YANGON—The latest announcement from the Myanmar government gives a green light for businesses to reopen, provided they strictly follow COVID-19-related health instructions. This week, Myanmar’s Parliaments had a series of serious discussions on whether to take loans from international sources to cover additional budget deficits incurred to mitigate the social, economic and health impacts of COVID-19.
The Ministry of Planning, Finance and Industry (MOPFI) said it would use up to 5 percent of GDP for stimulus spending to ease the impact of COVID-19. The Ministry of Commerce (MOC) held its very first e-commerce meeting and announced that it will launch a central e-commerce website to promote the use of digital platforms to drive economic growth. MOC also lifted a decades-old ban on liquor imports, instead imposing high taxes.
Singapore’s Infrastructure Asia (IA) signed a deal with MOPFI to help Myanmar
identify suitable investors for infrastructure projects listed in Myanmar’s Project Bank. The Yangon Regional Investment Committee has also approved new investments from both Chinese and local companies.
A new survey with help from the Luxembourg government also found that over 80 percent of micro, small and medium-sized tourism businesses (MSMEs) are ‘extremely badly’ affected by the pandemic.
Myanmar prepares to spend up to 5 percent of GDP for economic recovery
Deputy head of MOPFI U Maung Maung Win said Tuesday that the government is preparing to spend up to 5 percent of GDP for economic recovery from the COVID-19 pandemic.
Myanmar’s GDP is more than US$70 billion, which means the deputy minister expects the country to spend $3-3.5 billion on stimulus efforts.
U Maung Maung Win said in Parliament that the government needs to increase stimulus spending to revive the economy, as well as spending to upgrade the health sector and provide cash and food for low-income households and others. He emphasized the importance of the spending despite declines in government revenue due to relaxation of commercial taxes and license fees as well as declines in foreign direct investment (FDI), export earnings (including from natural gas), remittances and income from the tourism sector.
The head of MOPFI, U Soe Win, said the government would need several hundred billion kyats for the economic relief plan, the details of which are currently being worked out between government departments.
Myanmar plans to launch central e-commerce website
MOC is planning to launch a central e-commerce website to enable businesses to sell produce online, as part of the government’s plan to promote the use of digital platforms and drive economic growth.
During the ministry’s first e-commerce meeting, Deputy Minister for Commerce U Aung Htoo said the website will launch before the end of this year. He added that it will only accept funds through bank transfers, mobile payments or card payments. The ministry says it will soon release an overview of its plan to develop e-commerce in Myanmar.
Myanmar’s COVID-19 Economic Relief Plan (CERP) also includes commitements to promote e-commerce as well as the use of digital and mobile platforms for payments and retail trade.
Singaporean firm to help Myanmar with key infrastructure projects
MOPFI signed a deal with Singapore’s Infrastructure Asia (IA) initiative to help Myanmar identify suitable investors for infrastructure projects listed in Myanmar’s Project Bank, including by inviting international-standard tenders.
According to the Singapore Embassy, IA agreed to share best practices and knowledge in order to structure and improve the bankability of the projects, as well as identify and connect authorities with suitable investors and other partners.
IA will also work with MOPFI to appoint advisers to carry out procurement, provide technical support and invite international-standard tenders.
Launched in February, the Project Bank is an online platform that aims to establish “a predictable and transparent system” and provide key data such as project descriptions and status, total project cost, financing plans and timelines. It also notes the implementing government agency, project contact details and how each project aligns with the Myanmar Sustainable Development Plan (MSDP). Only projects that align with the MSDP will be included. Launched in 2018, the MSDP aims to align the country’s policies and institutions to achieve inclusive economic growth.
Myanmar tourism sector needs more govt support
A new survey on the impacts of COVID-19 on Myanmar’s tourism sector showed that over 80 percent of micro, small and medium-sized tourism businesses (MSMEs) are ‘extremely badly’ affected by the pandemic.
The survey, backed by the Ministry of Hotels and Tourism (MOHT) and carried out by Luxembourg Aid and Development and the Luxembourg Agency for Development Cooperation, said all tourism MSMEs have been significantly impacted by a lack of customers, income and financing.
The survey said almost 90 percent of tourism-related MSMEs have seen decreased revenues. Almost 80 percent had very little business and 60 percent had to reduce their workforce, either by laying off staff or putting staff on furlough or unpaid leave following travel restrictions due to COVID-19. Moreover, 42 percent have increasing debt due to lack of cash flow and another 42 percent also had trouble with their supply chains due to border and airport closures.
The survey revealed that confidence in the government’s ability to provide sufficient support is very low: only 5 percent of businesses surveyed said they believed this was the case while 21 percent said they do not have confidence in the government.
The survey found that the government also faces a challenge as far as giving clear information and direction for tourism business, as 53 percent of MSMEs stated that they did not know what government support is available and 21 percent said it is hard to know, as the situation is constantly changing.
Myanmar ends ban on imports of foreign liquors
MOC announced it will end a decades-old ban on liquor imports on Monday, instead imposing high taxes. MOC said the move aims to control illegal imports, increase tax revenue from the liquor market and meet demand.
However, the ministry said that the import of any products with a value of less than US$8 a liter will still be banned in order to protect local producers. Imports of foreign beer and cigarettes are still banned.
New investments approved in Yangon and Ayeyarwaddy
On Wednesday, the Yangon Regional Investment Committee approved about US$4.82 million in foreign investments from Chinese investors and 1.6 billion kyats (US$1.15 million) in investments from local investors, according to the Directorate of Investment and Company Administration (DICA).
The investments involved the garment and manufacturing industry as well as companies that produce snacks. Yangon Regional Investment Committee has expected that the two investments would create job opportunities for 2,996 people.
The Ayeyarwady Regional Investment Committee also approved US$700,000 in Chinese investment for a garment factory that will allegedly employ 610 people.
Myanmar is still US$2.4 billion short of its target for foreign investment for the current fiscal year, which ends in September, DICA told reporters on Wednesday.
U Thant Sin Lwin, director general of DICA, said that the government can still meet the investment target for the year since they are now considering nearly US$1.3 billion in new investments and more investments will come in the remaining months.
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