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Suu Kyi backs speaker as Myanmar parliament opens

Posted by pakin On August - 18 - 2015 ADD COMMENTS

NAY PYI TAW — Myanmar’s parliament reopened Tuesday for its final session before November’s national elections, with the spotlight on the influential speaker — who was violently ousted just days ago as head of the military-backed ruling party.

Opposition leader Aung Sang Suu Kyi criticised the manner in which Shwe Mann, a close political ally, had been removed. Hundreds of armed police seized the headquarters of the Union Solidarity and Development Party in the middle of the night, witnesses said, confiscating computers and preventing some members from leaving.

It was a political purge reminiscent of the days of dictatorship in the Southeast Asian country.

“This is not what you expect from a working democracy,” Mrs Suu Kyi told reporters.

The Nobel laureate also slammed an impeachment bill Shwe Mann was being pressured to table — possibly as early as Tuesday.

The bill says parliamentarians who have lost the trust of even 1% of their constituents can be stripped of their seats, meaning Shwe Mann could be a target.

“Ridiculous,” Mrs Suu Kyi said. “It is now clear who the enemy is and who is the ally.”

Myanmar only recently started moving from dictatorship to democracy, but critics say the strings of power behind the quasi-civilian government remain members of the old military elite, including former dictator Than Shwe, who lives a generally secluded life in a sprawling compound in the capital, Nay Pyi Taw.

As elections approach, tensions have been building between President Thein Sein and Shwe Mann, both former generals and members of the governing party. Tensions were exacerbated last week when the names of nearly 100 newly retired military members did not make it onto the party’s candidate lists. Some hardliners blamed Shwe Mann.

The parliament speaker — seen as a reformist — set a no-nonsense tone as parliament resumed Tuesday, immediately rejecting a motion by several USDP lawmakers to suspend the session because of floods and landslides.

The MPs could excuse themselves, he said, but there was important business to attend to in the parliamentary chambers.

Shwe Mann had lost the support of conservatives in the party, in part because of his close ties to the wildly popular Mrs Suu Kyi. The two met for an hour on Monday, apparently to discuss the political upheaval and its potential impact.

There was murmuring Tuesday that polls now scheduled for Nov 8 could be delayed by up to a month.

Mrs Suu Kyi said that while leadership changes within the ruling party were an “internal matter,” if they affect the election, resulting in either a cancellation or delay, “we must not be silent.”

She was also critical of a bill that could lead to Shwe Mann’s impeachment.

Last month, 1,700 members of his constituency in Zayarthiri, located in the heart of the capital, said he violated the law by showing disrespect for the military’s role in parliament. That followed deliberations on a bill that could have ended the military’s right to veto all proposed amendments to the country’s 2008 constitution.

“One percent to the right of recall? It’s ridiculous … it doesn’t make any sense,” Mrs Suu Kyi said. “There are so many things to do. If we start voting on that … we won’t even have time to do the other things.”

Retailers brace for competition

Posted by pakin On August - 10 - 2015 ADD COMMENTS

MYANMAR RETAILERS, riding on an economic boost, anticipate fiercer competition from foreign players once restrictions are lifted.

Win Win Tint, president of Myanmar Retailers Association and managing director of City Mart Holdings, said that Myanmar may allow the entry of international retail chains in the near future, driven by local demands.

“New retail channels such as e-commerce are emerging and we also expect the arrival of foreign retail chains. So, retailers would need to adopt a different strategy, upgrade their service and improve efficiency,” she said.

As of yesterday, there were about 300,000 retailers in Myanmar. Modern retail trade currently accounts for about 10 per cent of fast-moving consumer goods (FMCG) sales and it is still at the early development stage. Established formats in modern retail are department stores, hypermarkets and supermarkets. In three years, convenience stores are also sprouting around Yangon.

Myanmar’s retail market has been expanding fast since the country opened its doors in 2012. The economy in the past four years expanded by over 7 per cent per annum. According to the United Nations, Myanmar’s per-capita income rose from $799.5 in 2010 to $1,125.9 in 2012. World Bank data showed that per-capita income was $1,197.95 in 2014. Retail business has expanded accordingly, with average annual growth of between 7-15 per cent in the past four years.

“We see continued increase in consumer expectations due to rising income, increased ability to travel overseas and accessibility to Internet,” Win Win Tint said.

Yangon has witnessed the fastest growth in the retail industry. With supermarkets in shopping malls being geared towards affluent consumers, traditional retailers such as small shops, local markets and kiosks remain popular among locals.

At present, City Mart – the nation’s largest retailer – imports about 70 per cent of its products from Thailand. Confectionery, snacks and beverages are among the top 10 import items. Though consumer goods are most sought after, Win Win Tint anticipates greater demand for products that offer convenience, like ready-to-eat meals, thanks to rapid urbanisation and lifestyle changes.

“A growing urban population will drive retail demand. The number of supermarkets and convenience stores are also on the rise, particularly in key residential communities and densely populated zones,” said Yinn Mar Nyo, sales and marketing director for the Sule Square Mall and Office Tower, set to open early next year.

Also, she said, many people are becoming addicted to international brands and foresees top-tier retail projects in Yangon in a few years.

“Large-scale and better-quality retail developments are soon to take shape in Yangon, as the city transforms into a modern-day metropolis. The advent of large-scale and upgraded shopping centres will bring further growth in Yangon’s evolving retail market. Similarly, as lifestyle advances, and it also improves buying behaviours,” she said.

Foreign or local, the retailers will have to brace for challenges. According to the City Mart’s owner, the major challenges to the retail business include finance, infrastructure and skill shortage.

“Many businesses are challenged by the high cost of land and high cost of doing business in recent years. Local businesses have very limited financing for expansion and a shortage of qualified workforce. As Myanmar is in the early stage of development, infrastructure is still poor for the development of retail business such as poor connectivity [roads, communication] and electricity,” Win Win Tint said.

She added that most retailer have installed full-scale backup generators to cope with power shortage. She stressed the importance of supply-chain management in the development of retail business, but admitted that the network is not well-established yet and that only a few retailers have a nationwide selling system.

Discovery Yangon’s art scene

Posted by pakin On July - 2 - 2015 ADD COMMENTS

Backyard Travel, the online boutique Tour Operator specializing in unique, insider tours throughout Asia, announced a new tour ‘Art in Yangon: An Unfamiliar Canvas’. This concise city tour introduces travelers to Myanmar’s vibrant arts scene, with a two-day/one-night itinerary that encompasses the city’s best galleries, boutiques, restaurants and artist studios.

Yangon is one of the most charming cities in Southeast Asia, with a stunning mix of historic colonial architecture, shop houses and grand temples. While the urban landscape speaks of Yangon’s history, this exciting art tour uncovers a more contemporary side to the city’s character.

Exploring independent galleries, non-profit arts and crafts stores and pop-up studios, travelers not only gain insight into modern Myanmar art, but have the chance to speak with artists and artisans and support local communities in need. Venues such as the TS1 Pop-up Project, the River Galleries, Deitta Art Gallery and LinkAge Restaurant and Art Gallery, travelers get a comprehensive look at local talent. The tour also visits parts of Yangon not often frequented by tourists, such as Nagar Glass Factory, hidden in the center of the city.

“Yangon is a beautiful city, with traces of traditional Myanmar arts evident at every turn,” says General Manager of Backyard Travel Maeve Nolan. “This tour highlights Yangon’s lesser seen but flourishing contemporary arts, immersing travelers in the scene and putting them in touch with local artists and creative organizations.”

Over 1m plastic cards issued in 3 years

Posted by pakin On June - 22 - 2015 ADD COMMENTS

About 5 per cent of Myanmar’s population has a bank account, but the number of people holding debit or credit cards is now over 1 million, or about 1.8 per cent of the population.

According to the Myanmar Payment Union (MPU), an umbrella organisation for 21 domestic banks, 1 million debit cards have been issued so far. There is no figure for how many credit cards have been issued.

To the issuers, the number is more than satisfactory given that debit and credit cards were just introduced to the cash-based society in 2012. To consumers, the convenience is beyond imagination in a country where cash was until recently the only means of payment. It was a revolution considering that prior to 2012, Myanmar had fewer than 100 ATMs (automated teller machines), compared to over 1,000 now, while no shops accepted cards. And the outlook is bright. In 2013, Myanmar had 0.57 ATMs per 100,000 people, compared to 104 in neighbouring Thailand, according to the World Bank.

Banyar Min Min Htun, a lecturer at Sagaing Cooperative University, prefers using plastic cards to cash. He uses an MPU card issued by the Cooperative Bank.

“It is safer and quicker than using cash or going to the bank to withdraw money. Wherever I go across the country, I just bring the card and don’t bother to carry a lot of cash,” he says.

He uses the card for shopping and money withdrawals. More supermarkets and shops are accepting plastic and ATMs usually allow a maximum withdrawal of Ks300,000 (US$250).

“If I need to withdraw more than Ks300,000, I need to go to two ATMs as MPU cards are accepted by ATMs at all banks. The most obvious advantage is that I do not need to go to the bank and stand in a queue. And I also do not need to take banking hours into consideration. I can withdraw money at my convenience,” he says.

Currently, most plastic cards widely used in Myanmar are debit cards issued by the MPU.

The Central Bank of Myanmar (CBM) formed the coalition in 2011 as the Myanmar Payment System Development Committee. It was renamed the MPU in 2012. The MPU first distributed debit cards with the support of 17 founding members, including state-owned, semi-government-owned and private banks. The MPU is now finalising the process to transform itself into a public company in the next few months.

Bright future for MPU

Zaw Lin Htut, chief executive officer of the MPU, says that more than 1 million MPU cards have been issued and they can be used in every machine at all the member banks. The central bank recently allowed the MPU member banks to issue credit cards.

“MPU cards have spread widely across the country thanks to the support of the central bank,” he said. “With permission to issue credit cards, we expect the number of MPU card users to reach 1.5 million by this year’s end. Over the next three years, that number should rise to 4-5 million cards.”

MPU cards are currently accepted at most of the large shops in Yangon, including three City Mart (the country’s largest supermarket chain) outlets in Myaynigone, Junction Mawtin and Junction 8. The MPU is currently in negotiation with City Mart to have MPU cards accepted in all 20 City Mart branches: 19 in Yangon and one in Mandalay.

“We see a very bright future for plastic cards as the economy opens. If credit cards are issued in the months to come, customers can use their future income in advance. Obviously, this will help increase the number of card users,” he explains.

Zaw Lin Htut sees risk management as key to issuing credit cards.

“Like in other countries, there are risks with issuing credit cards. But our member banks are not new to the business. Most of the banks are long established and experienced. When issuing credit cards, banks may issue two kinds – secure and insecure credit cards – depending on their knowledge and relationship with customers. If a bank does not know much about a customer, a deposit may be required as collateral,” he said.

Credit card risks to issuer banks should be under control now that all MasterCard and Visa cards issued by domestic banks are more or less like debit cards. Cardholders therefore need to fill their cards with cash before using them.

Visa’s goal

In November 2012, MasterCard Worldwide was the first international payments network to issue a licence to a Myanmar bank, paving the way for branded cards to be issued and accepted in the country for the first time.

Visa International, the world’s largest payment network by value, followed shortly afterwards.

Hiro Taylor, country manager of Visa Myanmar, says the network has witnessed double-digit growth but did not disclose the number of cards issued.

Currently eight client banks – AGD, AYA, CB, KBZ, Myanma Apex, Myanmar Oriental, Myanmar Citizen and United Amara – are issuing Visa cards.

The cards can be used to make online purchases or to shop overseas in different currencies. How the banks screen customers varies and depends on the banks’ own policies and processes.

Taylor says that Visa aims to displace cash with electronic payments, which will provide great efficiency and transparency to the economy. The firm therefore works tirelessly with financial institutions, government agencies and related stakeholders to improve card acceptance nationwide.

“As a global payments technology company, we see one of the most valuable contributions we can make as helping to bring more people into the formal financial system. We do so by creating pathways to financial inclusion for the financially underserved through our products, services, technology and payments expertise; financial literacy tools and resources; and our strategic partnerships,” he said.

“We believe access to financial services is essential for progress. Financial inclusion moves people from being untapped and isolated members of our economic system to thriving and contributing participants. Improving access to financial services and electronic payments is a critical building block to help more people improve their lives and lift themselves out of poverty.”

The economic impact of electronic payments on an economy can be profound. Electronic payments added US$983 billion in global economic growth from 2008 to 2012, according to Visa.

“Electronic payment is taking shape in Myanmar and it is crucial that the financial industry as a whole takes the right step. We continue to support the financial sector in capacity building,” said Taylor.

Visa helped establish the Myanmar Risk Management Council in 2013 and ran workshops to educate key stakeholders. Recently Visa held a workshop on mobile financial services which was attended by more than 80 government personnel from 13 ministries. Visa has also sponsored two members of the CBM to study electronic payments at the National University of Singapore.

Visa cards are now accepted by 1,800 retailers, mostly concentrated in tourist destinations such as Yangon, Inle Lake, Mandalay and Bagan. Recently, a deal was struck to allow the use of the cards at City Mart outlets.

They can also be used to withdraw money from 1,150 ATMs nationwide.

“This is particularly good news for tourists buying gifts in Myanmar to take home. Businesses can increase their sales safely and securely, knowing their money will be deposited to their bank accounts the following day.”

Merchant’s viewpoint

May Zin Soe Htet, City Mart’s marketing director, says the chain decided to accept Visa and MPU cards for customers’ convenience.

“For the time being, acceptance of plastic cards has not shown obvious effects on our sales. But we value our customers’ convenience. Now our customers do not need to bring cash when shopping. As the country develops, the use of plastic cards will definitely increase day by day,” she said.

May Zin Soe Htet admits that the chain sometimes faces IT hiccups and wants better online facilities to accept plastic cards.

“Currently, the Internet here is not that good. The system works properly as long as the Internet speed is high. Otherwise, there may be some delays and inconvenience,” she said.

She says City Mart outlets have not yet seen many plastic cards users. On average, each of the three Visa-accepting stores usually process transactions for about 30 Visa cards while the three MPU-accepting branches receive about 15 MPU cards a day.

May Zaw Lin Htut says that Myanmar needs to take time to transform the cash-dominated society into a card-accepting one.

“Thailand and Malaysia applied the practice more than 20 years ago. But they still use cash in some places. Likewise in Myanmar, for the plastic cards, it may take about 10-15 years to cover the whole population,” he said.

“Obviously, Internet speeds have increased since last year. Internet speed and mobile penetration are increasing year by year… More people should get used to using banks. At the same time, banks should also provide more products and services for the convenience of their customers.”

User feedback

Banyar Min Min Htun prefers using an MPU card to a Visa card, as the balance of a Visa card account must be at least US$30. This blocks him from withdrawing more money while an MPU card allows the cardholder to drain all the cash stored.

Su Su, an English teacher at a private language school that employs more than 400 staff nationwide, is using an MPU card for withdrawals. Her school pays her salary through the account.

Su Su says that the biggest shortcoming of the card is the insufficient cash stored in ATMs, especially at the end of the month.

“Generally, it is good except from 3pm-4pm when banks usually calculate the balance. At that time, machines often do not work. And on the first and last three days of every month, the machines regularly run out of cash. They should supply more notes.”

The technology seems unable to catch up with consumer expectations. That is what Chaw Su Hlaing has experienced.

“Earlier this year, I came to a KBZ ATM to withdraw money. The ATM just stopped working after I put my card in. It was not because of an electricity blackout. It was late and nobody was around except for a security guard. I had no other choice but to come back to the bank the next morning to meet the manager. Only then could I withdraw money and get my card back,” she said.

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