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Myanmar to end Kirin row based on law: investment minister

Military Regime Says Economic Shrinkage To Be Smaller Than Outsiders Predict

Myanmar's Investment and Foreign Economic Relations Minister Aung Naing Oo said in an Dec. 8 interview that he hopes Japan will restart aid. (Screenshot from the online news conference)

YANGON -- Aung Naing Oo, Myanmar's investment and foreign economic relations minister, says a dispute between Japanese brewer Kirin Holdings and a company backed by the Myanmar military will be settled based on the law.

Everything will "go along with the laws," and the government is monitoring the progress of the issue between the two parties, the minister told Nikkei and other media outlets in an online news conference on Tuesday. Maung Maung Ohn, Myanmar's information minister, also took part in the interview. Both ministers were appointed by the military after it seized power from the civilian-led government in February.

"We are encouraging both parties to settle this issue amicably, but if that does not happen, that will be [settled], according to the law," Aung Naing Oo said.

At issue is the fate of Myanmar Brewery, which is jointly operated by Kirin and Myanmar Economic Holdings (MEHL). Kirin decided to unwind the partnership after the Myanmar military took control of the country in February. The joint venture is owned 51% by Kirin, while MEHL holds the rest.

Kirin asked MEHL to sell its stake, but negotiations between the two have gone nowhere. MEHL filed a request with a court in Myanmar in mid-November to dissolve the joint venture. On Monday, Kirin asked the Singapore International Arbitration Centre to resolve the case. Given that the military has all the levers of government under its control, the impartiality of the Myanmar court handling the case is in question.

But Aung Naing Oo, who was appointed by the military, sought to dispel those concerns. "I think this is not a problem ... because ... our constitution is still alive, and the legislature judiciary and executive are under the different pillars."

The State Administrative Council, the highest decision-making body set up by the military, "never" involves itself in the judiciary, and there will be "no bias" in settling the dispute between Kirin and MEHL, the minister said.

The bilateral investment treaty between Japan and Myanmar also protects investors from abuses of power either by the Japanese or Myanmar government, he said. The treaty "fully protects businesses from both countries."

With regard to Myanmar's shortage of foreign currency, which has caused concern among foreign companies operating in the country, Aung Naing Oo said: "We fully notice, and we must overcome the obstacle that has become a bottleneck." Myanmar's central bank and government are "operating and working together to resolve this bottleneck as soon as possible," he added.

"The central bank is exercising regulatory measures, as well as selling foreign exchange, [for] the sectors which are prioritized [as] in need of it. At the same time, the Ministry of Commerce is focusing on export promotion to mitigate the trade deficit," he said later by email in response to a request for details.

The minister acknowledged that Myanmar had experienced an economic setback due to the COVID-19 pandemic and political unrest. But, he said, "My personal point of view" is that the economic problems described by international economic institutions such as the World Bank are "quite exaggerated."

The World Bank, the International Monetary Fund and the Asian Development Bank believe Myanmar's economy shrank by about 18% in the year ended in September. "We have to admit that our economy once contracted, but not [by] 18%," he said. The projections by the international situations are designed to "politicize" the situation in Myanmar, Aung Naing Oo said.

According to Myanmar's preliminary figures, the contraction was "around 8% to 9%," he said, adding that the international institutions' projections were "based on some unreliable sources," mainly those in "opposition" to the military.

While the IMF forecasts Myanmar's post-pandemic economic growth at around 2.5%, the government is compiling a five-year economic plan, according to Aung Naing Oo. The IMF projection is "much lower than what we can do in reality," he said. "Definitely, our GDP growth will be higher than what the IMF projected."

Since the military took control of Myanmar, Japan has suspended talks on aid for new projects in the Southeast Asian nation. "We are hoping for the best. Hopefully, once the political situation is stabilized, we can expect the resumption of the Japanese ODA," Aung Naing Oo said, referring to Japan's official development assistance.

Unless there is a resumption of ODA from Japan, the minister hinted at the possibility that Myanmar will seek funds from China and other countries to carry out its infrastructure development projects. "We need to find alternatives," such as replacement of ODA with public-private partnerships, he said, adding, "We need to find another source of funding" for infrastructure projects.