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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
-Automob
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=0D
U.S. Department of State =
Burma Country Commercial Guide
Office of the Coordinator for Business Affairs
=0D
COUNTRY COMMERCIAL GUIDE
=
Burma (Myanmar)
=
JUNE 1995
=0D
Prepared by U.S. Embassy
Rangoon, Burma (Yangon, Myanmar)
=0D
This Country Commercial Guide (CCG) presents a comprehensive look at =
Burma's commercial environment through economic, political and market =
analyses. =
=0D
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. =
=0D
Table of Contents
=0D
I. Executive Summary
=0D
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
=0D
III. Political Environment
-Nature of Bilateral Relationship with the United States
-Major Political Issues Affecting Business Climate
-Brief Synopsis of Political System
=0D
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
=0D
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
=0D
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 =
=0D
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 =
=0D
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
=0D
IX. Business Travel
-Business Customs
-- Obtaining Appointments Government Officials
-International Connections =
-Foreign Exchange Controls/Procedures =
-Hotels =
-Ground Transportation =
-Health and Food =
-Holidays =
=0D
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 =
=0D
Annex A: How to Register as a Company
=0D
Annex B: List of Travel Agencies (Selected)
=0D
Annex C: List of Hotels (Selected)
=0D
Annex D: Select List of Lawyers, Business Consultants,
=0D
Business Associations, Shipping Lines/Agents,
=0D
Local Business Contacts, Trade-Related
=0D
Publications, Government Agencies =
=0D
=0D
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.
=0D
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. =
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
Chapter II. ECONOMIC TRENDS AND OUTLOOK =
=
Major Trends and Outlook
=0D
(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.)
=0D
A. Government Role in the Economy
=
=46rom 1962-88, Burma had a centrally-planned economy with little foreig=
n =
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:
=0D
Allowing the private sector to engage in most economic activities;
=0D
Legalizing border trade and allowing it to be conducted at market =
exchange rates;
=0D
Signing border trade agreements with India, Thailand, China and =
Bangladesh to normalize and expand border trade;
=0D
Streamlining trading procedures;
=0D
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;
=0D
Introducing a parallel currency (foreign exchange certificates or FECs) =
to help circumvent the overvalued official exchange rate;
=0D
Vastly reducing the areas of the economy doing business at the official =
exchange rate;
=0D
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);
=0D
Privatizing some state-owned enterprises;
=0D
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;
=0D
Permitting private sector banks;
=0D
Allowing four private banks tied to the government to handle foreign =
exchange;
=0D
Implementing a foreign investment law allowing foreign investment in =
most sectors of the economy, and permitting 100 percent foreign =
ownership in some sectors;
=0D
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;
=0D
Promulgating a domestic investment law;
=0D
Implementing a new mining law; and
=0D
Easing procedures for issuing business and tourist visas.
=0D
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.
=0D
B. Economic Outlook =
=0D
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.
=0D
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.
=0D
1994/95 Performance
=0D
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.
=0D
Principal Growth Sectors
=0D
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. =
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
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. =
=0D
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.
=0D
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. =
=0D
Manufacturing =
=0D
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. =
=0D
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.
=0D
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. =
=0D
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.
=0D
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.
=0D
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).
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
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. =
=0D
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.
=0D
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.)
=0D
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
=0D
NOTE: This analysis of the Balance of Payments uses the official =
exchange rate. =
=0D
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.
=0D
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. =
=0D
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.
=0D
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. =
=0D
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.
=0D
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.
=0D
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). =
=0D
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).
=0D
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.) =
=0D
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.
=0D
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. =
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
The Agricultural Ministry's Irrigation Department has been building 30 =
dams simultaneously, ranging from small irrigation dams to hydroelectric =
dams. =
=0D
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. =
=0D
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
=0D
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. =
=0D
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. =
=0D
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.
=0D
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.
=0D
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.
=0D
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.)
=0D
Joint Ventures =
=0D
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. =
=0D
Steps to Establishing an Office; Registering as a Company =
=0D
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. =
=0D
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. =
=0D
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". =
=0D
Advertising =
=0D
-- List of Newspapers =
=
The following state-owned newspapers are published by the News and =
Periodicals Enterprise of the Ministry of Information. =
=0D
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.
=0D
-- List of Economic Journals and Magazines (select)
=0D
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
=0D
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.
=0D
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. =
=0D
Legal System
=0D
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.
=0D
Taxes
=0D
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.
=0D
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.
=0D
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)
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
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).
=0D
Trade Fairs
=0D
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. =
=0D
1995 Trade Fairs: =
=0D
October 1995 =
=0D
Mid Year Gems Emporium
=0D
The followings exhibitions are organized by Applied Investments =
(Asia) Pte. Ltd. and Conference & Exhibition Management Services Pte. =
Ltd., Singapore 1995/96 =
=0D
June 21 - June 24, 1995
=0D
Myanmar Computer, Telecom & Consumer Electronics Expo'95
Myanmar Building Materials & Construction machinery Expo'95
Myanmar Garment & Textile Machinery & Accessories Expo'95
=0D
October 11 - October 14, 1995
=0D
Myanmar Food & Hotel Equipment Expo'95
Myanmar Food Processing & Packaging Expo'95
=0D
December 6 - December 9, 1995
=0D
Myanmar Energy & Power Equipment Expo'95
Myanmar Oil & Gas Equipment Expo'95
Myanmar Transport & Motor Accessories Expo'95
Myanmar Pumps & Valves Expo'95
=0D
1996 Trade Fairs: =
=0D
January 1996
=0D
Myanma International Trade Fair
=0D
March 1996
=0D
33rd Annual Gems and Jade Emporium
=0D
October 1996
=0D
Mid-year Gems and Jade Emporium
=0D
Chapter V. LEADING TRADE PROSPECTS FOR U.S. BUSINESS =
=
Telecommunications (ITA Industry Code: TEL; TES)
=0D
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.
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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.
=0D
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.
=0D
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. =
=0D
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).
=0D
Agriculture and Agro Industry (ITA Industry Codes: AGC; AGM)
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=0D
Industrial Inputs (ITA industry Codes: YAR, TXF, TXM, FPP, GIE, ICH, =
MTL, PCI, PVC, PKG, BUS, CPT, EIP, ELP, USD)
=0D
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. =
=0D
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.
=0D
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.
=0D
Computers and Related Industries, Service and Maintenance (ITA Industry =
Codes: CPT, CSF, CSV)
=0D
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)
=0D
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.
=0D
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. =
=0D
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. =
=0D
Aviation, Shipping and Rail Transport (ITA Industry Codes: RRE; TRN; =
PRT; AVS; CVR)
=0D
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. =
=0D
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.
=0D
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.
=0D
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. =
=0D
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. =
=0D
Consumer Goods (ITA Industry Codes: GCG; CEL; COS; TOY; HCG; MUS; SPT; =
AUV; BUS)
=0D
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.
=0D
Travel Industry
=0D
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.
=0D
Insurance
=0D
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.
=0D
Other Opportunities for U.S. Firms (ITA Industry Codes: ACE; MCS; GIE; =
USD: FOD)
=0D
- Engineering expertise =
- Generators and related electrical products =
- Food and Beverage Products
=0D
VI. TRADE REGULATIONS AND STANDARDS =
=
Barriers to Trade and Investment
=0D
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. =
=0D
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.
=0D
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.
=0D
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. =
=0D
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)
=0D
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. =
=0D
(Barriers to Investment are further discussed in Chapter VII). =
=0D
Trade Regulation =
=0D
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.
=0D
Tariffs and Import Taxes =
=0D
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.
=0D
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. =
=0D
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. =
=0D
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.
=0D
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.
=0D
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. =
=0D
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.
=0D
Prohibited Imports =
=0D
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 =
=0D
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. =
=0D
Although the commercial tax on exports has been reduced from 1 to 5 =
percent, it must be paid in foreign exchange. =
=0D
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. =
=0D
Temporary Entry =
=0D
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. =
=0D
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.) =
=0D
Free Trade Zones =
=0D
None =
=
Membership in Free Trade Arrangements =
=
None =
=0D
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. =
=0D
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. =
=0D
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.
=0D
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.
=0D
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. =
=0D
Screening of Foreign Investment =
=0D
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.
=0D
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. =
=0D
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.
=0D
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. =
=0D
Companies' Act
=0D
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.
=0D
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.
=0D
Discrimination =
=0D
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. =
=0D
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.
=0D
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. =
=0D
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: =
=0D
Foreign Currency =
=0D
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.) =
=0D
Withdrawal of foreign investment capital in relevant foreign =
currency at the prevailing official rate at termination of business is =
allowed. =
=0D
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. =
=0D
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.
=0D
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. =
=0D
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.
=0D
Expropriation and Compensation
=0D
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
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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.
=0D
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. =
=0D
Regulatory System =
=0D
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
=0D
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). =
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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. =
=0D
FOREIGN DIRECT INVESTMENT
=0D
Types of Investment =
=0D
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
=0D
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. =
=0D
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.
=0D
Total Investment Approved By the Myanmar Investment Commission for =
Existing Projects By Sector =
=0D
March 31, 1989 through March 31, 1995 =
(in millions of U.S. Dollars) =
=0D
Sector Number of Projects Amount Approved =
(Existing Projects)
=0D
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
=0D
TOTAL 107 2237.15 =
=0D
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.
=0D
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.
=0D
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.
=0D
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.
=
=0D
Flow of Total Investment Approved by the Foreign Investment =
=0D
Commission, by Fiscal Year (as of March 31, 1995) =
(in millions of U.S. Dollars) =
=0D
1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 =
449.49 280.57 5.89 103.78 377.60 1351.88
=0D
Ownership of Foreign Investment
=0D
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. =
=0D
Existing Foreign Investment Enterprises as at March 31, 1995
by Form of Organization
=0D
Sr. Particulars No. Amount of
No. Foreign Capital
(USD in millions)
=0D
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
=0D
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.
=0D
Total Investment Approved By the Myanmar Investment Commission
=0D
By Country for Existing Enterprises
=
=0D
March 31, 1989 through March 31, 1995 =
(in millions of U.S. Dollars) =
Country Amount Approved =
=0D
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
=0D
TOTAL 2237.15
=0D
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.
=0D
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).
=0D
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.
=0D
The highly skewed official exchange rate and other factors limits the =
interest of foreign banks in operating in Burma. =
=0D
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. =
=0D
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. =
=0D
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.
=0D
List of Banks with Correspondent U.S. Banking Arrangements =
=0D
-State-owned Banks
=0D
-- 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 =
=0D
Correspondent U.S. Banks for MFTB:
=0D
- Bank of America
- Bankers Trust Co.
- Chase Manhattan Bank
- Citi Bank, New York
- American Express
=0D
-- Myanmar Investment and Commercial Bank (MICB) =
526/532 Merchant Street, P.O. Box 442), Yangon
Tel: 80395/78421; Telex: 21244 MICBBK BM =
=0D
Correspondent U.S. Banks for MICB
=0D
- Citi Bank, New York
- American Express
=0D
-- Private Banks (with Foreign Exchange capacity)
=0D
- Cooperatives Bank Limited =
334/336, Strand Road (Corner of 23rd St.), Yangon =
Contact: General Manager
=0D
- Myawaddy Bank Limited =
189, Sule Pagoda Road, Kyauktada Township, Yangon =
Contact: U Tun Kyi, General Manager (Tel:01-87900/87866) =
=0D
- Myanma Citizens Bank =
383 Maha Bandoola Street, Kyauktada Township, Yangon
Contact: U Than Aung, Managing Director (Tel: 01-73512) =
=0D
- Yangon City Bank Ltd. =
Sepin Street, Sule Pagoda Road, Yangon =
Contact: U Sein Mra, Manager (Tel: 01-89256) =
=0D
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.
=0D
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. =
=0D
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 =
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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. =
=0D
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.
=0D
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) =
=0D
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). =
=0D
NOTE: Karen New Year, Idd, Deepavali public holidays notices are =
announced a few days ahead. =
=0D
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 =
=0D
1992/93 1993/94 1994/95 1995/96
(Prov.) (Prov.) (Est.) (Actual)
=0D
-GDP (at current prices) 249,395 351,333 436,427 475,158 =
=0D
(kyat in million)
-GDP (at current prices) 41,036 57,516 74,569 79,193 =
=0D
(USD in million)
-GDP (at constant prices) 54,757 58,001 61,950 66,716
=0D
(kyat in million) =
-GDP (at constant prices) 9,010 9,379 10,585 11,119
=0D
(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 (=3Dkyat)
-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 =
=0D
(USD in millions)
3. Trade 1992/93 1993/94 1994/95 1995/96
(Prov.) (Prov.) (Est.) (Actual)
=0D
-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 =
=0D
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.
=0D
*Source:GOB figures provided to the Business Study Mission
on June 1995.
=0D
**Source: U.S. Customs data, only 1993 and 1994 Calendar Year data =
available. =
=0D
Source: (Unless otherwise stated) "Review of the Financial, Economic and =
Social Conditions 1994-95", Ministry of National Planning and Economic =
Development.
=0D
1994/95 Official Budget Figures as published in: -
=0D
Annual Review Government Press
(Kyat in millions) (Kyat in millions)
=0D
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
=0D
Overall Balance/GDP 5.9 -
=0D
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.
=0D
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)
=0D
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 =3D K. 6.0774 K6.1084 K.5.8572 K. 6.0 =
Source: Review of the Financial, Economic and Social Conditions 1994/95 =
(Burmese Edition)
=0D
Total Investment Approved By the Myanmar Investment Commission
=0D
By Country for Existing and Completed Projects
March 31, 1989 through May 17, 1995 =
(in millions of U.S. Dollars) =
=0D
Country No. Amount Approved =
=0D
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
=0D
TOTAL 134 2599.81
=0D
Total Investment Approved By the Myanmar Investment Commission for By =
Sector =
=0D
March 31, 1989 through May 17, 1995 =
(in millions of U.S. Dollars) =
=0D
Sector Number of Projects Amount Approved =
=0D
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 =
=0D
TOTAL 134 2599.81 =
=0D
Source: Myanmar Investment Commission
=0D
Annex A =
=0D
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:
=0D
- 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. =
=0D
2. Capital Remitted to Burma =
=0D
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. =
=0D
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: =
=0D
- 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. =
=0D
Changes can be made to the above within two months from the date the =
application is submitted. =
=
2. Remitting Capital to Burma =
=0D
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. =
=0D
Annex B =
=0D
Travel Agencies (Selected) =
=0D
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 =
=0D
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)
=0D
Tour Mandalay Co., Ltd
194/196, 2nd floor
Mahabandoola St. Pazundaung P.O.
Yangon, Myanmar
Tel: 951090589/53287
=
=0D
Annex C =
=0D
=
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 =
=0D
Best Inn/Best Executive Suite =
96/98 Pansodan Street, Yangon, Myanmar =
Tel: 01-72835/86058 =
Telex: 21201 BM (ST 404) =
=0D
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) =
=0D
Mya Yeik Nyo Hotels =
23/25 Kaba Aye Pagoda Road, Bahan P.O. =
Yangon, Myanmar =
Tel: 01-53818/53819; Fax: 951-38318 =
=0D
The Nawarat Hotel
257 Insein Road, Yangon, Myanmar
Tel:01-67888; Telex: 21201 BM (666); Fax:951-67777
=0D
Summit Parkview Hotel
350 Ahlone Road, Dagon P.O.
Yangon, Myanmar (Tel: 27966; Fax: 951-27992)
=0D
Annex D
=0D
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.
=0D
Legal Services =
=0D
Dr BA TIN, Barrister-at-Law =
55 Maha Bandoola Garden Street,(1st floor) =
Yangon (Tel:951-76318, Res:951-78258) =
=0D
U MYA THEIN =
52 Maha Bandoola Garden Street,(1st floor) =
Yangon (Tel:951-77930, Res:951-60338) =
=0D
=
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) =
=0D
DAW MYA MYA AYE, B.A. Barrister-at-Law
46, Saya San Road, Bahan P.O.
Yangon (Tel: 951-50956; Fax: 951-53345)
=0D
U YE HTOON
Maw Htoon & Partners
49/51 Thirty First Street
Yangon (Tel: 951-71919/76595/36869;Fax: 951-34586)
=0D
Patents and Trademark Attorneys =
=0D
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 =
=0D
Financial/Business Consultant =
=0D
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) =
=0D
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 =
=0D
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
=0D
Shipping Lines (Selected) =
=0D
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)
=0D
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.)
=0D
DZ Container Lines
76, 2nd floor, Bo aung Gyaw Street
Botahtaung P.O., Yangon (Tel: 951-96102)
=0D
Lian Huat Shipping Co., (Pte) Ltd.
801, Maha Bandoola Rd.(Corner of 12th Street)
Lanmadaw P.O., Yangon (Tel: 951-24730)
=0D
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. =
=0D
Shipping and Forwarding Agencies (Selected) =
=0D
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) =
=0D
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 =
=0D
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. =
=0D
Courier Services
=0D
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
=0D
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
=0D
DHL
U Win Sein (Manager)
524 B, Merchant Street
Tel: 75398/71385
=0D
LOCAL BUSINESS CONTACTS =
=0D
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
=0D
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) =
=0D
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 =
=0D
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)
=0D
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) =
=0D
U Moe Kyaw (a) Peter, Managing Director =
Myanmar Marketing =
27/10 U Wisara Housing Estate, Dagon Township =
Yangon, Myanmar (Tel:951-86379/73254) =
=0D
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 =
=0D
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) =
=0D
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 =
=0D
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) =
=
=0D
Note: =
(1) "U" stands for Mr.; "Daw" stands for Ms. =
(2) List of local contacts for a specific sector can be provided upon =
request. =
=
=0D
GOVERNMENT AGENCIES OF INTEREST TO U.S. FIRMS (Selected) =
=0D
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 =
=0D
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 =
=0D
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 =
=0D
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 =
=0D
Managing Director
Myanma Foodstuff Industries =
192 Kaba Aye Pagoda Road =
Yangon, Myanmar =
Tel:951-56533; Cable: SETMUSAKON =
Telex: 21500 SAMATA BM/21513 SAMATA BM =
=0D
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 =
=0D
Director General =
Fisheries Department
Corner of 33rd Street and Strand Road =
Yangon, Myanmar =
Tel:951-83855/78022; Cable: WHALES, Telex: 21310 PEARL-BM =
=0D
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) =
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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 =
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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 =
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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
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Director General
Office of the Work Committee for the =
Development of Border Areas & National Races
Ministers' Office, Theinbyu Street
Yangon, Myanmar, Telephone:951-85936 =
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List of Trade Related Publications =
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Name of Publications Price in kyat =
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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
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* Newspaper cuttings (available at Commercial Section, American =
Embassy). =
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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
=0D
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 =
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** Not for sale. =
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Note: The above publications can be bought at: =
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Sapay Beikhman Government Book Store =
529/531 Merchant Street Bogyoke Aung San Market =
Yangon, Myanmar Yangon, Myanmar =
=0D
Inwa Book Store 232 Sule Pagoda Road
Yangon, Myanmar
Tel: 71078
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