned domestic airline
Myanmar Airways has bought several newer used Fokkers in order to expand
and upgrade its service.
Although the government is upgrading its shipping fleet, all contracts
awarded to date have gone to China, especially the Yunnan Machinery
Import Export Corporation. Deals have included purchases of large
freighters and smaller ocean and river vessels, cargo barges, tug boats
and upgrading state-owned Myanmar Shipyards. In May 1995, Japan entered
the market by signing an Memorandum of Understanding to upgrade Myanmar
shipyards and provide engineering support for a new port to be built
south of Rangoon. Indonesian and South Korean firms are actively
pursuing opportunities in the ship building business.
The government is also expanding its rail network and importing coaches,
engines and other equipment. Most such sales have gone to China,
although state-owned Myanmar Railways has bought U.S. engines.
Hydroelectric Power (ITA Industry Codes: CON; WRE; USD; ACE)
The government is seeking foreign investment in hydroelectric projects,
especially small-scale ones. Large parts of Burma lack electricity, or
are subject to frequent power cuts. Burma has many rivers with vast,
untapped hydroelectric potential. Lack of access to international
financing severely limits Burma's ability to develop its hydroelectric
resources, however. China has helped build several hydroelectric
projects. Thailand and other countries and organizations involved in a
Mekong Delta development project have shown interest in damming the
Salween river so that Burma can sell electricity to Thailand.
Meanwhile, the Burmese government is continuing to build hydroelectric
projects on its own.
Wood-Based Industries (ITA Industry Codes: FOR; USD; PUL; TLS)
About 50 percent of Burma's land area is forested. The nation has a
wide variety of high-quality tropical hardwoods, including 75 percent of
the world's teak. There is an immediate need to develop Burma's wood-
based products industry because the government wants to end the forestry
industry's dependence on exporting logs. As of December 1, 1993, the
government ended teak and hardwood concessions granted to Thai merchants
in the border areas and announced that any firm receiving concessions
must export an increasing percentage as wood-based products (100 percent
after four years). Private log exports have been suspended since March
31, 1994, and the government is considering a permanent ban. Although
an increasing number of private ventures are successfully exporting
wood-based products, many state mills cannot yet meet export quality.
Asian firms are moving rapidly into this market and have formed joint
ventures with the state-owned Myanmar Timber Enterprise (MTE) to
refurbish and manage plywood and other wood based factories. Several
foreign firms have formed joint ventures with local private companies to
manage sawmills. Drastic changes in government forestry policy in 1994
and the failure of MTE to supply factories with contracted amounts of
wood at the contracted price has caused severe disruption to Burma's
wood-based industry. Several foreign and local investors declared
bankruptcy and/ or pulled out saying that the failure of MTE to fulfill
contracts to supply wood, the government's unwillingness to supply
sufficient amounts of wood, and corruption in the timber industry made
it impossible to do business.
Consumer Goods (ITA Industry Codes: GCG; CEL; COS; TOY; HCG; MUS; SPT;
AUV; BUS)
Although per capita income remains extremely low, rising purchasing
power among some Burmese and very low effective tariff rates have
enabled firms from several countries to sell increasing amounts of
consumer goods. There has been a marked increase in the number of
stores where foreign consumer goods and foodstuffs can be bought with
kyat at the unofficial market rate, dollars, other hard currencies,
foreign exchange certificates and/or U.S. dollar credit cards. Several
department stores are importing a variety of products under open general
licenses. Several Japanese and South Korean firms have opened or
expanded stores selling consumer electronics and other goods. Consumer
goods also flood in over the border from China and Thailand. Regular
trade and rampant smuggling brings in consumer goods from all over Asia,
including U.S. products that often come via Thailand or Singapore.
There has been a rapid increase in the amount of foreign goods sold in
Burma on consignment. Even remote cities such as Lashio have stores
selling home electronics on a consignment basis. Some such stores are
supplied by the state-owned Myanmar Export Import Service (MEIS). Other
state-owned enterprises are willing to enter consignment agreements
where they use their name to bring in products on behalf of the foreign
firm outside the cumbersome import permit system in exchange for a
commission of 3 to 5 percent of sales.
Travel Industry
The government has launched a major campaign to attract 500,000 tourists
to Burma for "Visit Myanmar Year - 1996." Although few people expect
that goal to be met, the top-level government attention given to
developing tourism has led to modest improvements in Burma's tourist
infrastructure, particularly in Rangoon. Hundreds of local travel
agencies have sprung up to deal with increasing foreign visitors. Many
seek to form alliances with regional and international agencies. Some
foreign-owned tour operators have been granted licenses to operate in
Burma. The government is looking for foreign firms to help develop
ecotourism.
Insurance
Increasing local and foreign private investment in construction,
industry, infrastructure projects, mining, energy and other fields
creates opportunities for U.S. sales of insurance services. Currently
state-owned Myanmar Insurance has a monopoly, but it has made business
arrangements with some foreign firms, and re-insures many projects,
offshore, especially in Hong Kong and Singapore.
Other Opportunities for U.S. Firms (ITA Industry Codes: ACE; MCS; GIE;
USD: FOD)
- Engineering expertise
- Generators and related electrical products
- Food and Beverage Products
VI. TRADE REGULATIONS AND STANDARDS
Barriers to Trade and Investment
Despite moderate economic progress and rising purchasing power among the
growing middle and business class, Burma remains designated by the
United Nations as a least developed country. Per capita income is only
USD 239.
Foreign entrepreneurs say it has become easier to do business in Burma
over the past two years as the government has streamlined commercial
procedures somewhat, confirmed letters of credit have become as accepted
way of doing business and private and government agencies have more
foreign exchange to spend. Nevertheless, cumbersome restrictions left
over from the socialist period remain, including permits required for
imports, exports and most other business activities. Over-regulation is
made worse by the fact that some government employees regulating
commerce or working in joint ventures with foreign firms are holdovers
from the socialist period. The government's desire to establish a
market-oriented economy has not yet worked its way deeply enough through
the bureaucracy to eliminate burdensome regulations and procedures.
Firms connected to government or military officials through joint
ventures, shareholdings or personal contacts enjoy privileged access to
raw materials and permits. Procedures for issuing import and other
business permits are not transparent, which provides opportunities for
graft. Several Burmese importers and exporters say it is extremely
difficult to work in trade without paying officials for permits.
Although foreign businessmen report that official corruption in Burma is
on a lower scale than in other nations of South East Asia, it is a
rapidly growing problem, and affects both local and foreign investors
and businessmen. Some businessmen say official corruption makes it
difficult for private businesses to earn a profit. Since the economy
is in transition from a centrally planned to a market system, rules and
regulations (especially for imports and exports) are subject to
amendment with little or no advanced notice, causing considerable
confusion in the business community.
The official exchange rate, which overvalues the currency by nearly 20-
fold, is a key impediment to foreign trade and investment. Burma also
lacks a significant private banking sector, modern banking practices and
an independent Central Bank. (See Chapter VIII)
Poor infrastructure is a major impediment to distribution of goods and
services. Due to the inadequacy of its narcotics suppression efforts
and serious abuse of human rights, Burma has been unable to obtain
multilateral financial assistance and most bilateral aid has been
suspended. The U.S. EXIM bank does not have an active loan program for
Burma, and OPIC insurance is not available.
(Barriers to Investment are further discussed in Chapter VII).
Trade Regulation
Many private sector imports into Burma are done on the "import first,
export later" system, whereby the importer undertakes a commitment to
export products of equal value at a later date.
Tariffs and Import Taxes
Burma follows the Harmonized System of International Nomenclature. Three
types of taxes can be levied on imports: import duties; commercial taxes
and license fees. Tariffs range from 0 to 500 percent, with cars,
luxury items, jewelry and items produced in Burma facing the highest
tariffs. Tariffs on most other items including consumer goods are
moderate. Tariffs on most industrial inputs, machinery and spare parts
are around 15 percent.
Even when the official tariff rate is high, however, the real effective
tariff is low for most items because the dollar value of imported items
is converted into kyats at the official exchange rate before the duty
is imposed. For example, an import valued at USD 5,000 is calculated to
have a value of 30,000 kyat at the official exchange rate, so a 200%
tariff on this import would be 60,000 kyats. At the unofficial market
exchange rate, however, the dollar value of the tariff is closer to USD
520, making the real effective tariff about 10 percent. Effective
tariff rates will rise dramatically if the government re-aligns its
currency, or changes the way it calculates tariffs.
Government ministries, state-owned enterprises and government joint
ventures can import a large variety of industrial inputs, machinery and
spare parts duty-free. There is an "exempted" list of industrial
inputs, machinery, spare parts, electronics, consumer goods and other
items that the private sector can import duty-free if they import only
one item. Importers regularly get travelers to bring back items on the
exempted list for re-sale to the general public.
The commercial tax is levied in a wide range of imported and
domestically produced goods according to a set schedule. Certain goods,
mostly basic foods and raw materials, are exempt. Commercial tax rates
for imported goods are 10, 20 or 30 percent, depending on the type of
goods. Certain type of "foods", such as cigarettes and liquor, face
commercial tax rates above 30 percent.
Customs Valuation
The Customs Department usually bases its valuation on CIF value, after
adding landing charges equal to 0.5 percent of CIF value. For some
commodities, Customs uses its own reference guide to determine the value
of imports. The guide lists prices in kyat based on the price goods are
sold for in Burma, and sometimes lists values substantially lower or
higher than the value outside Burma.
Import Licenses
Import permits are required for all items except for those entering
under the exempted list (see above). The Ministry of Trade issues
import permits to registered importers. Most licenses are valid for six
months. A proforma invoice must be attached to the application for an
import permit. Procedures for issuing import permits are not
transparent. It can be difficult to obtain an import license without
good connections with the Ministry of Trade but easy to obtain one if
such connections have been established. If all required papers are in
order, Trade Ministry officials say an import permit can be obtained in
as little as four hours. If additional documents are needed, the
permit can be issued the next day.
Items on the "Prohibited List" (see above) are not granted import
licenses. The Ministry issues open General Licenses (OGL) to certain
importers, such as some department stores, to import a variety of
products. Open General Licenses are usually for year at a time. They
can also go to businesses operating under a permit issued by the Myanmar
Investment Commission (MIC). Recipients of OGLs must by the nature of
their business, have a need to import frequently either for capital
investment or other business operations.
State Economic Enterprises (SEEs) conduct their own import and export
operations without having to obtain permits from the Trade Ministry.
Foreign companies in joint ventures with the Government can get an
import or export license from the Trade Ministry on recommendation from
their SEE partner.
Prohibited Imports
The Export Import Control Committee, an interagency committee chaired by
the Deputy Minister for Trade, makes ad hoc amendments to the list of
prohibited imports. The list is published in trade bulletins and
publications, but changes with little notice. The current list includes
specialized communications equipment, color copier machines, right-hand
drive sedans 1990-year model and older, and narcotics. In the past
cosmetics and old clothing were among imports temporarily banned.
Before importing to Burma, it is wise to check the latest import list,
especially if importing what the government might consider a politically
sensitive or luxury item.
Export Controls
All exports require a permit from the Trade Ministry. The Ministry
uses this requirement to mandate that exporters charge what the Ministry
believes to be the international price. Exporters say this mandated
price is often above the market price and sometimes forces exporters to
re-negotiate signed sales contracts. There is no written legislation on
export controls, nor a set list of controlled exports. The Export
Import Control Committee has made frequent amendments to the list of
prohibited exports, issuing temporary bans with little or no advance
notice. The state has a monopoly on exports of rice, teak, petroleum,
natural gas, gems, jade, pearl and other items. Exports of such items
are controlled by the relevant Ministry. By obtaining information and
assistance from the relevant Ministry, these restricted commodities can
and have been exported by domestic and foreign private exporters. Some
items, such as live animals, can be exported by the private sector, but
the relevant Ministry has to grant permission before the Trade Ministry
will issue a permit.
Although the commercial tax on exports has been reduced from 1 to 5
percent, it must be paid in foreign exchange.
Import/Export Documentation
Government-issued Import or Export Declaration forms require some
attachments. These forms must list the number, contents description,
value, weight, measurement or quantity of goods, the country of origin
and the final destination.
Temporary Entry
Written permission is required from the relevant local government agency
or Burmese Embassy abroad to bring goods in temporarily for seminars,
trade events or other purposes. The goods should be declared to Customs
at the point of entry. No duties are levied on temporary imports.
Labeling, Marking Requirements
The designated port-of-entry must be clearly marked. The destination
should be listed as "Yangon, Myanmar" (although "Rangoon, Burma" can be
listed in parentheses.)
Free Trade Zones
None
Membership in Free Trade Arrangements
None
VII. INVESTMENT CLIMATE
Openness to Foreign Investment
Government Attitude
The government is eager to attract foreign investment in order to meet
an urgent need for foreign exchange and economic development. High-level
government officials say they will consider any reasonable proposal that
provides sufficient benefits to Burma. The law allows the government to
approve any investment proposal deemed to be in the national interest.
There have been cases -where, after receiving a proposal from a foreign
investor, the government has modified laws to accommodate approval of
the investment. Government priorities for foreign investment include
export-oriented industries; exploitation of natural resources;
production and services; acquisition of high technology and regional
development. Most ministries prefer to have a written investment
proposal they can submit to their technical experts for comment.
Ministers generally will not endorse a proposed deal unless the
Ministry's financial and technical experts certify that the deal is in
the national interest. These experts are generally well-trained and
compare quite favorably to their counterparts in other developing
countries.
Foreign Investment Law
In 1988, the government promulgated a Foreign Investment Law permitting
100 percent foreign ownership in many areas. Foreign companies may also
form joint ventures with a private company or state enterprise, as long
as the foreign firm holds a minimum 35 percent equity share.
Although the government has allowed the private sector to engage in most
economic activities, it has retained its monopoly in postal and
telecommunications services, broadcasting and television services,
manufacturing of products related to security and defense, rice exports
and electricity generation. The government also does not allow foreign
investment in banking, insurance and conservation of forests and
plantation on a commercial scale.
The government has relaxed its monopoly, however, to permit foreign
investment via joint ventures with state-owned agencies in the sale and
extraction of teak; production and sales of jewelry and pearls;
extraction and processing of petroleum and natural gas; electricy
generation; mining; dockyard services; air and rail transport. In
mining and oil and gas exploration and development, the foreign party is
required to sign a production or profit sharing contract with the
relevant government entity. Terms have been tough, including large
signature and production bonuses. The government is considering allowing
foreign firms to form joint ventures in banking and telecommunications.
In the banking sector, joint ventures would be with private banks, while
joint ventures in telecommunications would be with state-owned Myanmar
Posts and Telecommunications.
Foreign entities cannot own land in Burma, but long-term leases are
available for 30 years, renewable for additional periods of 30 years.
In 1991, the government introduced a regulation making up to 500,000
acres of land available for up to 30 years to private foreign and local
investors for agricultural development, including fish and livestock
breeding.
Screening of Foreign Investment
Myanmar Investment Commission
There are two main avenues for foreign investment, the Myanmar
Investment Commission (MIC) and the Companies Act. An investor seeking
MIC approval usually goes through the relevant Ministry or local
partner. If the investor submits a proposal directly to the MIC, they
refer it to the relevant Ministry for comment on technical issues.
The Foreign Investment Law is 8 pages long, much shorter than laws in
other countries. Provisions spelled out in the investment laws of
others countries are left to negotiation on a case-by-case basis between
the investor and the government. There is often considerable back and
forth negotiation between the investor and the relevant Ministry. Once
the Ministry approves the investment proposal, it goes to the "Office of
the MIC" where there is further back and forth negotiation between the
investor, the Ministry and the Office of the MIC. During these
negotiations, the government may seek to have the investor include
provisions in his proposal on a variety of issues, e.g. that 70-80% of
the production be exported. As the office of the MIC includes
representatives from state agencies that may be in competition with the
foreign investor, these negotiations may seek to impose restrictions on
the foreign investor. The full MIC will not consider an investment
proposal until the Ministry, Office of the MIC and the investor have
come into agreement. During these negotiations, investors often seek
to have items included in their MIC permit on profit repatriation,
outside arbitration of business disputes or other areas concern. Having
such matters spelled out in the MIC-approved investment permit allows
business to proceed more smoothly because local bureaucrats are often
fearful of agreeing to an investor's request if it has not been approved
beforehand in writing by higher officials.
The MIC is chaired by Deputy Prime Minister Rear-Admiral Maung Maung
Khin. Burma's other Deputy Prime Minister, serves as Vice Chairman,
while Minister for National Planning and Economic Development Brig.-
General David Abel serves as the Secretary. The Joint-Secretary is Daw
Khine Khine. Over 14 cabinet ministers serve as MIC members. The MIC
has been approving about 95% of the investment proposals that reach it.
Those rejected are usually from smaller, less established companies, or
proposals that call for a small amount of capital to be brought into
Burma.
Procedures within the MIC have been streamlined, although bureaucratic
red tape within other Ministries still slows action on investment
proposals. For example, formation of a joint venture with a government
entity requires that the articles of association and Memorandum of
Understanding be approved by the Attorney General. In order to conduct
business after receiving MIC approval, a foreign investor must secure a
permit to trade from the Ministry of Trade.
Companies' Act
Investment proposals can be made outside MIC channels under a regular
company license issued by the Ministry of Trade or the Ministry of
National Economic Planning, i.e. under the Companies Act. (The Myanmar
Companies Act covers the procedural aspects of forming all types of
companies.) The minimum foreign investment for such firms is kyat
1,000,000 (about USD 150,000 at the official exchange rate) or more
depending on the type of investment. For example it is kyat 500,000 for
a foreign industrial firm and kyat 300,000 for trading services. The
investment must be paid in hard currency at the official exchange rate.
In addition, foreign investors without MIC approval must pay annual
registration renewal fees of kyat 500-1000, in hard currency at the
official exchange rate.
Investment Incentives
Tax and other investment incentives are available only to ventures
approved by the MIC. The minimum required investment for MIC-approved
foreign investors has been reduced to USD 100,000, which can be paid in
cash or equipment. Investors can also negotiate with the MIC for
permission to bring in their authorized capital in stages, rather than
all at once. The MIC exempts foreign investors from income tax for
three consecutive years with the possibility of extension; exempts or
grants relief from customs duties on capital equipment imported during
the construction period and on raw materials imported in the first three
years after construction; and offers accelerated depreciation, the right
to forward losses and relief or exemption from certain other taxes.
Agricultural investments approved by the MIC are exempt from payment of
land revenue taxes for 2 to 8 years from the date of the lease,
depending upon the type of agricultural crop. These and other
incentives are specified in the Foreign Investment Law, and are given to
all investments approved by the MIC.
Discrimination
A major form of discrimination against foreign investors is a
requirement that they pay their expenses in hard currency at the
official exchange rate (see below). Foreign investors must also pay
income tax on expatriate income in hard currency at the official
exchange rate. Burma has a myriad of continually changing regulations
on imports, exports and other forms of commerce. Rules change with
little or no advance notice. This confusing business climate affects
foreign and domestic investors, but firms with good local contacts have
an edge on keeping up with the changes and working their way through the
system.
Conversion and Transfer Policies
Non-Convertible and Overvalued Currency
A main obstacle to foreign investment is an official exchange rate that
overvalues the domestic currency (kyat) by some 20 times. Equity
contributions made under the MIC permit are valued at the official rate,
although firms making "in-kind" investments of equipment have leeway in
determining the value of this equipment. When foreign firms bring in
foreign exchange to be used for purchases on the local economy, they
must deposit it in a state bank. If these funds are withdrawn in kyat,
their value is calculated at the official exchange rate. Foreign firms
can avoid the official exchange rate by paying for services in dollars -
- a number of services can be contracted in dollars at a mutually agreed
upon price. Foreign firms can also withdraw funds from their state bank
accounts in Foreign Exchange Certificates (FECs), which can be spent or
exchanged for kyat at a market rate. Many foreign firms also avoid the
official exchange rate by organizing joint ventures so that the local
partner assumes all kyat expenses (e.g. labor, rent, domestically
available inputs). The government, however, is now demanding payment in
hard currency for an increasing number of local expenses, including the
salaries of locally hired management level staff. Other legal means to
avoid the official exchange rate include acquiring kyat at the
unofficial rate by importing goods for resale in kyat, countertrade or
production sharing arrangements, or generating a supply of kyat through
local sales. A number of investment projects have been delayed while
the investor seeks out a suitable arrangement for legally converting his
hard currency to kyat at the market rate.
The kyat is not freely convertible. Kyat and FECs cannot be taken out
of Burma. The government strictly limits outflows and inflows of funds
for any purpose, including debt service, imported inputs, capital,
returns on intellectual property and profit remittance.
Remittances
Although the Foreign Investment Law allows an investor who has brought
foreign exchange into Burma to withdraw foreign exchange, including net
profits, it is difficult to do so. The Foreign Investment Law says the
following about repatriation of funds for investments approved by the
MIC:
Foreign Currency
There is a limit to what foreign investors can take out of Burma.
Foreign investors must open a foreign exchange account at the Myanma
Foreign Trade Bank (MFTB) and the Myanma Investment and Commercial Bank
and any transaction is required to go through these banks. (NOTE:
Since this law was written, four private banks have also received
permission to handle foreign exchange, but they currently operate mainly
as windows for the MFTB.)
Withdrawal of foreign investment capital in relevant foreign
currency at the prevailing official rate at termination of business is
allowed.
With the permission of the Foreign Investment Commission (Note:
Now re-named the Myanmar Investment Commission), an investor can
transfer abroad his entitlement in relevant currency.
o Withdrawal of net profits is allowed after deducting all
taxes and prescribed funds from the annual profits received by the
person who has brought in foreign capital.
Withdrawal of the legitimate balance is allowed after paying taxes
and deducting living expenses out of the (foreign investor's) salary and
after deducting lawful income obtained by the foreign personnel during
their stay in Burma.
On a case-by-case basis, the government will allow foreign investors
earning hard currency through exports to repatriate a proportion of
these earnings after paying the necessary taxes. Kyat earnings cannot
be repatriated. Foreign firms often use countertrade to repatriate
earnings. Typically, they buy a local product in kyat and export it.
If the firm is incorporated in Burma, the export earnings must be
deposited in the firm's foreign currency account at a state-owned bank
in Burma, but can be repatriated after taxes are paid. If the firm is
incorporated outside Burma, the firm does not have to return its
earnings from the countertrade export to Burma. Many foreign firms
seeking to repatriate profits leave the countertrade to a local firm;
they merely negotiate the exchange rate with the local firm, which
acquires some local product, sells it offshore and puts the money in an
offshore account through a local bank by opening a letter of credit.
Expropriation and Compensation
The government continues sporadically to seize land and other property
from its citizens and forcibly relocate people. Such seizures are done
without due process or transparency of purpose, and are not in
accordance with international law. Owners of seized property do not
receive adequate or effective compensation. Foreign and domestic
investors who had property seized during the 1960's have tried without
success to obtain adequate compensation. Foreign firms, however, have
not reported property seizures since enactment of the Foreign Investment
Law, which explicitly forbids expropriation during the term of the
investment contract. Burmese law and the guidelines for the new
constitution currently being discussed contain guarantees against
nationalization of private property.
Dispute Settlement
Although Burmese law stipulates that commercial disputes are to be
handled solely under Burmese arbitration, the Foreign Investment Law
allows contracts to list other options, including appointment of an
arbitrator and, in a few cases, international arbitration. This
provision may be modified in the future to more closely comply with
other countries' laws and practices. Burma is not a member of the
International Center for the Settlement of Investment Disputes nor is it
a party to the New York Convention.
Most businesses involved in disputes seek to settle the matter
informally, rather than rely on the cumbersome legal system. The
government actively encourages settlement between parties to a dispute.
Several arbitration groups have been formed. Since enactment of the
Foreign Investment Law, one dispute has gone to court, which ruled in
favor of the foreign investor. Some local and foreign investors who
had property seized during the 1960s have continued to seek
compensation. Some disputes concern blocked bank accounts, where the
Burmese government has given permission for the withdrawal of funds from
these accounts but not for repatriation overseas.
Political Violence
There have been insurgencies in several border areas, although cease-
fire agreements have been signed with all but two insurgent groups and
one armed group run by a drug warlord. Peace treaties have not been
signed, however. Government control of the border areas is weak or non-
existent. In 1988, the entire country was convulsed by widespread,
violent disturbances that had started in protest against one-party rule
and economic mismanagement. Economic activity was at a near standstill
for many weeks and many factories were destroyed or severely damaged.
Thousands were killed when the military seized direct control of the
country and sharply repressed all opposition. The current high level
of repression leaves no outlet for the widespread resentment among
the populace against the military regime. Although tight repression
means that immediate prospects for political disturbances appear low,
the situation is inherently unstable and impossible to predict. The
potential for violent, widespread disturbances is present.
Performance Requirements/Incentives
There are no stated performance requirements, but the government imposes
de facto ones. The relevant Ministry and/or the office of the MIC may
not allow the full MIC to consider a proposal until the investor has
included these de facto performance requirements, e.g. on exports and
foreign exchange earnings. Minor changes in the operation,
capitalization and structure of an investment can be made without MIC
approval. However, substantial changes would be subject to MIC review,
and past performance would undoubtedly be a factor in the Commission's
decision.
Right to Private Ownership and Establishment
The standard of competitive equality is not applied to private
enterprises in competition with public enterprises or cooperatives, or
even to private firms competing among themselves. Good connections,
rather than free competition, often determine which
private, state or cooperative firms get access to needed inputs and
permits.
Protection of Property Rights
Foreigners and foreign-owned companies are not allowed to acquire, sell
or transfer immovable property in Burma, but rights to acquire and hold
other types of property are generally respected. All the same, seeking
protection for such rights from Burmese courts can be difficult.
Although Burma has a well developed legal system based on British law,
in practice the system is undermined by corruption, unprofessional
behavior on the part of some legal officials, and blatant political
interference in certain cases.
Regulatory System
Enforcement of tax, labor, health and other regulations is haphazard and
can be arbitrary. Although foreign investors have not complained of
confiscatory taxes, some restaurants, hotels and other businesses have
been forced to close for short periods due to excessive taxation. Tax
assessments can be arbitrarily high because tax collectors have
considerable leeway in determining the income and net profit of
businesses. Moreover, various government Ministries charge taxes and
fees in addition to regular taxes. The hotel sector is especially hard
hit, because government Ministries see hotels as a source of dollars and
therefore charge a variety of fees in hard currency, seemingly at whim.
Government officials frequently press local and foreign firms to
"donate" to "civic" causes such as government displays marking various
official celebrations. Local firms that refuse to turn over their
assigned "donations" have faced difficulties getting permits needed to
do business.
Bilateral Investment Agreements
None
OPIC and Other Investment Insurance Programs
Because its government does not respect international norms on workers'
rights, Burma is ineligible for OPIC programs. Burma is not a member of
the Multilateral Guaranty Agency (MIGA).
Efficient Capital Markets and Portfolio Investment
The financial sector in Burma is just starting to modernize. Burma
lacks a significant private banking sector, modern banking practices, a
stock market, and an independent Central Bank. The government controls
interest rates for private and state banks at negative real levels. The
maximum allowed loan rate is 17 percent. Tight controls on activities by
the handful of private banks include controls on the amount of money
that can be loaned to any one client. Only a few private banks linked
to the government can handle foreign exchange. Lending from state banks
to the private sector is virtually nonexistent, except for loans to
farmers by the state-owned Myanmar Agricultural Bank and Rural
Development Bank. Lending from private banks has increased, but remains
very limited. There is no venture or development capital available for
start-up enterprises. Private domestic companies usually borrow via the
informal, black market system, usually with gold or property as
collateral. Interest rates are generally 3-4 percent per month for a
collateral loan, and 5 to 8 percent per month for a non-collateral loan.
Foreign investors, especially in joint ventures with a government
entity, have significantly greater access to domestic credit. Legal,
accounting, and regulatory systems are not transparent, nor are they
consistent with international norms.
Labor
With a young population of over 43 million, Burma's labor supply is
abundant and inexpensive but lacking knowledge, experience in modern
business and manufacturing methods. Although literacy rates are high,
years of falling educational standards, aggravated by the closing of the
universities for nearly four years after the violent suppression of pro-
democracy demonstrations in 1988, has taken its toll on the quality of
skilled labor and professional services. In the past, Burma's educated
class was nearly bilingual, but as a result of several decades of
neglect of English language training, fewer younger people speak or
understand English well.
The situation is improving in the major population centers as younger
students acquire computer skills at recently opened private training
institutes. There are also a small number of students who have returned
after two/three years of training abroad, especially in Singapore, Japan
and the United States. The presence of foreign oil firms and service
companies has also helped to increase the pool of trained personnel.
In certain cases, foreign firms or joint ventures have been constrained
from hiring employees freely, particularly when forming a joint venture
with a government enterprise to take over an operating production
facility. In other cases, enough flexibility seems to have been written
into such contracts that this has not been a serious problem. Overall,
foreign firms find Burmese labor easily trainable, hard-working, well-
disciplined and motivated.
In 1989, the United States withdrew Burma's eligibility for benefits
under the Generalized System of references (GSP) due to the absence of
internationally recognized worker rights. Workers are unable to
organize, negotiate or in any other way exercise control over their
working conditions. Although regulations set a minimum employment age
and wage, and maximum work hours, these are not uniformly observed,
especially in private factories and other establishments. The
government uses forced adult labor in infrastructure construction and
porterage for the military in active combat zones. These labor
practices are not consistent with Burma's obligations under ILO
Conventions 29 and 87.
Foreign Trade Zones/Free Ports
None
Capital Outflow Policy
Foreign exchange transactions can be handled only by the state-owned
Myanmar Foreign Trade Bank (MFTB), Myanma Commercial and Investment Bank
(MICB), Myanmar Economic Bank (MEB), and four private banks tied to the
government. Citizens who earn foreign currency must deposit their
earnings in these banks. Burmese citizens cannot export foreign
exchange, but, after paying 10 percent of the amount in taxes, can
withdraw the rest in FEC's or use it to purchase airline tickets for
personal use or for commodities sold at specially authorized retail
outlets.
FOREIGN DIRECT INVESTMENT
Types of Investment
Investment figures published by the Burmese government include only
investment approved by the Myanmar Investment Commission (MIC). These
figures do not include the bulk of Chinese investment, which has
included mining, some manufacturing and many infrastructure projects.
Moreover, roughly USD 500 million has been invested through the
Companies Act, especially from Thailand and Singapore.
Levels of Investment
As of March 31, 1995, the government reported that total MIC-approved
foreign investment was USD 2.6 billion. USD 326 million of this amount
is investment in projects that have already been completed, leaving USD
2.2 billion in still active (i.e. "existing") projects. (The amount of
total approved foreign investment for both existing and terminated
projects is listed in the appendix.) Two projects, together worth USD
400 million, were approved between March 31 and June 20, 1995. One
project was in hotels and tourism, the other was for manufacturing. As
of June 20, the government reported that approved investment in 109
"existing" (i.e. still ongoing) projects was USD 2.6 billion.
In 1994/95 the oil and gas sector has received the most investment,
thanks partly to the USD one billion Total pipeline and natural gas
production project. (This amount is to be invested over the 30-year
life of the project). The hotels and tourism sector received the second
largest amount of foreign investment, USD 514 million.
Total Investment Approved By the Myanmar Investment Commission for
Existing Projects By Sector
March 31, 1989 through March 31, 1995
(in millions of U.S. Dollars)
Sector Number of Projects Amount Approved
(Existing Projects)
Hotels and Tourism 26 488.04
Oil and Gas 15 1360.22
Mining 5 13.21
Manufacturing 46 134.74
Fisheries 11 235.95
Agriculture 1 2.69
Transport 3 2.30
TOTAL 107 2237.15
The 1994/95 boom in luxury hotel projects was accompanied by a sharp
jump in manufacturing ventures. Twenty nine foreign investment projects
were approved between August 1994 and March 1995, most of them in
manufacturing, followed by fisheries and hotel/tourism sectors. Mining
investment includes production sharing contracts for two gold processing
plants. Investment in the transport sector includes the formation of
Air Mandalay, a joint venture between a Singaporean firm and state-owned
Myanmar Airways to provide domestic air transportation. Other major
investments have included oil and gas production, electronics
production, sawmills, wood-based industries, and garment industries.
Investment in mining may increase further in 1995. The government is
expected to announce the awarding of 9 mining blocks to foreign and/or
local investors sometime in the future. Manufacturing investment may
also see a boost. South Korean investors are seeking MIC approval for
an electronics components factory, and Japanese investors have signed
Memoranda of Understanding for a factory making roofing materials and a
factory making cables/fiber optics.
Investment Flows
Foreign investment more than doubled in 1994/95, with USD 1.4 billion in
investment being approved, by far the largest amount since promulgation
of the Foreign Investment law in 1989. USD 1.0 billion of this amount
was in the oil and gas sector. The fisheries sector attracted the
second largest amount of investment during 1994/95, USD 148 million,
followed by hotels and tourism with USD 86.1 million and manufacturing
with USD 76.3 million.
Previously, the last large spurt of foreign investment was in 1989/90
when ten foreign companies, including two American firms, signed
production sharing contracts for oil exploration and development, and
gained MIC approval for investments worth a total of USD 449 million.
Foreign investment inflows slowed thereafter, and eventually most
foreign companies exploring for oil and gas onshore left without making
commercially significant discoveries. In 1991/92, Burma attracted only
USD 6.0 million in new foreign investment. Foreign investment began to
recover in 1992/93.
Flow of Total Investment Approved by the Foreign Investment
Commission, by Fiscal Year (as of March 31, 1995)
(in millions of U.S. Dollars)
1989/90 1990/91 1991/92 1992/93 1993/94 1994/95
449.49 280.57 5.89 103.78 377.60 1351.88
Ownership of Foreign Investment
As of April 1995, 38 of the 107 foreign investment projects were joint
ventures with state economic enterprises, while an additional 19 were
production sharing contracts between foreign investors and state
economic enterprises. Eight foreign investments were joint ventures
with the military-owned private company Myanmar Economic Holdings (MEH).
(MEH's shareholders are all active or retired military. Its partnership
with foreign investors includes textile factories, consignment stores
and hotels). Sixteen foreign investments were joint ventures with other
local private companies. Twenty-two projects were wholly-owned by a
foreign investor.
Existing Foreign Investment Enterprises as at March 31, 1995
by Form of Organization
Sr. Particulars No. Amount of
No. Foreign Capital
(USD in millions)
1. 100 percent foreign owned 22 385.84
2. Joint Venture with 66 481.11
(a) State Economic Enterprises 38 304.83
(b) Myanmar Economic Holdings Ltd. 8 39.36
(c) Yangon City Development Committee 1 1.00
(d) Private Enterprises 16 130.08
(e) Cooperatives Society 3 5.84
3. Production Sharing Basis 19 1370.20
Total 107 2237.15
Major Foreign Investors
According to March 1995 Myanmar Investment Commission (MIC) statistics,
which record only investment approved by the MIC, the United Kingdom is
the largest foreign investor in Burma. United Kingdom investment
includes enterprises incorporated in the British Virgin Islands and
Bermuda. In 1995, British firms launched joint ventures in lingerie
production and cigarette manufacturing. France is the second largest
foreign investor, while Singapore is third and the United States is
fourth. Most U.S. investment is in the oil and gas sector.
Total Investment Approved By the Myanmar Investment Commission
By Country for Existing Enterprises
March 31, 1989 through March 31, 1995
(in millions of U.S. Dollars)
Country Amount Approved
United Kingdom 630.66
France 499.92
Singapore 295.69
United States 269.11
Thailand 257.16
South Korea 91.19
The Netherlands 83.00
Malaysia 69.57
Hong Kong 41.04
Philippines 6.67
China 5.50
Australia 3.00
Macao 2.40
Bangladesh 0.10
Canada 0.00
TOTAL 2237.15
The above figures are somewhat misleading, because they do not consider
minority shareholdings and list investments under the nationality of the
original investor. For example, about USD 23 million of investment by
Texaco is listed under the name of the British firm that signed the
original investment contract, and then became a minority shareholder
when Texaco bought out and expanded the investment. Pepsico's joint
venture with a local private firm to produce and market Pepsi products
locally is not reflected in these figures because it was not subject to
Myanmar Investment Commission approval.
VIII. TRADE AND PROJECT FINANCING
Description of Banking System
By June 1995, 15 private banks had opened (four of which were at least
partly owned by government or military officials through either joint
ventures or shareholdings). The government tightly controls private
bank activity by controlling the amount of money they can loan,
maintaining fixed negative real interest rates for savings and loans and
denying most private banks the right to deal in foreign exchange.
Total deposits of the private banks have risen to about K. 5.8 million
kyat, while total lending stands around 4.2 billion kyat. Although a
1990 banking law permitted foreign banks to open branches in Burma, none
of the handful that applied have received permission to open. The
government is considering allowing joint ventures between foreign and
some local banks. By June 1995, 27 foreign banks had received
permission to open representative offices in Burma (Arab Bangladesh
Bank, Ltd. -- Bangladesh; Global Commercial Bank -- Cambodia; Nova
Scotia Bank -- Canada; Banque National d'Paris, Banque Francaise du
Commerce Exterieur, Banque Indo Suez -- France; Shanghai Banking
Corporation Ltd. -- Hong Kong; Panin Bank International Inc. Nauru, Bank
Dagang National Indonesia -- Indonesia; Sakura Bank (formally known as
Mitsui Taiyo Kobe), The Bank of Tokyo -- Japan; Malayan Banking Berhad,
Public Bank Berhad, Bank of Commerce (M) Berhad -- Malaysia; Abn Amro
Bank NV -- the Netherlands; the Development Bank, Keppel Bank, United
Overseas Bank Ltd., the Overseas-Chinese Banking Corporation, Overseas
Union Bank Ltd. -- Singapore; Thai Military Bank, Siam City Bank Ltd.,
Thai Farmers Bank, Krung Thai Bank, Bangkok Bank Ltd., Bank of Ayudhya
Public Co. Ltd. -- Thailand; Standard Chartered Bank -- United Kingdom).
These offices fall under the jurisdiction of the Central Bank and serve
as a trade and commerce liaison for local and foreign clients. Several
also help arrange offshore financing for business in Burma.
The highly skewed official exchange rate and other factors limits the
interest of foreign banks in operating in Burma.
Until recently, the state-owned Myanma Foreign Trade Bank (MFTB),
Myanma Investment Commercial Bank (MICB) and Myanma Economic Bank (MEB)
were the only banks allowed to deal in foreign exchange. The MFTB
handles foreign currency transactions for individuals and the MICB for
companies. MEB handles foreign currency transactions in border trade
regions. In April 1994, the government allowed four private banks to
handle foreign exchange, including letters of credit. These four banks
are tied to the government through joint ventures or shareholdings. The
extent of their foreign currency operations is growing, but it is not
yet clear whether foreign firms and individuals can have foreign
exchange accounts at these private banks. Both foreign and Burmese
citizens and companies can open hard currency accounts at the state
banks. Among Burmese citizens and companies, however, only a few
authorized vendors are allowed to handle foreign specie and then only
for a short period of time before being required to deposit it in a
foreign currency account. Banking practices and regulations, especially
regarding foreign exchange, may change in the future.
Foreign Exchange Controls Affecting Trade
The Burmese currency, the kyat, is not convertible and is artificially
pegged to the IMF's Special Drawing Right (SDR). This overvalues the
currency by some 20 times. International trade is almost exclusively
conducted in hard currency, usually U.S. dollars. In addition,
barter/countertrade is used with payment in rice, hardwoods,
agricultural, forestry or other products. Government countertrade
remains suspended. As the Government tries to boost export earnings by
switching to cash sales, however, the amount of products available for
countertrade is shrinking. Nevertheless, the severe lack of foreign
exchange and the overvalued exchange rate force most exporters to Burma
to rely on buy-back countertrade.
How to Finance Exports/Methods of Payment
Many exports are done on an "import first, export later" basis. A
foreign firm sends the items on consignment to a local import/export
firm, which sells them and pays the agreed amount to the foreign firm.
Foreign companies also set up their own trading companies to receive
imports and handle other countertrade. Some ministries, state-owned
enterprises and businesses use their own sources of foreign exchange to
import products. Some have agreed to small-scale purchases of imports
in kyats at the market rate.
Availability of Financing
Until 1988, Burma relied heavily on foreign assistance and concessional
loans to finance major projects in mining, agriculture, infrastructure
and other areas. Following the military government's violent
suppression of a pro-democracy uprising in 1988, most multilateral and
bilateral assistance was suspended, including U.S. aid. Because of its
inadequate narcotics suppression efforts, serious violations of human
rights and lack of progress toward initiating domestic reform, Burma is
ineligible for U.S. aid and the United States and other countries oppose
loans and financial assistance to Burma by multilateral financial
institutions. The United States and other countries oppose loans and
financial assistance by multilateral financial institutions. The U.S.
EXIM bank does not have an active loan program for Burma. In the past,
the Japanese government made limited funds available to the Burmese
government in return for loan re-payments for use in agriculture,
energy, and mining. In November 1994, the Japanese government announced
it would resume some Official Development Aid (ODA) humanitarian
assistance.
The active involvement of Asian firms in Burma has led to increased
financing being available from Singaporean, Hong Kong and other Asian
Banks.
List of Banks with Correspondent U.S. Banking Arrangements
-State-owned Banks
-- Myanmar Foreign Trade Bank (MFTB)
80/86 Maha Bandoola Garden Street (P.O. Box 203), Yangon
Tel: 01-81810; Telex: 21300/21332/21348/21349 AB BANKFE BM
Fax: 095-01-89585
Contact: Managing Director
Correspondent U.S. Banks for MFTB:
- Bank of America
- Bankers Trust Co.
- Chase Manhattan Bank
- Citi Bank, New York
- American Express
-- Myanmar Investment and Commercial Bank (MICB)
526/532 Merchant Street, P.O. Box 442), Yangon
Tel: 80395/78421; Telex: 21244 MICBBK BM
Correspondent U.S. Banks for MICB
- Citi Bank, New York
- American Express
-- Private Banks (with Foreign Exchange capacity)
- Cooperatives Bank Limited
334/336, Strand Road (Corner of 23rd St.), Yangon
Contact: General Manager
- Myawaddy Bank Limited
189, Sule Pagoda Road, Kyauktada Township, Yangon
Contact: U Tun Kyi, General Manager (Tel:01-87900/87866)
- Myanma Citizens Bank
383 Maha Bandoola Street, Kyauktada Township, Yangon
Contact: U Than Aung, Managing Director (Tel: 01-73512)
- Yangon City Bank Ltd.
Sepin Street, Sule Pagoda Road, Yangon
Contact: U Sein Mra, Manager (Tel: 01-89256)
NOTE: These banks have not yet established relations with U.S.
correspondent banks. However, Yangon City Bank has established a
correspondent relationship with Development Bank (DBS) of Singapore,
Keppel Bank of Singapore, Standard Chartered Bank, Singapore, Hong Kong
& Shanghai Bank in Hong Kong, Bank Francaise du Commerce Exterieur Paris
(BFCE) and Bank of Tokyo in Tokyo and in New York.
IX. BUSINESS TRAVEL
Business Customs -- Obtaining Appointments with Government Officials
Since the Burmese government wants to attract foreign business, it has
relaxed procedures for foreign firms seeking appointments with
government officials. Ministries prefer that foreign firms seeking
appointments to contact them directly in writing (including by fax or
telex). The U.S. Embassy will follow-up on appointment requests by U.S.
firms, when requested to do so.
Official working hours for the government are 9:30 AM to 4:30 PM, but
some government officials do not remain at their jobs for the entire
workday. It is difficult to confirm appointments with government
officials, often they will confirm an appointment only an hour or two
beforehand. Moreover, officials may be summoned to meet their
superiors, forcing them to break other appointments.
International Connections
Myanmar Airways International (MAI), Silk Air (subsidiary of Singapore
Air), Biman (Bangladesh), Air China (CAAC) and Thai Airways provide
direct service to Singapore, Kuala Lumpur, Kunming, Jakarta, Hong Kong,
Bangkok, Dhaka and China. An Indonesian airline and Air India are also
expected to provide direct flight services to Burma. Singapore is the
most important gateway for transshipment of goods to and from the United
States -- Myanma Five Star, American President Lines and other foreign
vessels handle such shipments.
Visas
Business visas are valid for 14 days, and extendable from one to three
months. In most cases, business visas should be obtained from Burmese
Embassies abroad. Sponsorship is generally not required, but if the
Burmese Embassy has questions about the foreign businessperson, it will
request sponsorship from Burmese government agencies or local private
companies. The application process for business visas varies from one
week to one month, depending on the country where the visa is obtained
and whether application is made in person or through the mail. Tourist
visas are valid for 28 days. Group tours as well as foreign independent
travelers (FIT) are allowed. A minimum of 3 days to a week should be
allowed for the issuance of tourist visas. There are over 100
registered travel agencies operating in Burma, some of which are listed
in the Annex B.
Foreign Exchange Controls/Procedures
The Burmese government is strict in enforcing customs and currency
control regulations. There is no limit to the amount of foreign
currency and travelers' checks that can be brought into Burma, but any
amount over USD 2000.00 must be fully and accurately declared in detail
on the customs and currency declaration form visitors receive upon
arrival. Any currency exchanged for kyat must be traded at an official
exchange facility and noted on the back of the currency declaration
form. No kyat may be brought into or taken out of Burma. The penalty
for violation of these laws is a six-month minimum prison sentence
and/or a fine.
In February 1993, the Burmese Government introduced Foreign Exchange
Certificates (FECs). FEC 1.00 is equivalent to USD 1.00. FECs are legal
tender within Burma. They are commonly accepted by hotels and major
restaurants, but their acceptance by merchants varies. Most visitors
arriving on tourist visas are asked to exchange USD 300 in either U.S.
dollars or British pound sterling into FEC upon arrival at the airport.
The original 300 FEC cannot be reconverted on departure from Burma.
Unutilized amounts of FEC above 300 can be reconverted at the airport at
the time of departure, if the visitor presents the FEC vouchers.
Occasionally, the airport exchange counter has run out of dollars or
pound sterling before being able to reconvert all excess FEC for
departing visitors.
There is no limit to exchanging U.S. dollars or British pound sterling
for FECs at the legal exchange centers, including those at the airport,
hotels, state-owned banks, counters run by Myanmar Hotels and Tourism
Services and those counters run by FEC exchange license holders in
Rangoon's main tourist market ("Aung San" or "Scott" market). The open
market rate for FECs varies between FEC 1.00 equals kyat 60.00 - 115.00,
depending on the merchant or business accepting FECs. Visitors can use
traveler's checks or credit cards (American Express, Visa) to obtain
FEC, but cannot change credit cards or traveler's checks to obtain hard
currency.
Although airport procedures have relaxed, personal baggage can be
subject to a thorough search both on arrival and departure. All
valuables such as cameras, radios, tape recorders, and jewelry must be
declared on entry, and full duty must be paid on any item left in the
country, for whatever reason (including loss or theft). Departing
tourists who declared over USD 2000.00 on arrival must have receipts for
all items purchased in Burma and the amounts of their purchases must
tally with the amount of foreign currency exchanged for kyat or FEC.
It is extremely difficult to cash personal checks in Burma. American
Express Credit Cards may be used at some hotels and stores. Visa and
Master Card are also accepted but only for purchases not exceeding USD
500.00. The MFTB offers cash advances in FEC for Visa and American
Express credit cards.
Hotels
It is always advisable to confirm hotel reservations prior to arrival.
Hotel space in Rangoon can be tight during the winter and special events
such as the semi-annual gem emporiums held in the early spring and fall.
Hundreds of small but clean and comfortable private hotels, guest houses
and inns have opened (some are listed in the Annex C) and can accept
foreign guests. Four world class hotels opened in 1993/94 and about 12
are scheduled to open between 1995/96.
Ground Transportation
In addition to the private, small, pick-up truck type taxis, private
transport hiring services are available at most hotels. The government
also maintains taxi stands at hotels and other sites, with daily or
hourly rates payable in dollars or FECs only. Private tourist agencies
are now licensed to rent vehicles (with driver) to foreign
businesspersons and tourists (also payable only in dollars or FECs). It
is advisable to arrange transportation from the airport prior to arrival
through a travel agency or local business contact.
Language
Burmese is the official language, although many businesspersons and
government officials speak English. English and Burmese are widely
spoken and used for official purposes including legal texts, official
forms and other business documentation. English fluency is not
universal. Some top government officials, for example, deal with
foreigners only through an interpreter.
Health and Food
Water is not potable, even for brushing teeth. Visitors should avoid
dairy products and uncooked or undercooked meat and vegetables.
Visitors should consult their physician or local health authorities for
a list of recommended immunizations prior to arrival. Although malaria
is not a problem in Rangoon, malaria suppressants should be taken if
traveling to some parts of the country.
Holidays (1995)
January 4 (Independence Day), February 12 (Union Day), March 2
(Peasants' Day), March 15, (Full moon day of Tabaung), March 27 (Armed
Forces), April 12 - 16 (Water Festival), April 17 (Burmese New Year),
May 1 (Workers' Day), May 13 (Full Moon of Kason), July 11 (Full Moon of
Waso), July 19 (Martyrs' Day), October 8 (Full Moon of Thadingyut),
November 6 (Full Moon of Tazaungdaing), November 16 (National Day),
December 25 (Christmas).
NOTE: Karen New Year, Idd, Deepavali public holidays notices are
announced a few days ahead.
APPENDICES
Country Data
1. Profile
-Population: 43.92
-Population Growth Rate: 1.87%
-Religion(s): Buddhist
-Government System: Military Dictatorship
-Language: Burmese (Myanmar)
-Work Week: Monday - Friday
2. Domestic Economy
1992/93 1993/94 1994/95 1995/96
(Prov.) (Prov.) (Est.) (Actual)
-GDP (at current prices) 249,395 351,333 436,427 475,158
(kyat in million)
-GDP (at current prices) 41,036 57,516 74,569 79,193
(USD in million)
-GDP (at constant prices) 54,757 58,001 61,950 66,716
(kyat in million)
-GDP (at constant prices) 9,010 9,379 10,585 11,119
(USD in million)
-GDP Growth Rate 9.7% 5.9% 6.8% 7.7
-GDP per Capita(kyat) 1293 1345 1410 1491
-GDP per Capita(USD) 212 220 240 249
-Government 22.1% 22.3% 22.2% 21.9%
Spending share of GDP
-Inflation 22.3% 33.6% 32.0% 35%
-Unemployment N.A. N.A. N.A. N.A.
-Agriculture 38.5 37.9 38.1 38.0
(as percent of GDP)
-Industry
(as percent of GDP) 12.9 13.4 9.4 9.8
-Gross Domestic Savings 13.1% 11.5% N.A. N.A.
(as percent of GDP)*
Gross Domestic Investment 12.5% 10.5% N.A. N.A.
(as percent of GDP)*
-Foreign Exchange 260.0 350.0 400.0 500.0
Reserves (USD in million)
-Average Ex. Rate 6.0774 6.1084 5.8527 6.0000
for USD 1.00 (=kyat)
-Foreign Debt(USD billion 4.815 4.815 4.815 5.5
-Debt Service Ratio 18.3 N.A. N.A. N.A.
-U.S. Economic and - - -
-
Military Assistance
(USD in millions)
3. Trade 1992/93 1993/94 1994/95 1995/96
(Prov.) (Prov.) (Est.) (Actual)
-Total Country Exports 601.3 692.1 815.5 1,098.8
-Total Country Imports 882.8 1,297.1 1,557.7 1,057.7
-U.S. Exports** N.A. 12.0 11.0 N.A.
-U.S. Imports** N.A. 46.3 67.2 N.A.
-U.S. Share of N.A. N.A. N.A. N.A.
Host Country Imports
NOTE: The government revises its economic data over a three-year cycle.
Data for 1995/96 are "estimated". Data for 1994/95 are "provisional".
Data for 1993/94 are "provisional actual". Only data for 1992/93 are
now available in final.
*Source:GOB figures provided to the Business Study Mission
on June 1995.
**Source: U.S. Customs data, only 1993 and 1994 Calendar Year data
available.
Source: (Unless otherwise stated) "Review of the Financial, Economic and
Social Conditions 1994-95", Ministry of National Planning and Economic
Development.
1994/95 Official Budget Figures as published in: -
Annual Review Government Press
(Kyat in millions) (Kyat in millions)
Central Govt Spending 44,100 45,154
State Economic Enterprise 91,942 95,356
Spending
Town and City Dev. Comm. 12.6 13
Spending
Total Public Sector Spending 136,054 140,523
Total Public Sector Receipts 111,620 90,159
Balance of Financial Account -1,480.6 -
Overall Balance -25,914.8 -
Deficit -24,434.2 -50,364
Spending/GDP 31.2 32.2
Deficit/GDP 5.6 11.5
Overall Balance/GDP 5.9 -
Sources: "Review of the Financial, Economic and Social Conditions 1994-
95", Ministry of National Planning and Economic Development and "The New
Light of Myanmar", local English newspaper.
Balance of Payments (Kyat in millions)
1992/93 1993/94 1994/95 1995/96
(Prov. Actual) (Prov.) (Est.)
A.Current Account -1246.5 -1745.8 -1762.2 -1460.4
- Merchandise:
export f.o.b. 3590.0 4249.0 4772.6 5561.6
import f.o.b. -6139.5 -7951.5 -9117.0 -9524.6
Trade Balance -2549.5 -3702.5 -4344.4 -3963.0
- Services/Income:
credit* -1579.9 2544.4 3015.0 3196.5
debit* -422.2 -747.4 -709.8 -643.9
- Official services 0 0 0 0
& transfer
- Private services 741.6 1670.3 1835.7 1899.0
& transfer
- Interest on -153.2 -429.1 374.6 -271.9
Debt Services
Total: goods, -1391.8 -1905.5 -2039.2 -1410.4
services, income
- Miscellaneous 145.3 159.7 277.0 -50.0
B.Direct Investment 835.9 587.4 1440.7 1745.8
Direct Investment 835.9 587.4 1440.7 1745.8
Portfolio Investment - - - -
Total:Group A plus B -410.6 -1158.4 -321.5 294.4
C. Other Short Term -82.4 -23.2 -31.6 -52.7
Financing
IMF (repayment) 79.1 -16.7 -17.1 -16.1
Short term loan -161.5 -6.5 -14.5 -36.6
Total:Group A plus C -493.0 -1181.6 -353.1 241.7
D.Other Capital Sources447.4 968.0 879.6 -100.4
Grants 434.0 601.3 976.5 831.3
Loans/Repayments 329.5 343.5 -94.4 -929.2
Subscription to:
- Int'l Financial -102.3 0.4 - -
Organizations
Regional Financial - - - -
Organizations
Miscellaneous -213.8 22.8 -2.5 -2.5
Total:Group A to D -45.6 -213.6 526.5 141.3
E. Net Errors/Omission N.A. N.A. N.A. N.A.
Total: Group A to E -45.6 -213.6 526.5 141.3
F.Reserves N.A. N.A. N.A. N.A.
Monetary gold N.A. N.A. N.A. N.A.
SDRs N.A. N.A. N.A. N.A.
Foreign Exchange N.A. N.A. N.A. N.A.
assets
Source: Review of the Financial, Economic and Social Conditions 1994/95
(Burmese Edition)
Balance of Payments (U.S. dollar in millions)
1992/93 1993/94 1994/95 1995/96
(Prov.) (Prov.) (Est.)
Actual)
A.Current Account -205.1 -285.8 -301.1 -243.4
- Merchandise:
export f.o.b. 590.0 695.6 815.5 926.9
import f.o.b. -1010.2 -1301.7 -1557.7 -1587.4
Trade Balance -419.5 -606.1 -742.3 -660.5
- Services/Income:
credit* 260.0 416.5 515.1 532.8
debit* -69.5 -122.4 -121.3 -107.3
- Official services 0 0 0 0
& transfer
- Private services 122.0 273.4 313.7 316.5
& transfer
- Interest on -25.2 -70.2 -64.0 -45.3
Debt Services
Total: goods, -229.0 -311.9 -348.4 -235.1
services, income
- Miscellaneous 23.9 26.1 47.3 -8.3
B.Direct Investment 137.5 96.2 246.2 292.5
Direct Investment 137.5 96.2 246.2 292.5
Portfolio Investment - - - -
Total:Group A plus B -67.6 -189.6 -54.9 49.1
C.Other Short Term -13.6 -3.8 -5.4 -8.8
Financing
IMF (repayment) 13.0 -2.7 -2.9 -2.7
Short term loan -26.6 -1.1 -2.5 -6.1
Total:Group A plus C -81.1 -193.4 -60.3 40.3
D.Other Capital Sources 73.6 158.5 150.3 -16.7
Grants 71.4 98.4 166.8 138.6
Loans/Repayments 54.2 56.2 -16.1 -154.9
Subscription to:
- Int'l Financial -16.8 0.1 - -
Organizations
Regional Financial - - - -
Organizations
Miscellaneous -35.2 3.7 -0.4 -0.4
Total:Group A to D -7.5 -35.0 90.0 23.6
E. Net Errors/Omission N.A. N.A. N.A. N.A.
Total: Group A to E -7.5 -35.0 90.0 23.6
F.Reserves N.A. N.A. N.A. N.A.
Monetary gold N.A. N.A. N.A. N.A.
SDRs N.A. N.A. N.A. N.A.
Foreign Exchange N.A. N.A. N.A. N.A.
assets
Exchange Rate:USD 1 = K. 6.0774 K6.1084 K.5.8572 K. 6.0
Source: Review of the Financial, Economic and Social Conditions 1994/95
(Burmese Edition)
Total Investment Approved By the Myanmar Investment Commission
By Country for Existing and Completed Projects
March 31, 1989 through May 17, 1995
(in millions of U.S. Dollars)
Country No. Amount Approved
United Kingdom 11 634.15
France 1 465.00
Thailand 27 418.26
Singapore 27 337.16
United States 13 226.27
Japan 5 101.14
The Netherlands 2 83.00
Austria 1 71.50
Malaysia 7 69.57
Hong Kong 17 64.44
South Korea 9 60.59
Australia 4 28.20
Canada 1 22.00
Philippines 1 6.67
China 4 5.50
Bangladesh 2 2.96
Macao 1 2.40
Sri Lanka 1 1.00
TOTAL 134 2599.81
Total Investment Approved By the Myanmar Investment Commission for By
Sector
March 31, 1989 through May 17, 1995
(in millions of U.S. Dollars)
Sector Number of Projects Amount Approved
Manufacturing 50 175.30
Hotels and Tourism 30 570.38
Oil and Gas 23 1420.62
Fisheries 14 246.32
Mining 13 182.20
Transport 3 2.30
Agriculture 1 2.69
TOTAL 134 2599.81
Source: Myanmar Investment Commission
Annex A
How to Register as a Company
Registering as a foreign branch of a company incorporated outside Burma
and having an established place of business in Burma:
1. Applying for the Permit to Trade
Application should be addressed to:
The Chairman
Capital Structure Committee
c/o The Registrar
Companies Registration Office
Directorate of Investment and Company Administration
Ministry of National Planning and Economic Development
653/691 Merchant Street, Yangon, Myanmar
Phone: 01-77417, 83583; Telex: 21338 BUR RANGOON.
Application must be made on Form A (Annex 1), which is issued by the
Ministry of National Planning and Economic Development. A kyat 3.00
court fee stamp must be affixed to Form A. The following documents must
be attached to Form A:
- A copy of the company's background profile;
- Copies of the company's balance sheets for the past two years;
- Completed questionnaires (Annex 3 of Form A);
- List of intended economic or business activities to be carried out
in Burma;
- List of estimated expenditure for the first year of operations;
- A certificate from the relevant ministry or ministries authorizing
operations of public utility services or exploitation, development or
utilization of any natural resources within Burma.
Changes can be made to the above within two months from the date the
application is submitted. This registration must be renewed annually.
2. Capital Remitted to Burma
The foreign company must bring foreign exchange in the form of "head
office foreign capital." The Capital Structure Committee determines the
required amount depending on the company's economic activities and the
financial status of the company's head office. Fifty percent of the
required amount must be remitted within 30 days of the date of issuance
of the Permit to Trade. The remaining 50 percent must generally be
remitted in 180 days. If the foreign company can prove, in writing, to
the satisfaction of the Capital Structure Committee, that the final
remittance is not yet required for the scope of the company's activities
in Burma, the company may be allowed to defer the final remittance.
Registering as a foreign company incorporated in Burma:
1. Applying for Registration
Applications for registration must be obtained from:
The Registrar
Companies Registration Office
Directorate of Investment and Company Administration
Ministry of National Planning and Economic Development
653/691 Merchant Street, Yangon, Myanmar
Phone: 01-77417, 83583; Telex: 21338 BUR RANGOON.
The registration fee is kyat 600.00 to 15,000.00 depending upon the
authorized capital. The following documents must be attached to the
registration application, which can be obtained from the Ministry of
National Planning and Economic Development:
- Permit to Trade;
- A copy of the company's background profile translated into
Burmese;
- Full address of the registered or Principal Office of the company
in Burma;
- List of the directors and managers (if any) of the company;
- Names, addresses and nationalities of one or more persons resident
in Burma authorized to accept service on behalf of the company.
Changes can be made to the above within two months from the date the
application is submitted.
2. Remitting Capital to Burma
The foreign company must bring foreign exchange in the form of "issued
and paid-up capital." The government's Capital Structure Committee
determines the required amount depending on the company's economic
activities and the financial status of the company's head office. Fifty
percent of the required amount must be remitted within 30 days of the
date of issuance of the Permit to Trade. The remaining 50 percent must
generally be remitted in 180 days. If the foreign company can prove, in
writing, to the satisfaction of the Capital Structure Committee, that
the final remittance is not yet required for the scope of the company's
activities in Burma, the company may be allowed to defer the final
remittance.
Annex B
Travel Agencies (Selected)
Ancient Beauty Tourism Service Co. Ltd.
149, Bo Aung Kyaw Street, Kyauktada Township
Yangon, Myanmar
Tel: 01-78921; Telex: 21201/21236 BM 1411
Fax: 95-01-89960(354)
Contact: Nay Zin Latt
Free Bird Tours Co., Ltd.
357 Bo Aung Gyaw Street, Kyauktada P.O.
Yangon, Myanmar
Tel: 01-94941/75638; Fax: 95-1-89960-Attn-782
Telex: 21201/21236 BM 922
Contact: U Zin Thein
Golden Express Tours Ltd.
286 (1st Floor) Pansodan St., Kyauktada P.O.
Yangon, Myanmar
Tel: 01-22635; Telex: 21201/21236 BM 1478 G.E.L.
Fax: 095-01-89960/89961 (350) g.e.l.
Contact: Yong Min
Golden Land Travel Services (Myanmar) Co. Ltd.,
214(2-A), Bo Aung Gyaw Street,
Botataung P.O., Yangon, Myanmar
Tel: 01-83827/83898/96074
Telex: 21532 DANKON BM, 21515 NORKON BM
Fax: 95-01-83898/61900
Contact: U Khin Zaw
KOMY (Korea-Myanmar) Tour
1 Wingaba Road, Bahan Township
Yangon, Myanmar
Tel: 95-01-53101/53102
Fax: 95-01-52547; Telex: 21439 KOMYCO
Ruby Land Tourism Services
90 Upper Pansodan Street
Kandawgalay Township
Yangon, Myanmar
Tel: 95-01-81219; Fax: 95-01-89960 UAK-RUBYLAND-093
Telex: 21201/21236 BM UAK-RUBYLAND 1321
Contact: U Aye Kyaw (Managing Director)
Thuriya Travels and Tours
192, Room 9, 39th Street
Yangon, Myanmar
Tel: 01-72952; Telex: 21201/21236 BM 595 (M.W.T.)
Contact: Myo Wai Tint
Taw Win Travel Co. Ltd.
6 45th Street, Botataung P.O.
Yangon, Myanmar
Tel: 951-96080; Telex: 21201/21236 Bm (TW) 2153
Fax: 951-89960/89961 ATTN 1237
Contact: Rita Myint (Managing Director)
Tour Mandalay Co., Ltd
194/196, 2nd floor
Mahabandoola St. Pazundaung P.O.
Yangon, Myanmar
Tel: 951090589/53287
Annex C
Private Hotels in Rangoon (Selected)
Bagan Hotel
29(A) Po Sein Road, Yangon, Myanmar
Tel:01- 50489, Fax: 951-39660
Baiyoke Kandawgyi Hotel
Kandawgyi P.O., Yangon, Myanmar
Tel: 01-86521/86524; Fax:951-80412
Best Inn/Best Executive Suite
96/98 Pansodan Street, Yangon, Myanmar
Tel: 01-72835/86058
Telex: 21201 BM (ST 404)
Hotel December
89(A) Pyay Road, Dagon P.O., Yangon, Myanmar
Tel: 01-21943; Telex: UTL(533) BM 21201/21236
Fax: 95-1-89960 (ATTN: 307 U THET LWIN)
Mya Yeik Nyo Hotels
23/25 Kaba Aye Pagoda Road, Bahan P.O.
Yangon, Myanmar
Tel: 01-53818/53819; Fax: 951-38318
The Nawarat Hotel
257 Insein Road, Yangon, Myanmar
Tel:01-67888; Telex: 21201 BM (666); Fax:951-67777
Summit Parkview Hotel
350 Ahlone Road, Dagon P.O.
Yangon, Myanmar (Tel: 27966; Fax: 951-27992)
Annex D
The American Embassy in Rangoon assumes no responsibility for the
professional ability or integrity of the persons and companies whose
names appear in the following lists. Their names are arranged
alphabetically, and the order in which they appear has no other
significance.
Legal Services
Dr BA TIN, Barrister-at-Law
55 Maha Bandoola Garden Street,(1st floor)
Yangon (Tel:951-76318, Res:951-78258)
U MYA THEIN
52 Maha Bandoola Garden Street,(1st floor)
Yangon (Tel:951-77930, Res:951-60338)
U TIN MAUNG KYU
73 Pansodan Street
Yangon (Tel:951-76780, Res:951-73197)
U HLA MYINT
18 Mahabawdi Street
Kyaukkone, Yankin P.O.
Yangon (Tel:951-57027)
DAW MYA MYA AYE, B.A. Barrister-at-Law
46, Saya San Road, Bahan P.O.
Yangon (Tel: 951-50956; Fax: 951-53345)
U YE HTOON
Maw Htoon & Partners
49/51 Thirty First Street
Yangon (Tel: 951-71919/76595/36869;Fax: 951-34586)
Patents and Trademark Attorneys
U KYI WIN
53/55 Maha Bandoola Garden Street, Yangon
Tel:951-76031; Telex: 21210 BM (UKW/209)
MA KHIN KYI
Rm. 29, 53/55 Maha Bandoola Garden Street, Yangon
Tel:951-70454
U OHN MAUNG
3, 34th Street, Yangon
Tel:951-76984
Financial/Business Consultant
U HLA TUN (Registered Accountant)
53/55 Maha Bandoola Garden Street
Yangon
Tel: 01-71495
Telex: 21210 BM (UHT/312)
Chamber of Commerce and Trade Associations (Selected)
The Union of Myanmar Chamber of Commerce and Industry (MCCI)
Ruby House, 74/86 Bo Sun Pat Street
Pabedan Township (P.O. Box 1557), Yangon
Tel: 01-70749; 01-82208; Telex: 21201 UMCCI (517); 89960 UMCCI 1289
Contact: U Myo Nyunt, Honorary Joint Secretary
Myanmar Rice Millers Association
69 Theinbyu Street, Botataung Township
Yangon (Tel:951-84478; 951-80537)
Contact: U Win Myint, General Secretary
Aquatic Trade Technicians Association
144 Seikkantha Street (1st fl.), Kyauktada Township
P.O. Box 262, Yangon, Myanmar
Tel: 74500; Telex: 21201/21236 BM - 467
Contact: Chairman
Myanmar Edible Oil Dealers Association
17/19 Boywe Street, Pabedan Township
Yangon, Myanmar (Tel: 92817/72776)
Contact: Chairman
Myanmar Industries Association
74/86 Bo Sun Pat Street, Pabedan P.O.
Yangon (Tel: 951-77103)
Contact; U Htein Win, Chairman
Shipping Lines (Selected)
Ben Phee Cheng Koon
Managing Director
PHEE International Shipping (Myanmar) Ltd.
Phee Int'l Shipping and Forwarding Pte. Ltd.
198 A, Bo Myat Tun Street
Yangon, Myanmar (Tel: 951-91996/97593; Fax: 951-97593)
Head Office: 50 Telok Blangah Rd
#01-04/05 Citiport Centre,
Singapore 0409 (Tel: 2706200; Fax: 2709706)
(Agent for American President Line; Jardine Starline Management Pte.,
Ltd.)
DZ Container Lines
76, 2nd floor, Bo aung Gyaw Street
Botahtaung P.O., Yangon (Tel: 951-96102)
Lian Huat Shipping Co., (Pte) Ltd.
801, Maha Bandoola Rd.(Corner of 12th Street)
Lanmadaw P.O., Yangon (Tel: 951-24730)
The American Embassy in Rangoon assumes no responsibility for the
professional ability or integrity of the persons whose names appear in
the following lists. Their companies' names are arranged
alphabetically, and the order in which they appear has no other
significance.
Shipping and Forwarding Agencies (Selected)
Michael Win Lwin
Managing Director
Golden Moon-Face Moving & International Ltd.
Yangon Vanpac Enterprise
78 Wadan Street (P.O. Box 595)
Yangon 11131, Myanmar
Tel: 951-22622/01-83827; Telex: 21201/21236 BM MWL (767)
U Tint Zaw
Managing Director
Express Movers Co., Ltd. (EMCO)
58 Maha Bandoola Garden Street
Room 1-2 First Floor (G.P.O. Box 69)
Yangon, Myanmar
Tel:951-76319; Telex: 21201/21236 CODE 242
U Aung Kyaw Min (a) Freddie
Managing Director
Myanma International Moving Services (MIMS)
14 A-1 Lane, 9th Mile
Yangon, Myanmar
Tel:941-67057/65788; Telex: 21201 BM (AKM/114); Fax:951-89604
U Kyaw Myint
Managing Director
TST TransPack Network
63/65 14th Street, Lanmadaw Township
Yangon, Myanmar
Telephone:951-76627/64841; Telex: 21201 BM 1413; Fax:951-65251
The American Embassy in Rangoon assumes no responsibility for the
rofessional ability or integrity of the persons whose names appear in
the following lists. Their companies' names are arranged
alphabetically, and the order in which they appear has no other
significance.
Courier Services
UPS
U Ohn Myint (Authorized Representative)
No, 146 (L-2) Khay Mar Thiri Street
9 Mile, Mayangone P.O.
Yangon, Myanmar
Tel: 951-67110; Fax: 951-65513; Tlx: 21354 WWF YGN BM
Federal Express
Indo-China Express
U Soe Win (Operation Manager)
No. 130, 1st floor, 31st Street, G.P.O. Box. 103
Yangon, Myanmar
Tel: 951-83346 (Off)/951-24847 (Res); Fax: 951-80303
DHL
U Win Sein (Manager)
524 B, Merchant Street
Tel: 75398/71385
LOCAL BUSINESS CONTACTS
U Pe Maung Zin, General Manager
Associated Business-consultancy Services Ltd. (ABCS)
Nawarat Arcade, Nawarat Hotel
257 Insein Road, Hlaing P.O.
Yangon, Myanmar
Tel:951-40715; Fax: 951-67811
Capt. Maung Aye, Managing Director
Aye International Trading
300 Shwebontha Street
Yangon, Myanmar
Tel:951-73622; Fax:951-89568
U Win Thein
Cho Cho Trading
118 C, Oasis Lane, 8 Mile Pyay Road
Yangon, Myanmar
Tel: 951-61725/53271/39379; Tlx: 21408 Cho Cho BM
U Kyaw Maung, General Manager
Golden Global Group Ltd.
68 (2nd Floor), 30th Street
Yangon, Myanmar
Tel:951-74355; Telex: 21201 TELBOX BM (ATTN:UMH 481)
U Thein Tun, General Manager
Golden Star Enterprises
Bldg. 7/8,Bahosi Yeiktha, Bogyoke Aung San Street
Lanmadaw, Yangon, Myanmar
Tel:951-33946/31991; Telex:RANKOK 21345 BM
U Hla Win, Managing Director
Win Yadana Enterprise Ltd.
16 Natmauk Road, Tamwe Township
Yangon, Myanmar (Tel:951-53578/53600/90032;
Fax: 951-39885/91065; Telex: 21226 TELBOX 1256 MMT)
U Hla Myint Thein
International Trading Enterprise
261 1st floor, 39th Street, Kyauktada P.O.
Yangon, Myanmar
Tel:951-81791; Telex: 21201 TELBOX BM 024
U Nyunt Maung, Managing Director
K.T.G. Trading
157B 47th Street, Botataung P.O.
Yangon, Myanmar
Tel:951-95764/33374; Telex: 21201/21236 BM 417
U Minn Din, Managing Director
Minntech Consultancy Services
5 Wingaba Road, Bahan P.O.
Yangon, Myanmar
Tel:951-50941; Telex: 21327 ATNEWS BM/21247 DEUTAG BM
U Aye Cho, Managing Director
Mitsugi Co.
#15 104/112 Anawrahta Street (corner of 38th Street)
Yangon, Myanmar (Tel:951-80296)
U Moe Kyaw (a) Peter, Managing Director
Myanmar Marketing
27/10 U Wisara Housing Estate, Dagon Township
Yangon, Myanmar (Tel:951-86379/73254)
Michael Moe Myint
Myint & Associates Co. Ltd.
Suite 33 Blgd. 2, Mayangone Junction
8 1/2 Mile Pyay Road, Yangon, Myanmar
Tel:951-64302/64303/64304, Telex:21429 MYINT BM; FAX:951-64882
U Htein Win, Managing Director
Myitmakha Engineering Co.; Ltd.
112/114 33rd Street, Kyauktada P.O.
Yangon, Myanmar
Tel:951-86903/37483; 951-40735
U Soe Win, Managing Director
Popa Minerals Prospecting Group
Myaing Haywun Housing Estate
Bldg.# 2 Rm.#15-18 8-1/2 mile Junction
Mayangone P.O., Yangon, Myanmar
Tel:951-60776/60791; Fax: 951-89960/89961 (981)
U Khin Maung Ohn, Managing Director
Uni-Myanmar General Enterprise Ltd.
114 A Kayebin Road
Yangon 11191, Myanmar
Tel:951-21264; Telex: 21201 BM KMO 081
Mr. G.S. Sharma, Managing Director
Yamona International Co., Ltd.
17/21 35th Street (P.O. Box 149)
Yangon, Myanmar
Tel:951-75620; Telex:21201/21236 (GS 576); Fax:951-82980
U Than Tun Aung
Yadanabon Enterprise Group
Exporter, Importer & Business Consultant
810 Maha Bandoola Street, Lanmadaw 11132
Yangon, Myanmar
Tel:951-73776/73492;Telex:21201/21236 (929); Fax:951-89960 (308)
Note:
(1) "U" stands for Mr.; "Daw" stands for Ms.
(2) List of local contacts for a specific sector can be provided upon
request.
GOVERNMENT AGENCIES OF INTEREST TO U.S. FIRMS (Selected)
Director General
Agricultural Planning Department
Ministry of Agriculture
Thiri Mingala Lane, Off Kaba Aye Pagoda Road
Yangon, Myanmar (Tel:951-64429, Fax: 951-63984)
Managing Director
Myanma Agriculture Service
Kanbe, Irrigation Compound, Yankin
Yangon, Myanmar
Tel:951-65743/67039; Fax: 951-63984; Telex: 21311 AGRICO-BM
Managing Director
Cooperative Export Import Enterprise
259/263 Bagyoke Aung San Street
Kyautada P.O., Yangon, Myanmar
Tel:951-83540/83599; Telex: 21201 BM BURCOOP
Managing Director
Myanma Electric Power Enterprise
197/199 Lower Kemmendine Rd., Ahlone P.O.
Yangon, Myanmar
Tel:951-22866/20918; Fax: 951-22964/22965; Telex: EPCUB 21306 BM
Managing Director
Myanma Petrochemical Enterprise
23 Minye Kyawswa Road
Yangon, Myanmar
Tel:951-22813; Fax: 951-22964/22965; Telex: 21329 PECHEM BM
Director General
Energy Planning Department
74/80 Minye Kyawswa Road
Yangon, Myanmar
Tel:951-22535; Cable:NANITHA
Telex: 21307 MYCORP BM ATTN EPD; Fax: 951-22964/22965
Managing Director
Myanma Petroleum Products Enterprise
74/80 Minye Kyawswa Road
Yangon, Myanmar
Tel:951-21093; Fax:951-22964/22965; Telex:21307 MYCORP BM ATTN PPSC
Managing Director
Myanma Oil & Gas Enterprise
74/80 Minye Kyawswa Road
Yangon, Myanmar
Tel:951-22874/21049; Cable: YENAN
Telex: 21307 MYCORP-BM; Fax: 951-22964/22965
The Minister
Ministry of Forestry
Thiri Mingala Lane, Off Kaba Aye Pagoda Road
Yangon, Myanmar (Tel:951-63737, Fax: 951-64493)
Director General
Forest Department
BPI Lane, Forest Compound, West Gyogon, Insein
Yangon, Myanmar
Tel:951-81367/71624; Cable: CHIEFOR
Director General
Myanma Timber Enterprise
Ahlone P.O. 206
Yangon, Myanmar
Tel:951-22823/20637, Cable: TIMPRO; Telex: 21312 TIMCOR-BM
Director General
Department of Health, Ministry of Health
36 Theinbyu Street
Yangon, Myanmar (Tel:951-92900)
Director General
Industrial Planning Department
Kaba Aye Pagoda Road
Yangon, Myanmar
Tel:951-56316/56077; Cable: IMPDAMENT
Telex: 21500 SAMATA BM/21523 SAMATA BM
Managing Director
Myanma Foodstuff Industries
192 Kaba Aye Pagoda Road
Yangon, Myanmar
Tel:951-56533; Cable: SETMUSAKON
Telex: 21500 SAMATA BM/21513 SAMATA BM
Managing Director
Myanma Textile Industries
192 Kaba Aye Pagoda Road
Yangon, Myanmar
Tel:951-56333/56336; Cable: TEXMIPRO
Telex: 21500 SAMATA BM/21513 SAMATA BM
Managing Director
Myanma Pharmaceutical Industries
192 Kaba Aye Pagoda Road
Yangon, Myanmar
Tel:951-56740; Telex: 21500 SAMATA BM/21513 SAMATA BM
Director General
Fisheries Department
Corner of 33rd Street and Strand Road
Yangon, Myanmar
Tel:951-83855/78022; Cable: WHALES, Telex: 21310 PEARL-BM
Managing Director
No. (2) Mining Enterprise
Kanbe Road, Yankin
Yangon, Myanmar
Tel:951-51421/50166; Cable: TINCORP, Telex: 21205 MCTWO-BM
Director General
Geological Survey & Exploration Department
Kanbe Road, Yankin
Yangon, Myanmar (Tel:951-51494; Cable: DIRGEO)
Managing Director
Myanma Gems Enterprise
66 Kaba Aye Pagoda Road, P.O. Box 1397
Yangon, Myanmar
Tel:951-60905/61901; Telex: 21506 GEMSCOR-BM
Director General
Myanma Hotels and Tourism Services
77/91 Sule Pagoda Road
Yangon, Myanmar
Tel:951-86024; Telex: 21330 HOTOCO BM, Fax:951-82535
Director General
Directorate of Trade
228/240 Strand Road
Yangon, Myanmar
Tel:951-74961/84299/84182/84183
Cable: COMMERCE; Telex: 21338 TRAPRO-BM
Director
International Trade Promotion Service
Directorate of Trade
228/240 Strand Road
Yangon, Myanmar
Tel: 01-83514, 01-83517, 01-83519, 01-84299
Telex: 21338 TRAPRO-BM
Managing Director
Myanma Agriculture Produce Trading
70 Pansodan Street
Yangon, Myanmar
Tel:951-81048/84044/71505/71350; Cable: AGRITRADE
Telex: 21305 UBMEIC-BM (ATTN: AFPTC)
Managing Director
Medicine & Medical Equipment Trading
189/191 Maha Bandoola Street
Yangon, Myanmar
Tel:951-83227/81466/70551; Cable: MEDITRADE
Managing Director
Myanma Export Import Services
577/622 Merchant Street
Yangon, Myanmar
Tel:951-77577/80266/80077
Cable: MYANEICO, MYANEXPORT, MYANIMPORT
Telex: 21305/21328 UBMEIC-BM
Chairman
Yangon City Development Committee
Yangon City Hall, Sule Pagoda Road
Yangon, Myanmar (Tel:951-83988)
Managing Director
Myanma Post & Telecommunications
43 Bo Aung Kyaw Street
Yangon, Myanmar
Tel:951-81566/85499; Cable: POSTAL RANGOON
Telex: 21222 MANTEL-BM; Fax: 951-89911
The Minister
Ministry of Finance and Revenue
The Ministers' Office, Theinphyu Street
Yangon, Myanmar
Tel:951-84763; Telex: 21233 FERD BM
Director General
Customs Department
132 Strand Road, Yangon, Myanmar
Tel:951-81682/84533/83660
The Minister
Ministry of National Planning and Economic Development
663/691 Merchant Street, Yangon,Myanmar
Tel:951-80816, Fax:951-80950
Secretary
Foreign Investment Commission
Ministry of National Planning and Economic Development
663/691 Merchant Street
Yangon,Myanmar
Tel:951-72009, Fax:951-82101
Managing Director
Myanma Airways
104 Strand Road, Yangon, Myanmar
Tel:951-82678, Telex: 21204 RGNBAC BM, Fax:951-30613
Managing Director
Myanma Ports Authority
10 Pansodan Street
Yangon, Myanmar
Tel:951-81838/83122, Telex: 21208 BM; Fax:951-30613
Director General
Office of the Work Committee for the
Development of Border Areas & National Races
Ministers' Office, Theinbyu Street
Yangon, Myanmar, Telephone:951-85936
List of Trade Related Publications
Name of Publications Price in kyat
1. The Burma Companies Act, 1 Apr., 1914 40.00
2. The Partnership Act, 1 Oct., 1932 5.00
3. The Partnership Rules (Revenue Department), 08/14/88 3.00
4. The Burma Companies Rules, 1940 35.00
5. Special Company Act, 10 Nov., 1950 1.00
6. The Burma Companies Regulations, 1957 3.00
7. The Union of Myanmar Foreign Investment Law, 40.00
Procedures and Types of Economic Activities
Allowed for Foreign Investment, Nov. 1993
8. Law Amending the Burma Companies Act, *
SLORC Law No.2/89, 21 Jan.1989
9. Law Amending the Income Tax Rules (computation and *
assessment of capital gains), SLORC Rules No. 1/89,
22 Mar.1989
10. Law Amending the Income Tax Law, SLORC Law No. 6/89, *
22 Mar.1989
11. Law Amending the Profit Tax Law (minor changes), SLORC *
Law No.7/89, Mar.1989
12. Law Amending the State Budget Law (includes income tax *
rates and provisions), SLORC Law No. 8/89, 03/22/88
13. The State-owned Economic Enterprises Law, SLORC Law 5.00
No. 9/89, 31 Mar.1989
14. Doing Business in Burma, April 1989 and June 1990 10.00
15. Types of Economic Activities Allowed for Foreign 5.00
Investment (30 May, 1989)
16. An Outline of Taxes Administered by the International **
Revenue Department, July 1989, Jan. 1990, Jan. 1991
17. Guide to Foreign Investment in Myanmar, 25.00
Part I - 1989 and Part II - 1990
18. Prospective Importers of Myanmar Export Products 40.00
19. Myanmar Trade Directory 1994-95 250.00
* Newspaper cuttings (available at Commercial Section, American
Embassy).
20. The Financial Institutions of Myanmar Law, 07/4/90 3.50
21. Rules relating to the Financial Institutions 3.50
of Myanmar Law - July 4, 1990
22. The Central Bank of Myanmar Law - July 2, 1990 9.00
23. The Central Bank of Myanmar Rules - April 9, 1991 5.00
24. The Myanmar Agricultural & Rural Development 4.00
Bank Rules - April 9, 1990
25. The Myanmar Agricultural & Rural Development 4.00
Bank Law - July 9, 1990
26. Income Tax Law, Rules and Regulation with Extract **
from the State Budget Law, 1989
(as amended up to 08/1/90)
27. The Myanmar Tourism Law 10.00
28. Procedures Relating to the Myanmar Tourism Law 25.00
December 31, 1991
29. Statistical Yearbook 1993- Central Research 100.00
Organization
30. Review of the Financial Economic and Social Conditions
1994-1995 110.00
31. Yangon Directory 94-95 130.00
32. Myanmar Citizens Investment Law 50.00
33. Myanmar Export/Import Rules and Regulations for 200.00
Private Business Entrprenuers, July 1994
34. Myanmar Yellow Pages, 1995 300.00
35. Myanmar Marine Fisheries Law 1990 **
Ministry of Livestock Breeding & fisheries
36. Freshwater Fisheries Law, March 1991 **
37. Law Relating to the Fishing Rights of **
Foreign fishing Vessels
38. Private Industrial Enterprise Law, Nov 1990 **
39. Investment in Myanmar 1994 US$ 8.00
The Union of Myanmar Investment Commission
** Not for sale.
Note: The above publications can be bought at:
Sapay Beikhman Government Book Store
529/531 Merchant Street Bogyoke Aung San Market
Yangon, Myanmar Yangon, Myanmar
Inwa Book Store 232 Sule Pagoda Road
Yangon, Myanmar
Tel: 71078
(###)
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