Thura NewsViews. Myanmar Economics and Politics. Weekly Newsletter. Issue 262, March 30, Politics

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1 Issue 262, March 30, 2017 Thura NewsViews Politics China to invite President U Htin Kyaw for visit President U Htin Kyaw is set to pay a visit to China in the coming months, at the invitation of President Xi Jinping. The visit is aimed at the promotion of bilateral relations and cooperation said a local report, quoting the BBC. U Htin Kyaw, who is largely regarded as playing a figurehead role while the real power lies with State Counsellor Daw Aung San Suu Kyi, has previously visited Laos, Russia, India and Cambodia as Myanmar s official head of state. Aung San Suu Kyi visited China in August last year when she met with Xi, as well as Chinese Premier Li Keqiang and other government officials. The timing comes at a time of increased tension between the two countries. This week China staged air and ground drills close to the border in an apparent show of strength due to increased fighting, notably between Myanmar s armed forces and the Myanmar National Democratic Alliance Army, also known as the Kokang group. Negotiations have also been intensifying about a number of highprofile infrastructure projects being conducted by the two countries. Five groups could sign NCA Five more groups could soon sign the Nationwide Ceasefire Agreement (NCA), said a local media. The article quoted Nai Win Hla, a central executive committee member of the New Mon State Party (NMSP), as saying that a final decision would be made at a United Nationalities Federal Council (UNFC) meeting in May. The groups set to sign, according to the article, are the NMSP and five other UNFC members, namely the Karenni National Progressive Party (KNPP), Wa National Organisation (WNO), Lahu Democratic Union (LDU) and Arakan National Council (ANC). Recent reports have suggested a recent split in the UNFC regarding the NCA. Other members of the group, including the Kachin Independence Army and Shan State Progress Party, could not be reached for comment in the local article but are known to have a more tense relationship with the central government and recently backed a proposal by the United Wa State Army to take a different approach to the peace process than signing the NCA. Thura Swiss Ltd. Economic Research Shwe Hinthar B /2 Miles Pyay Road 11 Qtr. Hlaing Tsp. Yangon, Myanmar Phone +95 (0) Fax +95 (0) info@thuraswiss.com March Highlights State Counsellor Daw Aung San Suu Kyi has travelled to Kachin State to meet with people who have been internally displaced by conflict there. Construction on the Yangon-Dala bridge will begin in April, according to an announcement by the Ministry of Information. A business delegation from the UK Department of International Trade (DIT) will visit Myanmar this week to promote potential opportunities.

2 Thailand-Myanmar to promote return of refugees Thailand s government is to ask almost 70,000 Myanmar refugees living near the border to return home, but insists any moves will only be made on a voluntary basis, said a report in the Bangkok Post. The article quoted Third Army Chief Lt Gen Vijak Siribansop as saying the refugees will return gradually and that Myanmar has prepared areas where they can return. The report did not specify a location for the returnees. The refugees are in camps under what the article calls Third Army control, and include Ban Ma La in Tha Song Yang district, Ban Um Piam in Phop Phra district and Ban Nu Pho in Umphang district. Lt Gen Vijak said the returns would focus on the refugees safety and dignity and will be facilitated by the United Nations High Commissioner for Refugees. Economy Military acquires new equipment from Russia and India The Myanmar military has ordered a new batch of equipment from Russia and India, according to reports. An article in IHS Jane s reported that Myanmar has ordered an initial batch of three Yakovlev Yak-130 Mitten advanced jet trainer aircraft, quoting senior Russian defense industry officials, adding that more are expected to be ordered in the future. Mr Viktor Kladov, director of international co-operation and regional policy of the Rostec State Corporation, was quoted as saying, We have delivered a few aircraft to the Myanmar Air Force, and they liked it so much they want to buy more. News reports in India also said that there are plans to sell lightweight torpedoes to the Myanmar military. The Times of India said the deal was worth US$ 37.9 million and is part of India s plans to counter China s strategic inroads in the region. Myanmar moves up Human Development Index Myanmar has been promoted to a medium-ranked member of the human development index (HDI), according to a new report by the United Nations Development Programme. The report ranked Myanmar with an HDI score of 0.556, placing it 145th out of 188 countries. The average score in East Asia Pacific is The legacy of Myanmar s under-investment in social sectors will take time to overcome and extra efforts are required for this, said Ms Renata Lok- Dessallien, UN Resident and Humanitarian Coordinator. She also called on the government to prioritise human development, which she said would help drive sustainable development in the future. The HDI was developed in 1990 to measure a country s performance on education, life expectancy and income. Tourism industry to market wet season as green season The Myanmar Tourism Federation (MTF) has started a new campaign aimed at attracting more tourists to the country during the wet season, by billing it as green season. Tourist numbers typically fall dramatically during the wet season, which runs roughly from June to October. The MTF is highlighting reasons why tourists should visit during those months, including the fifty shades of green, from paddy fields to forests. Other benefits highlighted include the fact that the weather is much cooler during the rainy season and that some of Myanmar s best fruits and vegetables are grown during that period. A release from Myanmar in Figures GDP (PPP): $283.5bn (2015) GDP (official ex.rate): $66.98bn (2015) GDP growth rate: 8.3% (FY proj.) Population: 51.4mn people (2014) Inflation: 11.5% (2015) Foreign trade: $22bn (2015) FDI: $64bn (31/07/2016) International reserves: $9.4bn (Dec 2015) CBM rate Kyat/$ = 1362K/1$ (30/03/17) For advertising with Thura Swiss please contact us by info@thuraswiss.com or by phone +95 (0) Please note that our advertisement contracts are based on a subscription of a minimum of 4 weeks. 2

3 MTF also said that many tourism companies are offering special promotions during the rainy season. The main attractions in Myanmar such as Bagan, Mandalay, Northern Shan State, Kalaw and Inle Lake only get a 25 percent chance of rainfall during the rainy season, and even if it rains on these days, it s usually short, said Daw May Myat Mon Win, vice chairman of the MTF. Companies and Investments Mitsubishi eyes hospital investment Japanese giant Mitsubishi Corp is preparing to take advantage of the growing healthcare industry in Myanmar by investing in a joint-venture with local firms. An article in Nikkei Asian Review, said that Mitsubishi will partner with local firms Capital Diamond Star Group (CDSG) and Yee Shin Holdings, the latter a hospital operator, to develop a healthcare facility on 9,300 square metres of land north of downtown Yangon. The project, worth an estimated US$ 90.4 million, is due for completion by 2020 and will include 300 beds, 70 percent of which will be private rooms to cater to the upper class. Mitsubishi will provide 30 percent of the capital and medical services, according to the report, CDSG will develop the site and Yee Shin will operate the hospital. The site will also include several specialist treatment rooms as well as housing and a shopping mall. Myanmar opens Thilawa to foreign insurers The management of the Thilawa Special Economic Zone, on the outskirts of Yangon, will open up the area to international insurance companies, according to reports. Currently only three Japanese companies Sompo Japan Nipponkoa, Tokio Marine & Nichido Fire Insurance, and Mitsui Sumitomo Insurance are operating insurance offices at Thilawa, but the government will begin to allow foreign insurers into Thilawa as part of an initial step to boost the insurance industry, U Thant Zin, a director in the finance ministry s Financial Regulation Department was quoted as saying by Nikkei Asian Review. About 20 international insurance firms have opened representative offices in Myanmar in the last three years as they wait to enter a market that offers huge potential. There have been no applications yet, but we just sent out the notification, Thant Zin was quoted as saying regarding offerings to be based at Thilawa. According to the article, companies applying for a licence must be able to prove 10 years of operational experience, at least US$1 billion in assets or paid-up capital and a minimum of B+ credit rating from a reputable ratings agency. 3

4 Legal Box by Duane Morris & Selvam LLP Selling Medicine in Myanmar Recently, twenty-seven pharmacies in Myanmar s Mandalay District were caught selling unregistered and unlicensed medicines, including expired products. These pharmaceutical companies will be charged under the National Drugs Law 1992 ( Drugs Law ) which mandates that pharmacies sell only licensed and registered medicines. The Drugs Law is the leading authority guiding pharmacies in Myanmar, as it regulates the control, manufacturing, import, export, storage, distribution and sale of medicine in Myanmar. Pharmacies are required to have a systematic storage system, pharmacy license and a normal regulated-drugs license. Under the Drugs Law the penalties for selling medicines that are unregistered or expired include a fine and potential imprisonment. The fine may be as little as 5,000 MMK (US$ 3.65) to a maximum of 50,000 MMK (US$ 36.50). A custodial sentence may also be imposed for a term of seven years. The Food and Drug Administration (Mandalay branch) ( FDA ) has submitted a proposal to the Mandalay Regional Government seeking prosecution against these pharmaceutical stores including potential closure. If this proposal is accepted, as part of the proposal, the FDA will conduct random weekly and monthly inspections. On 27 April 2016, expired medicines worth more than 100 million MMK (US$ 73,000) were incinerated. The products were seized from twenty-three pharmaceutical companies and pharmacies. In the past, action has been taken to educate pharmacy owners not to sell compounded medicine, expired medicines and drugs without licenses. Given recent events, the FDA is concerned about public safety and has mandated to better protect the public through stricter enforcement of the Drugs Law. Through our office in Yangon, Duane Morris & Selvam advises corporations on investment, business and regulatory processes in Myanmar. For further information, please contact Mr Krishna Ramachandra (kramachandra@duanemorrisselvam.com), Ms Babita Ambekar (bambekar@duanemorrisselvam.com) or Mr Rory Lang (rjlang@duanemorrisselvam.com) or visit Duane Morris & Selvam is recognised as a leading law firm for Myanmar related Corporate and M&A work The Legal 500 (2017). 4

5 Events Name Details Organizer/Ministries Contact Information India Education Fair Yangon Myanmar International Yarn & Fabric Show Venue: Summit Park View Hotel, Yangon Date: 31 March-01 April 2017 Venue: Tatmadaw Exhibition Hall, Yangon Date: Apr 2017 Indian Embassy Yangon & EDCIL under MHRD Government of India CEMS-Global USA +95 (0) , Myanmar International Machine Tool and Automation Exhibition Myanmar Hospitality and Tourism Conference Emerging Asia FinTech & Agent Banking Summit Venue: Tatmadaw Exhibition Hall, Yangon Date:11-14 May 2017 Venue: Park Royal Hotel, Yangon Date: 15 May 2017 Venue: tbc, Yangon Date: May 2017 ASEAN Ports and Shipping Venue: Sule Shangri-La Hotel, Yangon Date: July 2017 Myanmar Banking & Finance Conference Myanmar Green Energy Summit 2017 Compack Myanmar 2017 Builders Myanmar 2017 Venue: Yangon, Myanmar Date: July 2017 Venue: Yangon, Myanmar Date: August 2017 Venue: Tatmadaw Hall, Yangon Date: September 2017 Venue: Tatmadaw Hall, Yangon Date: August 2017 Yorkers Trade & Marketing Service Co., Ltd Sphere Conferences Magenta Global Transport Events, Myanmar Port Authority Sphere Conferences Confexhub Enterprising Fairs (India), Myanmar Industries Association Fireworks Trade Media Ptd Ltd Jason@sphereconferences.com enquiry@magneta-global.com.sg enquiries@transportevents.com joyce@sphereconferences.com conference@confexhub.com packaging@efipl.in (0)

6 Tenders Ministry of Electricity and Energy: Request for Proposal (RFP) Myanma Oil and Gas Enterprise (MOGE) had initially launched a public invitation for interested parties to submit a Letter of Expression of Interest ("LEOI") for a Joint Venture in Onshore Pipeline Construction and Maintenance Services with MOGE in June MOGE is now launching this Request for Proposal ("RFP") in the form of an open tender to interested parties, including but not limited to LEOI respondents from the LEOI exercise conducted in June 2014, to submit a response to this Request for Proposal (the "Application"). In this context, MOGE intends to select a suitable internationally proven pipeline construction and maintenance services company as the "Joint Venture Partner" through a step-by-step process: Phase 1: Request for Proposal; Phase 2: Evaluation Process; and Phase 3: Negotiations and Signing. Interested parties are required to submit an Application no later than 3 PM, local time (Nay Pyi Taw, Republic of the Union of Myanmar), on April 24, 2017 to the following address: MOGE Tender Committee for Joint Venture Establishment in Petroleum Services (Pipeline), Complex 44, MOGE Office, Nay Pyi Taw, Republic of the Union of Myanmar. Ministry of Electricity and Energy: Request for Proposal (RFP) Myanma Oil and Gas Enterprise (MOGE) had initially launched a public invitation for interested parties to submit a Letter of Expression of Interest ("LEOI") for a Joint Venture in Onshore Seismic Acquisition Services with MOGE in June MOGE is now launching this Request for Proposal ("RFP") in the form of an open tender to interested parties, including but not limited to LEOI respondents from the LEOI exercise conducted in June 2014, to submit a response to this Request for Proposal (the "Application"). In this context, MOGE intends to select a suitable internationally proven seismic acquisition services company as the "Joint Venture Partner" through a step-by-step process: Phase 1: Request for Proposal; Phase 2: Evaluation Process; and Phase 3: Negotiations and Signing. Interested parties are required to submit an Application no later than 3 PM, local time (Nay Pyi Taw, Republic of the Union of Myanmar), on April 24, 2017 to the following address: MOGE Tender Committee for Joint Venture Establishment in Petroleum Services (Seismic), Complex 44, MOGE Office, Nay Pyi Taw, Republic of the Union of Myanmar. Ministry of Electricity and Energy: Request for Proposal (RFP) Myanma Oil and Gas Enterprise (MOGE) had initially launched a public invitation for interested parties to submit a Letter of Expression of Interest ("LEOI") for a Joint Venture in Onshore Drilling Services with MOGE in June MO- GE is now launching this Request for Proposal ("RFP") in the form of an open tender to interested parties, including but not limited to LEOI respondents from the LEOI exercise conducted in June 2014, to submit a response to this Request for Proposal (the "Application"). In this context, MOGE intends to select a suitable internationally proven drilling services company as the "Joint Venture Partner" through a step-by-step process: Phase 1: Request for Proposal; Phase 2: Evaluation Process; and Phase 3: Negotiations and Signing. Interested parties are required to submit an Application no later than 3 PM, local time (Nay Pyi Taw, Republic of the Union of Myanmar), on April 24, 2017 to the following address: MOGE Tender Committee for Joint Venture Establishment in Petroleum Services (Drilling), Complex 44, MOGE Office, Nay Pyi Taw, Republic of the Union of Myanmar. 6