Investor Confidence Up,

but with Caveats

Myanmar’s government is making the country more attractive to foreign businesses but the improvement and enforcement of regulations which reassure investors is “slow and lacks sufficient transparency,” a study said.

The country’s adoption of the international Convention on the Recognition and Enforcement of Foreign Arbitral Awards is a positive step, but fitting it into Myanmar’s “complex and ill-developed legal framework will be a major challenge,” said the January-March Country Risk Report by UK business analysts Maplecroft.

“Investors will find that the business environment is skewed in favor of local conglomerates such as the Myanmar Economic Corporation,” the study said. “These businesses have strong ties to the military, and have a dominant market position in sectors ranging from fuel distribution to real estate.”

It also warned that foreign investors partnering local businesses “face very high risks of corruption and mismanagement.”

However, on the positive side Maplecroft said there was little risk of the state nationalizing investor assets. -William Boot

“We have never failed to pay taxes every year. IRD should be more careful in future,” he said.

U Tin Htun Naing of the IRD said, “We released the list with the good intention of collecting overdue taxes, but that the list was incorrect was a shock to us all. We admit our error and apologize for that.” -San Yamin Aung

Coffee – A New Frontier

Yoma Strategic Holdings Ltd plans to set up what it says could become the biggest coffee plantation in Myanmar, hoping the frontier economy has the potential to develop a strong coffee industry.

The Myanmar-focused property conglomerate, led by chairman U Serge Pun, said in March it has signed a deal to set up a joint venture to establish a coffee business with ED&F Man, a global agricultural trader, according to Reuters.

Yoma will hold an 85 percent stake in the venture, which is expected to require up to US$20 million of investment over four years, the agency reported. Its target will be to plant 3,700 acres of coffee.

Myanmar is geographically well situated to become a coffee producer, though its coffee industry is in its early days, with a number of small plantations.

In 2012, it produced about 8,000 tons of coffee beans on 12,000 hectares (29,652 acres) of land, according to estimates of the Food and Agriculture Organization of the United Nations. In 2011, the country exported under 100 tons of coffee.

Yoma also announced it had signed an agreement with the Myanmar government to set up a dairy plant to supply milk to schoolchildren, as well as a cold storage and logistics business with Japan’s Kokubu & Co., Ltd.

-Reuters