Myanmar’s first community-based tourism (CBT) project, one of seven planned, is up and running in Magway region, much to the delight of local residents.

At a recent launch event here, community leader San Htun said the members of four villages joining the scheme threw full support to the project implemented by ActionAid Myanmar and Journey Adventure Travel Co.

Lack of rain made it nearly impossible to grow plants. Some young women had to seek jobs in cities, with some girls working at beer shops.

A talk with an ActionAid officer three years ago resulted in this project. With help from Journey Adventure Travel, the first 150 visitors arrived in January, contributing US$10 (Bt356) per head to the community development fund. Villagers also look to earn more through the sale of handicrafts, fresh fruits, traditional wear, souvenirs and local food.

The project expects 1,500 visitors this year, generating some $15,000 to improve infrastructure and social welfare. A small power project is planned for later this year.

“We do not have many things to show. We aim to show our friendliness, hospitability, our way of life and how we earn our living. So we mainly aim for receiving foreign visitors,” he said.

During a one-night stay, visitors experience traditional meals, typical food, local businesses and souvenir shops, biking, planting trees and entertainment programmes including traditional dances and musical instruments.

San Htun was glad that young women have returned home to help.

Lee Sheridan, general manager of Journey Adventure Travel, said the firm had received a lot of positive feedback from its customers, so it spent in excess of $55,000 for the project this year.

The second project will involve villages in Bagan, which welcomed more than 300,000 visitors in 2014.

“If a tourist merely spends $30 for food while in Bagan, it will be $9 million per year. Even if one in nine goes to local food producers, it will generate $1 million income for villagers,” said ActionAid country director Shihab Uddin Ahamad.

Tourism has been the organisation’s focus to generate income for women and youth.

Khin Than Win, Hotels and Tourism Ministry’s director for tourism promotion, said Myanmar plans to work on seven such projects in four states and two regions this year to create new destinations.

“We have many interesting places and culture heritages, particularly in Bagan and Mandalay. We aim to promote cultural tourism. Some tourists prefer enjoying their own experience in the countryside, observing the culture and ways of life of rural people,” she said.

Other projects involve tours to see the Ayeyarwaddy dolphins in Mandalay, with help from the Wildlife Conservation Society.

Others will be implemented in ethnic areas – Pa-O village in Shan state to be implemented by Germany’s GIZ, Indawgyi Lake in Kachin state by Fauna & Flora International, Than Taunggyi in Kayin state by the Hanns Seidel Foundation and PeaceNexus Foundation, and Kayah state by the International Trade Centre.

Khin Than Win hopes the projects will play a vital role in poverty reduction in rural areas by creating job opportunities and increasing the locals’ income. This development can be replicated in several more places, like Hpa-an of Kayin state, Kalaw of Shan state and Rakhine state, she said.

Last year, Myanmar attracted 4.7 million visitors.

Tourism Minister Htay Aung said the projects are one of the priorities in the tourism master plan, since the country boasts beautiful scenery and friendly people. “The partnership of 3P – public sector, private sector and people – is really important,” he said.

“The local community has to be involved in the planning process of [tourism] destinations as well as in decision-making. Otherwise, the projects will be incomplete. In case things go wrong, the people of the community will be the victims.”

ActionAid’s Ahamad said it is very important to empower the community before starting CBT to ensure the residents are capable enough to protect themselves from any potential harm.

It is crucial to identify what good culture can be promoted, such as not smoking in public, not drinking alcohol in front of children, planting trees, caring about the environment, respecting women and respecting local culture such as joining meditation.

“The community should not be the subject of the tourism business, rather the actor and co-owner of the business. Achieving human rights depends on the power of the people,” he said.

Partnering with the private sector is crucial to ensure quality services and continuation of the business, and support from the authorities is necessary.

The CBT should encourage agricultural production. The government needs to build linkages with agriculture, fishing, food processing, handicrafts and other services.

Such linkages provide sustainable market opportunities for local suppliers and strengthen local production while offering tourists an authentic cultural exposure.

The recent global stock market turmoil is also expected to take a toll on air travel, particularly in business class where full-service airlines earn most of their profits, said Mr Tony Tyler, director-general of the International Air Transport Association.

“Airlines in this region are finding profitability quite thin because of the pressure of strong competition, and there’s a lot of capacity in the market,” Mr Tyler told reporters ahead of the Singapore Airshow, which begins on Tuesday.

“When you take the strong competition from low-cost carriers in the region… and you take the very strong competition for long-haul traffic from the Gulf carriers, profitability for airlines in this region is not strong at all.”

IATA in December estimated global airlines’ net profit for 2016 at US$36.3 billion (S$50.7 billion), up 10 per cent from its estimate of US$33 billion for 2015.

But Mr Tyler said more than half of this year’s profit would come from North America, with earnings by Southeast Asian carriers likely to come under heavy pressure.

Underscoring the challenge, Mr Tyler said no-frills carriers now account for 54 per cent of capacity in Southeast Asia, up from around 38 per cent in 2009.

Comparably, budget airlines account for 31 per cent of capacity in the United States and 39 per cent in Europe. The global average is 26 per cent.

Budget carriers like Malaysia’s AirAsia, Indonesia’s Lion Air, Singapore-based Jetstar, Thailand’s Nok Air, Cebu Pacific of the Philippines and Vietnam’s Vietjet are giving regional industry mainstays like Singapore Airlines a tough challenge.

Gulf carriers like Qatar Airways, Etihad and Emirates have eaten into their Southeast Asian rivals’ long-haul premium markets by offering top-notch in-flight services and the latest aircraft.

Mr Tyler said Southeast Asian legacy airlines “can play to their particular strengths” to compete, leveraging on their strong brands and service quality.

They must also keep cutting costs and investing in modern fuel-efficient planes, he said.

“The airlines in this part of the world are generally well run, efficient businesses and they’re quite capable of competing… but it’s just certainly at the moment a tough market,” the IATA chief said.

– AFP

The government announced on Thursday that the target for the micro loan programme, dubbed People’s Business Credit (KUR), had been increased slightly to Rp 103.2 trillion (US$7.69 billion) from the Rp 100 trillion set in January, saying it was now preparing new participants to take part in the scheme.

Coordinating Economic Minister Darmin Nasution said the meeting had approved the target, which was agreed by 19 banks that would participate in the programme this year, far higher than the number involved in 2015.

The decision to increase the target was taken during a coordination meeting held at the Coordinating Economic Ministry’s headquarters attended by ministers and officials of state agencies as well as executives of state-owned banks.

He said the ministry was also expecting that the Financial Services Authority (OJK) would soon complete its ongoing review of four multifinance firms that were deemed as prospective candidates to join the KUR programme.

The four multifinance firms are BCA Finance, Adira Finance, Mega Central Finance and Federal International Finance, which are expected to disburse at least Rp 1.5 trillion of KUR loans this year.

“Apart from those four companies, there are several other multifinance firms who have already submitted their proposals to the OJK and are still under review,” Darmin said.

Darmin said the government had also added seven guarantor companies to provide insurance for the programme, namely Jamkrindo, Jamkrindo Syariah and Askrindo as well as guarantors owned by the regional governments of Riau, Bangka Belitung (Riau Islands), South Sumatra and Central Java.

In 2015, three state-owned lenders — Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank Negara Indonesia (BNI) — participated in the KUR programme, along with one private lender, Bank Sinarmas, which played a relatively small role, mainly offering loans to Indonesian migrant workers (TKI).

As of Dec. 31, 2015 total loans disbursed by the KUR programme reached Rp 21.4 trillion to 960,424 customers, lower than the Rp 30 trillion targeted.

According to the Coordinating Economic Ministry’s data, the three state-owned lenders had continued to disburse Rp 6.48 trillion of KUR loans to more than 290,000 customers between Jan. 1 and Feb. 5 this year.

In order to achieve the 2016 nationwide KUR target, the government has allowed more banks, including privately owned and regional development banks, to join the programme, with certain requirements in terms of financial situation and business portfolios.

OJK chairman Muliaman D. Hadad said at least 70 percent of the total allocated amount would be disbursed by three state-owned lenders — BRI, Bank Mandiri and BNI — while the rest would go to other participants.

With more participants in the programme, Muliaman said the financial regulator was intensively reviewing the candidates, including studying its plan to involve rural banks to act as channeling agents for some banks.

“We’ve also paid special attention to seven regional development banks involved in the programme in order to ensure their readiness,” he said.

Bilateral trade has expanded from zero since the day Vietnam and the US normalised their diplomatic ties 20 years ago to US$36.3 billion in 2014. The figure is expected to hit $40 billion in 2015.

According to Deputy Minister of Industry and Trade Tran Tuan Anh, among the free trade agreements Vietnam has engaged in, the Trans-Pacific Partnership (TPP) agreement is expected to afford favourable conditions for Vietnamese exports.

Nguyen Duy Khien, head of the American Market Department under the Ministry of Industry and Trade (MoIT), said Vietnam shipped $30.6 billion worth of goods to the US in 2014, up 24 per cent against the previous year.

According to the MoIT, Vietnam began to access the US market in 1995. Vietnam’s export turnover to the country reached $800 million in 2000 – the year the Vietnam-US Bilateral Trade Agreement was signed.

The US has become Vietnam’s largest importer, purchasing garments, electronic products, footwear, rice and fish from the Southeast Asian nation.

In the sphere of investment, the US ranked seventh among the countries and territories investing in Vietnam with a total direct investment of $10.7 billion by June this year.

Vu DucGiang, President of the Vietnam Textile and Apparel Association, said Vietnam was the world’s fifth largest garment-textile exporter, and the US remained the country’s top market in this field.

However, the garment-textile and footwear sectors are forecast to face difficulties as a result of Vietnam’s TPP membership as the US has initiated the “yarn forward” rule of origin.

In order to benefit from tax breaks, Vietnamese companies must use materials imported from other TPP members, Giang said, noting this would be a real challenge for Vietnamese businesses when up to 70 percent of materials they are currently using are purchased from foreign countries, mainly China – a non-TPP member.

Deputy Minister Tran Tuan Anh said the TPP would be an impulse for Vietnam’s economy to gear towards comprehensive renovation, a higher competitive edge and a better business environment.

Anticipating opportunities afforded by the TPP, lots of US businesses have suggested expanding footwear orders with Vietnam, while many others have invested in weaving and dyeing projects in the country.

The trend sparks the hope that the TPP will continue creating a momentum for the two countries’ relationship, he said.

Economists also stressed the need to provide more information about the two countries’ markets and conduct trade promotion activities such as exhibitions, workshops and market surveys.

The US now has more than 720 valid projects in Vietnam. In the first quarter of 2015, US investors poured nearly $68 million into eight new projects in the country.

The 2015 CAD was equivalent to 2.1 percent of gross domestic product (GDP), compared with 3.1 percent CAD in 2014, the central bank said.

“It was due to a bigger decline in imports than in exports, as well as improved income and service balance. The drop in imports was caused by lower domestic demand in the sluggish economy,” said BI spokesperson Arbonas Hutabarat in a statement on Friday.

At the same time, he continued, the drop in exports was driven by weakened external demand caused by global slowdown and the continuing drop in global commodities prices.

In the fourth quarter of 2015 alone, the CAD stood at $5.1 billion or 2.4 percent of gross domestic product (GDP), widening from the third quarter CAD of $4.2 billion or 1.9 percent of GDP.

CAD is a measure of a country’s foreign trade in both goods and services. It is part of the balance of payments, which summarizes an economy’s transactions with the rest of the world.

Indonesia’s balance of payments slipped to a $1.1 billion deficit last year from a surplus of $15.2 billion in 2014, a result of declined surplus in Indonesian capital and financial transactions, Arbonas explained.

This is stated in the State Bank of Vietnam’s (SBV’s) Circular No 01/2016/TT-NHNN, which was issued on February 4 to provide guidelines for a decree on the development of supporting industries.

Decree No 111/2015/ND-CP, issued last November 3, said preferential policies related to credit, taxes and land rents would be offered to projects applying new technology, equipment and manufacturing processes that can help increase their production capacity by at least 20 per cent.

It also said the money borrowed by the SMEs must be guaranteed by credit underwriting organisations, and the SMEs must register a mortgage value of at least 15 per cent of the loans at the lending institutions.

The firms should also have at least a 20 per cent stake in the investment projects, and they must not owe anything to the state budget or be responsible for any bad loans with any lenders.

According to the circular, credit institutions and foreign banks’ branches in Vietnam will finance the prioritised projects with short-term loans in dong, with interest rates being equal to or less than the specific rates set by the central bank’s governor at certain periods of time.

The Vietnam Development Bank and other organisations authorised in conformity with the law would be the guarantors of the SME loans, the circular said.

Industry insiders asked, however, whether the loan incentives could truly help domestic SMEs take part in the development of supporting industries, as Vietnam integrated more deeply with the global economy.

As the country has entered into a variety of free trade agreements, especially the large Trans-Pacific Partnership trade deal, multi-national companies might take up supply chains right in the domestic market.

Yasuzumi Hirotaka, chief representative of the Japan External Trade Organisation in HCM City, told news website enternews.vn that Vietnam still lacked a solid foundation for supporting industries, with the enterprises being internally weak.

“There is a high risk that many of them will have to withdraw from the market. This will be clearly seen in the next one year or two, so the domestic firms need timely support from the government to improve their strength now,” he said.

He said about four million SMEs were offered low interest rates for loans in Japan, following government policies.

In Vietnam, SMEs and support industries are among several areas that the government prioritises for funding, besides exports, high-tech firms and agriculture and rural development.

According to the latest SBV report on dong lending rates, commercial banks applied rates of six to seven per cent per year for short-term loans, and nine to 10 per cent per year for medium to long-term loans, in the prioritised sectors in January.

In normal business areas, the short-term rates were between 6.8 per cent and nine per cent per year, and the medium to long-term rates were between 9.3 per cent and 11 per cent per year.