Naypyitaw in US $100 Million China Deal to Build Train Factories

Asean Pushes for ‘Creative’ Tourism in Myanmar to Protect Culture

Myanmar is to be included in “creative” multi-country tourism packages to be promoted by the Association of Southeast Asian Nations (Asean) linked to protection of cultures and the environment.

“Our new focus is on experiential and creative tourism that respects environment and culture,” said U Aung Zaw Win, the director general of Myanmar’s Ministry of Hotels and Tourism. He is also chairman of the Asean Tourism Product Development Working Group.

China and Myanmar have signed a US $100 million agreement to jointly build railway rolling stock. Ninety percent of the money will be covered by loans from Chinese state banks to finance construction of at least two factories to build diesel locomotives and passenger carriages, said the Chinese news agency Xinhua.

Technical expertise will be provided by the China National Machinery Import and Export Corporation, the Chinese partner in the deal with Myanmar’s Ministry of Rail Transportation.

This agreement comes just a few weeks after Japan financed and carried out a feasibility study on modernizing the more than 600-km railway route between Yangon and Mandalay. At the time Myanmar’s deputy minister of railways, U Thaung Lwin, said Japanese companies would be awarded the modernization contract.

Some media reports have said factories under the Chinese loans deal will be built in Mandalay and Naypyitaw.

Beijing has previously signed an agreement with the Naypyitaw government to build a freight railway route from the China’s Yunnan Province through Myanmar to the Bay of Bengal coast at Kyaukphyu.

South Korea Exhibits its Manufacturing Skills at Naypyitaw Trade Show

South Korea held a four-day exposition of Korean companies and their products and services in Naypyitaw from July 26 to 29. Exhibitors included manufacturers of electronics equipment, cosmetics, furniture, textiles and household appliances.

Plans to hold the Korea Expo 2013 were agreed to when South Korean Finance Minister Hyun Oh-seok visited Myanmar in June as the head of Seoul’s first major trade delegation.

Korean firms, including the managers of Seoul’s Incheon International Airport Corporation, are bidding to win contracts to develop the new Hanthawaddy airport 80 km from Yangon.

South Korea ranks far behind China, Thailand, Japan and Singapore in investment in Myanmar, but government figures reveal that trade between Myanmar and South Korea in 2012 grew to a value of US $573 million.

“Today’s travelers are more sophisticated and interested in experiences with immersion in local ways of life,” he said.

A study in June by Norway and the Asian Development Bank forecast that Myanmar could attract 7 million tourist visits a year by 2020.

‘Serious Gaps’ in US Openness Rules for Business in Myanmar, says NGO

There are “serious gaps” in the rules established by the US government that American companies are required to comply with when doing business in Myanmar, a human rights group said.

Even though Washington lifted economic sanctions, US firms must report their business activities in Myanmar to the US State Department in order to try to ensure transparency and the avoidance of still-sanctioned individual Myanmar businesspeople.

The first US companies this month published their Myanmar investments, including business activities in oil and gas extraction. More are expected to reveal their activities later in the year.

“The first reports demonstrate both the usefulness of these reports, as well as some of the weaknesses in the US requirements,” said Jonathan Kaufman, legal advocacy coordinator with EarthRights International (ERI), a US-based human rights NGO.

“However, serious gaps remain in the rules. Even Hercules Offshore—which provided the most detailed report—is not disclosing the names of its Myanmar suppliers and subcontractors,” ERI said in a statement. “This makes it difficult for civil society groups to monitor its investments for the serious human rights, environmental, or other abuses the rules are designed to prevent.”

Hercules Offshore Inc has worked with Thailand’s gas explorer PTTEP which has links with Myanmar’s controversial state-controlled Myanmar Oil and Gas Enterprise.

Muse in Shan State Tops Cross-Border Trade as China Takes Lead

Myanmar’s land crossborder trade totaled US $894 million in value in the AprilJune quarter, according to the latest government figures. Two-thirds of the trade was with China.

Border trade is climbing as the number of permitted crossings increases—now 15 with China, Thailand, India and Bangladesh.

The biggest two-way trade in the quarter was with China via Myanmar’s border town of Muse in Shan State, logging more than $600 million, according to the Chinese state news agency Xinhua. Overall trade was split almost 50-50 between exports and imports. The biggest single Myanmar export commodity group in the quarter was agricultural produce. Imports were mostly raw material and finished factory products.

— WILLIAM BOOT