Logging in Myanmar, sea turtles and more

Logging in Myanmar

Myanmar has banned lucrative logging operations as the newly-elected government of democracy leader Aung San Suu Kyi steps up a battle on deforestation, an environment official said on Thursday.

The restrictions start already at after 2011 elections bun since 60's the illegal logging, specially at Thai and China border has continued up till today. The main problems are that most neighboring countries has lost their own Rosewood and Teak forests and are eyeing Myanmar, that has had its forests mainly intact due the country's isolation last decades.

Currently the biggest problem is northern border logging that continues regardless the government ban of log exporting. The logging has been lucrative business and participants are not very keen on losing their profits, including government own logging companies. Also there is the question of getting a new work for almost 17000 workers in this industry.

IMO only way to stop this practice completely is to build Myanmar's own timber industry and demand for Teak and Rosewood so that neighboring countries can't compete with the manufacturing industry anymore. This is the long process but I am sure that if the job is done properly, enough foreign investments to this industry will help i.e. furniture manufacturing in Myanmar to compete in international level. Instead of selling raw wood, Myanmar government should attract companies to add the value the wood products and export only semi- or final hardwood products out.

Save sea turtles and dugongs in Myanmar

To the naked eye, the blue sea and miles of white sand with no development or people in sight were a vision of paradise. And yet, as we learned, below the surface things were far from idyllic. The young dugong that accidentally drowned in a fishing net was just one symptom of another tragedy and challenge unfolding in this country – one that, while nearly unnoticed, could have major implications for the future of millions of rural people.

Literally out of sight, the country’s marine resources have been pillaged almost to the point of no return. Research data released in February of this year by the Norwegian government demonstrated a decline in Myanmar’s oceanic and coastal fish stocks of between 70-90% since the late 1980’s.

If you are interested in to read some data, here is the Myanmar part report of BOBLME  project (THE BAY OF BENGAL LARGE MARINE ECOSYSTEM)

Updated Myanmar fishing industry report

Also Norwegian Institute for Water Research has done the pollution report of Myanmar waters, which you can read here:

Myanmar water pollution report

To protect these beautiful beaches and sea life, government should act fast before it is too late. The income from tourism will surpass any benefit in future over the excess fishing in Myanmar waters.The scuba-diving industry is increasing in the world, while the amount of  clean reefs and waters are reducing. So last intact areas will be the most valuable to this big tourism industry in future.

Myanmar giving tax exception to investors

In a bid to ensure equitable development, the Myanmar Investment Bill will enable investors to enjoy tax exemptions from three to seven years for designated regions and sectors.

The bill, to be passed this year, is a combination of the Foreign Investment Law and the Myanmar Citizens Investment Law. In addition, the Myanmar Investment Commission (MIC) will be reformed this month.

The MIC can scrutinize and allow tax exemption or relief to investors in order to support equitable development.

Aung Naing Oo, secretary of the MIC and director-general of the Directorate of Investment and Company Administration, said: "Now we are planning to attract a massive inflow of investment. The bill includes that provision. Investors in less-developed regions shall enjoy tax reductions rather than those in more developed regions. They can get tax relief based on the region and sector. The MIC will fix the rates after seeking the approval from the government and the enactment of the law."

The MIC will designate less-developed areas as Zone One, moderately developed regions as Zone Two and Zone Three for the areas least in need. Zone One investors can get tax exemption for seven years, Zone Two for five years and Zone Three for three years.

Whats good with this? The investments are spread more around the country, not just the Yangon or other major cities. Also the labor cost is usually lower in rural areas so the manufacturing costs are lower.  And downside? It is hard to attract foreigners staying far out of major cities due the lack of modern living facilities (I.E. water, shops, electricity and proper modern sewage system).

Getting 3 years tax exemption will naturally pressure you to make as much profit in these 3 years as possible, which is usually hard for the new business. So these kind of incentives attracts mainly large international companies that can move the goods and manufacturing process fast from place to place. To attract more long term permanent manufacturing  business, government should provide infrastructure with proper facilities with low cost as it is done in Europe and many other places. End of the day the tax benefit will help only some prospectors, not long term the country.