YANGON—Myanmar’s government has reimposed COVID-19 restrictions on Yangon after the city saw a spike in cases. But many businesses are trying to return to work. Meanwhile, exporters suffer amid the slump in the value of the dollar.
As a part of its COVID-19 relief fund, the government said it has invested 40 billion kyats (US$30 million) in small, rural businesses. Moreover, garment manufacturers are facing significant declines in orders from Europe and the US and many factories are planning to sack staff.
Myanmar’s cross-border exports have fallen from last year due to the impact of COVID-19, according to the Ministry of Commerce.
But it is not all bleak. A Philippine-based creative digital marketing agency has launched an operation in Myanmar, agreeing a joint venture with one of the country’s largest conglomerates.
Dollar decline continues
Although the Central Bank of Myanmar (CBM) has purchased dollars from private banks to prop up the market, the dollar continues to depreciate against the kyat.
The central bank bought more than $36 million (48 billion kyats) in August with the dollar varying from 1,333 to 1,361 kyats.
The dollar is currently trading at around 1,350 kyats. In late March, the dollar was around 1,550 kyats and it hit 1,600 kyats in October 2019.
In the first six months of this year, the CBM said it bought more than $160 million (213 billion kyats) to make up for a sharp drop in the dollar’s value.
Cash for small businesses
The Department of Rural Development said the government had used more than 40 billion kyats from its village fund to support small, rural businesses hit by COVID-19.
The government’s “Cash for Work” project aims to mitigate the economic impact of COVID-19 on the rural poor.
Loans have been delivered to businesses in 1,710 villages, the department said.
Garment orders slump by 75%
Garment factories are struggling as orders from the European Union for spring clothing have declined by more than half, according to the Myanmar Garment Manufacturers Association (MGMA).
Factories traditionally begin to produce spring clothing for the European market in August. But this year they only received an estimated 20 to 25 percent of the orders compared to 2019.
The garment sector mainly relies on the US and EU markets. Some factories are planning to reduce their workforces and temporarily or permanently close due to declining orders, the MGMA said.
Since the first COVID-19 case in Myanmar in late March, many factories have cut jobs and have been forced to either temporarily or permanently close.
Border exports decline
Myanmar’s cross-border exports fell by $37 million (49 billion kyats) from the same period last year due to COVID-19 restrictions, according to the Ministry of Commerce.
Exports were valued at $6.5 billion (8.6 trillion kyats) from October 2018 to August 2019. The figures for this financial year have fallen by $37 million.
The ministry said exports to China were hit the hardest because of Beijing’s heavy restrictions on border trade, imposed to avoid COVID-19 being reimported. Corn exports to China have been suspended since late August.
Drivers from Myanmar are also barred entry to China, further hampering trade, the ministry added.
Philippine digital firm opens in Myanmar
A Philippine-based creative digital marketing agency, Xiklab Digital, has officially launched operations in Myanmar and Singapore, the company announced.
The operation, called “Hello Xiklab Yangon”, is a joint venture with the Myanmar Golden Star (MGS) group, one of the largest conglomerates in Myanmar.
MGS is engaged in Myanmar’s beverage sector, banking and microfinance, hospitality, real estate, commodity trading and the media.
Xiklab said its services in Myanmar would provide services to the MGS group and other clients outside the group.
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