YANGON—Myanmar’s major businesses are back in operation as no local transmissions of COVID-19 were detected for more than two weeks. Many tourism-related business in some states and regions are preparing to reopen, particularly in tourism hotspots for both local and foreigners. The government also announced that the number of company registrations in May was significantly higher compared to April, when Myanmar received its lowest number of new registrations since current regulations began in 2018.
The Japan International Cooperation Agency (JICA) announced 5 billion yen (US$45.75 million) in loans to assist businesses in Myanmar hit by the coronavirus pandemic. The Myanmar government said it has lent a total of 28 billion kyats (US$20.2 million) to businesses hit by COVID-19, 10 billion kyats of which went to tourism businesses.
The Ministry of Commerce said Myanmar’s exports to China dropped by a total of US$160 million during the 8 months since the start of this fiscal year (2019-2020) compared with the same period during last fiscal year (2018-2019) due to the effects of COVID-19.
Myanmar’s online company registrations rebound
The government investment agency, the Directorate of Investment and Company Administration (DICA), said that the number of online company registrations in the country doubled in May compared with the previous month. In April, the country saw a significant decline in registrations due to the effects of the global pandemic.
DICA said the number of company registrations increased to 798 in May, up from 348 in April. According to current regulations, all companies must register through Myco, an online registration system launched by DICA.
According to DICA, it received a total of 1,400 registrations in May 2019. Currently, a total of 68,000 companies have registered through Myco since 2018.
Government lends 10 billion kyats to the tourism sector
As tourism businesses demand more support from the government, officials said that tourism businesses have so far have received over a third of total loans from the government for COVID-19 relief.
On Monday, U Aung Naing Oo, the permanent secretary from the Ministry of Investment and Foreign Economic Relations (MIFER), said that the government has lent a total of 28 billion kyats (US$20.2 million) to businesses hit by COVID-19 as of June 1, including more than 10 billion kyats lent to tourism businesses.
According to MIFER, the government launched its fourth loan program last week and has been reviewed remaining applications for loans. The Myanmar government launched its COVID-19 relief fund for local businesses in March, targeting small and medium-sized enterprises and the garment, manufacturing, and hotel and tourism sectors, offering loans at a 1 percent interest rate.
According to MIFER, the government has lent 7 billion kyats to a total of 168 hotels, over 1 billion kyats to 107 tourism-related businesses including tour companies and another 1 billion-plus kyats to a total of 58 restaurants.
MIFER said a total of 4,258 garment and manufacturing businesses and small and medium-sized enterprises applied for loans. MIFER has granted loans to 726 businesses as of May 22.
Japan announces loan for small businesses
The Japan International Cooperation Agency (JICA) has announced emergency loans worth 5 billion yen (US$45.75 million) to assist businesses in Myanmar hit by the coronavirus pandemic as part of its plan to help the country mitigate the impacts of COVID-19.
On Monday, JICA said the loans will be low-interest and will support small and medium-sized enterprises (SMEs) to continue operations despite the severe economic situation caused by COVID-19.
JICA said it is financing the emergency program by restructuring an ongoing SME financing project that started in 2018, known as “JICA SME Two-Step-Loan Phase 2”, to respond quickly to the serious situation of SMEs.
According to JICA, the emergency program is operated through Myanma Economic Bank and other commercial banks participating in the SMEs project, which aims to support Myanmar’s COVID-19 Economic Relief Plan (CERP).
The new loans can be used for both working capital and fixed asset investments without any limitations on the ratio between the two, with the baseline interest rate set at 5.5 percent as of May 2020, JICA said.
JICA said the loans can mature in one to five years, including appropriate grace periods that will be set to facilitate repayment by SMEs. The majority of the funds are available for loans with relaxed collateral conditions to enable more SMEs to access the funds, according to JICA.
JICA said the new loan program is the first in a series of upcoming COVID-19 response projects it has in the pipeline.
Myanmar’s border trade with China declines
Myanmar’s border trade with China during the first 8 months of this fiscal year, which began in September 2019, dropped by US$160 million compared with the same period last fiscal year, according to the Ministry of Commerce.
Ministry of Commerce spokesperson U Khin Maung Lwin said movement and border gate restrictions due to COVID-19 disrupted trade.
From Oct. 30, 2019 to May 15, 2020, Myanmar imported a total of US$2 billion-worth of goods through the Muse, Chinshwehaw and Kanpiketi border gates.
Since late March, China has strictly controlled border gates between Yunnan Province and Myanmar to prevent the further spread of COVID-19. Myanmar farmers and traders have been hurt badly following China’s restrictions and controls on the border.
The Myanmar government has received criticism from traders and farmers over the significant decline in border trade. Recently, Myanmar and China held a series of discussions about how restrictions on the border have negatively impacted Myanmar’s seafood and fruit industries.