Business Roundup

The Irrawaddy Business Roundup

By Zaw Zaw Htwe 21 March 2020

This week, Myanmar’s government has been making plans to cushion the potential impact of COVID-19.

It has funded 100 billion kyats (US$70 million) in loans for the CMP (cut, make and packing) garment sector, hotels and independent, domestically owned businesses after waiving the advance income taxes for the export sector.

A state-owned airline has reduced flights to Singapore and clothing imports are now arriving by air.

In other news, the Central Bank of Myanmar has banned a bank from operating and Korean observers visited toddy palm plantations to study sugar production.

Government digs deep to counter coronavirus  

The government announced 100 billion kyats in loans to cushion the economic impact of COVID-19 after easing the deadlines of tax payments, and tax exemptions for businesses owned by Myanmar nationals that have been affected.

The fund can assist garment and manufacturing, hotels and other tourism businesses and small- and medium-sized enterprises owned by nationals.

Those sectors had been recognized as the priorities for state assistance, based on their vulnerability to COVID-19, said the Ministry of Planning, Finance and Industry.

The 1 percent interest rate will apply for a year. State Counselor Daw Aung San Suu Kyi has also announced that the government will waive the 2 percent advance income tax on exports until the end of this fiscal year.

Economists have warned of a financial crisis for the country if the impact of the coronavirus cannot be controlled.

Bank banned for legal violation 

The Central Bank of Myanmar (CBM) has banned the Asia Yangon Bank Co. Ltd from banking for violating laws, without saying what rules had been broken.

The CBM also said it will be appointing a new director for the bank to keep operations going for its customers.

The Asia Yangon was established in 1994 and it has 13 branches in seven states and regions.

Koreans observe sugar production 

Korean scientists visited Magwe Region where toddy palm trees have been planted to observe the plant’s sap ability to produce sugar, according to the Myanmar Times.

The groups observed the sap of the toddy palm in Natmauk and Magwe townships.

Korean companies were planning to buy the sap to produce sugar, the paper said.

The sap from toddy palms has traditionally been used to produce palm sugar but cultivation has decreased as prices for palm sugars are too low.

State-owned airline reduces flights to Singapore 

State-owned Myanmar National Airlines (MNA) has reduced its two evening flights to Singapore until at least March 31 amid the coronavirus fallout.

However, its morning and midday flights to Singapore will continue.

MNA operated four round trips a day to Singapore since August 2015.

Chinese clothing supplies arrive by plane 

This week, 15 tons of textiles arrived from China by air to address the COVID-19 supply crisis.

The Directorate of Investment and Company Administration (DICA) said the imports were arranged by the Ministry of Commerce, Myanmar Garment Manufacturing Association (MGMA), the Chinese Embassy and the China Enterprise Chamber of Commerce in Myanmar.

Importing by air was more expensive but factories needed supplies urgently, DICA’s director U Myo Thu told The Irrawaddy. He said overland imports would continue.

Around 50 vehicles loaded with material were still arriving each day overland, said the Ministry of Commerce.

According to the MGMA, 20 out of 400 garment factories in Yangon Region have had to stop operations due to supply shortages because of COVID-19.

The sector also faces the threat of order cancellations from its buyers in Europe and elsewhere.

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The Irrawaddy Business Roundup