YANGON—Myanmar is set to receive around US$2 billion from international development organizations to implement its COVID-19 Economic Relief Plan (CERP), which seeks to mitigate the economic impacts of the global pandemic.
Deputy Minister of Planning, Finance and Industry U Set Aung wrote on Facebook that at least four or five international development organizations, as yet unnamed, have already committed to support Myanmar’s economic relief plan.
U Set Aung said that the government is currently calculating how much of the budget for the plan will come from foreign aid and how much will come from budget re-allocation.
Launched by the Myanmar government in late April, the relief plan aims to help the country recover from the economic and social impacts of the global pandemic. The CERP includes a number of strategies and responses, including steps to re-allocate 10 percent of the 2019-20 budget for all government entities to the COVID-19 response fund.
According to the international organizations, Myanmar needs to spend US$2-3 billion to implement its action plans.
“At present, the country’s external debt to GDP ratio is less than 15 percent, and it is appropriate to take concessional loans,” U Set Aung said.
“At this time, [the country] does not want to reduce government spending, which is one of the major components of GDP. But government spending should be used effectively. The CERP will provide policy to direct current government spending,” the deputy minister said.
The Ministry of Planning, Finance and Industry (MOPFI) and the Ministry of Investment and Foreign Economic Relation (MIFER) organized a video conference last week to coordinate the views of international development partners. At the meeting, all development partners supported the CERP and agreed to provide assistance, according to the minister.
According to the MOPFI, government is also negotiating for aid and assistance from the World Bank, the Asian Development Bank (ADB) and the International Monetary Fund (IMF) to help to implement the plan.
The CERP focuses on improving the macroeconomic environment through monetary stimulus; easing the impact on the private sector through improvements to the investment, trade and banking sectors; assisting laborers, workers and households; promoting innovative products and platforms; strengthening the health care system; and increasing access to COVID-19 response financing, including contingency funds.
Among several steps aimed at easing the impact on private sector firms, the government has committed to increasing funding in support of local businesses. According to the plan, the government will increase the COVID-19 fund for domestic businesses from 100 billion kyats (US$71.7 million) to 200-500 billion kyats by the end of 2020, depending on the market response.
Under the plan, the government will also establish a separate 100-billion-kyat fund by the end of 2020 for designated commercial banks to promote financing of trade of any products. Among steps to ease the impact of COVID-19 on households, the CERP includes cash transfers for the most vulnerable and the worst-affected, including IDPs, through mobile financial services transfers.
The plan includes measures for the Ministry of Health and Sports (MOHS) to improve the country’s health care system by upgrading existing laboratories, hospitals and health care centers and recruiting and training doctors, nurses, medical staff, health care workers and volunteers.
Last week, MOPFI head U Soe Win held a teleconference discussion about the World Bank’s loan program for Myanmar with Mariam J. Sherman, the World Bank country director for Myanmar, Cambodia and Laos. During the meeting, both sides also discussed how to increase Work Bank International Development Association (IDA) loans to $200 million for the Myanmar: National Food and Agriculture Systems Project.
The government’s relief plan has committed to help farmers, including by facilitating rice exports to maintain immediate incentives for farmers to plant this season.
In late April, the World Bank announced a $50 million emergency loan for Myanmar which focuses on supporting improvements to hospital systems and public health emergency preparedness in the battle against the coronavirus across the country.
The Union Parliament has announced it will resume on May 8 to approve a supplementary budget allocation and foreign loans to support the government’s COVID-19 responses.
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