Republic of the Union of Myanmar Working Committee to address impact of Coronavirus Disease 2019 (COVID-19) on the Country’s Economy

Press Release 1/2021
17 March 2021

  1. The Working Committee to address the impact of Coronavirus Disease 2019 (COVID-19) on the Country’s Economy disbursed loans from the COVID-19 Fund with 1 per cent interest rate per year to businesses which are hit by the COVID-19 on 9 April 2020, and the loans which were taken out earliest will turn a year soon and the time comes to be paid off to the committee.
  2. To help the domestic businesses continue to run with the smooth financial flow, the State Administration Council has instructed the committee to extend the end of the loans period to six months from the set date.
  3. Hence, it is hereby announced to those who took out the loans from the COVID-19 Fund that the end of the loans period has been extended to six months from the date for returning the loan.

Source: The Global New Light of Myanmar


Manufacturing exports fall by $1.64 bln as of 5 March

EXPORTS of finished industrial goods drastically fell to US$3 billion between 1 October and 5 March in the current financial year 2020-2021, a severe drop of $1.64 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce. As per the ministry figures, the exports of finished industrial goods totaled $4.68 billion during the same period in the 2019-2020FY. Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, contributing to the country’s GDP to a certain extent. Myanmar’s garment export dropped by over 25 per cent as of the first quarter of the current FY compared with a year-ago period on the back of a slump in demand by the European Union market, the Ministry of Commerce stated.

Myanmar’s garment industry has been facing challenges such as raw material supply disruption and orders’ cancellation amid the pandemic. Additionally, the current political conditions would drag down the sector, a market observer shared his opinion. At present, the CMP garment factories temporarily shut down and left thousands of workers unemployed. Myanmar mainly exports CMP garments to markets in Japan and Europe and the Republic of Korea, China, and the US. The garment sector is among the prioritized sectors driving up exports. The CMP garment industry has emerged as a promising one, with preferential trade from Western countries. Yet, the country’s current political changes are likely to aggravate the garment industry, traders stressed. Myanmar’s garment factories operate under the CMP system, and those engaged in this industry are striving to transform CMP into the free-on-board (FoB) system.

As the factories cannot enter into a contract for FoB, Own Design Manufacturing (ODM) and Own Business Manufacturing (OBM), the income is limited, according to the MGMA. According to data from the Ministry of Commerce, exports of garments manufactured under the cut-make-pack (CMP) system were valued at US$4.798 billion in the last financial year 2019- 2020. Although the sector is struggling due to the cancellation of order from the European countries and suspension of Western countries’ trade during the pandemic, export values rose in the previous FY (1 October 2019-30 September 2020). The export value of CMP garments was only $850 million in the 2015-2016FY, but it has tripled over the past two FYs. In the 2016-2017FY, about $2 billion was earned from exports of CMP garments.

The figure increased to an estimated $2.5 billion in the 2017-2018FY and $2.2 billion in the 2018 mini-budget period (from April to September). It tremendously grew to $4.6 billion in the 2018- 2019FY, according to the Commerce Ministry. Since an outbreak like COVID-19 might happen in the future, it is necessary to prepare for a sufficient raw materials supply. That being so, the public and private sectors will cooperate in setting up the supply chain on our own sources, including weaving, knitting, dyeing, and sewing factories. The MGMA has more than 500 members and garment factories in Myanmar, employing more than 400,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar.

Source: The Global New Light of Myanmar


Agro-exports remain to rise even private banks shut down

The agricultural exports unexpectedly surge over the past five months even though traders face transaction problems due to the closure of private banks. The agricultural exports have topped US$2.49 billion as of 5 March 2021 in the current financial year since 1 October 2020. The figures reflect a significant rise of $765.74 million this FY. The agro-exports soared from $1.72 billion in the corresponding period of the 2019-2020 FY. According to the trade figures released by the Ministry of Commerce.

Myanmar’s agricultural exports rose regardless of the coronavirus’s impact on foreign demand for other export groups and political instability. Private banks’ closure forced the traders to turn to the operators running ‘hundi’, an informal money transfer system, to make transactions in the border trade. At present, some ocean liners suspended cargo transport from Myanmar in recent days. The cargo transport will double or triple if we conduct the trade with small ships. It could harm the export sector somehow, according to Myanmar Mercantile Marine Development Association.

In the exports sector, the agriculture industry performed the best, accounting for over 22 per cent of overall exports. The agricultural sector’s top export items are rice and broken rice, pulses and beans, and maize. Fruits and vegetables, sesame, dried tea leaves, sugar, and other agro-products are also shipped to other countries. Myanmar agro products are primarily exported to China, Singapore, Malaysia, the Philippines, Bangladesh, India, Indonesia, and Sri Lanka. Sometimes, the export market remains uncertain due to unsteady global demand.

The country requires specific export plans for each agro product, as they are currently exported to external markets based upon supply and demand. Contract farming systems, regional and state agriculture departments, exporters, traders, and some grower groups are required to meet production targets, said an official from the Agriculture Department. The Commerce Ministry is working to help farmers deal with challenges such as high input costs, procurement of pedigree seeds, high cultivation costs, and unpredictable weather conditions. 

Source: The Global New Light of Myanmar