Business Roundup

The Irrawaddy Business Roundup

By Zaw Zaw Htwe 19 December 2020

Yangon – This week, Myanmar’s government has been looking to relax COVID-19 restrictions to allow the economy to recover despite soaring numbers of coronavirus cases.

Myanmar has lifted its COVID-19 ban on domestic flights but has already seen a decline in foreign investment in the Thilawa Special Economic Zone (SEZ) in Yangon.

The World Bank has forecasted that Myanmar’s economy will start a slow recovery early next year.

Meanwhile, all firms in the extractive sector have been ordered to publicly disclose all contracts next year.

Myanmar resumes domestic flights 

On Dec. 16, Myanmar’s government lifted its COVID-19 ban on domestic flights which was imposed on Sept. 11 to curb the spread of COVID-19.

The government is also planning to resume international commercial flights at the end of December.

State Counselor Daw Aung San Suu Kyi said last Friday that the government is planning to lift its ban on international flights to boost the country’s recovery.

Myanmar banned international flights in late March, only allowing relief, cargo and special flights.

Thilawa SEZ investment declines

Due to the impact of COVID-19, the Thilawa SEZ in Yangon has reported a 50-percent, year-on-year decline in foreign investment, according to the SEZ management committee.

During eight months this year, only five foreign investments were approved for Thilawa SEZ.

“The flow of foreign investment into the SEZ has not completely stopped. Some discussions are ongoing,” Daw Than Than Thwe, joint secretary of the management committee, told The Irrawaddy this week.

By February, more than US$2 billion (2.7 trillion kyats) in 117 foreign investments from 19 countries were approved at Thilawa since 2014-15.

Recover forecast for early 2021

The World Bank warned on Wednesday that Myanmar’s poverty could increase due to COVID-19 restrictions but a slow recovery could start by March next year.

The bank said many households were struggling to repay debts and COVID-19 restrictions were putting more citizens at risk of falling into poverty.

“Myanmar needs to act fast in implementing its COVID-19 response plans to support the economy and mitigate increases in poverty,” said Mariam Sherman, World Bank director for Myanmar, Cambodia and Laos.

She added that Myanmar should focus on measures that slow the spread of the virus, provide relief and food security to the poor and most vulnerable, and support economic activity for the short term.

“Over the longer term, public investments in infrastructure and digital technologies can increase domestic demand and employment, while boosting the productive capacity of the economy,” Sherman said.

The World Bank said Myanmar’s economic growth is projected to remain subdued at 2 percent in 2020-21, due to COVID-19 containment measures.

Mining firms told to publish contracts

Myanmar’s President U Win Myint has ordered the government, state-owned enterprises and private companies in the country’s extractive sector to publicly disclose their contracts from Jan. 1.

The president said all union, states and regions, government departments, state-owned enterprises and private companies must disclose the full text of any contract, license, concession or other agreement.

He said all parties extracting oil, gas, timber and minerals must follow contract transparency rules in collaboration with the Myanmar Extractive Industries Transparency Initiative (MEITI).

The 2017-18 MEITI report said the extractive sector accounted for 4.8 percent of the country’s GDP, 5.2 percent of state revenue and 35 percent of exports in that financial year. In 2016, 60-80 percent of gemstones in Myanmar were not declared and bypassed the formal system, according to MEITI.

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