Mekong Monitor: German firms in Myanmar plan on reducing investments compared to pre-COVID-19 period
Photo Credit:The Myanmar Times
TRADE, ECONOMY, AND INVESTMENT
German firms in Myanmar plan on reducing investments
(12 August 2020) A business outlook survey report recently released by the Delegation of German Industry and Commerce in Myanmar found that about two thirds of the companies surveyed plan to reduce investments compared to before COVID-19. The majority of companies also expect the economy to recover by 2021 at the earliest, while 46.7% expect an economic recovery to take longer. More than two thirds of the companies see the lack of business support measures as the current main challenge. Nevertheless, more than 86.0% of the companies surveyed said they remain committed to Myanmar as a permanent location for business. Total trade volumes between Myanmar and Germany surpassed US$820 million in fiscal year 2018/2019. Myanmar exported US$190 million worth of goods, mainly machinery and pharmaceutical products from Germany so far this year.
Trade association to start brokering trade between India and Myanmar after COVID-19
(12 August 2020) The Upper Myanmar India Association plans on starting its own trade brokering business to facilitate trade between India and Myanmar after the COVID-19 pandemic is over. The association’s chair, U Ba Yan, stated that they intend to help Indian traders connect with their counterparts in Myanmar. There are about 150 members in the association. Trade between both countries have come to a halt since COVID-19, with trade only conducted through maritime routes due to the closure of land borders. In the fiscal year 2018/2019, total trade between Myanmar and India reached US$201 million, with exports accounting for US$177.5 million. Total border trade as of 31 December 2019, amounted to US$34 million.
Dung Quat oil refinery processes its first batch of Russian Sokol crude oil
(10 August 2020) Vietnam’s Dung Quat oil refinery processed its first batch of Russian Sokol crude oil on a trial basis, as the owner of the facility, state-run PetroVietnam, seeks to diversify its crude oil sources. Dung Quat’s traditional crude oil source, the Bach Ho field, has seen shrinking output in recent years. The refinery imported more than 710,000 barrels of Sokol crude oil in July 2020 to mix with other types of crude oil for a test run. In 2019, Dung Quat processed its first batch of West Texas Intermediate (WTI) and Bonny Light crude oil, and the refinery plans to import 8 million to 10 million barrels of these two types of crude in 2020.
Cambodia expected to sign bilateral FTA with China as the EU enforces sanctions on exports
(12 August 2020) Cambodia is expected to sign a bilateral FTA with China in the near term as the EU enforces trade sanctions against the country for alleged human rights violations. On 12 August 2020, the EU enforced tariffs on about 20% of Cambodia’s exports to the bloc. The sanctions came after a year-long review by the EU (concluded in February 2020), which recommended partially suspending Cambodia’s privileges under the Everything But Arms (EBA) scheme. The privileges are vital for Cambodia’s US$10 billion garment and footwear sector; Cambodia sent about 25% of its exports to the EU in 2019. Cambodia now faces tariffs of up to 12% on 40 items it exports to the EU, including travel goods, sugar, and some garment and footwear products. According to analysts, Cambodia’s FTA with China, which focuses on agricultural exports, will do little to help the country’s apparel sector, which employs more than 900,000 workers.
Former banker Predee Daochai appointed as new finance minister in revamped cabinet
(12 August 2020) The former co-president of Thailand’s second-largest lender Kasikornbank Pcl, Predee Daochai was appointed as Thailand’s new finance minister in Prime Minister Prayuth Chan-Ocha’s revamped Cabinet on 12 August 2020. A former senior executive of PTT Pcl, Supattanapong Punmeechaow, was named as deputy prime minister and put in charge of the Energy Ministry. This comes as Thailand’s economy is forecasted by the finance ministry to contract by 8.5% in 2020. The country’s economy is facing its worst performance due to both COVID-19 and student protests. According to a finance ministry source, Predee is expected to call for a meeting with top executives at the ministry for an update on economic conditions and forthcoming prospects to prepare measures to manage the economy.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.