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Economy, Investment and Trade
Myanmar’s economy to improve in 2018
(19 May 2018) The World Bank has projected Myanmar’s economy to increase to 6.7 percent in 2018 reflecting the administration’s efforts to hasten reforms and improve the financial sector. The organization said the medium-term prospects for the nation looks promising despite some risks. Increase in foreign investment will further boost growth in the country. However, for the growth to happen, the government needs to ensure that it is feasible and inclusive. Although there is growing global and domestic uncertainty especially the Rakhine state issue, the growth is expected to increase to 6.4 percent in 2017 from 5.9 percent in the 2016-17 financial year. This increase was motivated by improvements in the agricultural sector especially in crop production, stronger manufacturing performance, and improving services sector although there was a period in which the tourism and banking sector went through a slowdown due to the Rakhine issue. Inflation, which abated to 5.5 percent in 2017 from 7 percent in the financial year 2016-2017, is anticipated to decrease further to 4.9 percent in 2019.
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First credit bureau to be introduced in Myanmar
(22 May 2018) Myanmar Credit Bureau, a joint venture between the Myanmar Bank Association and Singapore’s Asian Credit Bureau Holdings has obtained a license from the Central Bank to establish the first credit bureau in Myanmar. The bureau is expected to start operations next year with a starting capital of US$2.2 million. The role of the bureau is to gather information on loan repayment histories of borrowers and distribute the profiles to lenders including non-bank financial institutions. This initiative aims to help entrepreneurs in the country to be qualified for loans by refining the risk assessment method and allow lenders to analyse the creditworthiness of borrowers by providing more credit profiles and borrower information. The country believes that this will be the leading step towards interest rate alleviation and eventually endorsement of risk-based pricing for loans.
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Myanmar government takes a loan from Central Bank to finance the country’s deficit
(24 May 2018) Myanmar administration will take a US$476 million loan from the Central Bank of Myanmar (CBM) to aid the fiscal deficit for the six-month interim period, which started on 1 April 2018 and ends on 30 September 2018. Myanmar’s Ministry of Planning and Finance deputy minister U Maung Maung Win said the loan amounts to around 20 percent of the administration’s allowed local borrowings from the central bank, which also follows the Union Budget Law. The country’s focus is to cover 80 percents the administration’s debt requirements through treasury bonds, while the remainder from CBM. The government has pledged to stop its dependence on CBM to address the country’s fiscal deficit in two years.
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Myanmar allows more opportunities for Foreign Direct Investment (FDI) in different sectors
(17 May 2018) Myanmar’s Investment Commission (MIC) has been monitoring the latest developments in the country’s infrastructure framework and the body is looking to open up other sectors for foreign investment. Many foreign investors have shown interest in Myanmar’s education sector when the administration permitted foreigners to make full capital investments on 20 April 2018 and that development spurred MIC to consider opening up other sectors in the country. According to Myanmar’s Directorate of Investment and Company Administration (DICA), MIC is looking at liberalising the insurance sector first as many insurance companies have visited the country to discuss on expanding their services in Myanmar.
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Tightening of security measures for Myanmar Embassy in Pakistan
(31 May 2018) Anti-corruption agencies from Myanmar and South Korea signed an agreement to (21 May 2018) Myanmar presidential emergency funds worth US$237,842 was used to upgrade security features in the Myanmar Embassy in Pakistan as it anticipates possible terror attacks due to the Rakhine issue. There have been a number of rallies held in Pakistan to protest Myanmar government’s treatment towards Rohingya Muslims after the Pakistani Foreign Ministry invited Myanmar’s ambassador to talk about the alleged human rights abuses against Rohingya Muslims. According to the Vienna Convention on Diplomatic Relations, a host country is in charge of providing security for foreign embassies and Pakistan’s diplomatic police force has provided security measures for the embassy staff. However, the police force also recommended the embassy to reinforce the security of the embassy building. The embassy then submitted a list of necessary security measures, namely to build tall walls and high-security gate, to the Union Ministry.
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