ASEAN Regulatory Brief: Foreign Banks in Myanmar, Thai Minimum Wages, and Increasing SME Aid in Brunei
Myanmar: Government Approves Licenses to New Foreign Banks
The government recently gave approval to four new foreign banks to operate in the country. The four banks are as follows:
- Bank for Investment and Development – Vietnam
- SUN Commercial Bank – Taiwan
- Shinhan Bank – South Korea
- State Bank of India – India
With the issuance of these licenses, the total number of foreign banks now allowed to operate in Myanmar has risen to thirteen. A number of banks that have been approved have not opened branches yet, as they fulfill their regulatory compliance obligations. In addition, a number of banks will operate under temporary licenses for a year, and will only become permanent, once they fulfill their obligations to the government. Once the banks have been operationalized, foreign companies will find it easier to access financing, which the World Bank stated was the largest problem for business in Myanmar. The approval for the banks is a part of the government’s larger plan to attract foreign investment into Myanmar.
Thailand: Government Announces New Minimum Wages in Five Industries
The government recently announced new minimum wages in five industries. Approved by the Thai Wage Committee, new salaries will cover skilled employment in 20 lines of work – with each wage increase providing a band of wages to be applied. The details of the new wages are as follows:
Electrical and electronic industry
- Workers assembling equipment or lights: Tier 1 – US $ 10 (360 Thai Baht), Tier 2 – US $ 12.8 (430 Thai Baht)
- Motor assemblers: Tier 1 – US $ 10.4 (370 Thai Baht), Tier 2 – US $ 12.6 (445 Thai Baht)
- Machinery maintenance technicians: Tier 1 – US $ 11.6 (410 Thai Baht), Tier 2 – US $ 13.9 (490 Thai Baht)
- Safety system technicians: Tier 1 – US $ 11.3 (400 Thai Baht), Tier 2 – US $ 13.6 (480 Thai Baht)
Auto parts and spares
Turners, Welders, Machinery maintenance technicians: Tier 1 – US $ 11.3 (400 Thai Baht), Tier 2 – US $ 13.6 (480 Thai Baht)
Auto body painters, Body sealing technicians, Quality guarantee staff: Tier 1 – US $ 11.3 (400 Thai Baht), Tier 2 – US $ 13.6 (480 Thai Baht)
Gem cutters, Jewelry molding, Decorating technicians: Tier 1 – US $ 11.9 (420 Thai Baht), Tier 2 – US $ 15.6 (550 Thai Baht)
- Shipment managers: Tier 1 – US $ 11.7 (415 Thai Baht), Tier 2 – US $ 14.1 (500 Thai Baht)
- Workers handling forklifts carrying cargo up to 10 tons: Tier 1 – US $ 10.2 (360 Thai Baht), Tier 2 – US $ 12.1 (430 Thai Baht)
- Inventory supervisors: Tier 1 – US $ 9.9 (350 Thai Baht), Tier 2 – US $ 11.9 (420 Thai Baht)
- Warehouse operating staff: Tier 1 – US $ 9.6 (340 Thai Baht), Tier 2 – US $ 11.6 (410 Thai Baht)
The proposal for the new wages will be tabled at the Thai Cabinet meeting later this month. Once approved by the Cabinet, the new wage rates will apply from August. The new wage rates may drive up costs for manufacturers in Thailand. However, economists say that the increased worker productivity could offset the higher cost of manufacturing by increasing the revenue for business.
Brunei: Government to Aid SMEs to Resolve Debt
The government recently announced that it will aid small and medium enterprises (SMEs) in resolving their non-performing loans. The move comes in the wake of a large volume of unpaid debt for SMEs in the recent past. Reports indicate that between 2006 and 2015, SMEs were extended US $ 210 million worth of loans. However, as of 2016, US $ 55 million remains unpaid – representing a nonpayment of around 26 percent loans.
Darussalam Enterprise, a statutory body, will be responsible for providing assistance to defaulting SMEs. The body is to develop a payment and financing scheme in consultation with SMEs on a case-by-case basis to ensure repayment. The move is expected to provide a boost to the SME sector. The resolution of non-performing loans will bring stability in the borrowing market. In addition, the move will build confidence for lenders, which in turn will ensure easy accessibility to capital for borrowers.
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