Myanmar and Australia have held their first high-level consultation in Naypyitaw on a three-year economic cooperation program, official media reported Tuesday.
The consultation is held between Myanmar's Ministry of National Planning and Economic Development and the Australian Agency for International Development (AusAID) held in the new capital Monday.
They discussed further partnership development among working groups, systematic use of the aid of AusAID in the sectors of health, education, career development, public finance management and census taking, as well as sending technicians for mining industry and experts for ASEAN Economic Community and reform process, said the New Light of Myanmar.
Australia pledged 100 million Australian dollars' (91.87 million U.S. dollars) grant aid to Myanmar in July for its education reform, in addition to a grant of 5 million Australian dollars for Myanmar's peace making process with its ethnic armed groups.
In March 2013, Australia pledged an additional 20 million Australian dollars over two years for the first phase of the new Myanmar- Australia Partnership for Reform.
Aiming to enhance trade and investment ties with Myanmar, Australia has assigned a resident Trade Commissioner to Yangon.
Australia will also lift some restrictions on defense engagement.
The Central Bank of Myanmar will continue to make currency interventions following their adoption of free-floating exchange rates to avoid speculator risks, economist Hla Maung told Mizzima.
Hla Maung said the free-floating move was positive, but that Myanmar would need to take action against high-risk investors if it is to protect its early economic activity.
“It would be dangerous to let the demand and supply theory determine everything at this early point,” he said.
Dr. Aung Thura, a chief executive officer at Thura Swiss Company also pointed out that Myanmar may need to intervene directly in the near future.
He claimed that due to the large black-market operating in Myanmar, authorities will not be able to use interest rates to indirectly control exchange rates, like many other countries.
“The officials concerned have a responsibility to watch not only the exchange rates of the banks but also the currency exchange rates in the black-market,” said Dr. Aung Thura.
Others argue that privately-owned banks in Myanmar are prepared for the free-float exchange, and will not react well to intervention.
Than Lwin, the deputy chairman of Kanbawza Bank, told Mizzima that Myanmar’s currency experts are more than prepared for the financial risks associated with speculators.
“The Central Bank has experts on currency policy making,” says Than Lwin. “I believe the Central Bank has enough global reserve currency to protect itself.”
Dr. Aung Thura claims that Myanmar’s currency intervention should not be viewed as a threat, claiming that similar practices were accepted world wide. He cited the case of Swiss National Bank, pointing out that despite being one of the world’s largest banks, they were still forced to buy large amounts of Pound Sterling to jump start exports.
Deputy Minister for Finance and Revenue, Maung Maung Thein confirmed on 15 July that Myanmar will begin implementing a stock exchange market this year.
Earlier announcements state the stock exchange market will be established by 2015, but preparations are already under way.
“Earlier we planned to begin in 2015, but it would be too late. So, we are beginning this year,” says Maung Maung Thein.
The Central Bank of Myanmar is cooperating with the Daiwa Research Institute and Japan’s Tokyo Stock Exchange to establish Myanmar’s stock exchange. Later this month, Maung Maung Thein says there will be a demonstration on the operation of the stock exchange with the help of a Myanmar IT company.
According to Maung Maung Thein, the “Security Exchange Law” has been put forward to the Lower House in the current ongoing parliamentary sessions. Shortly after the bill has been approved, the stock exchange will be established.
Maung Maung Thein says a relevant committee has been formed in order to ensure a smooth launch for the stock exchange.
“Myanmar needs a huge market to attract financial investments,” says Maung Maung Thein. “Myanmar did not have that market. To establish that market [stock exchange], we have prepared for many years.”
Hla Maung, an economist, says, “It’ll be surprising if the stock exchange can be established in late this year. The sooner the better. But it is a financial market, so we need to have public companies and corporations that can sell shares. If not, the market will be weak and unsuccessful.”
Public companies that will sell shares in the stock exchange have to submit the company’s real status to the supervising committee. However, experts say this will pose a big challenge to existing Myanmar companies as they deal with problems about tax affairs.
Dr. Aung Thura, chief executive officer at Thura Swiss Company, who provides economic research services for public companies in Myanmar, recently told Mizzima, “According to Daiwa, new emerging companies such as KBZ and AGD will enter into the stock market rather than the current public companies when the stock exchange is established in Myanmar.”
Currently, only two public companies have registered at the Myanmar Security Exchange Center [MSEC]. An international economic researcher told Mizzima that if experts spread knowledge about the stock market among Myanmar citizens beforehand, it is likely that the early stage of the stock market will run smoothly.
The stock exchange will be located near Bandoola Garden, where Myawaddy Bank currently stands. The building formerly owned by the Finance and Revenue Ministry is due to be returned to them later this year.
The Ministry of Finance has formed a new internal committee to act as a watchdog on the ministry and ensure that it acts in accordance with the law, the ministry’s deputy minister Dr. Maung Maung Thein yesterday announced.
Just as other government ministries, the MoF has internal audits and statutory audits carried out by the Auditor General’s office. The new internal audit body will assume responsibilities that extend those of the Auditor General.
Dr. Maung Maung Thein will spearhead the committee. Senior officers from the 11 total departments falling under the auspices of the MoF will serve on it.
The new internal audit committee will focus on assessing the MoF’s performance, whether the MoF is providing sufficient backing to banks and insurers and whether the MoF is acting under the law and relevant regulations. The committee will meet twice a month.
“The Auditor General will still check if there is fund misappropriation or embezzlement,” said Dr. Maung Maung Thein. “As pressure mounts over criticism of the MoF, we’re adopting more checks and balances and also monitoring the ministry’s performance.”
Both the public and MPs have decried the MoF in the past for widespread and open practices of bribery. More than 20 officials from the MoF’s Internal Revenue Department – including senior officers – were recently dismissed from the ministry for alleged corruption and ordered to pay back over 2 billion kyat ($200,000) back to the Union Government.
A senior official from the MoF told Mizzima anonymously that the officials were dismissed for tax evasion.
PACIFIC Alpine Co. Ltd., the sole domestic distributor of General Motors’ subsidiary Chevrolet – the newest American entrant into the market – announced that the company will sell Chevrolet’s hallmark Saloon sedan for 25 million kyat ($25,000) by the end of this year.
The company’s chief executive, Zaw Moe Khine, said that the Chevrolet showroom in Yangon should be finished December while a second showroom in Mandalay will be opened in 2014.
He added that the 25 million kyat pricing scheme includes custom duty and transport tax.
“We will start by selling 50 imported cars,” he told Mizzima. He added that Alpine later plans to sell medium-sized cars and pick-up trucks. All purchases will come with a two-year service plan.
GM exports some 4.5 million Chevrolets to 140 countries every year, according to company data, touting the car brand’s low fuel consumption.
South Korea’s Hyundai, Japan’s Mitsubishi and Germany’s Mercedes also plan to open showrooms within Myanmar – but have not yet set a time-frame for plans.
28 Jun Kyat hits new low
The US dollar was trading on Thursday as its highest rate this year, reaching 970 kyat at official counters but as high as 1,000 kyat in outside markets, according to media sources.
One month ago, the kyat stood at 860 to the dollar.
Myanmar media blamed the low exchange rate on the fall in the global gold price and the ongoing gems emporium in Naypyitaw, as well as the uncertain status of Myanmar migrants in Malaysia.
Xinhua News Agency quoted sources saying that many believe the kyat will continue its descent.
On July 1, Myanmar’s Foreign Exchange Certificates, or FEC, is due to be abolished after 20 years in circulation.