What is Myanmar doing to mitigate the economic impact of COVID-19?
** Last Update: 4 April ***
Inspired by recent reporting by KPMG and Oxford Business Group, this post is intended to describe various measures taken by the Government of Myanmar aimed at mitigating the economic fallout of the Coronavirus Disease 2019 (COVID-19).
NB: This post is being updated as new information becomes available. As usual, if I’ve missed something please let me know.
Coordination Mechanisms
National-Level Central Committee for COVID 19 Prevention
On 13 March 2020, the National-Level Central Committee for COVID 19 Prevention was formed, chaired by the Minister for International Cooperation and co-chaired by the Minister of Health. The Committee is focused on:
“…prevention and containment of severe pneumonia caused by COVID 19, monitoring quarantined patients and suspect cases, providing educational awareness to the public and travellers on this virus, disseminating news, prevention, monitoring and cure of this disease and supervising the work in this regard and for the importing of required medical equipment in time.”*
Working Committee to Address the Impact of Coronavirus Disease 2019 (COVID-19) on the Country’s Economy
Chaired by H.E. U Thaung Tun, Minister for Investment and Foreign Economic Relations. Members include the Minister of Planning, Finance and Industry, Minister of Labour, Immigration and Population, Minister of Commerce, the Governor of the Central Bank of Myanmar, the Deputy Minister of Hotels and Tourism, the Permanent Secretary of Ministry of Transport and Communications and the Director-General of the Ministry of Commerce. The Permanent Secretary of the Ministry of Investment and Foreign Economic Relations serves as Secretary.
COVID-19 Control and Emergency Response Committee
On 31 March 2020, President U Win Myint formed a new inter-ministerial committee titled the COVID-19 Control and Emergency Response Committee. You can find the official notification here. The committee is Chaired by H.E. U Myint Swe, Vice President, members include the Minister of Defence, Minister of Border Affairs, Minister of Culture and Religious Affairs, Minister of Transport and Communications, Minister of Labour, Immigration and Population, Minister of Social Welfare, Relief and Resettlement, Minister of Home Affairs, Minister of the Union Government Office, and the Chief of the General Staff (Army, Navy and Air) from the Office of the Commander-in-Chief (Army).*
Tasks will include:
- investigating people who have contact with persons infected with COVID-19 and to test and quarantine those individuals as soon as possible;
- overseeing the quarantine of thousands of migrant workers returning from Thailand and elsewhere;
- implement community lockdowns; and
- assist with the provision of food and health care, among other things.
- take actions against those who are spreading fake news through social networks and elsewhere;
- take action against those who are seeking to take financial advantage of the COVID-19 pandemic by selling drugs, food and other household commodities at an inflated price.
In areas where lockdowns are being implemented, the Committee is tasked with developing policies to ensure essential shops, drugstores, plants and factories, continue to operate safely.
In a 31 March 2020 Myanmar Times article, the State Counselor was quoted as saying:
“For the benefit of the country, a community quarantine will be imposed only where it is necessary.”
“…once a community is locked down, the new committee headed by Vice President U Myint Swe would ensure there are no shortages of food, medicine or other essentials.”*
Some have asked what is the difference between the 13 March National-Level Central Committee for COVID 19 Prevention and the 31 March COVID-19 Control and Emergency Response Committee. Gregory Kleiman sums it up below:
Political analyst U Maung Maung Soe told The Irrawaddy in a 31 March 2020 interview:
“The committee will be more focused on stability, security and law enforcement. This is the reason the military and its appointed officials have to play a major role in the committee.”
“The national committee will make the policy and the emergency committee will have to apply it on the ground. They will handle people who break the rules and regulations strictly during an outbreak.”
In more detail:
On 30 January 2020, the Government of Myanmar formed the “Committee for Preventing, Containing and Treating Pneumonia caused by COVID-19 Virus”. This committee was chaired by the Minister of International Cooperation and co-chaired by the Minister of Health.
On 13 March 2020, the government formed the separate “National-Level Central Committee for COVID-19 Prevention” chaired by the State Counsellor. That same day, the government also formed a “Working Committee to Address the Impact of Coronavirus Disease 2019 (COVID-19) on the Country’s Economy” chaired by H.E. U Thaung Tun, Minister of Investment and Foreign Economic Relations. This working committee exists as a sub-committee of the National-Level Central Committee.
Then, on 31 March 2020, the government formed the “COVID-19 Control and Emergency Response Committee”, chaired by H.E. U Myint Swe, Vice President 1. This committee has been reported as being an upgraded and reconstituted version of the National-Level Central Committee. I think it is, in fact, the 30 January committee that the new Emergency Response Committee replaces.
13 March 2020 — 45/20 — National-Level Central Committee for COVID 19 Prevention
31 March 2020 — 53/2020 — COVID-19 Control and Emergency Response Committee
Stimulus Packages
The government announced a major stimulus package on 18 March 2020 including:
“…100 billion kyats (nearly US$70 million) worth of loans, eased deadlines for tax payments, and tax exemptions for Myanmar-owned businesses that have been hit by the global pandemic.”*
The fund consists of 50 billion kyats from Myanmar’s revolving fund and another 50 billion kyats from the social welfare fund.
On 30 March 2020, the Myanmar Times reported that loans would be targeting the following sectors:
- Cut-Make-Pack (CMP) Enterprises in the Garment Industry;
- Hotels and Tourism Businesses; and
- Small and Medium Enterprises (SME).*
Loans will be provided at an interest of 1% for one year but will be up for review.
Those seeking loans must:
- apply between 30 March and 9 April 2020;
- be able to prove that they have been impacted by the COVID-19 pandemic,
- be an operating enterprise that will temporarily halt operations for three months (from the date of announcement), but can start operations immediately after receiving the loans; and
- be able to show that they have been generating revenue over the past two years and can pay back the loan.
Failure to pay back loans shall be met with legal proceedings as per existing laws.
On 2 March 2020 DFDL Myanmar published a solid overview of various financial relaxations which can be found here.
Tax Exemptions & Deferments
Qualifying businesses now have until the end of September 2020 (originally 31 March 2020 for Q2, and 30 June 2020 for Q3) to lodge quarterly income tax.
The monthly commercial tax, which was supposed to be paid by 31 March 2020, has also been deferred until 30 September 2020.
Businesses will also be exempt from paying a 2% advance income tax on exports until 30 September 2020, i.e. the end of the current fiscal year.* An article by Eleven Media Group provides slightly more detail:
“The persons who submit the export declaration forms must use (ECMA) AT Exemption Code for COVID-19 so as to enjoy the exemption of a two-per-cent advance income tax, according to the statement by Customs Department at the Ministry of Finance and Industry. For more information, any person can contact the Help Desk Section of MACCS’s (branch). With the aim of mitigating the impacts caused by COVID-19 on local businesses, the Ministry of Finance and Industry announced the notification №38/2020 on the exemption of a two-per-cent advance income tax, exercising the rights entrusted under Section 16 (b) of the Income Tax Law. According to the notification, the export and import businesses will be exempt from the collection of 2 per cent advance income tax.”*
The Central Bank of Myanmar
The Central Bank has assured citizens that banking will continue despite the crisis, while also ordering banks to make contingency plans that would permit the continued operation of services.*
Dropping Interest Rates
The CBM dropped interest rates by 0.5% on 12 March 2020, and again by 1% on 25 March 2020 — from 10% to 8.5% — effective 1 April 2020.
“According to the latest directive, the minimum bank deposit rate will be lowered from 7.5 percent to 6.5 percent, while the maximum lending rate will be lowered from 12.5 to 11.5 percent for collateralized loans and from 15.5 percent to 14.5 for non-collateralized loans.”*
Lifting Limits on Mobile Banking
The CBM has stated that limits on mobile banking will be raised to increase public convenience.
ATM Servicing
Banks have been advised to make arrangements to ensure branches and ATMs remain fully stocked and operational across the country.*
Other Banks & Financial Service Providers
United Amara Bank
United Amara Bank (UAB) has announced financial relief measures focused on alleviating short term cash-flow problems to assist customers affected by the COVID-19 virus.
“This includes a moratorium on loan repayments for up to six months, restructuring and rescheduling of existing loans and additional financing to affected customers in the hardest-hit sectors.”*
Wave Money
Wave Money is reported to be doubling transaction limits for over-the-counter money transfers from K500,000 to K1 million with immediate effect, to be in place until 30 April 2020.*
Other Ministries
Ministry of Transport and Communications
On 28 March 2020, the MoTC directed all Regional Supervision Committees to instruct bus lines to reduce the number of passengers by half. According to the Yangon Region Transport Authority (YRTA), bus lines at the Yangon Region Highway Bus Terminal will continue selling tickets at normal prices. It has also been reported that the Mandalay Region Supervisory Committee for Motor Vehicles has issued a notice saying all Mandalay bus lines must charge passengers for two tickets, or double the price, starting from 28 March 2020.*
Ministry of Commerce
The Department of Trade of the Ministry of Commerce will provide a range of new online services as of 1 April 2020 to reduce person-to-person contacts thus helping to prevent COVID-19 transmission. Online services are reported to include licence applications and receipt, and fee payments, and will cover CMP businesses, imports of medicines and related items, hospital equipment, foodstuffs, fertilisers, palm oil and oil products, milk and dairy products, electronic gadgets, items for fuel, lubricants, motorbikes and bicycles. Online export licences will be issued for agricultural products, lead, sugar, natural gas and other products.*
According to the Ministry of Commerce, companies will be able to fill in application forms at the website www.myanmartrade.com.mm.*
