Business News/ Burma

[moe@xxxxxxxxxxxxx]

APR 2 1999 
Straits Time
                      Firms in Myanmar find going tough

                      Some foreign companies, including those from
                      Singapore, have left, but others hang on to tap its
                      potential

                      By EDWARD TANG
                      IN YANGON

                      SINGAPOREAN businessmen face many obstacles
                      operating in Myanmar. Some have left but those who
                      remain are prepared to stay the course because of the
                      country's potential. 

                      The problems of doing business in this country were
                      among the issues raised at a breakfast meeting between
                      resident Singaporean businessmen and Deputy Prime
                      Minister Lee Hsien Loong on Wednesday, the second
                      and final day of his visit here. 

                      On the list were restrictions the government introduced
                      on import of luxury and "non-priority" household
                      products, and a new law that requires companies to
                      export first and earn credits in the Foreign Trade Bank
                      before they were allowed to import, even though these
                      companies were able to pay in hard currencies. 

                      These restrictions, imposed since March last year, were
                      designed to conserve foreign reserves, but they have
                      ended up penalising foreign investors, especially
hoteliers
                      who need to import wines, cheese and milk products for
                      their business. 

                      A ban on export of rice, groundnut, oil, sesame and
                      sesame oil has also caused Singapore traders to suffer
                      huge losses when they could not fulfil their sales
                      commitments and had to look for alternatives at higher
                      prices. 

                      In January this year, an 8 per cent tax on foreign
                      currency receipts from trading was imposed on private
                      traders, eating into their profit margin and causing
                      Myanmar exports to be less competitive. 

                      Singapore's hotel investments, which make up more than
                      half of the US$1.5 billion worth of projects by the

                      Republic in this country, has also been hit by the
Asian
                      economic crisis. It has caused occupancy rates to plunge
                      to between 20 and 30 per cent. 

                      Yet, hotel operators are unable to cut costs because
of a
                      4 per cent property tax, high electricity tariffs, and
                      astronomical telecommunication charges which are
                      several times higher than other regional countries. 

                      Hotel guests have complained that they were billed at
                      US$3.40 (S$5.90) per minute even for calls that were
                      unconnected -- a common occurrence owing to the
                      poor quality of phone lines. 

                      Ms Shirley Tan, marketing manager of Sigma Cable, a
                      Singapore company located in the Hlaing Tharyar
                      Industrial Estate, which Brigadier-General (NS) Lee
                      visited on Tuesday, said her greatest problem was to be
                      passed from one government agency to another. 

                      "No one seems to want to make the decision," she told
                      The Straits Times, adding that her company would
                      remain in Myanmar because of the country's promising
                      future. 

                      BG Lee told Singaporean journalists on Tuesday after
                      his meetings with Myanmar leaders, including Prime
                      Minister Than Shwe, that he had conveyed to them the
                      concerns of the Singaporean business community.