The Irrawaddy Business Roundup
By Nan Lwin 16 January 2021
YANGON — As Yangon saw a significant decline in COVID-19 cases, the authorities have ordered the closure of eight temporary hospitals in the city. However, Myanmar’s economy continues to suffer from the effects of coronavirus. This week, Sule Shangri-La Hotel, one of Yangon’s leading five-star hotels, announced its temporary closure after facing prolonged losses due to the travel restrictions. The Ministry of Hotels and Tourism said about half of all hotels in Myanmar have been temporarily shut.
Moreover, the Ministry of Commerce said foreign trade has declined by more than US$1.3 billion (1.7 trillion kyats) since August, compared with last year. A Thai construction giant also revealed a consortium it leads has received a termination letter for the development of the vast Dawei Special Economic Zone (SEZ) in southern Myanmar’s Tanintharyi Region.
The Central Bank of Myanmar has also given two Taiwanese banks the green light to open branches in Yangon.
More hotels shut temporarily
The tourism ministry said about 1,000 hotels— about half of Myanmar’s hotels – have temporarily closed due to COVID-19 restrictions.
About 30,000 hotel staff have been made unemployed, the ministry said.
Before COVID-19, there were more than 2,000 hotels and guest houses in Myanmar with 64,076 staff. On Dec. 31, the sector had 36,730 employees.
The Sule Shangri-La Yangon has announced its temporary closure for about nine months from February 1 until the end of 2021 to mitigate the financial impacts of COVID-19.
About two-thirds of hotels in the tourist destination of Bagan are also planning to close as they struggle to stay afloat.
Foreign trade declines
The commerce ministry said Myanmar’s international trade has fallen by more than $2.3 billion (3.1 trillion kyats) in the first three months of the 2020-21 fiscal year.
Between Oct. 1 and Dec. 31, Myanmar sold more than $7.6 billion (10.1 trillion kyats) in goods compared with about $10 billion (13.3 trillion kyats) last year.
Agricultural goods, including fishery products, sold for about $5 billion (6.7 trillion kyats) in the first three months of the last fiscal year, but around $3.6 billion (4.8 trillion kyats) this year. Exports of manufactured goods, including garments, fell by more than $1 billion (1.3 trillion kyats) from the last fiscal year.
Myanmar ditches Thai-led Dawei consortium
Myanmar has terminated the involvement of a consortium led by the Italian-Thai Development Public Co. Ltd (ITD) in the development of the Dawei SEZ.
The company received notification of termination of its agreement to develop the initial phase of the SEZ from the Dawei Special Economic Zone Management Committee on Dec. 30. It said the notification claimed the consortium had failed to make concession fee payments and had not complied with conditions before commencing operations under its concession agreement.
ITD said its legal adviser would prepare a “letter of clarification and rebuttal to the allegations”.
Taiwanese banks allowed to open
Two Taiwanese banks, Cathay United Bank and Mega International Commercial Bank, received licenses from the central bank to open branches in Yangon.
The central bank said it gave the banks nine months to prepare technology, hire staff and other requirements.
Cathay United announced it would open in the Junction City Tower.
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