Summary

Welcome to the latest edition of our Myanmar update for 2019. We have distilled the top news items into this summary 'speed read'.

New Yangon development – update

28 February 2019 was the deadline for interested companies to submit their expressions of interest (“EOIs”) to the New Yangon Development Co., Ltd (“NYDC”) to be considered for the New Yangon City Phase 1 infrastructure projects (“NYDC Challenge”) including:

  • Power Supply and Distribution;
  • Public Transport System;
  • Cyber Connectivity Infrastructure;
  • Municipal Waste Disposal;
  • Natural Gas Supply and Distribution; and
  • Convention Center.

The NYDC Challenge is modelled on the Swiss Challenge bidding method to allow private companies to assist with the development of New Yangon City. It is largely based on a Public-Private Partnership model.

Following the EOIs, a company will be selected to undertake preliminary works and feasibility studies and prepare the Pre-Project Documents (“PPD”), at its own cost, which will then be publicised for competitive tender bids.

The complete agreement will be publicised and open to challenge by any qualified party subject to strict adherence to the terms and condition of the agreement.

Should the agreement be challenged by a second party, the first party will be allowed to match the offer or forego the opportunity. In the latter scenario, the second party will be awarded with the contract after reimbursing the first party for the costs incurred in relation to the preparation of the PPD. The EOIs to the NYDC.

New beaches opened in Rakhine for hotel and tourism investments

In a bid to draw further tourism investment into Rakhine, the director of Ministry of Hotels and Tourism, U Ye Aung Moe, said that the Rakhine State Government will be opening up new beaches along the Rakhine coast for new hotel projects. Beaches that have been earmarked include Gyite Taw, Maw Yone and Maung Shwe Lay, which are located in southern Rakhine in the Gwa Township near to Ngapali Beach and Kantharyar Beach.

A site visit for interested investors was organised on the second day of the Rakhine State Investment Fair (22 & 23 February 2019) to Maw Yone, Maung Shwe Lay and Kantharyar beaches.

The newly designated beaches are being promoted as good investment opportunities given their proximity to Ngapali Beach, which is a popular tourist destination. 2018 saw more than 60,000 foreign tourists, mainly visiting Ngapali Beach and the Rakhine State’s historical sites.

A survey conducted by the Rakhine State Government showed that the main barriers to entry into beach hotel projects and tourism in Rakhine are the high land prices and poor transport infrastructure. These concerns are being addressed by the slew of infrastructure projects (road and airport construction) that are in the works as well as new projects intended to drive tourism – Mrauk-U new city, Mrauk-U airport, Ponnagyum industrial zone, the Kyaetaw – Mingan Development project, upgrading of the Ngapali airport and the eco-tourism project on Manaung Island.

Official data shows that up to US$9 billion of foreign investment has gone into hotels and tourism, livestock and fisheries and oil and gas in Rakhine; local companies have mainly been involved in hotel and tourism.

Yangon City Development Committee election

Elections are approaching on 31 March 2019 for the Yangon City Development Committee (“YCDC”), with six elected members being chosen to join five government-appointed members as well as township development committee members being chosen. Regional lawmakers have expressed their hopes that the elections will further reform efforts under the 2013 Yangon City Development Law and strengthen the municipal body against corruption and inefficiency, allowing it to tackle problems ranging from unregulated street vendors and littering to closer business regulation and urban planning.

Closer business regulation may be particularly relevant in light of the recent inefficiencies in YCDC-run livestock and agricultural businesses identified by the Auditor General, which reported that five out of fourteen YCDC-run businesses have been loss-making for five consecutive years. In response to criticism from members of the regional parliament, the YCDC has announced the closure of four of these businesses.

The Mayor of Yangon has placed blame for the poor performance of these businesses on improper management prior to his administration taking office, while also noting high investment costs when crops were switched, a lack of buyers for products, and insufficient technology to maintain livestock profitability.

Rally held in Yangon in support of changes to the constitution

Following the creation of a parliamentary committee to draft proposed amendments to the 2008 constitution and responses by the military arguing that the National League for Democracy (“NLD”) is using the wrong procedure for constitutional reform, a rally has been held on 26 February 2019 in Yangon in support of reform efforts.

Marking the second demonstration in the commercial capital of Myanmar in a week, several thousand turned out in support of the NLD’s proposal to examine the constitution and introduce new reforms. The NLD has not yet clarified the provisions it will seek to revise, although as referenced in our February 2019 postcard there are a number of proposals which are predicted to be under discussion. In particular, the provisions constitutionally guarantees the military’s 25 percent allotment of parliamentary seats and requires more than 75 percent approval from lawmakers to amend the Constitution – effectively conferring veto rights.

The Myanmar military has pushed back strongly against the mechanism of reform being pursued, and has highlighted the need for some contentious elements of the constitution as being necessary to safeguard the transition to a multi-party democracy and ensure control of the country remains in the hands of the Myanmar people.

However they have expressed openness to changes generally, stating that they would participate in the process and proposing a reform to allow the appointment of regional chief ministers by regional legislatures. The Union Solidarity and Development Party, with support from the military, has put forward a bill to amend this section. Some political analysts have raised concerns that this may in fact strengthen the military’s political position.

Rakhine State – update

The Institute of Southeast Asian Studies has produced a survey report, indicating that the Rohingya situation remains a key issue in the region, with 66.5 percent of respondents supporting a more proactive, mediation-focused response to solving the crisis, and only 14.6 percent favouring non-involvement. The survey had over a thousand participants from across Southeast Asia.

This has tended to align with growing international sentiment towards the crisis, with UN Secretary-General Antonio Guterres criticising the Myanmar government's efforts as being too slow, and with nine UN Security Council members, including the USA, UK, and France, calling for a session to debate the latest developments.

The Organisation of Islamic Cooperation has also taken the further step of unanimously adopting a resolution to pursue legal recourse through the International Court of Justice. The resolution followed from lengthy negotiations which culminated in the recommendation to take legal action relating to crimes against humanity and human rights violations in the case of the Rohingyas.

The refugee crisis across the border in Bangladesh continues to worsen, with the government of Bangladesh stating that it cannot accept any more Rohingya refugees after taking in more than 1.1 million. Plans are also proceeding to relocate more than 100,000 refugees to Bhashan Char, a remote islet, by mid-April – despite safety concerns raised by international aid groups, the United Nations, Human Rights Watch, and Amnesty International.