Myanmar CapitalBurma capital
Myanmar, the capital of infra
The Myanmar-based Infra Capital (ICM) is commissioned by InfraCo Asia Access (IAD) to develop, develop and finance advanced and economically sustainable infrastructural developments in Myanmar. IAD and ICM aim to encourage privately funded investments in infrastructures through project developments to the point of final closing so that national and multinational financers, institutional and investor funds, developer funds and other stakeholders can participate in these risk-free investments.
The IAD is a member of the PIDG (Private Infrastructural Development Group). InfraCo Asia has been developing a project portfolio since the start of work in 2010, which will provide over 830,000 individuals with the opportunity to get new or enhanced infrastructures. The work of Infraco Asia in Myanmar is financed by the British Ministry for International Development.
For more information on the results of InfraCo Asia, please refer to the 2015 Annual Report of the PIDG (Private Infrastructure Management Group).
Illegal capital inflows in Myanmar increase
Illegal capital inflow into Myanmar has increased rapidly under the government of U Thein Sein, depriving the government sector of millions of dollars that could have been used for production purposes, according to a recent statement. GFI's Global Financial Integrity reports on illegal capital movements in Myanmar between 1960 and 2013.
The Commission notes that, despite a number of policy and macroeconomic changes since 2010, illegal flows have been increasing rapidly, mainly due to miscalculations. Over the past 54 years, GFI has estimated that US$18.7 billion has poured out of Myanmar unlawfully, with an annual mean outflow of 6.5 per cent of Myanmar's GNP over the same area.
Illegal flows were four-fold higher, at $77. 7 billion - equal to 14. No precise numbers are available on the value of contraband, although there is some kind of anecdotic proof that this could eclipse the formal economies. "Estimations provided by our methodologies are probably very prudent, as they do not contain false invoices for trading goods, false invoices for trading the same invoices, doggy deals and business with cash," said Dev Kar, the main rapporteur of the work.
Between 1960 and 2013, more than 59% of the capital movements traced by GFI resulted from illicit trading and more than 89% from illicit outflow. Almost half of these in-trends - actual - occurred in the last four years of the survey, from 2010 to 2013.
"It' s very worrying that the illegal influx has increased considerably in recent years. The illegal influx was also fuelled by the cultivation of poppy seed in Myanmar - the second highest in the state. GFI said, however, that there was no estimation of illegal flow caused by drugs sale and traffic, as this could not be established either through commercial invoice figures or balances of payment figures.
They have also fueled the black market, eased fiscal fraud and resulted in criminality and bribery - all this has added to the government's income. Myanmar's levy is 7% of GNP and one of the lowliest in the country, making it difficult for the state to deliver proper healthcare and educational outcomes.
He added that if measures were taken to curb illegal flow, the government's bags would be much lower. Burma shed between $2. 9 billion and $3. 6 billion over the 54-year bout in possible fiscal revenue, GFI said, guessing that losing fiscal revenue equaled as much as 172 pc of the 1960 to 2013 healthcare issue and up to 73 pc of training expenditure.
From 2010 to 2013, Loss of revenue was the equivalent oft 129 pc of healthcare expenditures and 42 pc of expenditure on literacy, according to the reportf. Burma invests much less in public finances for educational and healthcare than many of its ASEAN members. In recent years, however, the authorities have kept their pledge to raise expenditure in these sorts.
Expenditure on training increased from 5.2% of the overall 2012 budgets to 11%. Heath expenditures increased from 1. 36pc to 6. 36pc of the account in the same accounting cycle. Undererground EconomyThe Underround Economics is also directly connected with illegal currents, and is a good deputy for the overall leadership of a nation, Mr Kar said.
Myanmar's black market average was 55. Ipc of the country's gross domestic product over the 54 year span, he said, "one of the highest in the world". On average, the black market was 49. In the sixties, 36pc of the government gross domestic product, increasing to 66. 17pc in the eighties. They argue that illegal cash flow is "driven by the black economy".
Therefore, the reduction of these streams should be a topical issue for the new administration after the November 8 election. In GFI's view, the reforms should focus on two principles: "more openness in national and global finance operations and greater intergovernmental co-operation to close the flow of illegal money".
A Myanmar anti-money lundering agency officer, the Financial Intelligence Unit (FIU), said Myanmar has subscribed to work with some jurisdictions to combat counterfeiting but has not yet subscribed with others such as China. A major issue with closing down the channel is that trading transactions are seldom made through banks and are usually made directly between merchants, a high-ranking Myanmar central banking officer said.
The Myanma State Economic bank has concluded credit transfer deals with a number of overseas bankers in frontier areas, but the administration needs to consider how it can improve these benefits, lower the cost of banking and rethink taxation levels, he added. Former Assistant Treasury Director-General U Soe Thein agrees that illegal capital movements are slowing down the increase in Myanmar's rate of taxation.
"However, this cannot be done over night - the banking practices have only just begun in Myanmar," he said. There is a need for a comprehensive review of the tariff system, with a strong emphasis on integrity and increasing capacities, GFI said, recommending that Myanmar implement the World Trade Organisation's tariff evaluation agreement, which prohibits imprecise or indiscriminate tariffs.
GFI also said that a real-time global price exposure assessment system could help to reduce large disparities between the trading levels of Myanmar and those of neighboring states. As an example, the Ministry of Commerce's numbers on Thailand's formal frontier trading were 90 percent lower than Thailand's three years ago, the Myanmar Times reports.
The Ministry of Commerce advisor, U Maung Aung, agrees that the level of non-formal commerce will stay high, while the administration is unable to cope with it. There are three new Thai and Indian borders to be opened this year, but not due to insecurity, he said, and added that Myanmar has 15 formal frontier trading points, but the number of illicit doors is much higher.
"We' re going to have to open more formal doors," he said. "The aim of the multi-disciplinary single-window system is to accelerate and facilitate the flow of information in cross-border trading. Nonetheless, the department is limited by its budgets, said U Maung Aung, and added that trafficking by ethnically militarised groups is hampering tariff reforms in some areas, while staffing levels at checkpoints are inadequate and criminal prosecution is very poor.
The Financial Action Task Force (FATF), an intergovernmental anti-moneylaundering and counter terrorism funding agency, noted in February that Myanmar had not made adequate headway in these areas in 2014, despite new legislation to combat currency trafficking and terrorists. He said that each of the banks has a regulatory supervisor who monitors trading or investing activities and that Myanmar Securities Exchange Centre, Myanma Insurance and Moneychangers are also mandated to report to the FIU.
GFI believes that bribery and irregular dogs and transfers "together are contributing to the continuing problems of illegal revenues from drug, human, currency and precious stones trafficking". Regulatory authorities are trying to formalize capital transfers by lifting limitations and streamlining the procedure, said the central bank's high-ranking officer. "While we cannot say how much uncontrolled funds are being channelled, I am sure that the volume of public funding can be doubled or tripled within a few years as the pace of growth in the field of cell phone and web browsing increases," he said.
The collection of high-quality information and statistical information would help the authorities to control and combat illegal capital movements, as well as the investigation of natural and technological trafficking in people. The GFI concluded by hoping that the review will encourage the US administration to consider legislation and regulation that could curb the influx of illegal funds into and out of the state" in order to maximise local resource for future prosperity".