YANGON—It was a very active week in Naypyitaw, Myanmar’s capital, especially for policy makers from government ministries tasked with implementing the comprehensive COVID-19 relief plan recently announced by the government. As local businesses are hit badly by COVID-19, the Myanmar government has announced an economic relief plan that seeks to flatten the curve of new infections without flattening Myanmar’s economy. The Central Bank of Myanmar also announced an additional interest rate cut to help businesses.
In Myanmar’s commercial hub of Yangon, nearly 2,000 factories have been permitted to resume their operations after complying with official COVID-19 preventative measures. The Myanmar Investment Commission also approved five projects in the oil and gas, real estate and services sectors.
Additionally, the government announced commercial tax exemptions for medical supplies related to COVID-19 prevention and treatment. The government has also extended its suspension of visas and commercial flights until May 15 to curb the spread of the coronavirus in the country.
Myanmar launches economic relief plan
Myanmar launched its COVID-19 Economic Relief Plan (CERP) on Tuesday, which seeks to mitigate the economic impact of the pandemic.
The Ministry of Planning, Finance and Industry (MOPFI) said the plan includes seven goals, 10 strategies, 36 action plans and 76 actions that seek to flatten the curve without flattening Myanmar’s economy.
The seven goals of the CERP include improving the macroeconomic environment through monetary stimulus; easing the impact on the private sector through improvements to the investment, trade and banking sectors; assisting workers as well as households; promoting innovative products and platforms; strengthening the health care system; and increasing access to COVID-19 response financing.
The CERP also contains measures to improve the macroeconomic environment through monetary stimulus to cushion COVID-19’s impact on the economy. These include lowering banks’ deposit and lending rate ceiling by 3 percent as well as their minimum reserve requirement; conducting credit auctions to inject more liquidity into the banking and financial sector; allowing the central bank to increase financing of the fiscal deficit; and temporarily reducing treasury bond and bill auction sales.
The government has committed to increasing funding in support of local businesses from 100 billion kyats (US$70.8 million) to 200-500 billion kyats. Under the plan, the government will establish a 100-billion-kyat fund by the end of 2020 for designated commercial banks to promote financing of trade of any products.
The CERP includes cash transfers to those most vulnerable and worst affected by the economic impacts of COVID-19, including IDPs in the most vulnerable areas, through mobile financial services transfers.
Central Bank of Myanmar cuts interest rates again
The Central Bank of Myanmar (CBM) has cut its key interest rates by a further 1.5 percent as the COVID-19 pandemic continues to take a toll on the country’s economy.
This is the third time the CBM has reduced rates since it announced a 0.5 percent cut on March 12, followed by a further 1 percent reduction on March 24. In total, the bank has now cut rates by 3 percent in less than two months.
According to the bank’s latest directive, it will lower the minimum bank deposit rate from 6.5 percent to 5 percent and the maximum lending rate from 11.5 to 10 percent for collateralized loans and from 14.5 to 13 percent for non-collateralized loans.
Myanmar Investment Commission approves five projects
The Myanmar Investment Commission (MIC) approved five projects in the oil and gas, real estate and services sectors during a meeting on Tuesday, to encourage both local and foreign investment during the COVID-19 crisis.
The MIC said the total investment amount for the five projects includes nearly US$65 million in foreign investment and 10 billion kyats (US$7 million) in local investment. In the meeting, the officials also approved additional investments on three existing projects, though the commission did not announce details.
As of March 30, Singapore is the largest investor in Myanmar, followed by China and Thailand.
The MIC said the oil and gas sector currently accounts for 26.9 percent of total foreign investment in Myanmar, while the power sector accounts for 26.3 percent and the manufacturing sector accounts for 14.18 percent.
Myanmar exempts COVID-19 medical supplies from commercial taxes
Myanmar’s Department of Internal Revenue announced an additional tax exemption for two types of goods related to the country’s fight against the global pandemic.
According to the announcement, medical equipment, disease treatment machines, personal protective equipment, test kits, medical supplies, all drugs and all FDA-approved traditional are exempt from commercial taxes.
On Feb. 6, MOPFI also announced tax exemptions for a list of 17 types of non-commercial tax products, including corn and maize, a variety of milk and dairy products, seeds, raw materials for detergents and animal feed.
Yangon factories begin to reopen
More than 1,800 factories in Yangon have been permitted to resume their operations after complying with official COVID-19 preventative measures, according to Yangon Region’s Ministry for Immigration and Human Resources.
On April 19, the Ministry of Labor ordered that factories could only reopen following the Thingyan New Year holiday after introducing COVID-19 preventative measures outlined by the Ministry of Health and Sports (MOHS).
According to the Yangon Region Ministry of Immigration and Human Resources, 1,974 factories had been inspected as of Wednesday. However, 115 of those factories failed to meet the guidelines.
Myanmar has more than 7,000 factories, 6,632 of which are in Yangon, according to the Ministry of Labor.
MOHS instructed all factories to ensure that workers can wash their hands and observe social distancing. Factories must have temperature checks and send home any worker who has a fever.
Factories must use pamphlets and intercom announcements to communicate with staff, as meetings in factories have been prohibited. Employees were told to report to health clinics with any COVID-19 symptoms, including coughing, difficulty breathing, fever and exhaustion.
Myanmar extends visa and flight ban
Myanmar has extended its suspension of visas and commercial flights until May 15 to curb the spread of COVID-19 in the country.
The Ministry of Foreign Affairs (MOFA) said the extension aimed to protect the population from imported cases of the coronavirus. However, relief, cargo, medical evacuation and special flights approved by the Department of Civil Aviation would not be affected. The department added that flight crews may be subject to quarantine.
In late March, Myanmar suspended all visas for foreign nationals, except diplomats accredited to Myanmar and United Nations officials based in the country who could prove they are not infected with coronavirus. They must still quarantine on arrival, MOHS said.
The ministry recently announced that the required quarantine for arrivals will be lengthened to 28 days, including 21 days in a quarantine center and seven days isolated at home.
As of Thursday, Myanmar has reported 150 COVID-19 cases including 6 deaths.
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