Yangon Chief Minister Pledges to Reduce Land Prices for Low Cost Housing

 

NEWS

If real estate housing developers sell homes at a lower cost, then the government can reduce the land price to zero so that the low-cost housing is accessible for everyone, U Phyo Min Thein, Chief Minister of Yangon, said at the monthly meeting between Vice President of Myanmar and local business at UMFCCI on February 22. He added that developers need to build high-rise buildings instead of low-rise buildings, which provide fewer number of apartments. However, developers said that constructing high-rise building increase construction costs making developers unable to sell their homes at lower prices.

(Source: Myanmar Business Today, March 04, 2019)

 

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RESEARCH VIEW

While opportunities for future investments call for more advanced buildings and infrastructures, it is also pertinent to ensure that housing units remain affordable for the locals with different income levels. Despite the abundant supply of raw materials, the lack of domestic manufacturing of construction materials, as the Chief Minister of Yangon stated, results in higher construction cost thereby raising the overall housing market price. In fact, lower construction cost would mean more competitive price for both high-end and low-end buildings, and that, as a result, could attract even more interest from both developers and customers. Hence, we recommend emboldening the domestic production of various construction materials by giving incentives in the form of tax exemption for manufacturing of construction materials to keep up with the demand from the country’s growing need of new buildings.

 

 

Approval given for South Korean industrial complex in Hlegu

 

NEWS

The Myanmar Investment Commission (MIC) has approved the setting up of a South Korean - Myanmar Industrial Complex (KMIC). During a meeting on February 20, the MIC gave its go-ahead for the complex to be established as a joint venture. 

(Source: The Myanmar Times, Mar 1 2019)

 

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RESEARCH VIEW

Since the establishment of bilateral diplomatic relationship in 1975, Korea has been a close and friendly partner country to Myanmar, and Korean businesses have channeled significant amount of FDI into the country just as its other Asian regional neighbors such as China, Singapore and Japan. Aside from the KMIC project allocation of US$110 million, South Korea has also invested $98 million to construct an international-standard logistics hub at Shwe Lin Ban Industrial Zone in Hlaing Thar Yar township, and opened factories at the Thilawa Special Economic Zone (SEZ) as of now. As many Korean manufacturing companies are now interested to expand further, the government should ensure the deployment of fully operational one-stop service centers for SEZs in the country. Meanwhile, given the robust potential for investments in SEZs, the government should be prepared for the challenges faced in setting up factories in the country. We recommend the government to work closely with the municipalities in laying out clear rules and regulations that will help the investors to set up their businesses smoothly in the country.

 

Association needed for quicker e-commerce development: minister

 

NEWS

The second Emerging Asia E- commerce Summit 2019 held in Yangon last week represents a growing harmony between the government and e-commerce businesses and that is positive for the development of the industry, said U Min Min, Deputy Director General of the Department of Trade.

(Source: The Myanmar Times, Mar 1 2019)

 

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RESEARCH VIEW

The ASEAN e-commerce market is still in its infancy, but remains as an important driver of growth across the region. Myanmar stands as one of the untapped markets with many opportunities at a hand’s reach in digital landscape. Currently, e-commerce in Myanmar involves the transactions using digital platforms such as social media, messaging apps and forums. As of 2019, there are an estimate of 220,000 active online buyers in Myanmar contributing 0.07% of the country’s GDP. Nevertheless, there are a few challenges yet to be addressed as there is no formal regulation for registering e-commerce businesses. On a real estate point of view, developers and retailers in the country tend not to migrate totally to e-commerce but in fact use online shopping and social media platforms, especially Facebook, to complement their physical stores. We believe that this is a thriving opportunity that mall operators and retailers should tap.