MYANMAR... WHAT THE WORLD IS READING
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NATION
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Myanmar…
What the world is reading
In 2014, a year after hosting the SEA Games, Myanmar holds the chair of the Association of Southeast Asian Nations, an indication of the country’s growing prominence and recognition on the international stage. This country, the largest in mainland Southeast Asia that remains largely untapped and undeveloped yet which holds a centre-stage position in one of the fastest growing regions in the world, has transfixed global attention. Since it revealed its long-shuttered interior to the world in 2011, Myanmar has become a focal point of global interest. A new magnet for investors, a new hotspot for tourism, a land of untold riches and resources… Yet the road to reform is not a smooth one. Social improvements in areas such as education and health care lag far behind the pace of economic development. Solutions to internal ethnic and religious strife remain elusive. Indeed, serious questions remain over the country’s political make-up and democratic future. “Myanmar… What the world is reading” takes an in-depth look at some of the issues happening right now in Myanmar. As well as articles about the reform progress taking place in various areas, we also have a section on investment and a guide to Yangon for first-time visitors to this fascinating city. “Myanmar… What the world is reading” also coincides with the recent launch of the electronic version of Myanmar Eleven newspaper while the print version of Myanmar’s first independent English language daily will be hitting newsstands in Myanmar soon. Myanmer Eleven offers readers in Myanmar and around the world insightful news on the changes and transformations taking place in the country with coverage of business, Asean and Asia, travel, culture, and trends shaping the new Myanmar. Myanmar Eleven newspaper is truly “what the world is reading”.
Editorial Advisor
: Pana Janviroj
Editorial Contributors : Achara Deboonme Khine Kyaw Lawrence Neal Manoj Tripathi Supalak Ganjanakhundee Yodsroi Sukdinunt Designer : Nanthanakorn Kumpanil Tanat Supichayangkun Advertising Enquiries
: Ratchanok Kusonmanin
Publisher : NMG News Co., Ltd. 1854 Bangna-Trat Rd., Bangna, Bangkok 10260, Thailand Printer : WPS (Thailand) Co., Ltd. Tel 0-2338-3000
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Myanmar… what the world is reading CONTENTS
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48
Tourism booms amid concerns of shortages
Global investors return en masse
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68
Visitors’ Guide to Yangon
The people that will shape Myanmar’s future
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Myanmar’s path to reform
20
Clearing the way to free and fair elections
12
Challenges remain in Myanmar’s democratic reform
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Central Bank’s expanding role
40
Social reform still lags far behind
29
The view from outside: Patience wearing thin over lack of progress
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Foreign Investment in Myanmar
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Bright prospects despite some concerns
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Connectivity a challenge to AEC integration
Myanmar’s path to reform After decades of isolation, Myanmar is emerging as a rising star with ongoing political, economic and social reforms to accelerate its integration into the international community. The country has witnessed a number of historic transformations since late 2010.
2010
2013
November ●
January ● The Asian Develop-
The military-backed civilian government is formed through the country’s first elections in 20 years.
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Aung San Suu Kyi is released from house arrest.
March ● Thein Sein is sworn in as president of a nominally civilian government.
May ● The new government grants general amnesty to thousands of prisoners.
October ● New labour law allowing the establishment of labour unions is passed.
November ● Asean approves Myanmar’s bid for chairmanship of the grouping in 2014. ● Aung San Suu Kyi announces her candidacy in parliamentary by-elections.
December ● US Secretary of State Hillary Clinton visits Myanmar. ● A law allowing peaceful demonstration is passed.
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2012 April ● The National League Democracy (NLD), led by Aung San Suu Kyi, takes a landslide victory in parliamentary by-elections. ● The US announces an easing of most of its sanctions on Myanmar. ● The EU agrees to suspend most of its sanctions on Myanmar.
2011
ment Bank resumes loans to Myanmar. ● New detailed regulations under the 2012 Foreign Investment Law are released.
June ● Coca-Cola announces business resumption in the country after a 60-year absence.
February ● Thein Sein embarks on his first European tour as head of state.
July ● Aung San Suu Kyi makes her parliamentary debu t.
August The government lifts its
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pre-publication censorship system.
April ● The EU lifts remaining trade, economic and individual sanctions. ● Privately-owned newspapers hit Myanmar’s newsstands for the first time in almost five decades.
October The National Planning
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and Economic Development Ministry undertakes investment policy reviews with Organization for Economic Co-operation and Development (OECD).
2014 January ●
Myanmar commences role as ASEAN Chair by hosting Foreign Ministers’ Meeting in Bagan.
December ● The 27th SEA Games takes place in the Myanmar capital Nay Pyi Taw.
September ● President Thein Sein visits the United States.
November New Foreign Investment
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Law is passed.
US President Barack
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Obama visits Myanmar on his first overseas trip since re-election and the first visit of a US President to Myanmar.
Myanmar magazine
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Political REFORM
Challenges remain in Myanmar’s
democratic reform Supalak Ganjanakhundee
The Nation
Clashes between Buddhists and Muslims in communal conflicts, arrests of journalists, the snail’s pace of peace talks between the government and armed ethnic groups, high numbers of political prisoners remaining in prison and incomplete charter amendments reflect the fact that reform in Myanmar is still far from complete. Reformist President Thein Sein, who championed the reform for democracy and national reconciliation, has some 20 months left in office. It is difficult to predict whether reform could be accelerated after the 2015 election. Thein Sein has done a great job beyond
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expectations to push the country, which had languished under military rule for nearly half a century, toward democracy and liberalization. Over the past three years, the President has fostered relaxation in many political areas, such as giving more freedom to politicians and freeing many political prisoners including well known figures like Nobel Laureate Aung San Suu Kyi and leaders of the 8888 generation like Min Ko Naing. He has also facilitated greater freedom for the media, paving the way for many new media outlets. He also began peace negotiations with many ethnic groups in the country that have been in
armed conflict with the authorities for a long time, some groups since independence. However, the changes seen in Myanmar so far have been largely superficial. What’s badly need now is to achieve change in the country at the structural level, which is an uphill task due to strong resistance from conservatives who want to maintain the status quo and as a result of ingrained habits.
Constitutional amendment Parliament speaker Shwe Mann, who chairs a committee on constitution amendment, has set a time line for amendments to the charter to be completed within six months prior to the general election next year. Amendment of the 2008 military-sponsored constitution involves many issues, as reflected from various parts of the society as well as from outsiders and the international community. Indeed, the charter needs to be revised from its fundamental principles, from the Magna Carta of the military-guided democracy to become a bible of
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genuine democracy, guaranteeing basic rights for all citizens. The most watched item is the clause on qualifications of the President, which currently prohibits a person like Aung San Suu Kyi, who was married to a foreigner and whose children hold foreign citizenship, from taking the top job of the country. The other essential part of the constitution, which many people wanted to rewrite, is that of the role of the military in politics. The current one reserves 25 percent of seats in the parliament for the military, which also has veto rights to direct the country. President Thein Sein, in his recent public speech in February, indicated that he wanted the constitution amendment committee to address the on-going peace negotiations in the revised charter to make sure that the rights and roles of the long-time state enemy ethnic groups are guaranteed. “When considering changes to the 2008 Constitution, I urge you not to overlook the outcome of this
dialogue,” he said. “Since the main demand of the ethnic groups is a union based on federalist principles, including equality, self-determination, ethnic rights and preservation of their cultures and languages, political dialogue of these and other wide-ranging issues will necessarily result in some amendments to the Constitution.” He added, “Therefore, I urge those primarily responsible for constitutional amendments, namely, Parliament, political parties and political groups, to take the above factors into consideration when making amendments.”
Ethnicities The government has inked truces with nearly all of the individual armed ethnic groups. The pacts, at least for now, have ended the armed conflicts between the government troops and the ethnic groups but development of their areas and their political role at the national level are not clear. Several rounds of meetings between government representatives and the individual ethnic groups, such as the Karen National Union (KNU) and the Restoration Council of Shan State/Shan State Army
(RCSS/SSA), have been held over previous years but many differences remain.
110,000 people remain displaced and dependent on humanitarian assistance.
According to a report of Eleven Media, the government wants the ceasefire to come first and political dialogue second, while the ethnic groups insisted on the opposite. The Kachin Independence Organization (KIO), in particular, was entrenched in this position. Last year, the KIO and northern allied groups wanted political dialogue to start as soon as possible. At the same time, southern groups led by the KNU and RCSS/SSA favoured the stance of the government towards the ceasefire. Under these circumstances, disagreements arose among the ethnic groups, it reported.
Conflict has spread to other parts of the country where Buddhists and Muslims have coexisted peacefully for a long time. Groups of extremist Buddhists have emerged in the country, launching a series of campaigns against Muslims under the
One of the reports in question was made by the United Nations. The U.N. High Commissioner for Human Rights, Navi Pillay, said in late January she had received credible information that eight Rohingya Muslim men were attacked and killed in Du Char Yar Tan village by local Rakhine on January 9. The UN official said this was
The Muslim Rohingya has received unfair treatment from the authorities for more than 50 years since the onset of the military regime. The government limited their movements, marriage rights, child birth and even home repair and construction of mosques, according to the Fortify Right report entitled “Policies Prosecution” released in February.
Nonetheless, attempts to foster peace and reconciliation continued. The government and all ethnic groups cancelled their meetings for nationwide peace talk on several occasions but never gave up the plan to hold negotiations on the future of their political roles. The lofty ambition for the ethnic groups is to hold self-determination in their respective areas.
Communal conflict Conflict between ethnic groups in Myanmar is not only between the state and armed minorities who have called for a certain degree of autonomy but also between different races and religions. Sectarian conflict in Rakhine state surfaced to the outside world in June 2012 when conflict and violence broke out between Buddhist Rakhine people and Muslim Rohingya, who are referred to as Bengali by the Myanmar authorities, killing more than a hundred people in the state. More than
nose of the government. Generally, the Myanmar elite and government officials have few positive attitudes toward Muslims, particularly Muslim Rohingya, who they regard as alien to the predominantly Buddhist society. A recent clash that took place in January killed more than 40 people. The clash became a dispute with the international community as the Myanmar authorities accused the United Nations and foreign media of using ‘unverified information’ on incidents in Rakhine state to blame Nay Pyi Taw over human rights abuses.
followed by a clash on January 13 in the same village, following the reported kidnapping and killing of a police sergeant by Rohingya residents, according to witnesses and rights groups. Myanmar has never properly addressed the Rohingya issue, to tackle the problem at its root. Human rights dedicated group Fortify Right reported recently that grievances of the Muslim Rohingya are mostly caused by government policies.
President Thein Sein is still faced with many uphill tasks to achieve reform, democracy and reconciliation. His relaxations over the past years have allowed many problems, not only in the political arena but also problems like land conflict, education and health, to surface. All these issues require radical approaches and strong political will to address, to attain change at the structural level. Otherwise there will be no real change in the country.
What the world is reading 15
ECONOMIC REFORM
Bright prospects despite some concerns
Achara Deboonme
The Nation
“Every sector in Myanmar will grow. Some local companies are now the targets for takeovers. For 2014, there will be more than 100 M&A deals,” Alisher Ali, managing partner of Silk Road Management and founder of Silk Road Finance, said at a panel discussion in Bangkok. At the event hosted by CNBC in September, he painted a rosy picture of the economic growth in the newly-opened country. His company has seen overwhelming interest from companies in Thailand, Japan, Singapore, South Korea and the rest of the world to do business in Myanmar. With the goal of tripling the size of the economy and raising annual gross domestic product per
capita to US$2,400 by 2015, the Thein Sein administration has introduced a slew of political and economic reforms that reflects the government’s resolve to create a pro-business environment. Various reforms have been undertaken by the government recently and many reforms are planned to improve the investment environment. These include the removal of import and export licensing requirements on some 600 products, the approval of new regulations on foreign investment to provide greater clarity to some aspects of the new Foreign Investment Law enacted in 2012, the granting of licenses to private insurance companies for the first time in 50 years, and the enactment of the anti-corruption law.
What the world is reading 17
Many jump on the optimism bandwagon Since political and economic reforms kicked off in 2011, investors from all over the world have sought to make their presence felt. Some expect to tap into the abundant natural resources, while others see the potential in the 60-million population market. Accordingly, the Asian Development Bank, World Bank and International Monetary Fund are positive on the growth outlook of the country thanks to the proceeding reforms. They expect the economy to expand in the range of 6.5-7.5 per cent in the 2013-14 fiscal year, which runs from April 2013 to March 2014. Meanwhile, the outlook for the next fiscal year remains bright, with forecasts in the range of 6.8-7.25 per cent growth. Which is impressive. The ADB is looking at an average growth rate of 5.3 per cent for the entire Southeast Asia region. The World Bank’s global gross domestic product forecast for the year is only 3.2 per cent, compared to 2.4 per cent in 2013. In the ADB’s Economic Trends and Prospects in Developing Asia report released in October, the development bank said Myanmar should gain from recent improvements in its investment environment. “Growth is supported by investor optimism following policy reforms, the reinstatement of Myanmar in the European Union’s Generalised System of Preferences for duty-free and quota-free market access, and a gradual easing of restrictions on financial institutions that facilitates credit to the private sector,” it said.
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While the tourism bill is expected to rise further, the awarding of two telecom licenses as well as the construction contracts for airports in Yangon and Mandalay should also boost prospects, aside from its chairing the Association of Southeast Asian Nations in 2014. News.com quoted Australian lawyer and consultant on Myanmar John Hancock as saying that foreign investors recognize the country’s potential. “It is just remarkable what has happened there in the last five, six, seven years. The opening up has been just quite remarkable,” he said. “The will to change, the will to move forward, is quite amazing. There is such potential there now. Everyone wants to be there, everyone is willing to throw money in there to support their interest to get on the fast track.” It explained why foreign companies – from the US to Thailand – have paraded into the country and plotted the plan to do so. The latest to make such an announcement was ENVIRON, an international environmental, health, safety and sustainability consultancy. The company is convinced that it would be in a good position given the emerging regulatory framework aimed at ensuring environmental protection
and sustainable development. “This is a time of great change in Myanmar, and there is tremendous need for the services ENVIRON provides in supporting sustainable economic development,” said Stephen Washburn, ENVIRON Chief Executive Officer. Yet, the road is not paved with roses. There are some economic risks that make some investors hesitant. Despite the country’s favourable geographical position, low wages and a large potential consumer market, investors need to be cognizant of the risks and challenges of transacting with a market that has only recently emerged from decades of isolation. Myanmar is in the process of developing its legal system and one would need to prepare for changes as new legislation is introduced. In addition, investors should note that implementation is not a proven process and that it will take time for regulations to come into effect. For example, in the durable goods market, the financing options remain limited. Foreign banks are not yet allowed to operate in Myanmar. The regulatory framework does not
always provide international banks with the option to secure collateral. With the exponential increase in demand for residential and office space due to the entry of foreign investments, rents in Yangon have skyrocketed. Other challenges include poor infrastructure, a shortage of skilled workers and a lack of transparency. On the sidelines, inflation has reached comparatively high levels – 5.7 per cent in 2013 with 5.8 per cent forecasted for this year. “Risks to the outlook arise largely from limited macroeconomic management capacity and narrow cushions. Inflation remains elevated and there are pressures from rapid money and credit growth, kyat depreciation and possible electricity price hikes. International reserves are still low and vulnerable to shocks,” said Matt Davies, the IMF’s Myanmar mission chief, while in Yangon late January. Like the World Bank said in its Myanmar Economic Monitor – October 2013, risks to the outlook include external and internal factors. Chiefly, there is the challenge of maintaining the reform momentum.
Myanmar’s GDP forecasts Forecasts for full fiscal year (April-March)
Agency
2012
2013
2014
ADB na 6.5 6.8 IMF
7.3 7.5 7.25
World Bank
6.5
Source: Compiled by The Nation
6.8
6.9
Charter CHANGE
Aung San Suu Kyi was married to the late British academic Michael Aris and her two sons Kim and Alexander hold British citizenship. Unless the constitution is amended her two sons must apply for Myanmar citizenship to allow the mother to qualify for the top job of the country. But that way is also quite risky since application to become a Myanmar citizen for those who are not in the country is not easy. The two young men previously held Myanmar citizenship but it was revoked years ago. Changing the constitution would be better for Aung San Suu Kyi but that is not easy either.
Clearing the way
to free and fair elections Supalak Ganjanakhundee
The Nation Myanmar’s President Thein Sein has given clear rein to hold the next general election in 2015 as a fair way to contest the leadership of the country by supporting amendment of the 2008 Constitution on the qualifications of presidential candidates. “I would not want restrictions being imposed on the right of any citizen to become the leader of the country,” Thein Sein said in a monthly televised address to the nation in January. The President’s statement is very supportive and encouraging for opposition leader Aung
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San Suu Kyi to have a chance to take the position of President of Myanmar, if she were to win the next election. Chapter III of the current constitution, which was drafted by the military and came into force in 2008, cited that the person who could be the President of Myanmar, should not have one of his or her parents, spouse or a legitimate child holding foreign citizenship or even enjoys the rights and privileges of a subject of a foreign government.
Myanmar has set up a committee, chaired by Parliament speaker Shwe Mann, to amend the constitution. Shwe Mann is regarded as another reformist but he can not do it alone. In fact, Thein Sein’s idea for the charter amendment does not simply involve changing the clause for Aung San Suu Kyi. He is also considering how to maintain a certain level of status quo. In the same public address, the President said “we will need to have all necessary measures in place in order to defend our national interests and sovereignty.”
To amend the qualifications of the President and Vice President as mentioned in section 59 and 60 of the constitution requires the approval of at least 75 percent of representatives in parliament. Aung San Suu Kyi’s National League for Democracy (NLD) has only 43 seats, a distinct minority in the 664-seat legislature. Needless to say, the military, which is supposed to be the conservative figure in parliament, has 25 percent of seats - sufficient to block the vote. Aung San Suu Kyi has campaigned for constitutional amendment since she was working outside parliament, but it could be a conflict of interest for her to push specifically for amendments on the qualifications of the President at this time. The Nobel Laureate Aung San Suu Kyi, who is a daughter of the national hero Aung San, is popular internationally but her domestic popularity has been questioned
many times during the sectarian conflicts in the country over the past year. She has not taken a clear stance to protect the rights of Muslims, notably Muslim Rohingya in the predominantly Buddhist state of Myanmar. Her party, the NLD is not strong compared to the ruling Union Solidarity and Development Party (USDP) of President Thein Sein. Victory in 1990 and again in a by election in 2012, in which the NLD swallowed nearly all the vacant seats, was purely driven by Aung San Suu Kyi’s personal popularity. The NLD is essentially a one-person solo party while the USDP has cells and mass support across the entire country. Election victory might not be a matter of popularity alone but also the political management skill of parties in the race. Aung San Suu Kyi would also face fierce competition from the leader of the USDP in the election. It is not clear whether President Thein Sein aims to continue his political career in the next election. Many observers believe he might step down and pave the way for Shwe Mann to carry on the reform.
as a visionary reformist capable of steering the difficult work of reform. There would be no problem for him if he decided to contest for a second term and he would be a formidable competitor for Aung San Suu Kyi. It won’t be easy for Aung San Suu Kyi if Shwe Mann replaces Thein Sein in the next race, either. With a military background and strong connections in the inner circles of the Myanmar elite, Shwe Mann could perform well in the election. His work as the current parliament speaker is highly visible. The former general has showed his political ambition to take the lead. Some 20 months or so remain before the next election. Both sides have many barriers to overcome. Thein Sein and his ruling USDP have to prove that reform could yield good results for the population while Aung San Suu Kyi and the NLD need to make sure that no more legal obstacles in the constitution block the way ahead.
For the work he has done during his tenure, President Thein Sein, who was seen previously as just a personal secretary of former paramount leader Than Shwe, has changed a lot. He is now seen
What the world is reading 21
leadership FOCUS
The people that will shape Myanmar’s future
Thein Sein
Khine Kyaw Achara Deboonme
The Nation
Myanmar is embarking on a new era, propelled by the reform machine launched in 2011. More needs to be done from now until the general election in 2015. In focus are individuals who are preparing the country for a more democratic environment in 2015, and those who will shape the country’s future in the years beyond.
As the head of state, President Thein Sein has played a key role in Myanmar’s reforms. With around a year left in office, we cannot ignore what “the man of reforms” has done for the country. Thanks to his reform initiatives, Myanmar is, once again becoming part of the regional and international community. The integration process was rough at the start, as witnessed by foreign participants of the World Economic Forum on East Asia and the 27th Southeast Asian Games. But they are patient thanks to the president’s commitment to press on his reform locomotive. Confirming his commitment to further opening, Myanmar for the first time takes the Asean chairmanship in 2014. Foreign direct investment is flowing into the country while visitors from many parts of the world are flocking to the country. The former general’s rare speeches carry weight across society. The head of state has made use of his compromising character and resolution not to steal attention. While in the US, he did not promise to endorse numerous reforms sought by the United States and other nervous backers of the democracy experiment. Rather, he said the issue is up to parliament. For example, he said he has no direct say in, or independent opinion on, whether Aung San Suu Kyi should be eligible for the presidency. The man, who has to approve all laws and by-laws, understands that in isolation for over five decades, constitutional amendments need the support of more than 75 per cent of the members of parliament, which includes the military. The process is slow. Public patience remains, solely on confidence in Thein Sein – the former general who has changed the face of the country in the space of a few years.
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Aung San Suu Kyi The only child of General Aung San, one of modern Myanmar’s independence heroes, Aung San Suu Ky is the most popular figure in Myanmar and has won huge public support to become the next president. The path is not easy for the Nobel Peace laureate, however, who will turn 70 next year. In more than two decades of facing down successive military juntas, the opposition leader has earned reverence at home and admiration across the globe. She has become an international symbol of peaceful resistance. The opposition leader faces another uphill task to become the president, which all hinges on amendment of the 2008 Constitution that requires the president’s children to hold Myanmar citizenship. Against pressure from her party, the National League Democratic (NLD), other lawmakers including senior military officers are reluctant to change the Constitution to qualify her for the post. The “Lady” has also faced criticisms recently, for not wielding her moral authority on behalf of the Rohingya, a Muslim minority group that faces state-sponsored discrimination and has suffered attacks by extremist Buddhists. From her many speeches, Suu Kyi has told the world what she would do if she becomes the president. While in Bangkok, she stressed the poverty issue and gender equality. Yet, she understands that global optimism is excessive. “If I advocate cautious optimism it is not because I do not have faith in the future but because I do not want to encourage blind faith,” she said while taking the Nobel award in Oslo.
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Thura Shwe Mann In the past years, Parliament Speaker Thura Shwe Mann has been instrumental in passing new laws and amending old laws, to enable Myanmar to catch up with the world and become more democratic.
Aung Min If peace among the ethnic groups in Myanmar is the key for a more democratic and economically-prosperous nation, Aung Min - a minister from the President’s Office - is the most important man.
In 2011, he was appointed speaker of the Lower House. Last July, he was named the Parliament Speaker, completely leaving behind the old days when he was a leading figure in the military junta that ruled the country until 2011. The former joint chief of staff of the Burmese Armed Forces is now chairman of the ruling Union Solidarity and Development Party (USDP).
Aung Min provided advice and ideas to the former military chief Senior General Than Shwe as well as the current President Thein Sein. He was a key player in the former military regime.
While taking the job, he said “The reason that we couldn’t run the country democratically is because we didn’t have a parliament, and when we had parliament, it was in name only. The current members of parliament must listen to the people’s voice and try to know the people’s feelings, attitude, and what they need. Then, it is the MPs’ job to implement it.”
After years of talks, the violence-plagued country will soon enter into a long-awaited national ceasefire agreement, following discussions on the draft agreement in January with 16 ethnic groups and at the Hpa-an meeting in March. Aung Min aims to bring the armed groups currently outside of discussions into the fold.
The task is tough, under huge pressure from local lawmakers and the international community. But it could be tougher, as the ruling party resolved to name him as a presidential candidate. Now considered friendly to Aung San Suu Kyi, he would contest her in the 2015 election.
In his capacity as head of Secretariat for the Myanmar Peace Committee, he is the government’s chief negotiator in peace talks.
The agreement will bring to an end the internal conflicts that began after the country’s independence in 1948.
Ye Htut Ye Htut served as a lieutenant-colonel for the Defence Services before taking up the post of deputy director-general at the Information and Public Relations Department under the Ministry of Information. He was later promoted as director-general of the department, which has been viewed as a propaganda machine for the military government. In January 2013, he was appointed spokesperson for President Thein Sein. He became the talk of the town when in 2012, he was reportedly behind the blog posts known by the pen name Dr Sate Phwar, who criticised the legislature for acting above the law. That news died with his refusal and unsuccessful investigation into the identity of the blogger. As a regular user of Facebook, Ye Htut often shares news from the government and the military and writes his opinions through his Facebook account. He also replies to comments on Facebook and offers explanations to the readers. Ye Htut has publicly criticised the press council on his Facebook page, using words that seem to put pressure on the press council, such as the time he and Kyaw Min Swe, the press council’s secretary, engaged in a debate on Facebook over the issue of “spread betting” on sports news journals.
Sett Aung Among government officials dealing with economic matters, Sett Aung is one of the most prominent. The former deputy minister for National Planning and Economic Development is now the vice governor of the Central Bank of Myanmar. He has been involved in many international and regional research projects related to economics, social and policy development in various countries including Myanmar, Vietnam, Cambodia, Laos, Thailand, Malaysia, Bangladesh, Sweden and Japan. He has successfully completed over 40 international and regional economic and social research projects in more than 10 countries. He is also chairman of the Thilawa Special Economic Zone Management Committee, which manages the special economic zone. While the Dawei special economic zone development was delayed, he was seen in Bangkok in late 2013 to finalise cooperation with the Thai government.
Min Aung Hlaing In March 2011, Min Aung Hlaing succeeded Sr Gen Than Shwe as Tatmadaw Commander-in-Chief. He has a reputation as a hardliner and has rapidly become a rising star within the regime. He is currently the country’s commander-in-chief of the Armed Forces. Recent speculation shows that the military lawmakers will nominate him as a presidential candidate in the 2015 general election. If this is true, his chances are high. Under the 2008 constitution, the Upper House, the Lower House and the military will nominate three presidential candidates. Both houses will then cast votes, including MPs representing the military, that controls 25 per cent of the parliamentary seats.
Sett Aung also heads the Telecommunications Operator Tender Evaluation and Selection Committee, which in June resolved to award two licenses to Telenor Group and Ooredoo.
In his capacity as the deputy minister of the Ministry of Information, he took charge of several issues, ranging from the violence in Rakhine State, press freedom to the passage of new laws. His name appears more frequently in newspaper than the Minister, Aung Kyi.
What the world is reading 25
ECONOMIC TRANSFORMATIONS
Central Bank’s expanding role
Achara Deboonme
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The Nation
In mid-February, a tourist was happy to learn that a US dollar could be exchanged for as much as 980 kyats. A week later, the rate was 988 kyats.
clearly shown for three currencies – US dollar, the euro and Singapore dollar. The indicative rates of other currencies are shown on the central bank’s web site.
Compared to the black market rate of 750-1,335 during 2001-2012 and the official exchange rate between 5.75 and 6.70 kyats, the situation now is more than satisfactory. Unlike in the past, foreign visitors can find exchange services at any bank, where the daily exchange rates are
This followed the Central Bank of Myanmar (CBM)’s announcement on April 2, 2012, that the value of the kyat against the US dollar would float, setting an initial rate of 818 per US dollar. On March 20, 2013, the Finance Ministry announced that it would abolish For-
Myanmar...
eign Exchange Certificates (FEC), which were mandatory for tourists, who had to buy at least $200 worth, until 2003, a measure used to prevent visitors from exchanging money on the black market. If anything, this shows that the CBM has exercised its designated role. The official exchange rate, that reflects the true condition of the national economy, makes life easier for foreign tourists and investors. The friendlier conditions draw more
ECONOMIC TRANSFORMATIONS
foreign currency into the country, whose foreign reserves cover just three months of imports. Very recently, for the first time in many years, the CBM announced that the country had 7.1539 tonnes of gold reserves and US$8.19 billion worth of foreign exchange reserves as of the end of October 2013. The turnaround is a big achievement for the CBM. Formed on March 30, 2011 by the Thein Sein administration, the CBM was designed to become independent in laying down monetary policies. The Central Bank of Myanmar needs to enact monetary policy independently to control price stability in the domestic market and to preserve the internal and external value of the kyat. If anything, this confirms the ongoing pace of economic reform in the country, which must proceed to further win investor trust. “Myanmar is undergoing an exciting transition. Recent economic reforms include adopting a floating exchange rate and removing exchange restrictions; establishing an autonomous central bank; and significantly increasing spending
on health and education. The authorities aim to build on these gains and achieve sustained, strong, and inclusive growth,” said Matt Davies, chief of the International Monetary Fund’s Myanmar mission. In Myanmar late January, Davies noted that the CBM’s reserves grew rapidly in 2013 through transfers from state banks and it now holds most of the government’s international reserves, as envisaged in the CBM law. “This progress needs to be consolidated and made automatic so
that CBM can accumulate further reserves to provide a larger cushion against external shocks. CBM also requires full budgetary autonomy and a strengthened market framework in order to implement effective monetary policy,” he said. More is to be done.
set up in Myanmar, mainly from Brunei, Bangladesh, Cambodia, China, India, Japan, Malaysia, Singapore, Thailand and Vietnam. If allowed, they will team up with 19 private banks and three stateowned banks in extending more services in the country.
Tina Singhsacha, chief representative of Standard Chartered Bank Myanmar, lauded the government’s decision to make the central bank independent from the Ministry of Finance, and expressed her confidence that in time such reforms will help build confidence in the banking sector.
With the right infrastructure, the CBM should then be able to efficiently cope with another designated responsibility – inflation which is expected to hover around 5.8 per cent in 2014.
The view from outside: Patience wearing thin over lack of progress
Achara Deboonme “This will not happen overnight as they will need time to implement a range of reforms to help enhance the country’s financial infrastructure,” she said. “We believe this is a step in the right direction, which will strengthen confidence in the banking system.” Following reform of the foreign exchange system, next could be the bigger banking sector as the central bank may allow foreign banks to offer some financial services this year. So far, over 20 foreign bank representative offices have been
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Myanmar...
The Nation “For its part, Myanmar has weathered numerous revolutions without regime change, including the “first wave,” after the fall of the Berlin Wall; the Saffron revolution in 2007; and multi-party elections in November 2010. The political situation in Myanmar cannot be compared with the uprisings in the Middle East because Myanmar itself overcame uprisings like those changing the Arab world,” wrote Zaw Htay, director of the office of the president of Myanmar, in his opinion piece published by the Washington Post in 2011.
His view reflected the local optimism towards the political and economic reforms implemented by the Thein Sein government since 2011. Until now, the international community has shared and maintained such optimism, despite reservations in some areas. The wrangling over the constitution amendment poses questions on democratic development, the government’s tight grip on media licensing is linked to poor press freedom, while series of local protests reflect internal conflicts. As reforms have slowly and unevenly
Myanmar magazine 29
ECONOMIC TRANSFORMATIONS
produced results, from time to time stark views on the country’s prospects surface. In its January 4 article on “Optimism about business prospects on the final frontier may be overblown”, The Economist reports what foreigners are thinking about the country. “A long road lies ahead. The reformers at the top are few in number: slow progress to date may show how weakly the bureaucrats below them have committed to real change. Although the government has signed up to various reform-minded international agreements, such as the New York arbitration convention and the Extractive Industries Transparency Initiative, implementing them is another matter, given a chronic shortage of trained lawyers and other professionals… Large pinches of salt are needed to season the diet of good news that still tends to emanate from Nay Pyi Taw, the gaudy capital built by the generals.”
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Myanmar...
Also published on January 4, the article titled “Myanmar’s Asean Challenge” in the NewStraitsTimes website also questioned the country’s ability to ride along with its counterparts. “During the new year, Myanmar will have to navigate three major priorities: accelerating Asean economic integration, reducing tension in the South China Sea and preparing the agenda for the future of Asean. However, doubts have been raised about the country’s ability to steer a grouping as significant as Asean in a rapidly changing strategic environment in the region where the US, China, Japan and the EU are intensifying their re-balancing efforts.” The discussion on the charter amendment has now grasped the world’s attention, as it will determine if national hero Aung San Suu Kyi will be able to contest the presidential election in 2015. In The Straits Times’ article on “Rocky road ahead for Myanmar
Constitution”, Yangon-based Richard Horsey, an independent analyst and former top United Nations official in Myanmar, said “It puts the ball back in her court. On the one hand, she can argue that it is unfair. On the other hand, you can imagine a lot of Myanmar nationalists saying if someone is too linked to a foreign country and the children are foreign citizens, where does one draw the line.” The article also quoted another Yangon-based analyst who asked not to be named as saying “The process is full of uncertainties. The military feels they introduced the Constitution and they have a sense of entitlement. It seems to a lot of people that the military is not ready to give up its prerogatives; that can only happen after 2015.” In its editorial titled “Ethnic violence in Myanmar”, the New York Times also showed its concern over the anti-Muslim sentiment which could derail the democratic reform progress.
“President Thein Sein needs to act urgently to investigate human rights abuses against Rohingyas, hold perpetrators to account, allow humanitarian groups access to camps and protect basic human rights, including the right to citizenship for people who have called Myanmar home for generations,” it said.
Connectivity
a challenge to AEC integration
Achara Deboonme In his opinion piece, Zaw Htay said that Thein Sein looks forward to trying to lead ASEAN much as he has guided Myanmar - maintaining his commitment to improve political, social and economic development, without outside pressure or influence. Well, it seems patience is running out and the president will need to act fast, to show the world that the country really means to turn a new chapter.
The Nation Myanmar joined Asean in 1997 to ride the globalisation and regionalism trend while internal political and economic reforms in 2011 unleashed a series of steps that would make the country a true part of the Asean Economic Community (AEC). Much of the actions so far have involved mainly road infrastructure, an integral part of the physical regional connectivity, thanks to the return of external financial assistance following the lifting of sanctions by the United States and European countries. The Foreign Investment Law was amended, to allow free flow of capital. A number of committees and sub-committees were formed to address various issues including those concerning transport, services, information, environment, and social development. In Bagan in January at the ASEAN foreign ministers meeting, Aung Lynn, the director
general for the ASEAN Affairs Department, said that his country aims to work with the other member states to strengthen implementation of the AEC. “The challenge is the difference in development among the ASEAN countries. President Thein Sein mentioned that one of the priorities of Myanmar is to solve the development gap among ASEAN countries,” he said. None of Asean leaders has explicitly stated that Myanmar would not be able to complete the tasks specified in the AEC Blueprints by 2015, to be fully ready for the community which will be launched on December 31, 2015. But there remain serious doubts how the poor country could by then be connected with the region politically, economically and culturally, when physical and non-physical infrastructure is not yet fully in place.
What the world is reading 31
ECONOMIC TRANSFORMATIONS
of reliable information, including official statistics, and this causes difficulties in designing effective policy measures to cope with the rapidly-changing environment toward the establishment of the AEC.
For example, road and rail connectivity is not yet ready to support the free flow of goods. Regional trade will prosper only with harmonised customs procedures, in line with the Asean Single Window. Myanmar aims to reduce the clearance time for import and export cargo from two and one day, respectively, to 30 minutes. That could be accomplished only with well-integrated computer systems connecting a number of authorities in charge of the trade in goods. However, the country has not yet put in place the computerized system, let alone the subsequent coordination among the various port and airport authorities. Myanmar also needs a roadmap for financial market liberalisation, to facilitate free flow of capital. While the kyat is floated and the stock market is planned to take off in 2015, the banking sector remains closed for newcomers. Without proper financial services, investors now have to rely on external sources of funds. In his paper on “Myanmar in Asean: Working Toward AEC”, Kyaw Soe Thein, director of the Ministry of National Planning and Economic Development’s Asean Division,
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Myanmar...
admitted that it remains difficult to develop the system, to handle transactions in foreign currencies. This is a barrier to attract investment which is a key factor for economic development, he said. On standards harmonization, he cited a lack of initiators, public awareness, technical infrastructure, and laboratory equipment. On the implementation of AEC, he said there is lack of awareness of the programme areas and implementation progress, even among the main beneficiary groups and responsible departments and agencies.
recently that: “People in towns and cities apart from Yangon have less awareness about the Asean community. Many local business people are afraid of AEC. They assume it will threaten them, as multinational corporations will enter our country with better quality goods and more reasonable prices.”
Kyaw Lin Oo, coordinator of the Myanmar People’s Forum, admitted
Second, limitation in institutional capacity, which results in a lack
To reap the full benefits of integration, Myanmar will have to deal with two types of limitation. First, limitation in capacity in terms of infrastructure, institutions, human resources, technology, and finance.
Myanmar is hopeful that the AEC will draw much-needed investment and increase the country’s export income, at a time when tourism is the biggest generator of foreign exchange. This would help grow its economy and per-capita income, which in 2011 was the lowest among Asean nations. In the year, the per-capita GDP was US$875.1, trailing behind Cambodia’s $879.9 and Laos’ $1,278.5. The figure is less than 10 per cent of the Asean average of $11,422.9. During the 2012-13 fiscal year, total trade volume for Myanmar was US$18.42 billion. Of that figure, the import volume was $9.34 billion and export accounted for $9.08 billion. A research work by Japan External Trade Organisation’s Institute of Developing Economies, titled “Building the ASEAN Economic Community: Challenges and Opportunities for Myanmar”, said Myanmar is endowed with abundant low-cost labour and a strategic location, a combination that is very attractive to foreign investors. “However, these factors alone are not enough to attract foreign investors. These endowments need to be accompanied by adequate infrastructure, including physical infrastructure such as roads, ports, airports, power plants, and water, and institutional infrastructure such as efficient customs, a capable and reliable financial system, and credible protection for investors.”
Measures needed to control
land use Achara Deboonme
The Nation A government land plot, covering 2,400 square feet, in Dagon Seikkan Township is now available for sale at 700 million kyats or US$70,707. According to the real estate agent, www.myanmar-housing.com, the land is good for local industrial plants or business offices. On the website, as of March 2, there are 791 property items in Yangon for sale and rent. There are several more local real estate websites like www.scipioservices.com and www. shwereport.com. Not missing the train is Colliers International. Massive construction activities in Yangon and other cities indicate the overwhelming interest in this country among foreign companies. Yet, this has led to skyrocketing real estate prices across the country, on the sidelines of criticisms over the involvement of money-laundering as well as the government’s confiscation of land from poor locals. Some areas in Yangon are now more expensive than New York City, while office rents are even higher than those in Singapore, making it a major hindrance for foreign investment aside from regulatory uncertainties. When foreign investors visited Nay Pyi Taw to attend the Myanmar Global Investment Forum last September, they voiced concerns over the land prices which have exploded in the past three years after it looked certain that Myanmar is on the path to further economic opening.
Myanmar magazine 33
“We expect prices to go up even more, as foreign direct investment goes up and the investment climate improves,” Tony Picon, managing director at Colliers International in Myanmar, said at the event. Due to high land prices, investment costs look unjustifiable, especially for some small and medium-sized companies. Even in hospitality, a booming economic sector which expects to draw 3 million visitors this year, foreign investment remains lower than expected. A report by Consultancy C9 Hotelworks showed that foreign investment in Myanmar’s hospitality sector has fallen well short of forecast growth, mainly because of speculation-driven land prices. “While the hospitality sector has enormous room for growth, Yangon remains in an early stage of development,” said C9 Hotelworks managing director Bill Barnett. “Most of the deals being done for hotel assets in the current
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Myanmar...
landscape are from local parties and not overseas groups. Given [that] Yangon has captured investor sentiment as a Southeast Asia hot spot, it has yet to deliver on its expected promise.” The government has been criticised for failing to impose an effective property taxation regime. The 37 per cent sales tax imposed in Nay Pyi Taw is considered ineffective to tame the prices. On the industrial land front, prices are also considered exorbitant. Myanmar is developing special economic zones in three areas - Dawei, Thilawa and Kyauk Phyu - for international investors and multinational companies. In February, the committee overseeing the Thilawa Special Economic Zone development decided to cut the land price by 30 per cent to draw investment. The high land prices also worry local investors. Some have attributed this movement to Myanmar’s cronies, which poured their money into the real estate market in the hope of laundering
their money. High land prices are believed to be driven by the fact that most of the land in Myanmar belongs to the government and foreign ownership remains a far-reaching idea. As foreign investors are fretting about high land prices, the local poor are having problems with the government. Reports revealed that many are now homeless after being evicted from their land, on the grounds that they had settled on government or military land. The issue was discussed in parliament in February but reports of such evictions continue to surface. Under the government’s plan, urban land use will be integrated in the National Comprehensive Land Use Plan to systematically allocate reserved land for future urban development. It’s clear that this process is moving slower than investors’ expectations.
ECONOMIC TRANSFORMATIONS
Tourism booms amid concerns of shortages Achara Deboonme
The Nation
E-Paper version at www.nationmultimedia.com/myanmareleven
Myanmar’s tourism industry hit a new record in 2013, with the number of international visitors rising to 2.04 million, which represented a 93 per cent increase from the previous year. More new records are expected as the country becomes a new destination for travellers and businessmen across the globe, amid concerns over poor infrastructure and negative impacts on local culture. Since the country opened up to the international community following several decades of isolation under successive military dictatorships, tourism is one of major industries from which Myanmar earns foreign exchange. Tourism revenue amounted to more than US$926 million last year, compared with $534 million in 2012. Maung Maung Swe, vice chairman of the Myanmar Tourism Board, said the industry would have more room for growth with new destinations being promoted
Discover all aspects of the new Myanmar 36 Myanmar... For more information call: 02-3383570 I E-mail: mkt_nt@nationgroup.com
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across the country. The outlook over the next few years is for double-digit annual growth. But this is dependent on the success of efforts to improve its infrastructure, from new hotels to airports.
nationals from Laos, Vietnam, Cambodia and the Philippines. As of February, Hotels and Tourism Minister Htay Aung said the country plans to offer the exemption to Thai travelers as well.
According to statistics for 2013, travellers from Asia commanded the biggest share of arrivals with 630,399 (70 per cent), followed by 158,163 from Western Europe (18 per cent), 62,628 from North America (7 per cent), and 28,079 from Oceania (3 per cent).
The raw beauty of Myanmar has been a major attraction for visitors to the country, aside from those who are looking for business opportunities.
Smaller numbers of tourists arrived from Eastern Europe, the Middle East, Central and South America and Africa. Thais were the biggest group, with 139,770 visiting Myanmar, followed by 90,550 mainland Chinese, 68,761 Japanese and 54,934 Koreans. To promote tourism, Myanmar has already abolished visa requirements for
At the Yangon International Airport which is the main gateway to the country, foreigners queue up for the visa on arrival while others form long lines for the immigration checks. The congestion is a sign that Myanmar will need to do more, to ensure sustainability in the tourism industry. The country is now easing congestion in Yangon with the construction of a new airport, Hanthawaddy International Airport, with construction costs estimated
What the world is reading 37
foreign investment to four- and five-star hotels only to protect local operators. Foreign companies are involved in the development of 39 projects with 8,029 rooms, and 30 projects with 5,207 rooms have been completed. The other six projects with 1,979 rooms are under construction and three new projects have just received approval. Maung Maung Swe added that because of the inadequate supply in major cities, especially Nay Pyi Taw and Yangon, room rates have stayed high. He noted that the country has made a big effort to bring rates down by decentralising investment to other cities to promote them as new destinations, which would reduce the demand for rooms in the key cities. At present, five-star hotels average $280 per night.
in the region of US$1.1 billion to $1.5 billion. According to Maung Maung Swe, when this is open in 2016 on schedule together with a new international airport in Nay Pyi Taw, the flow of businesspeople and tourists into Myanmar will be further boosted. Yet, like other experts, Maung Maung Swe acknowledged that the fast growth of the tourism sector had created headaches especially a lack of accommodation and facilities and a shortage of skilled workers to serve the rising demand. He estimated that the industry needs 500,000 skilled personnel. Likewise, Tourism Minister Htay Aung is most concerned with the
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Myanmar...
development of human resources for the industry. An undergraduate programme in tourism was initiated in 2012 at the National Management College in Yangon and Mandalay, with 400 students at present. The first lot will graduate in 2016. Aside from university-level education, some vocational training and short courses have been introduced. These skilled workers are expected to be instrumental in the success of the new hotels which are opening up. The minister admitted that hotel construction is also on the agenda. This year, the number of hotel rooms is projected to surpass 40,000, up from 34,834 last year. Openings of new four- and five-star hotels in Yangon will include a
Hilton, Rose Garden Hotel, The State House and Novotel Yangon Max, while in Nay Pyi Taw, Best Western Premier the Grand is being made ready. At the end of 2013, there were 923 hotels with 34,834 rooms in Myanmar. However, only 17 were categorised as four-star properties, and just six as five-star. Two-star properties numbered 116, three-star 83 and one-star 102. Many popular destinations including Inlay region still lack enough hotels to accommodate tourists as increasing numbers of visitors visit Myanmar during the high season between November and February. Inlay region currently has 73 hotels, including 2,031 rooms, according to the Ministry of Hotels and Tourism. Government policy is to restrict
Meanwhile, the locals are concerned with the deterioration of
their culture and ecology, as the number of visitors keeps doubling. Recently, tourism firms in Dawei Township revealed plans for viable ecotourism businesses in order to protect the ecology of their region. The region has welcomed a large number of tourists, mainly Thais and Japanese, thanks to the deep-sea port and industrial zone project. “Many tourists [to Dawei] are on business. We are headed for ecotourism here because other businesses may damage the ecology. By doing ecotourism, our tourists will reach new places and the environment is also protected,” said Htein Lin from the Dawei Tourism Company. “I ask the tourists why they visit Dawei. They say Dawei is different from other places. It has green forests and mountains. It is spacious and uncrowded. The weather is
not like that of Switzerland and Holland. Our climate is temperate, while it is very cold there,” he added. To address this issue, Myanmar has developed a “Policy on Community Involvement in Tourism” to grow community-based tourism systematically. The minister admitted that there will be a lot of work down the road
for Myanmar in tourism development and the country cannot do it alone. It still needs experience and expertise from international partners.
Visitor arrivals in 2013 Destination
No. of visitors
Asia 630,399 Western Europe
158,163
North America
62,628
Oceania 28,079 Source: Myanmar Tourism Board
What the world is reading 39
SOCIAL REFORM
Social reform
At the 42nd Myanmar Medical Research Conference held last January, it was reported that the number of children under five years of age suffering from deficiency in Vitamin A has reached a severe level.
still lags far behind
Nutritional deficiency is just an example of many problems Myanmar children face nowadays. Low-standard healthcare, poverty and a lack of health knowledge among the public are the factors behind such deficiencies. The death rate of children under five in Myanmar was 62 in every 1000 children in 2011, five times higher than the Thailand’s rate of 12 in 1000 children. About 2.5 million children accounting for 35 percent of the total population of children in Myanmar are suffering from chronic nutrition deficiency, and about 8 percent of them died of acute nutritional deprivation, the United Nations Children’s Fund reported.
Manoj Tripathi
The Nation
Myanmar’s social reform is in full swing as part of the “Framework for Economic and Social Reform” (FESR), which was announced early last year by President Thein Sein. Despite an increase in health and education spending this year, the government generally spends less on these sectors than almost any other country in Southeast Asia. In the current fiscal year, the President’s Office’s requested budget stands at Ks35.6 billion, or Ks3.7 billion up from last year.
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Myanmar...
On the education front, the quality of education at all levels is poor, which is attributable to Myanmar having the lowest education spending in the region. The school enrolment rate in Myanmar is also low compared to that of other ASEAN countries.
Current spending on social services still represents less than 2 per cent of Myanmar’s Gross Domestic Product, according to a statement by UNICEF. The military has the biggest share of the budget. Addressing the Financial Commission at a 2014-15 fiscal year budget meeting last month, the president said that the education budget – allotted 5.43 percent last year – will be increased to 5.92 percent, while the health budget will increase from 3.15 to 3.38
percent, according to a statement on the website of the Office of the President. In the health sector, the government has come up with a number of innovative measures to improve accessibility to healthcare among
the rural population, including strengthening township-level health financing and greater cooperation with development partners. Yet Myanmar’s health indicators currently compare poorly to those of its neighbouring countries.
Myanmar has 43,181 schools including 30,015 primary schools, 6,629 post-primary schools, 3,742 middle schools and 2,795 high schools across the country. Most of these are understaffed, underfunded and in a state of dilapidation, especially those in strife-torn regions like Rakhine State where children have become homeless as a result of ethnic violence. Most children in this country still rely on traditional schooling in Buddhist monasteries, which suffer from overcrowding and shortages of teaching staff. In terms of higher education, reform has been put in place though insufficiently. There are a total of 168 universities and colleges in Myanmar. Only Yangon University, Yangon Economic University and Mandalay University have educational cooperation and linkages with foreign universities. A lack of funding, mismanagement of resources, corruption and a lack of transparency are among the many impediments. In a report by Eleven Media, like other ministries, the Ministry of Education, for last year received foreign aid worth Ks 2.87 billion, but reported a much lower figure for that matter to the Budget Department.
Himself fully aware of the educational system’s many weaknesses and flaws, the president has proposed that immediate and long-term action plans be drafted. Meanwhile, opposition leader Aung San Suu Kyi has called for reform of not just schools and curricula, and the training of teachers, but also of Myanmar people’s attitude to education, which at present is “too narrow and rigid”.
What the world is reading 41
INVESTMENT
Foreign Investment
Foreign investors investing in Myanmar outside of the Special Economic Zones are treated under the Foreign Investment Law (2012) and the Foreign Investment Rules (2013). The law is administered by the Myanmar Investment Commission (MIC), a government-appointed body under the Ministry of National Planning and Economic Development. MIC evaluates and approves foreign investment proposals, stipulates the terms and conditions of investment permits, and evaluates the foreign investment situation.
in Myanmar
The law aims to promote the utilization of resources for domestic and export purposes, creation of employment, development of human resources and technology, stimulation of competition and productivity, and the development of national infrastructure. Foreign investors are allowed 100 percent equity ownership and overseas remittance of gains in the same currency as the initial capital outlay. The law guarantees that businesses will not be nationalized. There is no minimum foreign capital requirement.
Myanmar is currently in the process of implementing new legislation and updating old laws, many of which date back to the colonial era, in order to create a level playing field and favourable investment climate for both foreign and domestic investors. In general, 100 percent foreign ownership is permitted for the
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Myanmar...
majority of business activities, including areas such as services, telecommunications, non-food manufacturing, power generation, infrastructure, agriculture and first-class hotel projects. A relatively small number of projects require the participation of a local partner or the government itself in joint ventures, such as property
developments or oil and gas exploration, while a handful of business types are restricted to foreign investors. Several laws govern business and investment in the country, the most prominent of which are: • Myanmar Companies Act (1914) • The Myanmar Partnership Act (1932) • Myanmar Companies Rules (1940) • Special Company Act (1950) • State-owned Economic Enterprises Law (1989) • Financial Institutions of Myanmar Law (1990)
• • • • • • • •
Private Industrial Enterprises Law (1990) Law Amending the Commercial Tax Law (2011) Foreign Investment Law (2012) Foreign Investment Rules (2013) Central Bank Law (2013) Myanmar Citizens Investment Law (2013) Securities and Exchange Law (2013) Special Economic Zone Law (2014)
Foreign investors may also enter into joint ventures with Myanmar citizens, firms or state enterprises. The ratio of the foreign capital in such ventures is up to the respective partners to decide, except in restricted business activities where the ratio is prescribed in the Foreign Investment Rules. Investments made under the Foreign Investment Law benefit from a package of tax-based incentives and guarantees. These include a five-year income tax holiday with the possibility of extension on a case-by-case basis, exemption or reduction of duty and other taxes on imported capital
goods, exemption or reduction of duty and other taxes on imported raw materials, as well as tax relief on profits that are reinvested or gained from exports, and several other incentives. For investments in the high-tech sector, foreign companies are required to hire local employees for at least 25 percent of the workforce by the expiry of the first two years of operations, rising to 50 percent in the next two years and 75 percent in the third twoyear period. Investors are required to arrange necessary training to boost the skills of locally hired employees. For non-skilled work, employees must be local citizens. All foreign workers require a valid work permit issued by the government. Foreign investors are not allowed to own land in Myanmar. It is possible, however, to lease land on a longterm basis and then to subsequently renew leases, from the government or from private parties with the permission of the MIC. The Foreign Investment Law allows for an initial leasing period of 50 years with the possibility of extension for two more periods of 10 years each. Longer periods may also be possible with the consent of the government and depending on the type and amount of investment.
Restrictions on Investment While the majority of business activities likely to be of interest to foreign investors are available for 100 percent investment without restriction, certain activities, detailed in the Foreign Investment Law Rules of 2013, are restricted or prohibited. The most notable restricted activities include small- or medium-scale mining projects, import of disposed products for use in manufacturing,
What the world is reading 43
and printing and broadcasting activities. Several more activities can only be undertaken in joint venture with a Myanmar partner, with the local partner holding a minimum 20 percent share in the investment. These activities include production and distribution of a wide range of food and beverage products, chemicals and pharmaceuticals, plastic and rubber, large-scale mining projects, shipping, travel business, private hospitals and clinics, and construction of buildings. A third set of activities can be allowed with certain restrictions, such as restriction on the proportion of foreign ownership (forestry and timber activities, etc.), limitation on the duration of permit (large-scale mining operations, etc.), and projects only allowed in joint venture with the government (jewelry production and sale, etc.) and more. A fourth set of
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activities under the Rules details activities that can be undertaken following an environmental impact assessment (such as extraction of metals and minerals, petroleum exploration, major construction and infrastructure projects and some manufacturing activities).
Special Economic Zones and Industrial Zones Industrial parks – industrial clusters with dedicated infrastructure – have played a central role in the national economic development of many countries in the region, including China, Malaysia, Singapore, Thailand and Vietnam. In Myanmar, the government has established three Special Economic Zones (SEZ) at Dawei, Kyauk Phyu and Thilawa, with the aim of providing a favourable regulatory environment for investors to spark
the creation of entire value chains, as well as Industrial Zones in many locations nationwide. Special Economic Zones are established by the State to include hightech industrial zones, information and telecommunications zones, export processing zones, scientific and technological research and development zones, service business zones, sub-trading zones
and other zones as prescribed by the government. SEZ are governed under the Special Economic Zone Law of January 23, 2014 (which revokes the previous SEZ laws). Apart from dedicated infrastructure facilities and locations that offer access to major markets and logistics centres, the principle advantages of SEZ are tax incentives.
being built at an existing port area, which provides close links to neighbouring India as well as the Middle East and Europe. It is particularly attractive to Chinese investors due to its strategic location on the fastest trade route between China and the Middle East. The SEZ is the site of an oil and gas terminal being financed by the China National Petroleum Corporation as well as a pipeline linking the terminal with Kunming in southern China, together with a container port and gas-turbine power plant. Kyauk Phyu SEZ will focus on the processing of local resources such as agricultural goods and minerals. The first phase of the project is scheduled for completion in 2016. • Tax holiday – up to 7 years for local and foreign investors; up to 8 years for constructors in exemption zones • Second period of 5 years – 50% relief on income tax on exports • Third period of 5 years – 50% relief on income tax on reinvestment obtained from export sales • Customs Duty exemptions – 5 years on imported raw materials, machineries, equipment, vehicles and 50% exemption on the next 5 consecutive years
Land leases of up to 50 years may be granted to investors in SEZs, depending on the type and scale of investment involved, which may be extended by two further consecutive terms of 10 years each, in accordance with the 2012 Foreign Investment Law. The SEZ law stipulates that the management committee be responsible for setting wage levels and monitoring the ratio of local and foreign labour, with local skilled labour composing a mini-
mum of 25 percent in the first year, 50 percent in the second year and 75 percent in the third year. The government has established three SEZ so far: Dawei SEZ: A 250-sq-km SEZ being built in Tanintharyi Region on the Andaman Sea coast of southern Myanmar. Slated as Southeast Asia’s biggest industrial zone, the Dawei SEZ will accommodate heavy industries, particularly steel, petrochemicals and fertilizer, with power plants, a deep-sea port and shipyard, road and rail links, as well as residential, recreational and tourist facilities. The project was planned to be implemented in three phases over a period of three years. Several countries have expressed interest in investing in the project, spearheaded by Thailand and Myanmar, however the scale of the investments involved, together with opposition from local residents, has caused many investors to baulk at the project. Kyauk Phyu SEZ: Located on the western coast of Myanmar in Rakhine State, the Kyauk Phyu SEZ is
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Thilawa SEZ: The Thilawa SEZ is being built to house light industries, such as textiles and garments, high-tech industries, etc., on 2,400 hectares of land just south of Yangon. The project will also include a deep-sea port. Thilawa SEZ is a joint development project of the Myanmar government and Japan, with Japanese investors holding a 49 percent stake in the project. The first phase of the project is slated for completion in 2016. Thilawa SEZ has proved popular among investors because of its proximity to the country’s main city and existing ports and transport infrastructure. In addition to the SEZ, nineteen Industrial Zones have been established in Myanmar since 1995, mostly general industrial estates (GIEs), with a further seven under development. The existing zones are concentrated around the cities of Yangon and Mandalay while zones under development are more widely spread across the regions and states.
INVESTMENT
China and the Asean countries have been the major investors and trading partners with Myanmar since 1988, while Western investment and trade largely dried up with the imposition of economic sanctions. The opening of the country and the lifting of EU and US sanctions over the last three years have prompted many Western companies to return to the country once more.
Foreign Direct Investment Accumulated pledged foreign direct investment in Myanmar is US$45,327.83 million as of January 31, 2014.
By Sector
Sector
By the end of 2013, accumulated foreign direct investment approvals in Myanmar amounted to US$45.328 billion, of which 74.25 percent was invested in the power and oil and gas sectors, according to figures released by the Myanmar Directorate of Investment and Company Administration, Ministry of National Planning and Economic Development. The total number of approved investment projects was 655.
Global investors return en masse
No. Approved Amount
Power
The top investors in the country at the end of 2013 were China (31.39 percent), Thailand (22.05 percent), Hong Kong (14.92 percent), Singapore (8.39 percent) and the United Kingdom (6.95 percent). A large proportion of the Chinese investment is in the hydroelectric power and mining segments. The following pages list are some of the major global companies investing in Myanmar since the country’s emergence on the global scene in 2011.
(US$ million)
7
19,284.432
42.54
Oil & Gas
115
14,372.272
31.71
Manufacturing
312
3,710.349
8.19
Mining
69
2,862.424
6.31
Hotel & Tourism
51
1,797.921
3.97
Real Estate
22
1,229.150
2.71
Transport & Communication
18
1,217.016
2.68
Livestock & Fisheries
28
365.974
0.81
Agriculture
13
203.020
0.45
Industrial Estate
3
193.113
0.43
Other Services
15
54.392
0.12
Construction
2
37.767
0.08
655
45,327.830
100
Total
%
By Country Country
(US$ million) No.
Approved Amount
China
56
14,227.599
31.39
Thailand
70
9,995.071
22.05
Hong Kong
68
6,477.275
14.92
Singapore
103
3,802.415
8.39
UK
67
3,149.349
6.95
Republic of Korea
86
3,047.303
6.72
Malaysia
46
1,625.861
3.59
Vietnam
7
513.186
1.13
France
3
474.360
1.05
Japan
43
321,339
0.71
Others
106
1,604.072
3.74
Total
655
45,327.830
100
%
Source: Ministry of National Planning and Economic Development
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What the world is reading 49
Accor
ASMO
Global hotel chain Accor will develop three new hotels in Myanmar together with local partner Myat Min Co. – the Pullman Yangon Myat Min, the Sebel Yangon Myat Min and the Novotel Inle Lake Myat Min. The three hotels bring to six the total number of properties in Myanmar operated by the French-owned hotel chain.
Japanese automotive parts manufacturer ASMO Co., Ltd. has received approval from the Myanmar Investment Commission to establish an automotive parts plant in the Shwe Lin Pan Industrial Zone in Yangon. The company, in cooperation with its subsidiary PT ASMO Indonesia, will set up ASMO Myanmar Co., Ltd. to run the new plant.
Accor, the largest international hotel chain operating in the Asia Pacific, announced its re-entry to the Myanmar market in early 2013 with a new MGallery hotel in Nay Pyi Taw and two Novotel properties, the Novotel Yangon Max and the Novotel Mandalay Mingalar, all to be opened by 2015. “Southeast Asia has long been a strategic market for Accor, and as Myanmar’s tourism industry develops, we see significant growth potential in this country,” said Patrick Basset, Accor’s senior vice president for Thailand, Vietnam, South Korea, Cambodia, Laos, Myanmar and the Philippines.
Amara Holdings Singapore-based Amara Holdings has joined forces with Myanmar companies Youth Force Hotel and Youth Force Construction to establish a joint-venture company to build and operate a hotel in Dagon Township, Yangon. The new venture involves an investment of around US$50 million. A company statement said the investment is part of the expansion of the Amara chain of hotels across Asia, with hospitality assets in Singapore, China and Thailand. The partnership will leverage on Myanmar’s abundant natural resources and recent reforms to promote its tourism industry.
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ASMO produces energy-efficient motors for various applications in automobiles with around 18 subsidiaries around the world and some 10,000 employees.
Bangkok Airways
Bangkok Airways has been serving routes from Bangkok to Myanmar since 2004. The Thai carrier subsequently became the first foreign airline to serve the Myanmar capital Nay Pyi Taw, with three weekly flights from September 2013, and the first Thai airline to fly to all three major Myanmar cities – Yangon, Mandalay and Nay Pyi Taw. It has long been our plan to cover the three key cities of Myanmar by the end of September,” said Mr Puttipong Prasarttong-Osoth, President. “We anticipate that the majority of our passengers on the direct BangkokNay Pyi Taw flights will be businessmen and government officials. The other two routes will most likely be mainly tourists. We are confident that with our strong reputation of offering a boutique flying experience for our passengers, Bangkok Airways will become a leading player in this market,” he added.
Bangkok Bank Bangkok Bank Pcl. (BBL), Thailand’s largest commercial bank, has operated a representative office in Yangon since 1995. The Yangon representative office provides investment information and facilitates financial services for foreign investors in Myanmar that are BBL clients. However, it doesn’t perform any traditional bank functions since no foreign bank has yet been able to obtain a full-branch license in Myanmar. According to BBL Senior Executive Vice President Chansak Fuangfu, achieving bank-branch status is now the goal to improve services to Thai companies and clients in the 13 countries where BBL is operating. “Banking on our long years of experience here, once we get a branch license we can facilitate all clients in Thailand and those referred by overseas branches. Many foreign clients have approached us for information, knowing that we understand the culture here,” Chansak said.
Bayer German pharmaceutical company Bayer HealthCare has opened a new office in Yangon through its subsidiary Bayer Thai, according to Myanmar Business Today. The company also signed an agreement with India-based Mega Lifesciences – a distributor of pharmaceutical and consumer goods – to distribute products of Bayer’s healthcare division in Myanmar. Bayer’s products to be distributed in Myanmar include contraceptives, medicines in therapeutic areas of infectious diseases, diabetes care, cardiovascular treatments, oncology and animal health. “Myanmar is one of the fastest growing economies in Asean. As the country continues to progress in its reforms, we look forward to help meet Myanmar’s healthcare goals, to increase access to innovative treatment options and accurate medical diagnostics in urban and rural areas,” said Celina Chew, Country Group Head of Bayer North Asean Region.
Beijing Automotive Group (BAIC)
British American Tobacco
Beijing Automotive Group (BAIC), one of China’s top five automobile assembly companies that was established in 1958, is planning to launch a number of service centres in Yangon, Nay Pyi Taw and Mandalay this year, according to reports by Aung Gabar Company. Aung Sein, Managing Director of Aung Gabar said that BAIC is also planning to open its After Sale Service Centre this July or August. BAIC already opened three service centres in Bahan Township, Yangon in January of this year. The company is now operating together with Germany-based Daimler AG and South Korea-based Hyundai.
Better Way
Better Way (Thailand) Co., Ltd., a cosmetic producer and distributor under the well-known Thai “Mistine” brand, entered the Myanmar market over a decade ago. Divided into five major categories – body care, personal care, make up, fragrance, and skin care, Mistine products have been widely accepted by all classes of Myanmar consumer. In March 2009, Mistine expanded its business to “Mistine Direct” using the direct sales model that has been extremely successful in Thailand. In late 2012, the company formed a joint venture with Saha Group to build a Bt200million factory on an area of 10 rai, located in Saha Group’s industrial park in outer Yangon. The new factory, due to be completed in two years, will serve as a major manufacturing base to produce cosmetic products for the Thai and Asean markets, thanks to its low production costs, proximity to Thailand and convenient logistics.
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three to five years would also give Carabao Tawandang a production base for exporting its energy drinks into South Asian countries such as Bangladesh and India. It has an investment budget of around Bt1 billion, of which between Bt200 million and Bt300 million is for the energy-drink factory in Myanmar. “The Myanmar market for energy drinks has good potential. Economic growth in Myanmar will allow individuals to enjoy higher spending power. Having our own factory in Myanmar will allow our energy-drink products to be cheaper than those we now sell there, which are imported from Thailand,” Sathien said.
In 2013, British American Tobacco (BAT), one of the largest tobacco companies in the world, sealed a joint-venture agreement with I.M.U. Enterprise Ltd. of Myanmar to manufacture, distribute and market its brands for the local market. BAT, which has a majority share in the venture, will invest around US$50 million over five years to establish a world-class manufacturing facility for the production of London brand cigarettes. “This signifies much more than a shared responsibility for the production of our international brands,” said Rehan Baig, Managing Director of British American Tobacco Myanmar Ltd. “It is a long-term commitment to develop local talent in technical know-how and management capabilities whilst also creating more employment opportunities. We will employ approximately 400 people to begin with and we also intend collaborate with local farmers to improve their yield and quality of local tobacco.”
Carabao Tawandang With the goal of making Carabao Dang the No-1 energy-drink brand in Asean, Carabao Tawandang, the manufacturer of Carabao Dang energy drinks, plans to open factories in Myanmar within the next three to five years. Managing director Sathien Setthasit said the establishment of plants in Myanmar and Cambodia formed a central part of its plan to penetrate other Southeast Asian markets. The planned factory in Myanmar in the next
Carlsberg Group Carlsberg Group, one of the world’s leading brewery organizations, formed a joint venture with Myanmar Golden Star Breweries in early 2013 to brew and market Carlsberg beers in the country. The company is currently building Myanmar’s first ever international brewery on a 54-acre Greenfield site in Bago, which is expected to employ over 500 people directly and generate employment for thousands more. Daniel Sjogren, Managing Director of Myanmar Carlsberg said the brewery’s location will mean access to the highest quality raw materials. “We will have access to good quality water and the famous Bago rice. Other raw materials such as malted barley and hops will be imported according to Carlsberg Group’s high quality global specifications.”
Charoen Pokphand Group
Charoen Pokphand Group (CP), Thailand’s biggest agro-industrial conglomerate, has been successfully operating feed plants and farms in Myanmar since 1996. So far, its total investment in the country is about US$150 million. Operated by its subsidiary Myanmar C.P. Livestock, CP’s business in Myanmar now comprises a feed-meal plant with a capacity of 250,000 tonnes per month, a layer-hen and poultry farm with a capacity of 1 million birds per week, and a food-processing plant with total production of 7,000 tonnes per year. CP is set to invest US$550 million or Bt16.53 billion in Myanmar between 2012 and 2015. It plans to develop maize seed and farms, rice farms and rice mills, plus livestock processing plants.
China Non-ferrous Metal Mining Company China Non-ferrous Metal Mining (Group) Co., Ltd. (CNMC), one of China’s largest stateowned enterprises, and Myanmar’s Ministry of Mines (MOE) have announced plans for an US$800-million joint-venture nickel project in the Tagaungtaung area of central Myanmar. The Tagaungtaung nickel and ferro-nickel mine is the largest mining project approved by the MOE to date. Exploration and surveying has been on-going in the area since 2004 and ministry officials and CNMC have already formed the central supervisory committees and related subcommittees, which include quality control and the testing of full-blown mine and refinery operations. It is estimated that the project will produce 85,000 tonnes of nickel annually.
The Coca Cola Company
The Coca Cola Company became one of the first US companies to return to Myanmar following the lifting of sanctions in 2012, inaugurating the first local Coca-Cola bottling plant at Hmawbi Township, Yangon in June 2013. The plant is the first stage in a planned US$200-million investment over the next five years to increase production capacity, expand logistics, sales and distribution operations, and improve marketing and people capabilities. Coca-Cola estimates that the investment will create more than 22,000 job opportunities across the entire value chain over the next five years. “As we grow as a local business in Myanmar, we are committed to creating economic value and building sustainable communities,” said Mr Muhtar Kent, Chairman and CEO. “For the people of Myanmar, CocaCola embodies the optimism of a bright future, with the promise of better days and better lives ahead.”
Colliers International Colliers International opened a new office in Yangon in mid 2013, becoming the first global real estate services firm to enter the Myanmar real estate market. With 39 offices in 14 countries throughout Asia, the new office aims to serve the needs of businesses seeking to establish a presence in the country, through property investment or by setting up an office or residence. Mr Tony Picon, former Head of Research at Colliers Thailand, is Managing Director for the Myanmar operation.
Myanmar offers businesses great opportunities but significant challenges, with office rentals in Yangon on a par with Hong Kong and Singapore, shortages of quality apartments, and hotel rates continuing to rise. “We are bullish about the prospects for those who wish to be part of the Myanmar growth story. Yet, like any frontier market, everybody must be prepared for some difficulties when they start to operate here,” said Picon.
Ferrero Ferrero Rocher, a globally-famous Italian brand of chocolates and confections, is now being distributed in Myanmar, with Premiun Distribution Company and Pahtama Group in Myanmar being appointed as its formal representatives. “We will sell our brands across the country. We are officially distributing our products in Southeast Asian countries like China, Indonesia, the Philippines, Malaysia, Brunei, Singapore and Thailand. Now, we are distributing and selling chocolate here,” said Marcello Gallo, Ferrero’s new sales representative. Chaw Ngwe Ngwe, Marketing Executive from Premium Distribution Company explained that although Ferrero has been in the Myanmar market for some time, the product quality is not good enough because they are imported from China and Thailand. Locals today are enjoying very good quality chocolates as the products are being directly imported from Italy.
Fujifilm Japan-based Fujifilm Holdings Corporation, the first Japanese producer of photographic film and high-tech products such as digital cameras and motion picture products, is planning to open a branch office in Myanmar to increase its sales and services in the country. The corporation, under Fujifilm Myanmar Ltd., will facilitate sales and services in Myanmar, registering with the Directorate of Investment and Companies Administration on July 24, 2013. Fuji has exported and sold products in Myanmar before through franchise company Mya Zaw Co., Ltd.
What the world is reading 53
Fuji Xerox, a joint venture owned by Fuji Photo and U.K-based Rank Xerox Limited (now Xerox Limited) has also operated in Myanmar since April 2013. Fuji Xerox produces copiers, printers and medical equipment.
Fuji Group The Fuji Group, Thailand’s leading Japanese restaurant operator, opened its first dining outlet in Yangon through a joint venture with a Myanmar company in March 2012. The two-storey restaurant with a space of 500 sq. m. and karaoke facilities is located in Yangon’s business district. According to Rawiwan Tanaka, Marketing Director of the Bangkok-based Fuji Group, the restaurant has unexpectedly achieved overwhelming success. “Previously, we had planned to make it a pioneer investment, but unexpectedly we have become known very fast. If it is in the evening, our customers have to call to book their seats every day.” She said Fuji’s customers are local people and it had exceeded its target despite its prices being 20-40 per cent higher than those in Thailand because most ingredients have to be airfreighted in from the Kingdom. With this tremendous success, Fuji is looking to open a second outlet in Myanmar in the near future.
Index Creative Village Plc
outdoor MICE venue located in a prime area of central Yangon. The company has also outlined a five-point strategy to cement its position in the Myanmar market and established ICVeX as a professional event organizer in Myanmar. Mr Kreingkrai Kanjanapokin, Founder and Co-CEO of Index Creative Village said that the company’s five offensive strategies – event marketing, festive events, consumer insight research, integrated media platform and professional exhibition organizer – will enable Index to build a foundation of business networks and business expansion in Myanmar and reinforce its position of Myanmar market leader. “Index will be able to answer the needs of investors from both Thailand and other countries wishing to enter the Myanmar market,” he said.
Infinite Technology Corporation Infinite Technology Corporation Co., Ltd., a leading Thai producer of Queuing Management Systems (QMS), recently expanded its business into the Myanmar market through an agreement with Unique Asia Gate Ltd. to distribute the company’s Queue Management System. The company’s Queue products have already been installed in all eight branches of the CB Bank in Yangon. Mr Montri Wanna, CEO, said the company has so far received positive feedback from customers and promises to commit to all customer needs. “We also hope to expand our business to many other Asean countries in the near future,” he added.
Kasikornbank Index Creative Village, event organizer and agency, has joined forces with Forever Group to invest in the Bt200-million Myanmar Event Park (MEP), a 20,000-sq-m integrated indoor-
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Kasikornbank (KBank) opened a representative office in Myanmar in January 2013 as part of its strategy to become an Asian bank by making its presence felt in all 10 Asean countries. The representative office acts as a centre for Thai business operators who wish to invest or explore new markets in Myanmar, with the
Bank’s one-stop service for useful information and consulting services. In-depth marketing issues, trade and investment information, legal matters, major business networks and local financial institutions are among the data to be provided to customers, while a global business matching service will be offered from the Bank’s customer base, covering Thai businesses wishing to invest in Myanmar and Myanmar business networks in diverse industries. KBank Senior Executive Vice President Somkiat Sirichatchai said the Yangon office would enable the bank to get to know the people and the market before expanding operations into a branch. “KBank uses the partnership model to become an Asian bank by working with local banks to understand the market, before expanding the business in the mode and timing deemed appropriate,” he said.
Krungthai Bank Krungthai Bank (KTB) opened its first representative offices in Myanmar in late 2012. KTB believes its representative office will act as a stepping stone for it to reach more Myanmar firms. The good relationship between the Thai and Myanmar governments is helping boost investment and trade. The Myanmar government is expected to support KTB, since the bank’s major shareholder is the Thai government. KTB will start approaching Myanmar firms and companies with Thai partners. The representative office is the first of KTB’s four steps in establishing a strong presence in the western neighbour. KTB might consider setting up a joint venture with local banks. Next would be a wholly owned subsidiary. The ultimate step is to open a full-service branch. “If the economy there continues to grow rapidly, we hope our full branch can be opened in five years (2017),” said KTB president Vorapak Tanyawong.
Lotte Chilsung Beverage In January of this year, Lotte Chilsung Beverage, the beverage division of South Korea’s fifth largest business conglomerate, launched LOTTE-MGS Beverage, a US$81-million joint venture, 70 per cent owned by Lotte and 30 per cent by soda company Myanmar Golden Star. The new venture will act as the bottler for global soda giant PepsiCo, distributing Pepsi Cola, 7-Up, Mirinda and more into the US$150 million market. Lotte will renovate the production lines of two MGS plants in Yangon and Mandalay, and utilize MGS’s 17 offices around the country for logistics. Lotte has already opened three Lotteria fast food restaurants in Myanmar and is planning to add 30 more by 2016. The company has also invested in the construction of a hotel in downtown Yangon and will take over its operation on completion.
Loxley
setting up a warehouse for the distribution of steel products made by Bluescope Steel, a firm based in Thailand’s Rayong and jointly owned by Loxley. Other investment projects include the provision of internet-infrastructure installation services and a joint venture for the construction of a 150-megawatt power plant in an industrial zone close to Yangon.
Local company, United Diamond Motors was authorised as the official distributor for Nissan in July 2013.
Oriflame In June 2003, Sweden-based Oriflame launched its first ever showroom in Sangchaung Township, Yangon. Oriflame Cosmetics S.A. is a cosmetic group, founded in 1967 in Sweden with headquarters in Luxembourg. The company sells skin care and cosmetic products and has a presence in over 60 countries worldwide. “We are now distributing our cosmetics in Asia such as India, China, Vietnam, Indonesia, Thailand, Laos and Cambodia. We will also distribute our products in Myanmar after appointing the sale representatives,” said Nima Khoei, Myanmar’s Country Director for Oriflame.
Nissan Motor Company
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Nok Air Nok Air launched its first international flight to Yangon in October 2013. According to the airline’s CEO Patee Sarasin, demand for the Bangkok-Yangon route was high, despite 2,000 seats being available per day on other Thailand-based airlines. Nok Air is confident that the load factor of this route would be at least 80 per cent. Despite the lower purchasing power and floods, he foresaw brisk flying demand in the last quarter of 2013. The year 2013’s average load factor would be around 87-88 per cent. Currently, the airline operates two daily flights to Yangon and has enlarged the fleet with 16 more aircraft, including two Boeing 737-800 planes. The airline is looking at the possibility of flying to other destinations in Myanmar, including Nay Pyi Taw, Mandalay and Bagan.
Ooredoo
After first entering the Myanmar market around twenty years ago Loxley decided to close down its office in Myanmar due to the currency-exchange problem and Thailand’s 1997 financial crisis. Now, Loxley Pcl. is once more ready to re-embark on the Myanmar business scene. Loxley is planning to invest in several businesses to tap into the opportunities in the country’s ongoing construction boom. It will join hands with local businessmen in
“I’m very proud to say Nissan is the first car manufacturer to have the agreement from the Myanmar government to build this facility in partnership with Tan Chong Motors, which is Nissan’s distributor in Malaysia. The first car should be rolling off the production line in 2015,” said Mr Carlos Ghosn, CEO of Nissan Motor Company.
Nissan Motor is building a car assembly plant on 80 acres of land in Bago, according to company sources. The new plant will produce around 10,000 units per year of the Nissan Sunny, initially as semi-knocked-down (SKD) and subsequently completely-knocked-down (CKD) units.
Qatar-based Ooredo (formerly Qatar Telecom) will invest some US$15 billion for the installation of a 3G mobile telecommunications network in rural areas of Myanmar and major towns. The telecommunications giant will be one of two international mobile operators to launch telecom services in Myanmar, regarded as one of the last remaining untapped markets in the world. Myanmar currently has a very low mobile phone penetration rate of around 9 percent, compared with more than 100 percent in neighbouring Thailand.
The investment follows Ooredoo’s successful bid for the Myanmar telecom tenders, along with Norwegian-based Telenor, in the middle of last year. The licenses allow the winners to build and operate nationwide wireless networks for a period of 15 years, based on 100 percent foreign investment.
Panasonic Asia Pacific Panasonic Asia Pacific opened its Myanmar branch in Yangon in mid 2013, to focus on further developing the consumer business and the business-to-business segment in the country. Panasonic distributes all of its product categories in Myanmar, including air conditioners, refrigerators, washing machines, rice cookers and hair dryers. “As a fast growing country with a large youth population, Myanmar is an important market for Panasonic,” said Mr. Yorihisa Shiokawa, Managing Director, Panasonic Asia Pacific. “We believe that the country will continue to grow and prosper socially and economically in the coming years. Hence, we hope to further strengthen our business here and contribute to the country’s progress by establishing a Panasonic Asia Pacific branch office in the key commercial city of Yangon.”
Pan Pacific Hotels Group
Pan Pacific Hotels Group (PPHG) has announced a conditional joint venture with Shwe Taung Group, one of Myanmar’s leading corporations in real estate and infrastructure development, to develop the first “Pan Pacific” hotel in Myanmar, the Pan Pacific Yangon. The Singapore-based hotel group will hold a 20
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percent interest in the hotel. Opening in 2016, Pan Pacific Yangon will be part of a mixeduse development that comprises serviced apartments, retail and office space located along Shwedagon Pagoda Road in the Yangon city centre. PPHG is also opening its second PARKROYAL hotel in Myanmar in the capital, Nay Pyi Taw. Scheduled to launch in April, PARKROYAL Nay Pyi Taw will feature 180 rooms and comprise an all-day dining restaurant, spa, gym, swimming pool and meeting facilities. The group owns and has been operating the PARKROYAL Yangon, its first Myanmar property, for the past 12 years.
Parkson Retail Asia Parkson Retail Asia Ltd. (PRA), which is 67.6 percent owned by Malaysian department store group Parkson Holdings Bhd, is entering Myanmar via a joint venture with two local partners - Yoma Strategic Holdings Ltd. and First Myanmar Investment Co., Ltd. (FMI) to operate department stores in Myanmar. Parkson said the venture is in line with the group’s plans to establish and expand its network of Parkson stores across Southeast Asia. The first Parkson store marked its soft launch in May 2013 occupying four floors and 57,000 sq ft of the FMI Centre in Yangon. The joint venture is primarily targeting Myanmar’s largely under-served mid-toupper income segment of the retail market. A statement said the joint venture “will allow the group and its partners to leverage on one another’s expertise and strengths to gain firstmover advantage in the rapidly growing retail sector in Myanmar”.
PTT Exploration and Production
PTT Exploration and Production Plc. (PTTEP), a subsidiary of Thailand’s state-run oil and gas conglomerate PTT Plc., has invested in Myanmar for more than 24 years. Its petroleum exploration and production projects include the Yanada project in the Mottama offshore area, Yetagun project in Taninthayi offshore area, as well as the Zawtika project and Myanmar M3 and M11 project in the Gulf of Martaban. PTTEP has earmarked US$3 billion for Myanmar investment, of which the major portion - US$2 billion – will go to the Zawtika project. The project is scheduled to commence operation in the first quarter of 2014, with a daily capacity of 300 million cubic feet, of which 240 million cubic feet would be sold to Thailand and the remaining volume to Myanmar. According to Tevin Vongvanich, PTTEP President and Chief Executive, the US$3-billion allocation would be part of the company’s US$25 billion investment to produce 600,000 barrels of oil in 2020.
Co., Ltd., one distribution centre would be for Sahapathanapibul’s consumer goods and the other for ICC International’s fashion and cosmetics products. Additionally, it will provide logistics and warehousing services to customers, mainly Thai and Japanese companies, whose offices are located in the company’s industrial park.
Myanmar. The company is currently ironing out partnership issues and hopes to implement the project in the third quarter of 2014 with commercial operations in 2017. As much as US$200 will be invested in the project.
“Logistics and distribution services have been unavailable in Myanmar. In the future, if businesses can generate higher sales, they may encounter a shortage of personnel and losses of products. That’s the reason we decided to make an investment here,” Vichien Kantathavorn, Managing Director of Tiger Distribution and Logistics explained.
Shangri-La International Hotel Management
SCG ASEAN conglomerate SCG (formerly Siam Cement Group) announced in August 2013 an investment of Bt12.4 billion in its first integrated greenfield cement plant in Myanmar. The 1.8-million-ton plant, to be built in Mawlamyine, will include a 40-MW cleantechnology power plant, port facilities and infrastructure to support future expansions. Start-up is expected by mid 2016. SCG already has a solid position in Myanmar as a long-time supplier of cement products. “This project is the company’s major investment to support growth of the cement-building materials business in Myanmar and ASEAN, and is in accordance with the company’s strategy to become an ASEAN sustainable business leader,” said Mr Kan Trakulhoon, President and CEO of SCG.
Saha Group Saha Group, Thailand’s largest consumer products conglomerate, is spending Bt3 billion to develop an industrial park in Yangon, which will serve as its new low-cost manufacturing base. The industrial park will be made up of over 100 factories for Saha Group’s consumer products, foods, garment and cosmetics. The company also plans to set up two logistics and distribution centres in Myawaddy through a joint venture with a local investor. Operated by its subsidiary Tiger Distribution and Logistics
Semen Indonesia Persero The Jakarta listed Indonesian state-owned cement producer Semen Indonesia Persero Tbk (Persero) plans to establish operations in Myanmar in 2014. The company aims to develop a new cement plant in the country with an annual production capacity of one million tons. A Persero representative said that the company is looking to acquire a cement company or establish a joint venture in
industry sectors that year. The country had not made any business investment for over 20 years since 1988 when Myanmar first enacted the Foreign Direct Investment Law (FDI).
Siam Commercial Bank
Shangri-La International Hotel Management Ltd. will open its second hotel in Yangon with a prime location on the banks of Kandawgyi Lake in 2017. The Hong Kong-based hotel group has been operating in Myanmar since 1996 when it opened the 334-room Traders Hotel, Yangon. The official groundbreaking ceremony for the 350-room Lakeside Shangri-La, Yangon took place in December 2013. The site is near the new Shangri-La Residences, Yangon, which are also managed by Shangri-La. Shangri-La Residences comprises 240 luxury apartments in twin towers on a 15-acre plot of prime residential land. “As more corporate travellers set up homes in Yangon, it is a natural progression for ShangriLa to provide residential facilities and to serve as an extended family to new members of the Yangon community,” said Phillip Couvaras, general manager of Shangri-La Residences, Yangon.
SIACOM The French company, Societe Industrielle Agricole et Commercial D’Outre Mer (SIACOM), will team up with Myanmar’s XY Trading Company to operate agribusinesses in Hinnthada Township in the delta area of the Ayeyarwady River. The two have joined hands under the new company Shwe Zabar Co., Ltd., which aims to set up rice mills for processing steam-rice and run other agricultural businesses in the area.
Siam Commercial Bank Pcl. (SCB) made its first foray into Myanmar by opening a representative office in Yangon on November 23, 2012. “Myanmar has more opportunities than other regional countries at this time. Banking business sees it as a strategic market,” said Manop Sangiambut, Executive Vice President for the International Banking Business Division. He added that SCB is acting as financial advisor for Italian Thai Development Company and working with other respective business firms in implementing the Dawei Special Economic Zone Project. The Yangon office cooperates with eight local Myanmar Banks to provide wire transfer services between Myanmar and Thailand; import and export, money exchange and financial advice. SCB’s local partners are Asia Green Development Bank, Ayeyarwady Bank, Kan Baw Za Bank, Myanmar Foreign Trade Bank, Myanmar Oriental Bank, Co-operative Bank and Myanmar Investment and Commercial Bank. SCB is willing to go into joint venture in the future once foreign investors are allowed to establish banks in Myanmar.
French investment re-entered Myanmar only in 2011 with the debut of the new Myanmar government, investing US$469 million in two
What the world is reading 59
concluded the purchase of a site because land prices in Mandalay are shooting up and the location has not been settled yet,” he added.
To launch its services, the company plans to hire 1,000 full-time employees by year’s end.
Soilbuild Construction Group Singapore-based Soilbuild Construction Group, a service provider of construction and architectural works and project management services, signed an agreement with Myanmar’s Super Shine Company to offer management and consultancy services in the construction of a 24-storey high-rise building project in Tamwe Township, Yangon in July 2013. The contract is worth US$ 1.1-1.4 million. “Since Myanmar has begun its political and economic reforms, there have been many opportunities for doing business here. Our firm will expand the modernization of construction projects in Myanmar,” said Ho Toon Bah, Executive Director of Soilbuild Construction Group.
Standard Chartered Bank Standard Chartered Bank, the global UKbacked bank, has been authorised by the central bank of Myanmar to re-launch its banking operations in Myanmar after its advent in 1862. Opening a representative office in Yangon on February 5, 2013, the bank is the only major international bank operating in all 10 ASEAN countries. Its representative office will focus on wholesale banking activities and providing support to the bank’s global network of clients across Asia, Africa and the Middle East. “Standard Chartered has had a history of over 150 years in Yangon and we are delighted at the quick response of the Central Bank of Myanmar in approving our application. We look forward to supporting our global network of clients in their efforts to tap into emerging opportunities in Myanmar, which in turn will help spur further economic growth for the country,” Standard Chartered’s Group Executive Director & CEO Asia Jaspal Bindra said in a statement
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Super Group Instant coffee and coffee mix producer Super Group of Singapore has enjoyed a presence in Myanmar for over 15 years with a market share in coffee products of 40 percent and a penetration rate of more than 80 percent. The company operates a packaging plant with an annual output of 100-150 tonnes, selling most of its products as sachets, which appeal to low-income consumers in Myanmar as well as street vendors. Super operates 15 manufacturing and packaging facilities in six Asian countries and supplies its products to 50 countries worldwide. The firm is currently the number one seller of instant coffee in the Myanmar market, where the group generates 20 percent of its branded sales and enjoys a first-mover advantage.
Telenor
Norwegian telecom giant Telenor received a 15-year license from the Myanmar Investment Commission in January 2014 to operate mobile telephone services on the 900 MHz and 2.1 GHz bands. The company plans to launch services within eight months of receiving the license and achieve coverage for 90 percent of the Myanmar population within five years. Initially, the company will offer voice and data services over 2G and 3G networks. “We are fully focused on rapid roll-out of our network and establishing an extensive distribution system to make services easily available to the population,” said Mr. Petter Furberg, CEO of Telenor Myanmar.
Thai Beverage Thai AirAsia Thai AirAsia, the region’s largest low-cost carrier, operated its inaugural flight to Yangon in 2006. Apart from three daily direct flights from Bangkok to Yangon, the budget airline currently offers its passengers two daily flights from Bangkok to Mandalay and three flights weekly to the Myanmar capital Nay Pyi Taw. According to the Myanmar Times, Thai AirAsia Chief Executive Officer Tassapon Bijleveld, said Myanmar is a new tourist attraction and a lot of people want to visit. He is confident the country will be a very good market for tourism in Southeast Asia. Thai AirAsia also plans to add Bagan to its international routes.
Thai Airways International Thai Airways International Public Company Limited (THAI), through its THAI Smile business unit, kicked off flights between Bangkok and Mandalay on March 31 of last year. THAI Smile operates five flights weekly to the new destination, while Thai Airways continues operating on the Bangkok Yangon route, as it has done for many years. M.L. Bhudhisarn Varavarn, THAI Director of Area for Thailand, Indochina and Myanmar, said that flights to and from Mandalay expand THAI’s regional market, serving an increased number of Thai and international passengers requiring travel to and from Myanmar as well as passengers who enjoy modern and goodquality service based on THAI standards at affordable prices and to serve other regional markets.
Thai President Foods runs instant-noodle plants in many countries and ships the products to more than 50 countries worldwide. Overseas sales contribute about 15 percent of the total.
Unilever Beer Chang International Ltd., a subsidiary of Thai Beverage Plc. (ThaiBev), formed a joint venture with Myanmar Distillery in early 2013 to set up breweries and other beverage factories in Yangon and Mandalay regions as well as Shan State. It is allowed to produce its flagship ‘Beer Chang,’ which is one of the top international beer brands in Myanmar. ThaiBev is also considering importing Myanmar beer into Thailand, where many migrant workers from Myanmar make a living. Thai Beverage Plc is also strengthening its presence in Myanmar through its partnership with Singapore-based Fraser and Neave Ltd. (F&N). “With Myanmar’s growing income per capita, there’s a huge opportunity for consumer goods and companies such as ThaiBev. We’re looking at opportunities in the Myanmar market as well as the chance of Myanmar products coming here,” said Thapana Sirivadhanabhakdi, ThaiBev’s President and Chief Executive.
Thai President Foods Plc Thai food giant Thai President Foods, producer of Mama instant noodles, opened its first noodle plant in Myanmar 10 years ago and is currently considering investment in a second plant in the country.
Wood Craft International Singapore-based trading house Wood Craft International Pte. Ltd. has teamed up with Myanmar-based Global Star in a venture to produce finished-wood products. The new joint venture received permission from the Myanmar Investment Commission in October 2013 to establish a manufacturing facility in the Shwepyitha Industrial Zone. Wood Craft International deals in all types of timber products and has branch offices in many countries including India, Malaysia, Myanmar and Vietnam as well as in Africa and South America.
Zongshen Industrial Group Unilever, a global leading consumer goods company, whose roots in Myanmar go back over 80 years, has re-entered the country with the launch of its first factory in mid 2013. At present, its product range in the country comprises hair and skincare, food, laundry and oral care categories, with well-established brands such as Knorr chicken broth powder, Sunsilk shampoo, Clear shampoo, Lux soap, Sunlight soap and Ponds cosmetics. The company aims to stand at the top of Myanmar’s consumer goods market, which is expected to grow rapidly within the next 10 years. Many Myanmar workers who were previously employed by Unilever’s factories in Thailand have moved back to their homes to work in the factory. By 2015, Unilever expects to provide direct and indirect employment for over 2,000 people in Myanmar. It also plans to build a second factory in the country.
China’s motorcycle conglomerate Zongshen Industrial Group (Zongshen) announced it will invest US$100 million in a ferro-titanium mine in Kokang, in Myanmar’s northeastern Shan State. The mine borders China’s Yunnan province. In 2012 Chongqing-based Zongshen signed a framework agreement with a Kokang-based mineral company to co-develop the mine, which will produce ferro-titanium, an alloy of iron and titanium. The US$-100 million investment will be made in three phases with the first phase investment of approximately US$30 million at the end of 2013.
“We established our first plant in Myanmar about 10 years ago, with current capacity at about 30,000 cases per year,” said Mr Suchai Ratanajiajaroen. “For the progress of our investment in setting up our second instantnoodle plant in Myanmar, we still have not
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Visitors’ Guide to
Yangon Step back in time to a city unmarred by commercialization and globalization…
For the international traveller, Myanmar and its largest city Yangon represent one of the last untamed frontiers. Shuttered for decades, Yangon has only recently revealed its mesmerizing mishmash of traditional, colonial and ethnic flavours, quite unlike anywhere else. The re-opened Yangon is very similar to how it would have been when the British left over sixty years ago. The traffic has worsened quite a bit in the intervening years and mobile phones are beginning to appear, but otherwise little has changed. The buildings and roads have been left just as they were decades ago, albeit with a veneer of dust and decay, and the city is today the repository of the most extensive and finest examples of colonial architecture anywhere in the world. The people have largely been shielded from external influences too; they still wear traditional costume, chew betel and smear thanaka on their faces, and their daily rituals of work, prayer, cooking and home life remain little changed. None of the familiar symbols of globalization – McDonalds, Starbucks, 7-Eleven and the like, have arrived yet. How long the city can resist the pressures of commercialization and foreign influence is open to question.
around the city to see the various attractions – mainly pagodas, temples and other historic sites, walking around the Downtown to see the original Colonial architecture, and taking in the fascinating lifestyles and culture of the local people. Shwedagon Pagoda is the highlight of the city and must not be missed. Make a point to visit some local restaurants to try the diverse local cuisine and, depending on the length of your stay, take a day trip out into the country – perhaps to the ancient city of Bago or possibly a half-day ferry trip across the river to see the rural lifestyles of the delta region. Activities available to visitors tend to be spiritual in nature, such as meditation, rather than physical. Sporting activities, for example, are virtually non-existent. Fortunately, Yangon does have several large parks and green areas where you can escape from the heat for a while, located in a belt around the Shwedagon Pagoda. These include Kandawgyi Lake with its gaudy Karaweik, the People’s Park and Square, and the area around Inya Lake in the north of the city. For shopping, Bogyoke Aung San market on the northern perimeter of the Downtown shouldn’t be missed. It’s quite easy to get lost for an entire day in this vast complex of stalls and alleyways.
For most visitors, time will be spent trekking
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Getting around
When to go Weather-wise, the best time to go is Nov-Feb when it’s dry and temperatures are at their lowest. Unfortunately, this corresponds to the peak tourist season when hotels are likely to be fully booked and rates at their highest. From Mar-May the weather is stiflingly hot and humid, while Jun-Oct is when the monsoon rains blow in from the Bay of Bengal.
Entry formalities Travelers to Myanmar are required to have a valid passport with at least six months validity from the date of entry and an entry visa. Persons wishing to do business in Myanmar may be issued a visa on arrival. Visitors from a total of 27 countries, including most Western countries and the ASEAN states, are issued a tourist visa allowing a single stay of 28 days, which is not extendable. Visas are valid for up to three months from the date of issue. The cost of a tourist visa is US$50 (US$40 for nationals of the ASEAN countries).
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The Myanmar Embassy in Bangkok can process visa applications within one day. Two photographs are required and the application should be submitted between 9 am and noon at the Embassy for pick up between 3:30 and 4:30 pm on the same day.
Getting there Many airlines and flights now serve Yangon, with Bangkok being the main gateway. There are also frequent services from Beijing, Kuala Lumpur, Seoul, Singapore, Tokyo and other Asian cities. On the Bangkok-Yangon route, the flight time is just under an hour and Yangon is half an hour behind Thai time. Thai Airways, Bangkok Airways, Nok Air, Air Asia and Myanmar Airways International all operate flights to Yangon. Visitors will arrive at the modern Yangon International Airport, which is about 15 kilometers north of downtown Yangon. Immigration and customs are efficient and hassle-free for both arrivals and departures.
Taxi is pretty much the best way of getting around Yangon. Taxis are economical but either old and dilapidated or tiny. Most don’t have air conditioning or seat belts and don’t be surprised if you can see the road beneath your feet. Cost of a cab from the airport to Downtown is about 7,000 kyat, while most trips in town are 2,500-3,000 kyat. Buses are very cheap but crammed like sardines and – with numbers and destination info written in Burmese – all but incomprehensible. The city’s only mass transit system of sorts is the Circle Line railway which loops all the way around Yangon’s suburbs – great for seeing how the people live but otherwise of little use to tourists.
services or exchanged for kyat. The euro and Singapore dollar can also be exchanged at banks. Official exchange rates used at airport exchange counters and banks are now equivalent or better than black market rates. Exchange cash with a street moneychanger at your own risk. They are very proficient at giving you less than agreed. Credit cards and travelers cheques are still something of a novelty and most places don’t accept them, with the exception of a handful of five-star hotels. Myanmar is still a cash society. ATM machines are now present in limited numbers but most do not yet accept international bank cards.
For short distances in the Downtown area, travel on foot is the best idea but watch out for potholes or even drain holes in the pavements.
Myanmar’s currency is the kyat (K). US dollar cash is the most widely accepted currency for travelers but bills must be in perfect condition, with no marks, tears or folds. Dollars can be used as payment for goods and
Internet access is currently available at most hotels of 3 stars and above, and there are plenty of internet cafes around the city. Speeds vary depending on the time of day.
Visitors can make local calls and sometimes international calls at street booths offering telephone services. International calling services are also available at official telephone centres. To make a long-distance call within Myanmar, dial the area code followed by the number. Yangon’s area code is 1. International roaming services are not available in Myanmar, meaning visitors can’t use their own mobile phones from overseas. However,
as by regularly washing hands, avoiding mosquito and insect bites, and exercising caution when selecting foods and drinks. Comprehensive travel and medical insurance that covers emergency air evacuation, illness and any activities you expect to be participating in is probably a good idea. Get up to date on health matters before you go at http://www.who.int/countries/ mmr/en/
Hotels
Health and safety
Telephones and Internet
Money matters
CDMA hand phones are now popular and going down in price. In general, mobile phone signal strength in most areas of Yangon is pretty good. Mobile phone numbers begin with 09.
Myanmar is one of the safest countries in the world, with crime rates bettering many European and popular Asian destinations. Visitors are unlikely to experience bag snatches or pickpockets in Yangon but it’s wise to take precautions against theft, as you would in any big city, by avoiding lonely areas at night, being conscious of your valuables and by not keeping your money all in one place. Health care is another story however, with one of the lowest levels in the world. Most medical establishments still lack even the most basic medical equipment. Visitors are advised to take precautionary measures to avoid picking up diseases by maintaining good hygiene, such
The fact that Myanmar is one of the least developed countries in the world doesn’t mean that accommodation for foreign visitors is cheap. Far from it, hotels in Yangon are both very expensive and of a lower standard than other major Asian cities. The supply of hotel rooms remains very low while the demand, caused by the sudden large inflows of foreign travelers, is very high, giving hoteliers the opportunity to ramp up prices. This is particularly true during the
Nov-Feb peak period. Most hotels still don’t accept payment by credit card so booking in advance through one of the online booking agencies such as agoda.com or booking. com is nearly always a good idea. If you don’t book in advance be prepared to do a lot of footwork to find a vacant room and make sure you have sufficient crisp brand-new US dollars to pay in cash. Hotel prices will generally include a 5 percent government tax and 10 percent service charge, and breakfast is invariably free. Hotels of all price brackets are pretty well distributed across the city including in the vicinity of the airport. Staying downtown puts you in close proximity to many of the city’s sights and food outlets but places can be cramped and noisy. Hotels in the outlying areas are often quieter, more spacious and have a more pleasant environment, but the downside is that you need to spend more on taxis to get around.
Food and Water Precautions Follow these tips for safe eating and drinking: • Tap water is unsafe to drink. You should drink only bottled, boiled or filtered water. • Wash your hands regularly with soap and water, particularly before eating. • Make sure food is fully cooked and hot. • Don’t eat fruit unless it has been peeled. • Avoid ice. • Avoid dairy products unless you know they have been pasteurized. • Avoid food and beverages from street vendors.
Information and maps Visitors can pick up a city map and basic information about Yangon at the Tourist Information Office, located opposite Sule Pagoda in the city centre. There’s also a tourism information desk at Yangon International Airport. For the most up-to-date Yangon map, you should look for a copy of the Yangon Tourist Map, a full-colour and foldable map with useful information for tourists, published by DPS. The maps are available for free at several hotels, restaurants, bookstores, travel agencies and souvenir shops across the city.
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Shwedagon Pagoda
Religious wonder of the world Buddhists and tourists the world over come to marvel in awe at the mesmerizing pagodas of Shwedagon, which surely ranks as one of the religious wonders of the world.
Any visit to Yangon would be incomplete without a visit to the magnificent Shwedagon Pagoda, Myanmar’s most iconic and recognizable landmark. It is the country’s most sacred and revered religious structure which all Myanmar Buddhists strive to visit within their lifetime. Situated north of Yangon’s downtown area, the golden stupa is visible from virtually anywhere in the city. Aside from the main stupa, which is thought to enshrine sacred hair relics of the Buddha, the precincts of Shwedagon house hundreds of other temples and halls, stupas, statues, bells and other fascinating artifacts, reflecting architectural styles spanning 25 centuries. Shwedagon Pagoda is thought to have originated during the time of the Buddha over 2,500 years ago. It has been renovated and expanded countless times down the centuries by successive monarchs. The main pagoda now stands 99 metres in height on a hill rising 51 metres above the city.
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The pagoda can be accessed from any of four stairways on the north, south, east and west points, with lifts available at the southern and northern entrances. Vendors sell souvenirs and temple goods such as real and paper flowers, offerings, incense, robes, etc., from shops on either side of the covered stairways. Footwear must be removed at the entrances to the stairways, not at the platform, so visitors planning to exit by a different stairway should carry their shoes with them. A good time to visit the pagoda is around sunset or sunrise, when the marble flagstones are not too hot and the golden pagodas burst into an explosion of colour under the rays of the sun. Shwedagon Pagoda opens from 04.0022.00 (last admission at 21.45) daily except on the waxing days of Tabaung and Wakhaung when it is open 24 hours. The entrance fee is $5.00.
What to watch out for… The Umbrella Crown The current hti or umbrella crown of the pagoda, donated by King Mindon Min in 1871, is encrusted with an incredible 5,448 diamonds, 2,317 rubies, sapphires and other gems, and adorned with 1,065 golden bells. At the very top of the diamond bud or sein bu is a single 76-carat diamond.
This replica, which is accurate in overall form only, was built by Dagon Khin Khin Lay, a well known novelist, publisher and cinematographer of the 20th century.
Golden pagoda The main stupa is made of brick covered by plates of gold donated by monarchs and lay people since the Mon Queen Shin Sawbu started the practice in the 15th century. She provided her own weight in gold. Today, the lower stupa is plated with 8,688 solid gold bars while the upper stupa holds another 13,153 plates.
Hall of Great Prosperity At the northwest corner of the complex is a hall used for religious ceremonies which houses a large 9-metrehigh seated Buddha. The hall is used for the Mathothingan robe-weaving competition on the eve of Tazaungdaing in October or November.
Mahabodhi Temple Just to the north of the main pagoda is a replica of the Mahabodhi Temple in Bodh Gaya, the place in India where the Buddha achieved enlightenment.
Ground of Success The Ground of Success is a stylized flower of 10 petals marked on the paved area to the northwest of the main pagoda. The white circle of
the stamen is particularly revered by devotees who gather at the point to offer their prayers. Tharyarwady’s Bell King Tharyarwady donated a bell to the pagoda following his vist to Yangon in 1841-42. Cast on February 19, 1843, the bell weighs 42 tons with a height of 14 ft 3 in, making it the second largest existent bell in Myanmar. Mother Ogre The squat figure at the top of the northern stairway is a yaksha or ogre, a powerful semidivine figure that protects the treasures within. It is thought to be one of a pair placed at Shwedagon by Queen Shin Sawbu, who ruled from 1453-1471. What happened to the other one remains a mystery.
Shrine of Fertility The right-hand figure of the small shrine on the southeast corner of the plinth of the main pagoda can be seen holding a baby. Devotees believe that worshipping the figure will make women fertile. Bodhi Tree At the southeast corner of the complex is a sacred Bodhi Tree, a Buddhist symbol of enlightenment. The original Bodhi Tree or Sacred Fig, under which the Siddhartha Gautama is said to have achieved enlightenment, was located at Bodh Gaya in India.
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The Downtown
Historic centre that is very much alive
Take a stroll through three millennia in Yangon’s historic Downtown… Yangon’s downtown area or the central business district is an east-west grid of streets originally built by British military engineers. Fortunately for the traveler, downtown Yangon is compact, easily traversed and, with the exception of Shwedagon Pagoda, houses most of the sites of interest to the tourist. It also holds the bulk of Yangon’s 19th and early 20th century colonial architecture, some of the finest remaining in Southeast Asia. The best way to experience the area is to just wander around the choked gridlike streets on foot, taking in the sights, the colourful and noisy markets, and the smells of the food cooking at the countless street vendors. Sule Pagoda, which stands more or less at the centre of the area, is a good place to strike out from. Heading in an easterly and south direction, past the white City Hall and Maha Bandoola Gardens with the Independence Obelisk, takes you past some of the best of the old Victorian architecture, including the Port Authority, the Strand Hotel – now renovated to its original glory, and the British and Australian embassies. Several sites of interest can be seen on Bo Aung Kyaw Street, including the old Armenian church, the enormous Secretariat or Minister’s Office, where independence hero Aung San and his fellow ministers were assassinated in 1947, and the late 19th century red brick
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View from the top After a day slogging around the Downtown, head to the top of the 20-storey Sakura Tower on Bogyoke Aung San Road for a drink and a panoramic view of the city. From the tower’s Sky Bistro you can gain a new perspective of the downtown area, Yangon River and, in the other direction, the two-millenniaold Shwedagon Pagoda.
structure of St. Mary’s Cathedral. Walking from Sule Pagoda in a westerly direction takes you through the Little India and China Town areas, in the narrow lanes of Maha Bandoola Street. Many excellent restaurants and street food stalls can be found here. Sites to watch out for in this area include the Cantonese Kwan Yin Temple and the altogether more ostentatious Kheng Hock Keong Temple, built in Fukienese style. Take a look at the blue-andwhite Musmeah Yeshua Synagogue at 26th Street, still serving the dwindling Jewish population of Yangon and the bustling Theingyi Market just across the road.
Sule Pagoda The 2,000-plus year old Sule Pagoda, thought to enshrine a strand of hair from the Buddha, is situated in the middle of a traffic circle, surrounded by a ring of small shops and overlooked by an incongruous mix of old and modern buildings. Located at the junction of Sule Pagoda Road and Maha Bandoola Road, the pagoda is considered to be the geographical centre of Yangon, around which the British engineer Lt. Alexander Fraser designed the original grid-like layout of the city. It has also been the focal point for religious and political uprisings over the years. The structure of Sule Pagoda is quite distinctive, being octagonal from the
The Bistro has a café that opens daily from 9 am to 6 pm and a bar from 6 pm to 10.30 pm. You can just get a drink or sample something from the selection of Asian, Japanese and Western dishes. Evening is a good time to visit as the sun slips below the horizon and the lights illuminate the glowing pagoda nearby.
base right up to the shaft supporting the umbrella. The height from the plinth to the diamond bud of the pagoda is 144 ft 9.5 inch. The pagoda was ornamented with a new diamond bud and pennant-shaped vane in 1957 and the entire pagoda gilded in the same year.
Botahtaung Pagoda Botahtaung Pagoda, situated in the East Downtown on the Yangon riverfront, is thought to have been built by the Mon around the same time as the Shwedagon Pagoda over 2,500 years ago. In November 1943, the pagoda was completely destroyed by Allied bombs in a campaign targeting the nearby wharves. Rebuilding of the pagoda according to the original design got under way on the day of Myanmar’s independence on January 4, 1948. Many of the jewel-encrusted silver and gold images and other artifacts discovered during the reconstruction are now on display inside the hollow pagoda. A small gold cylinder containing two tiny body relics and what is believed to be a sacred hair relic of the Buddha is believed to be sealed inside the stupa. Outside the main pagoda is a hall housing a large gilded bronze Buddha cast during the time of King Mindon Min. Images of several Hindu deities and the Myanmar nat Bobogyi, considered to be the guardian spirit of the pagoda, can be seen in the grounds of the pagoda. Also of interest is a large pond, home to hundreds of turtles.
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Shopping Markets, street stalls and more
A veritable mecca for market lovers, Yangon has plenty to offer the traditionalist shopper. Although Yangon could hardly be described as a shopping utopia, it does offer foreign visitors some unique and interesting products to take back home. Inexpensive gifts include hnyat-phanat – traditional handmade sandals that are worn by everyone in Myanmar, lacquerware boxes and furnishings, marionettes, tribal dolls, paintings and other art, garments and fabrics, parasols, carved wood items and precious or semi-precious stones and jewellery. The city’s shopping landmark is undoubtedly Bogyoke Aung San Market (formerly Scott Market), an old-fashioned covered bazaar in the downtown, where countless shops are packed into alleys alongside a main market hall. Here, visitors will find almost every kind of locally-made product ranging from handicrafts such as textiles and tapestries, clothing, lacquerware, wood and jade carvings, silverware and brassware; jewellery and gold; antiques; home décor items and knick-knack souvenirs. Bargaining is widely accepted at this bustling market, so it is possible to haggle prices to less than might be found elsewhere.
Most places don’t yet accept credit cards, so take along wads of the local currency or crisp, unfolded dollar bills to make your payments. Other currencies, such as Thai baht, euros or Singapore dollars may be accepted in places frequented heavily by tourists, such as Bogyoke Aung San Market. The best bet is to exchange dollars at a bank and pay for goods and services with kyat. For gems and jewellery, buyers should be aware that there are a lot of fakes among the genuine stuff, so it is recommended to make purchases of these products at governmentlicensed shops, located mostly around Bogyoke Aung San Market or at the Myanmar Gems Museum and Gems Market. Myanmar has some stiff regulations concerning the export of gems and jewellery, so make sure you pick up the necessary documentation issued by a licensed dealer before departing the country. These regulations also apply to artifacts such as antiques, Buddha images and sculptures.
An artistic renaissance Art is enjoying something of a resurgence in Yangon since the government relaxed its rigid and ridiculous censorship rules governing art and other forms of expression. Shops selling traditional and contemporary
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Myanmar art are dotted all over town and in Bogyoke Aung San Market but the biggest and best known galleries are all in the downtown area. The Lokanat Galleries (open daily 9-5) on Pansodan Street is Myanmar’s
longest running art gallery, and features two halls dedicated to promoting the works of the country’s academic and contemporary artists. The Lokanat regularly features solo and group art exhibitions covering all genres
as well as occasional book fairs. Pansodan Gallery (open daily 10-6) exhibits Myanmar contemporary and traditional art and antiques. Also on Pansodan Street, the gallery organizes regular get-togethers on Tuesday
evenings. River Gallery is a project of New Zealander Gill Pattison, showcasing and selling the works of contemporary Myanmar artists. Over 30 leading and emerging artists are represented at the gallery, which is located in the
Strand Hotel Annex, connected to the hotel on Strand Road.
Markets, not malls Traditional markets abound in Yangon selling everything from fresh food produce to garments and textiles to imported electronics and cosmetics. A casual walk or drive around the city will reveal markets on virtually every street corner. Malls, on the other hand, are few and far between and neither interesting nor economical for the average visitor. For tourists, by far the best known market is Bogyoke Aung San Market in the northern downtown area. This vast covered market can be a one-stop-shop for souvenirs and gifts, clothing, gems, art and most other items of interest to the traveler, mostly at low and negotiable prices. Theingyi Market on Maha Bandoola Street not far from Sule Pagoda is the biggest market in central Yangon offering textiles, general household goods, and indigenous herbs and medicinal products. The produce is generally slightly lower priced than at the more touristfamiliar Bogyoke Aung San Market. Another one worth investigating is the teeming Mingala Market, located just east of Kandawgyi Lake, selling clothes, fabrics, electrical equipment, food and imported goods such as cosmetics and medicines. Fresh market by day, Mingala Zei transforms into a flesh market after dark with infamous night clubs on the upper floors.
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Danuphyu Daw Saw Yi Myanmar Restaurant
Eating & drinking A feast of regional diversity Often derided as overly oily, Myanmar cuisine offers some pleasant surprises with its vast range of fresh ingredients and regional influences. Your introduction to Myanmar cuisine is likely to be a bewildering affair, faced with arrays of local curries, soups, dips, salad-type dishes (but not in the Western sense) and sweets, all of which may be on display in a single restaurant. The restaurant staff in Yangon will have served foreign travelers before, so rather than giving you an incomprehensible menu to look at, they will show you the dishes available, often under glass at the back of the restaurant, where you can just point to what you fancy. A typically complete Myanmar meal would consist of rice, served with dishes such as oil-based meat or fish curry, a vegetable dish, spicy dip or sauce with a wide range of fresh or steamed vegetables and a soup – either a condensed soup like lentil soup or dhal, or a tart leaf-based soup. It could be accompanied by side dishes such as fried dried shrimp known as balachaun, salad and additional vegetable dishes. Tea is usually served after a meal. Myanmar foods are flavourful with herbal ingredients such as ginger, garlic, turmeric, chili, lemon grass, spring onions and coriander. Common condiments include fish sauce (nam pya ye), soy sauce, fish or shrimp paste (ngapi), curry powder, and fiery chili. Yangon is a reasonably cosmopolitan city so other cuisines are also well represented, especially Chinese, Indian, Thai and the food of Myanmar’s many ethnic groups, particularly Shan food. Western food as such is not that well represented and is often rather disappointing, with a few notable exceptions. In the Downtown area of Yangon, restaurants are situated in the shophouses (or on the street) and are generally rather unglamorous. For great food and an equally good atmosphere, you need to venture a little further afield. Here are a few places to get you on your feet with the local food:
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Feel Myanmar Food Feel, located in the embassy district just round the corner from the National Museum, offers the tourist a good introduction to dining Myanmar style with a huge choice of local dishes at quite reasonable prices. The place is always packed with a mix of locals and tourists and the atmosphere buzzes. The best way to order your food is to go to the glass counter at the back with all the main dishes and point. Then try to find a table and wait for your dishes to arrive. Various sweets, drinks and more can be ordered from the stalls set up right in front of the restaurant. Opens lunch and dinner. 124 Pyidaungsu Yeiktha St, T. 09 7320 8132.
One of the most popular Indian eateries in Yangon’s Little India, New Delhi Restaurant appeals equally to camera-toting tourists and longyi-clad locals with its extensive selection of Indian and Burmese specialities including vegetarian options. Most go for a vegetarian thali set that features a choice of chapati and/or rice, with dhal and a vegetable curry. The mango chutney is simply amazing! Locals usually go for fried fish, with rice poured over with warm dhal. Non vegetarian diners can savour chicken, mutton and goat’s brain biriyani with coconut rice, and most kinds of curries. A thali meal sets you back about a dollar. 274, Anawratha Road, between 28th and Shwebontha Road, Pabedan Township, T. 097 320 1518, 094 5004 1222.
Danuphyu, a short stroll away from Bogyoke Aung San Market or Sule Pagoda, is an excellent but no-frills place to get familiar with Burmese food in the downtown area. Most tourists don’t bother with the menu but instead look at the range of curries and other dishes on offer behind the glass counter and point to what they’re interested in. Most locals will accompany their dishes with a bowl of ngapi, a salty Burmese dip, which comes with various par-boiled vegetables, as well as the soup of the day. Despite its popularity, Danuphyu is still very reasonably priced with a substantial meal setting you back around US$5 or so. 175/177 29th Street, Pabedan Township, T. 248 977.
two-storey house, it serves pizza and other Italian classics that benefit from Myanmar’s wealth of green leaves, seafood and quality ingredients. The menu features a decent selection of popular dishes which are surprisingly inexpensive. A must try is Spaghetti ai Scampi e Piselli, which arrives on a big plate costing around US$4. An agreeable meal here gives excellent value for money. 104 University Avenue Road (next to the US embassy), Kamaryut, T. 09 500 6143, 09 511 4932.
19th Street eateries
Padonmar
Cafes DIBAR A popular choice for lunch and dinner among office workers, Cafes DIBAR is a great place to enjoy eating as much as you want without worrying about the bill. Set in a colonial-style
by a cup of black tea should keep you happy for the rest of the day. 105/107, Kha-Yae-Bin Road, Dagon Township (near The Governor’s Residence) T. 01 538 895, 01 122 0616 or 09 7302 9973, 09 7310 8608.
Set in an old colonial house with a leafy garden for alfresco dining, Padonmar attracts locals and tourists alike. Lunchtime, when it’s not too busy, is a good time to try various local specialities as recommended by the waiter. For around US$8, the set lunch feels like you’re taking on more than you can eat with a wide choice of soups, salads, and a chicken, fish, pork or beef curry as the man dish, served with a stir-fried dish. Banana cake for dessert followed
19th Street off Maha Bandoola Road in the Chinatown area buzzes with energy after the sun goes down. Packed with grilled food vendors, street restaurants and bars, with tables and stools spilling out onto the street, the small lane is popular among locals and visitors alike. The way to go is to just choose one of the many places along the street and then pick something off the menu or simply point to whatever takes your fancy – skewered meats, veggies, seafood, even insects. They will then barbecue it for you and serve it up with dips and sauces at your table. Goes down great with the cold draught beer and the atmosphere is hard to beat.
Mohinga – Myanmar’s national dish? Widely regarded as the national dish, mohinga is cheap and popular in Yangon and all visitors should give it a try. The dish consists of thin or flat rice noodles in a rich fish-based soup, garnished with crispy fried onion or veggies, sliced boiled eggs, sliced shallots,
coriander, spring onions, and seasoned with fish sauce, lime juice and dried chili. Chickpea flour or crushed toasted rice, garlic, onion, lemongrass, ginger, banana stalks, fish paste, fish sauce and freshwater fish such as catfish or snakehead are also sometimes
added. Though the original mohinga comes from southern Myanmar, where freshwater fish are abundant, different versions of the dish can be found around the country.
roadside stalls and restaurants, mohinga is, nonetheless, mostly consumed early in the morning for breakfast but has become known as something of an “all-day breakfast” in many cities.
Available all day at street hawkers,
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Yangon GUIDE
Bago
Enchanting kingdom of the Hamsa After pounding the streets of Yangon for a few days, most tourists appreciate the chance to get out of the city for a while. The ancient pagoda-studded capital of Bago makes for an excellent full-day trip. Bago (formerly Pegu), for centuries the capital of the Hanthawady kingdom of lower Burma, is a small dusty town a couple of hours northeast of Yangon with, perhaps, more religious edifices per square mile than anywhere else in the country. It’s just about possible to cram most of the town’s attractions into a single day, making Bago one of the very best full-day excursions from Yangon. If you set off early, it’s also possible to fit in a side trip to the Taukkyan War Cemetery on the way back. The best way to get to and get around Bago is to hire a taxi for the day from Yangon (shouldn’t be over $100) or it’s possible to get a bus or train from Yangon. The journey by road takes around 2 hours while the more leisurely rail trip takes about 3 hours. Once in Bago, getting around is either by trishaw, motorcycle or bicycle, all of which can be hired for the day. A ticket valid for all the temples, pagodas and other sites in Bago costs $10 from either the Shwemawdaw Pagoda or the Shwethalyaung Reclining Buddha. Additional small charges for cameras/videos/smart phones are collected at many of the sites.
The Bago Hamsa The symbol of Bago is a pair of Hamsa – a mythological water bird or goose – the female standing on the back of the male. The image recounts the tale of the founding of Bago long ago when the Lord Buddha and his disciples were passing by and happened to come across two water
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fowl, the female on the back of the male, on a tiny spit of land barely big enough for one bird to perch. He predicted that the spot would one day become a great country. In 573 AD several centuries later, after the area of sea had silted up, two Mon princesses founded a kingdom on
the very spot called “Hanthawady”. The kingdom of the Hamsa went on to become the dominant kingdom of lower Burma for several centuries. The image has also spawned the popular saying that the men of Bago are more
chivalrous than their compatriots elsewhere in Myanmar, or perhaps more hen-pecked by the domineering Bago women.
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Bago
Shwethalyaung Reclining Buddha The Shwethalyaung Buddha is a huge 55-metre-long reclining Buddha located on the west side of town and is thought to date from the 10th century. The Buddha was totally lost in 1757 when Pegu was sacked by King Alaungpaya, only to be rediscovered under dense jungle by the British more than 120 years later. The Buddha was restored following its discovery and
beautiful mosaic pillows, supporting the Buddha’s head, were added in 1930. Close by rests the Naung Daw Gyi Mya Tha Lyaung Buddha built in 2002, another huge reclining Buddha icon, while just across the street is the Four Figures Pagoda with its four back-to-back standing Buddha statues.
Kyaikpon Pagoda This pagoda is situated at the entrance to Bago. The name Kyaikpon, derived from the Mon language, means four faces and is dedicated to the four Buddhas that appeared under the names of Kakusan, Gonagon, Kasapa and Gottama. The pagoda was originally built in the reign of King Dhammazedi in 1476 but has been partially rebuilt and renovated several times, particularly following the great earthquake of 1930. As it stands today, with its rather gaudy pinkcoloured backdrop, the 90-foot-tall Kyaikpon Pagoda hardly looks like it was built in the 15th century.
Shwemawdaw Pagoda The Shwemawdaw Pagoda is to Bago what the Shwedagon Pagoda is to Yangon – the largest, grandest and most sacred of the pagodas in the area. At 375 feet in height, Shwemawdaw is in fact considerably higher than Shwedagon and holds the record of tallest stupa in Myanmar. It is also an important pilgrimage site for Buddhists from far and wide, particularly during the 10-day annual festival in the month of Tagu. The Mon-style pagoda is thought to have been built in the 10th century and is believed to enshrine hair and tooth relics of the Buddha. Like most ancient pagodas, it has been destroyed several times by earthquakes over the centuries, rebuilt, renovated and gradually heightened. Fragments of the fallen pagoda from previous eras can still be seen today.
Kanbawzathadi Palace Just south of the Shwemawdaw Pagoda is the magnificent golden Kanbawzathadi Palace of King Bayinnaung, one of the greatest Myanmar monarchs, whose empire stretched from India across to parts of Siam and Laos. The palace was built at the original site of Hanthawady and completed in 1553. The vast complex consisted of 76 apartments and halls, decorated with mosaic tiles and with many bedrooms roofed with solid gold plates. The grand palace was burned down in 1599, apparently as a result of a conspiracy by the kings of Rakhine and Taungoo. What can be seen today is a reconstruction of parts of the palace - the Settaw Saung, the Lion Throne Room and the Bee Throne Room - which was completed in 2003.
Yangon GUIDE
Shwegugale Pagoda Shwegugale Pagoda is thought to have been founded in 1494 during the reign of King Byinnya Yan. The relatively small but shady and enchanting pagoda is interesting for its gu, a cave or tunnel which completely encircles the base of the pagoda, inside which are 64 seated Buddha figures.
Adjacent to the pagoda is a pond with shrines housing the figures of nats - guardian spirits or ghosts. Nats, although not related to the Buddhist religion, are nonetheless popularly worshipped by many Myanmar people, and shrines to various nat figures are found in Buddhist temples and pagodas throughout the country.
Mahazedi Pagoda The white terraced Mahazedi Pagoda or “Great Stupa” is quite unlike most of the Mon-style pagodas built in this part of Myanmar. Dazzling under the tropical sun, the pagoda stands resplendent on the western bank of the Bago River. Built during the 16th century, the Mahazedi Pagoda did not fair well, being partially destroyed during the sack of Bago in 1757 and then completely leveled in the devastating earthquake of 1930. The pagoda as it can be seen today is a reconstruction that was completed as recently as 1982.
Taukkyan Allied War Memorial Cemetery The Taukkyan War Memorial Cemetery, also known as the Allied War Memorial Cemetery, makes a nice side trip on the way back from Bago. Located on the northern outskirts of Yangon, the cemetery is beautifully maintained by the Commonwealth War Graves Commission. Consecrated in 1951, the cemetery houses the graves of Allied personnel killed in Burma during the two world wars, as well as memorials to Commonwealth soldiers who fought and died in Burma during the Second World War but who have no known grave and soldiers that were cremated, according to their faith. The cemetery is a peaceful place to contemplate on life and to remember those who made the ultimate sacrifice.
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