Saudi’s PIF eyes $5bn Oman investments

scion Industrial engineering

The Public Investment Fund (PIF) announced that it has signed a Memorandum of Understanding (MoU) with the Oman Investment Authority (OIA).

The MoU is intended to expand cooperation and investment between the two entities, enabling new and promising investments in Oman’s rapidly growing economy.

PIF to invest in Oman
The MoU provides benefits and incentives for PIF and its portfolio companies, which intend to unlock investment opportunities in Oman.

The MoU also represents a significant milestone in PIF’s and OIA’s strategic partnership as it aims to expand PIF’s portfolio in Oman, building on the recent establishment of the Saudi Omani Investment Company (SOIC), a PIF-wholly owned company, which intends to invest up to $5bn in promising sectors in Oman.

SOIC recently closed its first investment in Oman as a 20 per cent anchor investor in Abraj Energy Services’ IPO and continues to seek other investment opportunities with OIA and its companies.

Through this MoU, Public Investment Fund aims to streamline its investment activities in Oman across a wide range of asset classes and target industries.

The OIA is expected to explore attractive investment opportunities for cooperation and partnership with Public Investment Fund, in addition to providing all aspects of support required in the Omani market.

Deputy Governor and Head of MENA Investments at Public Investment Fund Yazeed A. Al-Humied said: “This MoU is an important step in further strengthening the relationship between PIF and OIA to expand investment and cooperation in the fast-growing Omani economy.

“PIF aims to create long-term strategic partnerships in the region that support the creation of sustainable returns, deliver value to local economies, maximize PIF’s assets, and diversify the Saudi Arabian economy in line with Vision 2030.”

Deputy President for Investment at OIA Mulhem Basheer Al Jarf said: “This MoU builds on our existing relationship with PIF and enables greater cooperation, driving economic diversification in Saudi Arabia and Oman.

“It aims to facilitate partnership opportunities for the private sector in both countries, in alignment with OIA’s efforts to attract FDI to the Sultanate of Oman through Oman’s 2040 vision.”

As a key government entity responsible for strategic investments, OIA plays a leading role in Oman’s efforts to diversify the economy, foster sustainable development, and create a prosperous future for its people.

By attracting capital, championing innovation, and implementing strategic initiatives, OIA plays an instrumental role in advancing Oman’s economic growth, elevating its global competitiveness, and driving the nation toward a prosperous and resilient future.

Source:https://www.arabianbusiness.com/money/sovereign-wealth/saudis-pif-eyes-5bn-oman-investments

Saudi’s PIF eyes $5bn Oman investments

The Public Investment Fund (PIF) announced that it has signed a Memorandum of Understanding (MoU) with the Oman Investment Authority (OIA).

The MoU is intended to expand cooperation and investment between the two entities, enabling new and promising investments in Oman’s rapidly growing economy.

PIF to invest in Oman
The MoU provides benefits and incentives for PIF and its portfolio companies, which intend to unlock investment opportunities in Oman.

The MoU also represents a significant milestone in PIF’s and OIA’s strategic partnership as it aims to expand PIF’s portfolio in Oman, building on the recent establishment of the Saudi Omani Investment Company (SOIC), a PIF-wholly owned company, which intends to invest up to $5bn in promising sectors in Oman.

SOIC recently closed its first investment in Oman as a 20 per cent anchor investor in Abraj Energy Services’ IPO and continues to seek other investment opportunities with OIA and its companies.

Through this MoU, Public Investment Fund aims to streamline its investment activities in Oman across a wide range of asset classes and target industries.

The OIA is expected to explore attractive investment opportunities for cooperation and partnership with Public Investment Fund, in addition to providing all aspects of support required in the Omani market.

Deputy Governor and Head of MENA Investments at Public Investment Fund Yazeed A. Al-Humied said: “This MoU is an important step in further strengthening the relationship between PIF and OIA to expand investment and cooperation in the fast-growing Omani economy.

“PIF aims to create long-term strategic partnerships in the region that support the creation of sustainable returns, deliver value to local economies, maximize PIF’s assets, and diversify the Saudi Arabian economy in line with Vision 2030.”

Deputy President for Investment at OIA Mulhem Basheer Al Jarf said: “This MoU builds on our existing relationship with PIF and enables greater cooperation, driving economic diversification in Saudi Arabia and Oman.

“It aims to facilitate partnership opportunities for the private sector in both countries, in alignment with OIA’s efforts to attract FDI to the Sultanate of Oman through Oman’s 2040 vision.”

As a key government entity responsible for strategic investments, OIA plays a leading role in Oman’s efforts to diversify the economy, foster sustainable development, and create a prosperous future for its people.

By attracting capital, championing innovation, and implementing strategic initiatives, OIA plays an instrumental role in advancing Oman’s economic growth, elevating its global competitiveness, and driving the nation toward a prosperous and resilient future.

Source:https://www.arabianbusiness.com/money/sovereign-wealth/saudis-pif-eyes-5bn-oman-investments

Schneider Electric re-establishes and targets the African market : The multinational company has announced its big return to Algeria

Scion Industrial Engineering

Schneider Electric is making a comeback in Algeria, a reappearance and a geo-economic and strategic redeployment both announced the day before yesterday and during a press briefing held on the side-lines of the 54th Algiers International Fair (FIA 2023), through which Director General of Schneider Electric Group, Samuel Philippe, informed the Group’s main objectives on its recovery of the largest country in Africa and the Arab world. The French multinational, Schneider Electric, wants to win back Algeria and become a digital partner and a solid supplier of household appliances and professional equipment, through its big return to Algeria.

The representative of the multinational Schneider Electric stated that the objective of his Group is to “be present on the Algerian market, to introduce new household appliances and high-end professional equipment with well-designed prices for the Algerian market but also to integrate the labour rate in Algeria and also to introduce a new training system, to export products made in Algeria to the African market, to bring our know-how through our support, and to become a major industrial and long-term partner for Algeria, all this with our Algerian partner of Sacomi”, stated the DG of Schneider Electric, Samuel Philippe.

Source: https://algeriainvest.com/news/schneider-electric-se-reimplante-et-vise-le-marche-africain-la-multinationale-a-annonce-son-grand-retour-en-algerie

Bahrain joins industrial partnership for sustainable development

Scion Industrial Engineering

Bahrain has now joined the UAE, Egypt, and Jordan to become the fourth member of the Industrial Partnership for Sustainable Economic Development at its second Higher Committee meeting held in Cairo, Egypt. Bahrain will boost the partnership’s total industrial manufacturing value from $106.26 billion to $112.5 billion. The Partnership will focus on textiles and clothing among other sectors in the next phase.
Bahrain possesses a strong industrial sector with more than 9,500 companies and 55,000 employees as well as industrial foreign direct investments worth $4.3 billion. The UAE, Egypt, Jordan, and Bahrain represented 30 per cent of the Middle East and North Africa’s industrial contribution to the GDP, adding up to industrial exports worth $65 billion in 2019. The combined population of the countries is 122 million, which is 27 per cent of the Middle East and North Africa and 49 per cent of the region’s youth population under 24.

In May 2022, the UAE, Egypt, and Jordan had launched the Industrial Partnership for Sustainable Economic Development in Abu Dhabi. The initiative aims to establish integrated industries that contribute to diversifying the economy, promoting its growth and providing specialised job opportunities.

In the first phase, the Partnership has shortlisted 12 projects costing $3.4 billion, of the 87 proposals it received for setting up industrial projects in fertilisers, agriculture and food sectors. Along with textiles and clothing, the Partnership will focus on chemicals, plastics, and metals in the next phase.

Foreign direct investment in the UAE, Egypt, and Jordan touched $151 billion between 2016-2020, which is about 42 per cent of the new foreign direct investment in the Middle East. In 2019, the countries exported goods valued at $433 billion in total, while the imports added up to around $399 billion.

SOurce:https://www.fibre2fashion.com/news/textile-news/bahrain-joins-industrial-partnership-for-sustainable-development-282128-newsdetails.htm

Kuwaiti aircraft leasing major secures $75m financing deal

scion Industrial Engineering

Kuwait-based ALAFCO Aviation Lease and Finance Company has signed a financing agreement worth $75 million to strengthen its operations as the travel industry looks to rebound from the global coronavirus pandemic.

The Islamic Corporation for the Development of the Private Sector (ICD) and ALAFCO signed the four-year syndicated secured financing agreement with $50 million from ICD making it the lead financier in the deal.

The agreement comes after the aviation sector has been one of the hardest hit sectors during the pandemic.

Ayman Sejiny, CEO of ICD, said: “We are very pleased to support ALAFCO in its efforts as a leading player in the aircraft leasing market following Islamic finance principles.”

Adel Ahmad Albanwan, CEO of ALAFCO said: “The agreement demonstrates the confidence ICD has in ALAFCO’s business model, its long-term sustainability and the outlook of the aviation sector.”

ALAFCO is an aircraft leasing company based in Kuwait and is listed on the Kuwait Stock Exchange. It has major institutional shareholders including Kuwait Finance House (KFH), Gulf Investment Corporation (GIC) and Kuwait Airways Corporation (KAC).

Its portfolio consists of 79 Airbus and Boeing aircraft, leased to 23 airlines in 15 countries across Americas, Africa, Asia-Pacific, Europe, and the Middle East.

SOurce:https://www.arabianbusiness.com/industries-banking-finance/469702-kuwaiti-aircraft-leasing-major-secures-75m-financing-deal

Saudis triumph in oil market with comeback from the coronavirus crisis

scion Industrial Engineering

When the OPEC+ alliance of oil producers gathers next week, group leader Saudi Arabia can savor a moment of triumph.

Eighteen months after slashing crude production during the pandemic, Riyadh is set to pump at almost pre-Covid levels of 9.8 million barrels a day this month as a recovering global economy clamours for energy supplies.

Furthermore, by bringing those shipments back slowly enough to avert a new surplus, Saudi Energy Minister Prince Abdulaziz bin Salman has revived crude prices to $80 a barrel. That’s swelled the kingdom’s petroleum revenues to a three-year high, putting them on track for an even bigger payout in 2022.

“OPEC+ has had a very good year,” said Ben Luckock, co-head of oil trading at commodities merchant Trafigura Group. “They have delivered: they have managed to thread the needle.”

That’s a far cry from the tumult of last March, when the plunge in fuel demand briefly pitched Organization of Petroleum Exporting Countries and its partners into a vicious fight over customers. Those bitter memories seem very distant as the 23-nation network — jointly led by the Saudis and Russia — prepares to meet on monday.

If there’s a threat to the delicate balance OPEC+ has achieved, it’s that the market could overheat and prices rise too high.

The alliance has signaled it will stick with its schedule of modest production increases by approving another 400,000 barrel-a-day increment for November. But the market has shifted since that road map was agreed in July.

The shortage of natural gas, which has sent prices to the equivalent of $190 a barrel, is spurring a switch to oil products for heating and manufacturing, boosting overall demand. U.S. oil production is still recovering from Hurricane Ida, which has knocked out a total of almost 35 million barrels after slamming the Gulf of Mexico a month ago — equivalent to almost two full months of OPEC+ supply increases.

Anxiety among key consuming nations is palpable, especially if they end up experiencing a cold winter. China has instructed top energy firms to secure supplies at any cost. U.S. President Joe Biden’s administration says it has reminded OPEC of the need to support the recovery, and National Security Adviser Jake Sullivan met with Saudi Crown Prince Mohammed bin Salman this week.

“OPEC will come under increasingly intense pressure from Washington to open the production release valve and cap the upside” in prices, said Helima Croft, chief commodities strategist at RBC Capital Markets. “An increase beyond the 400,000 barrels a day is a live option for Monday.”

That’s a view shared by the world’s largest independent trader, Vitol Group. Not only is demand being boosted by the shortage of natural gas, the supply outlook is tightening as prospects diminish for a swift deal to revive Iranian exports, said Chris Bake, the company’s head of origination.

Tehran and Washington have been involved in negotiations to reactivate a nuclear accord — and lift U.S. sanctions on Iranian oil shipments — but the talks have so far made little headway. As a result, roughly 1.4 million barrels a day of Iranian crude that traders thought might be entering the market in late 2021 remains absent.

Bigger Boost?
Some OPEC+ delegates say privately that the increase approved at Monday’s meeting could be bigger than the scheduled 400,000 barrels a day. Scenarios for larger hikes have been considered, said one official.

The Saudis themselves don’t want to see prices spiral toward $100 a barrel, as excessive fuel costs would curtail demand and stimulate a revival in U.S. shale output, according to people familiar with the kingdom’s thinking.

A spike in crude prices — just weeks before world leaders gather in Glasgow, Scotland, for a fresh round of climate talks intended to shift the world away from fossil fuels — could boost support for the transition to renewable energy.

But the kingdom is not yet convinced that crude’s jump above $80 in London earlier this week reflects a genuine supply shortage, the people said.

OPEC+ is likely to wait and see whether the natural gas deficit bolsters oil demand “materially” before speeding up the return of output, said Amrita Sen, chief oil analyst and co-founder of consultant Energy Aspects Ltd. Such steps may be taken “in the future, but not yet.”

Source:https://economictimes.indiatimes.com/news/international/saudi-arabia/saudis-triumph-in-oil-market-with-comeback-from-the-coronavirus-crisis/articleshow/86701270.cms

Central Bank digital currencies: The future of money?

Scion Industrial Engineering

While the pace of the transition varies wildly from country to country, the tide of thought is gradually turning in favor of Central Bank digital currencies (CBDCs). In our latest insight piece, we examine what is motivating central banks to take this step, and the potential implications of CBDC adoption for the economy.

The tiny island-nation of the Bahamas—a place of palm-fringed beaches, azure waters and laid-back locals—seemed an unlikely place to kick off what could be a revolution in global finance.

But that was exactly what happened on 20 October 2020, when the Central Bank of The Bahamas launched the sand dollar, the world’s first central bank digital currency (CBDC) to be made available to the general public. Akin to a digital form of cash, CBDCs are distinct to typical electronic balance sheets in that they act as a direct claim on the central bank rather than on financial intermediaries, and sit in standalone “digital wallets” instead of traditional bank accounts.

The Bahamas wasn’t alone for long: A few weeks later, the Eastern Caribbean Central Bank launched its own digital currency, taking the total number of countries with operational CBDCs to five. Interest extends well beyond the sunny shores of the Caribbean: 81 nations are now actively investigating the technology, while 14 are at the pilot stage, according to data from the Atlantic Council.

Among major economies, China is leading the pack. Domestic trials are well advanced, with the total value of transactions using the e-yuan standing at over USD 5 billion, and more than 20 million citizens holding digital wallets. A further ramp-up is likely ahead of the 2022 Beijing Winter Olympics, which the government views as a chance to showcase the nation’s tech prowess.

In contrast, Western central banks have taken a more measured approach, content for now to publish research papers, engage with industry participants or—in the case of the central banks of Sweden and South Korea for instance—dip their toes in the water via simulated pilot schemes.

While the pace of the transition varies wildly from country to country, the tide of thought is turning in favor of CBDCs. The scarcity of physical cash, amid bank branch closures and a shift to online payments—trends which have been accelerated by the pandemic—is one reason. But more important is the emergence of privately-owned digital currencies, which could undermine the role of central banks at the heart of the financial system. For the U.S. there is an additional concern, with digital currencies raising question marks over the dollar’s future role as the global reserve currency.

Perhaps counterintuitively, the largest and best-known cryptocurrencies, such as Bitcoin or Ethereum, likely pose the least threat to the dominance of monetary authorities; their highly unpredictable nature makes them ill-suited as a store of value—a crucial prerequisite for money.

On the other hand, digital currencies which are linked to underlying assets—the cryptocurrency Tether is pegged to the USD for example—are of greater concern. These so-called “stablecoins”, far less volatile and thus more useful as a means of payment, have provided the rocket fuel for an ongoing boom in decentralized finance—an over USD 100 billion ecosystem which allows users to trade financial products without the involvement of banking regulators.

The rise of cryptocurrencies has also coincided with the growing presence of technology firms in the financial services space. In China, tech giants Alibaba and Tencent now account for over 90% of the mobile payments market. In the West, a vast number of banks are reliant on the cloud computing infrastructure of Amazon Web Services, Microsoft Azure or Google Cloud. And when it comes to digital currencies, Facebook could begin trials of its own, Diem, later this year.

The market power of these corporate behemoths, with their strong network effects and troves of consumer data, is already generating pushback from governments. In recent months, Joe Biden has signaled his desire to beef up U.S. antitrust regulation, while the EU is currently drafting new rules to rein in Big Tech, and Beijing has launched an assault on some of the country’s best-known homegrown IT firms in a bid to boost competition. Central bankers’ growing interest in CBDCs is thus merely another front in the ongoing battle between markets and the state for control over the economy.

What are the upsides of digital currencies?
Yet there is more to the rising popularity of CBDCs than a simple desire to push back against an encroaching private sector. It is no coincidence that early adopters have been small Caribbean island nations for instance; their fragmented geography makes traditional bank branches difficult to get to, and frequent natural disasters can leave bricks-and-mortar stores and transport infrastructure out of action for prolonged periods.

CBDCs offer a potential solution, by allowing citizens in remote areas to access financial services and pay for goods via their digital wallets without ever stepping foot in a bank, creating a checking account or even having access to the internet.

“After Hurricane Dorian [in 2019], it took banks more than a year to get their branch facilities restored. There are one or two banks that are still in the process of getting back to the state they were in,” commented John Rolle, governor of the Central Bank of the Bahamas, in a recent interview with Bloomberg. “Commerce in those communities is a little bit hamstrung. If you wanted to quickly set up a system where people could trade credit—or anything of that nature—having the wireless platform enables you to do that.”

A lack of banking services is far from unique to the Caribbean. According to World Bank data, there were 1.7 billion adults without a checking account in 2017. Even in the U.S., one of the world’s wealthiest nations in per-capita terms, over 5% of households were still unbanked in 2019, and 14% of adults did not use a payment card in 2017. This huge pool of citizens could stand to benefit from the introduction of CBDCs.

There are other possible upsides too. Publicly-managed digital currencies could provide an electronic paper trail of all transactions, helping to clamp down on fraud and organized crime—particularly if physical cash is replaced entirely. Cross-border payments, which often remain a costly, drawn-out process, have the potential to be simpler, cheaper and more efficient. CBDCs would render monetary policy transmission near-instantaneous, with central banks able to tweak in real time the interest that citizens receive on money stored in digital wallets, allowing for greater fine-tuning of the economy.

If combined with digital IDs, policy could also be made more targeted. For example, a subsidy for underprivileged families paid in digital currency could be programmed to be spent exclusively on food, education or health. Stimulus in the form of helicopter money to drive an economic recovery could be issued with an expiry date, encouraging households to frontload consumption and provide a boost to activity when it’s needed most.

What are the drawbacks of digital currencies?
For now, these purported benefits remain largely hypothetical. The rollout of digital currencies is still at an early phase: In the case of the Bahamas, there were 75,000 sand dollars in circulation at the end of June according to Central Bank data, compared to 500 million dollars in conventional cash.

When it comes to financial inclusion, CBDCs alone may not tackle the root cause of the problem. Factors such as technological illiteracy, a lack of trust in institutions and privacy concerns could be just as or more important than a lack of access to traditional banking services. Plus, some of the oft-cited upsides can be achieved through other means: Hong Kong for instance recently rolled out perishable vouchers to boost household spending via pre-existing fintech apps and the city’s Octopus payment card.

The technology could also have its downsides. Digital wallets would become a prime target for hackers, with large-scale cybersecurity breaches having the potential to critically undermine confidence in the currency. The ability for public authorities to track all financial movements in real time threatens to undermine citizens’ right to privacy. And reserves will drain from the banking system as customers reallocate savings to CBDCs, raising banks’ funding costs and potentially having a negative knock-on effect on credit issuance.

“As deposits migrate to new forms of digital money, banks are assumed to restore their liquidity positions, and hence their ability to continue lending, by issuing long-term wholesale debt”, commented the Bank of England in a recent discussion paper. “Since this is more costly than deposit funding, overall funding costs are assumed to rise. An increase in banks’ funding costs is assumed to increase interest rates on new bank lending.”

Periods of economic crisis could even see full-scale bank runs as households seek refuge in the safety of a Central-Bank-backed currency. As the Bank for International Settlements commented: “While system-wide bank runs into cash are now very rare, given deposit insurance and bank resolution frameworks, there is the possibility that a widely available CBDC could make these events more frequent and severe, by enabling ‘digital runs’ towards the Central Bank with greater speed and scale than is possible with cash.”

To the extent that the Central Bank’s remit expands—such as by directly providing retail services to customers—this could weigh on efficiency and the private sector’s ability to innovate. On the other hand, an overly hands-off role for public authorities could simply lead to renewed market concentration, only this time in the field of digital currencies rather than traditional payments.

Meanwhile, there are fears that CBDCs could undermine domestic currencies by making foreign alternatives readily available, hampering monetary policy transmission in the process. The Argentinian government would be hard-pushed to persuade denizens to continue saving in continually-depreciating pesos if they could easily access digital U.S. dollars, for instance.

The devil’s in the detail
The Bahamas has provided its own answers to some of these concerns. Sand dollars can be accessed via prepaid cards as well as through a mobile app, in a move designed to boost take-up of the currency among less tech-savvy citizens. Limits are in place on account balances and monthly transactions to avoid a sudden pull-out of funds from the traditional financial sector. And the Central Bank has adopted a hybrid architecture, building the infrastructure, technology and regulations but delegating the provision of retail services to a list of vetted firms, in order to harness the creative energy of the private sector. At the same time, competing digital wallets are designed to be interoperable, avoiding consumers becoming trapped in a single company’s digital ecosystem, as is currently the case with mobile payments in China.

This highlights a crucial point: CBDCs, in and of themselves, have the potential to do both harm and good. It is the framework in which they operate that will be key in determining their use to society. On the domestic front, the Bahamas’ model of restrictions on digital currency holdings and an oversight role for monetary authorities appears a sound way to go—at least in the early stages. An even more cautious initial approach could be to limit the use of the digital currency to financial firms as a way of smoothing interbank payments—so-called “wholesale CBDCs”.

Internationally, collaboration between different governments on aspects such as currency design and interoperability will be crucial to ensure that CBDCs realize their potential to facilitate overseas payments. At the same time, rules over non-resident FX holdings will be needed to avoid the erosion of local currencies.

“Central banks stand at the centre of a rapid transformation of the financial sector and the payment system. Innovations such as cryptocurrencies, stablecoins and the walled garden ecosystems of big techs all tend to work against the public good element that underpins the payment system,” said the Bank for International Settlements. “The eventual outcome will depend not only on technology but on the underlying market structure.”

Source:
https://www.focus-economics.com/blog/posts/central-bank-digital-currencies-the-future-of-money

Finance Firms Given 15-month Regulatory Grace Period if No-Deal Brexit

Scion Industrial Engineering

British regulators will give banks, asset managers, insurers and brokers until mid-2020 to fully comply with rules that replace European Union law in the event of a no-deal Brexit.

The Bank of England and Britain’s Financial Conduct Authority (FCA) on Thursday published a “near final”version of the rulebook that would come into effect if Britain leaves the EU without a transition deal.

Britain has already turned EU laws into UK statutes, but this “onshoring”entailed some changes to function properly and financial firms have said they would have limited time to comply if there is a no-deal Brexit, meaning they would be in breach of regulation and face possible sanction.

“In most cases, we plan to allow firms a period of 15 months to adapt,”the FCA and BoE said in separate statements.

Financial firms have been planning for all forms of Brexit since Britain voted in June 2016 to leave the EU, with the bloc as well as the UK putting in place measures to avoid markets falling off a “cliff edge”if there is a no-deal Brexit.

But FCA chief Andrew Bailey told UK lawmakers on Wednesday that despite the preparations, he could give no assurance that a no-deal Brexit would not disrupt finance.

“This grace period will offer relief and a degree of regulatory predictability,”Jonathan Herbst, global head of financial services at Norton Rose Fulbright law firm, said.

The final version of the rulebook would be published on 28 March, a day before Brexit is officially due to take place on March 29, if there is no deal.

If there is a transition deal, financial firms would continue under EU rules until the end of 2020 when the UK wants new, long-term trading terms with the bloc to start.

FCA executive director international, Nausicaa Delfas, said Thursday’s announcement was a significant milestone in the financial sector’s preparations for a no-deal Brexit.

“They ensure that there is a functioning regulatory regime from day one, and that firms are clear as to the requirements they need to meet by end March 2019 and beyond, so they can continue to meet the needs of their customers,”Delfas said.

Source:https://www.mmbiztoday.com/articles/finance-firms-given-15-month-regulatory-grace-period-if-no-deal-brexit

Myanmar launches trade, investment project with UK support

Scion Industrial Engineering

The Ministry of Commerce together with the Directorate of Investment Administration (DICA) and the International Trade Center (ITC) launched the Trade and Investment Project (TIP) on Monday with the aim of boosting Myanmar’s business ecosystem by improving trade and investments.

The TIP, which would run from 2019-21, is funded by a US$5.28 million grant from the UK’s Department for International Development (DFID) with technical assistance from the ITC, a multilateral agency based in Geneva.

The project’s strategic focus include improving trade competitiveness and business environment through updating National Export Strategy (NES), supporting investments in building productive capacities as well as expanding public and private trade and investment support services to micro, small and medium enterprises.

The TIP will also improve the investment promotion through the Myanmar Investment Promotion Plan (MIPP), and enable priority sectors growth through specialized support for the private sector.

The current NES, which runs from 2015-19, has a list of 11 prioritized sectors, which includes rice; beans pulses and oilseeds; fisheries; forestry products; textiles and garment; rubber; tourism; information and promotion; trade facilitation and logistics; access to finance; and quality management as supporting services to improve export.

The Ministry of Commerce will be adding fruits and vegetables, gems and jewelry, handicrafts, processed food products and digital business as the potential export sectors for the updated NES (2020-25).

The Ministry of Commerce’s permanent secretary U Aung Soe said the states and divisions of the country will then develop the prioritized sectors assigned to them following the NES’s updating of these sectors.

He said the NES will need to address how the country can leverage new opportunities through the creation of sustainable agro-processing, manufacturing and services jobs.

U Aung Soe added that it would also be important for trade to be inclusive and reach all the states and divisions, as well as promote the building of productive capacities.

Meanwhile, DICA Director General U Aung Naing Oo said seven states and divisions will be chosen for the TIP implementation, which will also support the MIPP.

ITC Executive Director Arancha Gonzalez said Myanmar has great growth potential as the TIP will work with private and public sector partners to capitalize on these opportunities and help the country to position itself for greater investment and deeper regional integration.

The DFID’s senior economist and inclusive-growth team leader Tom Coward said the TIP will support economic development in the states and divisions as well as generate jobs and improve incomes.

The launch of TIP comes at a time when exports appear to be gaining on imports. Data from the Ministry of Commerce showed the trade deficit for the first four months of the 2018-19 fiscal year, which starts in October and ends in September, has declined with imports increasing at a slower pace compared to the same period of last fiscal year.

According to the data, trade volumes for the period up to the second week of February reached US$12.65 billion, a gain of US$634 million compared to the same period of last fiscal year. Exports stood at US$5.9 billion while imports dropped by US$280 million to US$6.8 billion.

The government is targeting a total trade of US$31 billion for the current fiscal year, with US$15.3 billion for exports and US$15.8 billion for imports. This would reduce the trade deficit to US$500 million.

Myanmar exports items from seven major commodity groups. These include manufactured goods consisting mainly of garments, as well as agriculture produce, minerals, cattle, fisheries and forestry products.

In comparison, Myanmar’s major import items are divided into four groups — capital goods, intermediate goods, consumer goods and cut-make-pack garment products.

Source:https://www.mmtimes.com/news/myanmar-launches-trade-investment-project-uk-support.html

Approval given for South Korean industrial complex in Hlegu

Scion Industrial Engineering

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.

The development and operations of the first phase of the complex, which will be run by the Korea – Myanmar Industrial Complex Development Co Ltd, will be on land in Hlegu Township, Yangon Region. Phase one of the project is expected to utilise 127 hectares out of 224 hectares allocated for the complex.

KMIC will run as a 60/40 partnership between South Korea’s Land and Housing Cooperation and Myanmar’s Department of Urban Housing and Development under the Ministry of Construction.

US$110 million has been allocated for the project which is expected to take five years to complete.

The Ministry of Construction had said in May 2018 that the project is projected to create between 50,000 and 100,000 jobs when it is completed.

Plans for the complex call for areas dedicated to small, medium and large enterprises, employee housing, a training school, park, and business-related services.

The complex is important as many South Korean manufacturing companies are now interested to expand in Myanmar, Kim Young-sun, Secretary General of the ASEAN-Korea Centre, said in 2018.

Besides the complex, South Korea is contributing to the building of the Korea – Myanmar Friendship Bridge project in Dala Township.

source:

https://www.mmtimes.com/news/approval-given-south-korean-industrial-complex-hlegu.html