Rising Commodity Prices and Inflation Rate

22 November, 2021

Increasing prices of essential food items

According to the International Food Policy Research Institute (IFPRI)’s survey report on July 2021, food price inflation over the 12-month period from June/July 2020 to July 2021 amounted to 7.0 percent. Prices of the cheapest available rice and cooking oil increased by 13 percent and 47 percent, respectively, in July 2021 compared to June/July 2020. On the other hand, onions (-26 percent), fresh fish (-14 percent) and chicken (-6 percent) showed price decreases compared to June 2020. Price changes between May and July 2021 were relatively minor, except for green leafy vegetables, which decreased by 17 percent.

Short supply, delays in transport (resulting in high spoilage), as well as high transport costs of perishable vegetables resulted in more than doubling of the average tomato price. According to the September market price rate, the price of a bag of rice has risen from K47,000 ($26.30) to K52,000 ($29.10), while the price of one viss of seasoning powder has soared from K3,500 to K6,500. One viss of cooking oil climbed from K4,000 to K5,500. Although these prices can vary according to regions, the main thing is prices of all essential food items are increasing.

Food price inflation was relatively higher in rural versus urban areas and in the Dry Zone and the Coastal areas. Households in the poorest quintile faced much higher food price inflation (10.4 percent) than those in the richest quintile (4.3 percent) as rice and cooking oils, which prices have increased substantially over the last year. The changes in the retail prices of food products compare to normal periods can be seen as follow.  

Source: IFPRI’s Food vendor survey (July 2021)

Increasing prices of essential non- food items

Besides, the prices of household goods like detergent, shower gel, toothpaste, toilet paper and etc. have also increased. Throughout COVID-19 period, there were closure of factories, and shortage of raw materials which cause insufficient supply of household goods to the market. Besides, many people also did panic buying at the beginning of  every Wave. Therefore, the prices of instock goods are higher than before. Moreover, the rise in fuel price and the COVID rules cause transportation charges higher than usual, so prices of the goods also increase in the market. Moreover, there is another reason that cause the prices increase, the Ministry of Commerce has banned the imports of detergent, shower gel, toothpaste and toothbrushes at border trade zones in early June, 2021. People were afraid of the shortage of supply of their essential non-food items, so they try to buy a massive amount and store at home whenever they can get the items they usually use. Another reason of increasing prices is the selfish shop owners. They increase the prices of instock items whenever the lockdown news or banned news released even they have bought them with normal price.

Estimation of inflation rate

Inflation rate in Myanmar had increased to 6.51 percent in July from 5.68 percent in June of 2021, according to Central Statistics Organization’s Consumer Price Index (CPI). On 29 September, Reuters mentioned Myanmar’s currency has lost more than 60% of its value since the beginning of September, driving up food and fuel price in economy since the beginning of February 2021. The significant depreciation of the Kyat against the US dollar has passed through to the prices of imported consumer goods and inputs. According to the market data, October 2021 had the highest inflation rate as the exchange rate rose to 2,300 kyats per dollar in the first week of October. Moreover, the prices of fuel were also at the peak during that time. On the other hand, the manufacturing PMI data indicate that higher input prices have been reflected in higher output prices in recent months. Overall, average annual inflation of 6 percent is projected for FY 2021, which would be consistent with a significant acceleration in inflation in the second half of the year, according to the World Bank’s data. Nevertheless, some prices including food prices are likely to increase more sharply as already discussed with adverse impacts on real incomes and livelihoods for the household in the country.

Foreign Direct Investment (FDIs) in Myanmar 2020-21

8 November, 2021

FDIs in 2020-21

Foreign investment in Myanmar was first depressed by the COVID-19 pandemic since 2020 and then it has fallen to an eight-year low after the political event in February 2021, based on the released data. According to the Directorate of Investment and Company Administration (DICA), the total amount of foreign investment permitted in Myanmar during 2020-2021 financial year was nearly US $ 3.8 billion, excluding the investments in Thilawa Special Economic Zone, while the approved FDIs during 2019-2020 financial year was US $5 billion (including capital raised to expand existing operations in the country).  Myanmar Investment Commission (MIC) intended to reach a target of US $ 5.8 billion during 2020-2021 financial year.

FDI inflows by sectors and countries in 2020-21

By the end of September 2021, the electric power sector leads the list of most invested sectors out of 12 business sectors with 28% of total investment. This was followed by oil and gas sector, accounting for 25.18% and the manufacturing sector, accounting for 14.26%.

According to the meeting on 3rd November 2021, Myanmar Investment Commission approved 13 new projects for agricultural, hotels and tourism, manufacturing, and other service sectors. The approved projects amounted to US $ 204.838 million and K 225,520.015 million, where 2,972 job opportunities are expected to create. By the end of September 2021, the countries/regions with largest investment out of 51 countries investing in Myanmar are Singapore, China and Thailand.

According to the World Bank’s Economic Monitor, July 2021, of the FDI projects approved during the first seven months of FY21, 54% were in the electricity sector, 26% in the manufacturing sector, and 6% in the hotel and tourism industry as in the following figure.

FDI commitments in the first seven months of FY21 declined
(Source: World Bank’s Economic Monitor, July 2021)

In terms of countries of origin, Japan accounted for 41 percent of total investment commitments in the first seven months of FY21 – much larger than in previous years. Other major investors were Singapore and China, accounting for 31 percent and 13 percent respectively. It can be seen as follow.

Investment commitments by country
(Source: World Bank’s Economic Monitor, July 2021)

FDI outflows

Throughout the year 2021, a lot of foreign companies have decided to either withdraw from Myanmar or downsize their operations in the country. German wholesale company Metro has announced it will cease its local operations by the end of October 2021. The company built a logistics base in the Thilawa Special Economic Zone, in suburban Yangon, and began offering food ingredients to restaurants and hotels in 2019.

Moreover, British American Tobacco announced that it would leave the Myanmar market at the end of 2021, with business sources in Yangon attributing its departure to commercial decisions. Having begun operating in the country in 2013, with a $50 million investment, BAT’s exit from Myanmar after less than a decade reflects the extent to which the business environment has deteriorated in just a few months.

In addition, some franchisees for foreign food and beverage brands targeting Myanmar’s growing middle-income segment- including Auntie Anne’s, a U.S.-based chain of pretzel shops, and Koi The, a tapioca tea house operator from Taiwan, have closed their businesses in Myanmar. According to DICA, $2.2 billion worth of investments or loans associated with foreign direct investment flowed into Myanmar in 2020. It is likely the total will fall significantly in 2021 since 1,873 foreign investment projects had left Myanmar as the end of September 2021.

The latest example is the closure of the $45 million Kempinski Hotel in Myanmar’s capital Naypyidaw, which hosted President Barack Obama during his state visit in 2014. The Geneva-headquartered international luxury hotel chain revealed this month that the flagship hotel would cease operations starting October 13. Besides, an official from Yoma Strategic Holdings (YSH) said that they could sell their assets and businesses in the coming months after facing declines in demand of hotels, restaurants and cafes due to COVID-19 and the changing situations that had even led to the closure of their Auntie Anne’s bakeries which was a partnership with US-based Focus Brands.

The current uncertain situations have left these foreign companies unable to decide whether the country’s political and public safety situations will return to normal, or whether the business environment might be made worse by tighter sanctions and other factors. Meanwhile, Myanmar is seen to be hurt by the drop-off in foreign currency revenue that is used to support the economy. It is very important to maintain the situations in the country stable in order not to lose further foreign investments, which is followed with the losing of job opportunities for the people in Myanmar. Myanmar Investment Commission together with relevant ministries should support more on existing FDIs and put advice to the government.

Rising Fuel Prices and its impacts

25 October, 2021

Fuel prices in Myanmar have increased more than doubled since February 2021, as the cost of crude oil has jumped in international markets and the kyat has weakened significantly against the US dollar throughout the year 2021. Fuel price inched higher in the global market at US$73.98 per barrel for WTI crude and $78.09 for Brent crude on 26 September. In mid-February, a dollar was worth MMK 1,430 only, then the Kyat continues to weaken in the local market and rising above MMK 2,100 per dollar in mid-October.

Before February, the price of a liter of octane or diesel fuel was around MMK 700. Then, it has soared to over MMK 1,500 since last week of September. In some stations, the prices have reached around MMK 1,900 as the prices are different according to the region of the station being located. By looking at the daily fuel price rate of Denko Trading, while the fuel prices in the stations of Yangon were around MMK 1,550, the stations in Kachin were around MMK 1,700 on 1 October, 2021. The trend of the fuel price from February to mid-October 2021 as be seen as follow:

(Source: Myanmar Petroleum Trade Association)

There is also an insufficient supply of fuel in the stations of some regions so people have to wait a long queue every time they go to the gas station. And sometimes, they don’t even get enough gallons they need. It causes a huge harm for the truck owners and drivers. Meanwhile, the prices of engine oil, tyres and other parts have increased due to the weakening kyat. With the increasing of fuel prices, the truck owners have to increase freight charges which causes the price of goods in the market higher as consequences. Currently, freight firms are only carrying basic food and consumer goods. They are struggling at the moment and they might have to halt operations if the situation gets worse.

Moreover, Yangon taxi drivers have been particularly hard hit. Many have stopped driving because they cannot afford fuel. According to a taxi driver in North Dagon Township, it is the worst situation he has ever had in his 40 years of driving taxi. Before September, he earned 30,000 kyats per day and spent 6,000 kyats for fuel in average. But now, he has to spend 20,000 kyats for fuel a day and earn only 30,000 kyats as they cannot ask for more money. They have to struggle a lot during these days with a lot of difficulties. Price of cooking fuel like LPG gas is increased by 30%. vIn addition, the price of cooking oil and other goods have also risen along with the rising fuel prices. The households in Myanmar are facing challenges to cover up the rising of food expenses and charges with low income.

Normally, Myanmar imports fuel oil primarily from Singapore, with monthly volumes touching 200,000 tonnes for gasoline and 400,000 tonnes for diesel. There are about 2,000 fuel stations and over 50 oil-importer companies in Myanmar, Myanmar Petroleum Trade Association stated. Myanmar imported nearly $2.3 billion worth fuel oil in the past ten months (Oct-July) of the current financial year 2020- 2021, according to the Ministry of Commerce. Normally, a monthly oil import is estimated at $400 million, yet the oil importers are facing banking restrictions for maritime trade besides Kyat depreciation. In order to stable fuel retail price and distribute gasoline and diesel in cheaper prices, the Central Bank of Myanmar sold US $50 million dollars to fuel imports with bank rate on 18 October 2021.

Trends of Dollar Exchange Rates in 2020-21

4 October, 2021

In the first six months of 2020-2021 budget year, exchange rates between of Myanmar’s kyat currency and US dollar were stable from October 2020 to January 2021 around kyat 1,350/$.  Starting from February 2021, kyat value has fallen day by day. In the second six months of the financial year 2020-21, the Myanmar kyat continues to weaken against the US dollar. The exchange rate reached an all-time highest of K2,700 per USD on 29September,2021. Monthly average dollar exchange rate was increased by 55% in comparing with previous budget year. The trends of monthly average exchange rate can be seen as below;

Source: Central Bank of Myanmar/ Wakema Money Exchanger

Since February 2021, the need for dollars grew after the sudden halt to exports and foreign direct investment. The flows of foreign currency into Myanmar stopped after indication of economic sanctions were introduced by some foreign governments and suspension of aid programs. The Central Bank of Myanmar (CBM) is carrying out an auction for foreign exchange to reduce the fluctuation of foreign exchange rates in a short-term period and fulfil the needs of foreign exchange reserves. During the financial year 2020-2021, the CBM reportedly sold US$ 184.8 million in total at its auction rate in the past eight month from February to September 2021. According to the monthly sales, the CBM sold $6.8 million in February, $12 million in April, $ 24 million in May, $12 million in June, $ 39 million in July, $28 million in August and $63 million in September 2021. However it was not affected much to save kyat value.

Rules and directives have been set out for the CBM’s auctions. Following these rules and directives, the CBM is trading the foreign currency through three State-owned banks, 19 local private banks and 13 foreign banks, which are holding authorized dealer-AD licenses. Due to differences between CBM rate and market rate were widen, the CBM issued order for AD licensed banks and money changers to follow 0.8% trading band on 8 August 2021. On 10 September 2021, the Central Bank of Myanmar (CBM) removed it, leading to a higher variation in its bank-customer and interbank dealing rates according to the following announcement. The actual market rates have recently seen significant volatility against the regulator’s reference rate, and there has been a large discrepancy between the rates at licensed banks and money exchangers in the market.

There are many reasons that causes fallen of Myanmar kyat value like shortage of US dollars in the market due to the withdrawal of foreign investments, closures of international organizations, restrictions of foreign transactions in foreign imports and exports, holding US$ as an investment, increasing gold price and speculation in the market.

It cannot be denied that the decline in the value of Myanmar’s currency has resulted from the combined impacts of the political instabilities and the COVID-19 pandemic. Moreover, this is set to push up the costs of imported goods, particularly fuel prices which were up over 70 percent during 2020-2021, contributing to the across-the-board increases in the cost of living. All in all, CBM and related ministries should closely monitor the impact of declining kyat value and unstable foreign exchange market on Myanmar economy and should try to assuage consumer fears about dollar prices.

COVID vaccination plan by government and private sector

20 September, 2021

When COVID-19 virus is spreading quickly and widely, it is crucial that enough people in the community are vaccinated so that it can slow down the spread of disease. Moreover, there are two key reasons to get vaccinated: to protect ourselves and to protect the people around us. Because not everyone can be vaccinated, for example, the infants and those who are seriously ill or have certain allergies. Their lives depend on others being vaccinated to ensure they are also safe from the life-threatening COVID-19 virus.

Government vaccination plan

On 27 January, 2021, a COVID-19 vaccination program has launched across the country. Though there were political instabilities since February, 2021, the Ministry of Health and Sports (MoHS) said it is continuing with its COVID-19 vaccination program. On Jan 22, Myanmar received India’s gift of 1.5 million doses of Covishield to cover 750,000 people, with two doses per person. Around 260,000 vaccine doses are planned for health care staff, volunteers on the COVID-19 frontline, all parliamentarians and senior government figures. About 1.2 million remaining vaccine doses will be given to the public. On February 11, two more million doses of Covishield from India were also shipped to Myanmar.

There are 13 priority groups for vaccines, and the main target is over 65 years old persons, health workers, volunteers and other employees, private health workers, monks, nuns, religious organizations, homes for the age and the banking industry, according to Dr. Khin Khin Gyi. Moreover, all the people working in the transport sector also include in the lists. The next one is the employees of state-run and private factories and industry, hotel and guesthouse staff and the ones working at the prisons, restaurants, teashops and SMEs are on the list. The vaccine is currently being administered in different regions and states. There are township-level outlets, such as local schools and health departments, currently carry out the vaccination according to the priority list.

According to the report of the Ministry of Health and Sports (MoHS), as of 14 September 2021, a total of nearly 5 million people were given vaccines across the country. Among them, over 3.3 million people (6.14% of the population) have received both doses while over 1.6 million people (2.96% of the population) have received the first dose with over 8 million total doses delivered. MoHS has planned to meet 50 per cent of the population over the age of 18 to be vaccinated against COVID-19 by the end of 2021. 

Under the vaccination program, three million of Sinopharm and Sinovac jabs had arrived from China in July. At the end of August, a total of two million doses of Sinopharm, purchased from the People’s Republic of China had arrived. Then on 12 September, 2021, another 4 million of Sinopharm vaccines out of 24 million purchased from China had also arrived. The newly-arrived COV­ID-19 vaccines are distrib­uted to respective regions and states via roads un­der the necessary tempera­ture and MoHS has been administering the COVID-19 vaccines in states/ regions as per the national pri­ority programme. Currently, the country administrated 150,000 doses of COVID-19 vaccines to the target groups daily. 

MOHS announced extension of priority groups of vaccination on 17 September and they are over 55 years old people, disabled persons, members and families of Ethnic Armed Organizations (EAOs), people in Internal Displaced Persons (IDP) camps, patients who suffering from chronic diseases.

Vaccination plan by private sector

Besides, the private sectors are also allowed to import Covid-19 vaccines and vaccinate at private hospitals and clinics with the approval of Food and Drug Administration (FDA). The vaccine importers must meet the requirements set by the Ministry of Health and Sports (MoHS) such as FDA/ National Regulatory Authority (NRA) approval of vaccine from country of origin, letter of authorization from the owner, manufacture license or GMP certificate, storage and distribution plan, etc. As early as June, besides private hospitals, some companies were claiming that they had already received permission from the FDA to import COVID vaccines. On June 23, a local pharmaceutical company called SML announced on its Facebook page that it was accepting preorders for the vaccine.  Moreover, Myanmar’s Chinese Chamber of Commerce (MCCOC) announced its vaccination program of China-made Sinopharm jabs for 50,000 kyats per person in June and those who registered that month had received the first jabs on 24 August as 700,000 doses of vaccines to cover 350,000 people had arrived on the evening of 21 August. Unfortunately, they do not accept another list of people at the moment.

Problems in COVID Vaccination

Some people are reluctant to take vaccination provided by government due to unconfident on Chinese vaccine or following the words of political activists etc.

Application and importation process are complicated and take a long process for private organizations. Importation of one shipment of vaccine needs a minimum of 100,000 doses. Most private hospitals and small organizations could not manage to implement. Some organizations are trying but they are delayed due to complicated process.

In addition, there are different kinds of COVID-19 vaccines available in the market with different prices since there are some pharmaceutical companies importing COVID-19 vaccines in different means. For those who intend to receive vaccination from private sectors, they must choose the reliable private hospital or company or organization as there are some fake or disqualified medicines selling with really high price even offering home service vaccination.

The COVID-19 vaccination program involves the interest of the entire nation and is critical for all citizens. It is very important that a large amount of population needs to be vaccinated in this program and to get higher coverage of vaccination in a short period while achieving herd immunity is a long-term goal in order to reduce both the infection and death rates of COVID-19 in Myanmar. Last but not least, corruption, politicization, and discrimination should have no role in this program.

COVID patients and health care services during Third Wave

6 September, 2021

Due to Third Wave of COVID, the number of COVID patients has been increasing day by day in Myanmar since late May. According to the released data from Ministry of Health and Sports (MOHS), a total of 141,908 cases were reported from 425,119 tests with a positive ratio of 33.38 per cent and daily positive ratio of 40 per cent in July alone. There was a total of 6,000 deaths which is 58 percent of Myanmar’s official coronavirus deaths during the same period. In August 2021, the number of positive cases seem to be lower than July since the daily new cases in July was around 5,000 and there are around 2,000 in August. According to the Ministry of Health and Sports (MOHS), the positive cases rose to 392,300 after 3,166 new cases were reported on 29 August 2021. Among these confirmed cases, 346,408 have been discharged from hospitals. Death toll reached 15,183. However, the actual numbers are expected to be far higher since many die at home with suspected coronavirus, according to funeral charities. We cannot count actual number of COVID patients in the country.

There are many reasons that could lead the massive outbreak of COVID-19 third wave in Myanmar. During third wave, almost every house has at least one infected person. Then, it has a high risk of infecting others’ family members living in the same house. Those people have to be isolated for at least 14 days at their home or at a quarantine center. However, the number of quarantine center couldn’t meet the rising number of infected patients. So, the patients with mild symptoms are allowed to stay at Home-Quarantine. In reality, not every people can follow the rules strictly because of the emergency cases. While one of the family members are in danger of shortage of oxygen, for example, the mildly infected ones have to go outside and find the needed oxygen, medicines and food by themselves. They couldn’t care about that they still need to be isolated being an infected person, they just need to save their family member’s life, first. There are many volunteers groups who are helping patients at home but they couldn’t reach out to everyone. In addition, long queues of people at ATM machines was continue to be common sight during these days as people need cash in their hands to buy the needed expensive medicines and oxygen cylinders or concentrators. Sadly, there was lack of social distancing in these lines which could lead a high risk of being infected. So, the numbers of infected patients are rising day by day but are not recorded in any official data.

There are some government general hospitals, specialized hospitals and military hospital providing COVID treatment. Quarantine centers like Yoma Yeiktha quarantine center, Inya Center (Mayangon), and Myanmar Convention Centers have arranged the facilities for the positive patients. According to MOHS, there are 12 private hospitals and 4 COVID test centers. However, some people use COVID test kits instead of going to the test centers since it is easy to use and can be done at home.  And MOHS also allowed five private hospitals to provide medical treatment for the COVID-19 patients but some hospitals do not accept COVID patients due to lack of facilities. High cost of receiving treatment at private hospitals hinder patients to receive treatment. Indeed, COVID-19 patients have to be treated at ordinary quarantine centers or hospitals depending on their severity. However, every government hospitals and quarantine centers are overwhelmed with patients most of the time. Especially in July, the infected patients had to from hospital to hospital but there are no beds left so they have to seek treatment at home. There are some volunteer quarantine centers but they have limited beds or food and medical supplies. Some patients relied on volunteer treatment centers to receive COVID treatment but they don’t have enough medical equipment or medicines. Thus, many COVID patients are being cured at home.  

The healthcare service in hospital or full-facility quarantine center is apparently much better than being at home. There will be doctors and specialists for particular infections and also medical equipment and medicines. However in July, there was a huge shortage of medicines and oxygen, so the family of the patient has to find the needed medicine and oxygen outside. That was a rough time for all those people.

Those patients who stay at home are apparently at a greater risk of dying. There won’t be any doctor for emergency cases and no medical equipment to make them feel better. That’s why the authorities ask only patients whose oxygen level is good and have no other health problem to isolate at homes. However, there can be emergency at any time. As positive points, those who are at home receive a warmth care and mental strength from their family. Mental strength is crucial to the COVID-19 patients. Once they feel depressed, the virus can beat them death.

The Ministry of Health and Sports, in collaboration with department officials, and charitable organizations, is preparing for quarantine centres in respective townships which are still under operating. So, there are still some people who suffered from COVID and die at home for not being able to receive any proper treatment. We do need research for actual statistics to see true picture and make proper plan of healthcare services for future waves. Nevertheless, this is all our responsibilities to follow the COVID-19 rules and keep ourselves alive in this third wave of COVID-19 pandemic.

Medicines and COVID related materials imports

16 August, 2021

Since the outbreak of COVID-19 third wave began to rise nationwide in early July 2021, priority was given to the importation of anti-COVID-19 medicines and related materials. The third wave make people really shocked and everyone was trying to stock up whatever they think they’ll need. With demand soaring for pharmaceutical products and COVID related materials, prices have also started rising even at the wholesale markets throughout the country. The prices of face masks went beyond the reach of everyday people and some commonly used medicines for colds, flu and even supplements such as vitamin pills have also risen. The price of a box of 50 face masks in Yangon, Mandalay and Pyin Oo Lwin immediately jumped from K1,000 to K3,000-K5,000. Almost all COVID-19 related medicines were more expensive than usual.

In addition, one of the key shortages during the third wave is supplemental oxygen. Most pharmacies have run out of oximeters, oxygen cylinders and oxygen concentrators. This caused the prices of these materials exorbitant since there was a shortage in the market during July and most pre-ordered stocks were to be delivered in early August. The price of 10L medical-used oxygen concentrator became over 20 lakh when there was only around 10 lakh in normal days. Besides, even home-used oxygen concentrator came into market with the price of more than 15 lakh while there were under 10 lakh before. However, people had to buy these expensive things since the medical-used oxygen concentrators were out of stock at that time. They couldn’t wait till the pre-ordered stock arrive, as they need to save the lives of their family members urgently.

The country imports 90 percent of its medicine and related materials mostly from neighbouring countries. The most widely distributed masks and medicines in the market are imported from China and India. Unfortunately, supplies were limited due to the border closures to prevent the spread of COVID-19 between countries. On the other hand, the government is allowing continuous importation of anti-COVID-19 medicines and related materials in order to meet the urgent need of people in the country.

The Ministry of Commerce has announced that the import of anti-COVID-19 medicines, related materials and liquid oxygen were allowed for three months without having to apply for an import license starting from 12 July, 2021. Moreover, import of oxygen concentrator was reduced by 5% commercial tax, according to the Ministry of Commerce.  The ministry also arranges to take the imports arrived at the airports, jetty and border trade camps at once. The FDA also eases the restrictions on the import of medicine and raw materials.

In July, a total of 727 tonnes of liquid oxygen, 567 tonnes of liquid oxygen cylinder,114 tonnes of oxygen gas cylinders, 40,491 empty oxygen containers, 69,146 household oxygen concentrators, eight oxygen plants, 11 oxygen generators, four oxygen filling machines, 322,878 test kits, 1,104 tonnes of mask and 182,975 PPE suits were imported. However, there was still a shortage in the market of July since the whole country was suffering the massive COVID-19 outbreak in July.

Things become more manageable in August since the importation of anti-COVID-19 equipment has increased and the stocks are arriving daily. In addition, the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) formed a task force on 25 July 2021, with an aim to ensure adequate stock of essential medicine for prevention, control and treatment of the COVID-19 and have a smooth trade flow. The task force is dealing with the import problems and seeking one-time permit of Food and Drug Administration. It will help facilitate the import process. The task force office was launched on 28 July 2021, providing daily service for pharmaceutical imports and distribution.

The Ministry of Commerce is allowing to import the anti-COVID-19 equipment including liquid oxygen, oxygen gas, household oxygen concentrators, and medicines via sea, air and border routes on public holidays. A total of 942 tonnes of liquid oxygen, 72 tonnes of oxygen cylinders, 7 liquid oxygen containers, 6 oxygen distributors, 101,291 empty oxygen containers, 22 oxygen plants, 10 oxygen generators, 72,560 oxygen concentrators, 150,268 test kits, 488,512 PPE suits, 82 tonnes of gloves and 1,036 tonnes of masks have been imported by far in August.

Obviously, the imports of pharmaceutical equipment in 2020-2021 financial year will be more than 2019-2020 financial year because of COVID third wave. The total import of 2019-2020 financial year was US$555 million with US$518 million oversea trade and US$37 million border trade while the import value of Myanmar pharmaceutical equipment was estimated at US$303.5 million in the seven months (Oct-Apr) of the current financial year, 2020-2021, according to Myanmar Customs Department. During the time of COVID third wave, the importation has dramatically increased and the prices were also up not only of the selfish traders but also of the dollar appreciation so much in August. The importers, pharmacy companies and the relevant ministries have to jointly supervise to control the prices of medical supplies in the market to save our people.

COVID Third Wave in July

2 August, 2021

Since late June 2021, Myanmar has been suffering from a third wave of highly contagious COVID-19 and July has turned out to be the deadliest month with the deaths of 6,000 as of 31 July, 2021. According to the Ministry of Health and Sports, the daily fatalities of July hadn’t dipped below 300. However, the tally could be higher on the ground since there are some people who died at their homes after not being able to attend any hospital or quarantine center.  

Charities that help transport dead bodies to cemeteries in Yangon have reported seeing between 1,500 and 2,000 bodies daily which is about five times higher than MOHS’s announced rate. Moreover, the number of daily positive cases released by MOHS was around 5,000 in the last week of July which, however, was expected to be higher than that since four coronavirus strains—Alpha, Beta, Delta and Kappa—have been detected in Myanmar.

According to Ministry of Health and Sports latest updated at 8 PM on 31 July 2021, there were altogether 299,185 cases and 9,334 deaths in total from 3.15 million tests in Myanmar. The number of COVID-19 fatalities in the third wave has exceeded the combined total of COVID-19 deaths in the first two waves of the pandemic. A total of 3,216 people died in the first and second waves between March 2020 and late May 2021.

As of the first week of July, 296 of 330 townships across the nation have reported a spike in COVID-19 cases. COVID-19 deaths have been recorded in all Myanmar’s regions and states, with the highest number of fatalities reported in Yangon. There are also rising of fatalities in Mandalay, Ayeyarwady and Bago regions and Mon State. The rising death toll is a direct consequence of the collapsed Myanmar’s healthcare system. According to the charities, most of the coronavirus deaths in Yangon were due to hypoxia, where oxygen fails to reach body tissues, a common symptom in serious COVID-19 cases.

MOHS announced that there are 12 private hospitals and 4 centres for COVID testing and there are only 5 private hospitals which are providing treatment for COVID patients. Some private hospitals are under preparation stage. Moreover, prices of COVID medicines and equipment are rocket high by medical companies, traders and pharmacies. Without being prepared to cope with the sharp rise of coronavirus cases, the country is suffering from a severe shortage of medical oxygen. Shortages of medical oxygen have been reported in the regions and townships most affected by COVID-19, including the capital Naypyitaw, Yangon, Mandalay, Bago, and Sagaing region’s Tamu and Kalay townships.

The shortage of medical oxygen has resulted in huge price increases for oxygen cylinders being sold on the private market. An oxygen cylinder which can store 40 liters used to cost around 230,000 kyats. Now, the price has gone up to around 500,000 to 700,000 kyats. 15-liter oxygen cylinders have also increased in price from 130,000 kyats to around 300,000 kyats. Moreover, the refilling process is not an easy one in the current moment. According to a press conference, oxygen factories were told that oxygen cannot be sold to individuals and must be supplied to hospitals, clinics and quarantine centers. Any individual seeking to refill empty oxygen cylinders will need a letter of permission from health officials. There are some volunteer groups and charities which help people get oxygen in time but they cannot help and save everyone.

Due to increasing number of COVID cases, 108 townships are regarded as Stay at Home (Semi Lockdown) Townships. The government announced on 8 July 2021 that all basic education schools are closed for two weeks from 9 to 23 July 2021, then extended to 8 August.  In addition, the government announced that in order to control COVID, from 17 July to 1 August 2021 as public holidays. Infected people, especially when whole families are isolate at home, they are hanging yellow or white clothes and flags outside their homes to show they are infected and need help. Yellow signifies that the occupants need medical supplies and white asks for food.

The government issued Announcement on Extension of the Precautionary Restriction Measures Relating to Control of the COVID-19 Pandemic and Restriction on International travels and visas to 31 August, 2021. According to the 7 July MOHS meeting, the number of fully vaccinated people was 1.75 million which were only 3.3% of the country’s population. Regarding the press release on 29 July, 2021, a total of three million doses of vaccine arrived in Myanmar in July 2021. Three more million doses will arrive in coming August 2021. The already arrived vaccines are being injected into the people as quickly as possible according to the priority.

Nevertheless, Britain’s UN ambassador warned that half of Myanmar’s more than 54 million people could be infected with COVID-19 in the next two weeks. What the country currently requires is prioritization to secure lives of people. The government and related ministries should try to understand the real situation to tackle COVID third wave and save the lives of people as much as they can.

Impact of COVID-19 Restrictions on Freight and Logistic Market

26 July, 2021

COVID-19 has impacted many sectors of the country economy including logistics. Manufacturing, logistics and retail sectors have witnessed the high impact primarily driven by a combination of demand and supply shocks as supply chains globally were disrupted. In addition, the unstable political situation in the country has also impacted the logistics sector in the country. There is also suspension of shipping lines since the infection of disease remains increasing in most of the countries and this causes freight rates to increase.

Consequently, the shipping rates and the container cost are rocketing in maritime trade during the COVID-19 pandemic period. According to the wholesale traders, the shipping rates and container cost dramatically surged by four to ten times higher than previous freight rates. As a result, the traders are financially not doing well with the purchase price from foreign trade partners. The spikes in shipping cost amid the pandemic-induced container shortage scaled down the imports as well. The arrivals of the container ships declined and it somehow hurts the export sector. When the traders hire the ships with competitive pricing, it pushed up the freight rates. Then, they cannot make profit with high shipping costs. Additionally, container shortage problems also hinder export trading under the Free on Board (FOB) agreement.

Both maritime trade and border trade dropped amid the coronavirus impacts and the political changes. The neighbouring countries restricted the border posts to contain the spread of the virus. Myanmar exports agricultural products, fishery products, minerals, livestock, forest products, finished industrial goods, and other products, while it imports capital goods, consumer goods, and raw industrial materials. The country currently has nine ports involved in sea trade. Yangon Port is the main gateway for Myanmar’s maritime trade. It includes the Yangon inner terminals and the outer Thilawa Port.

However, there are some developments in shipping services after February, Yangon inner terminals and outer Thilawa Port received over 152 larger ships of above 30,000 DWT (Deadweight tonnage) in the past five months (February-June) after the draft limit has extended up to 10 metres, and a new navigation channel developed accessing to inner Yangon River. Starting from May, more ships enter Yangon terminals which handled over 11,000 containers and 115,000 metric tons of general cargos, according to the Myanmar Port Authority.

Even though the strategic geographical location of the country is attracting investments, lack of proper transport infrastructure has hindered the growth of the logistics sector in the country for many years. However, the ongoing developments in the country present a lot of opportunities for the logistics players. Most of the logistics players in the country, more than three-fourths of them are involved in provision of common services, such as unloading, loading, customs clearance, and forwarding services, while the remaining companies provide value-added services, such as labeling, shipment tracking, and cold storage. As the demand for these services is growing, more number of companies are adding these kind of services to their existing business portfolio.

According to the Myanmar Freight and Logistics Market Report (2021- 2026), the Myanmar freight and logistics market was estimated to be valued at more than USD 4 billion and was anticipated to grow at a CAGR of more than 7.5% during the forecast period. The logistics sector in the country is under transformation, driven by the increasing trade activity, improving connectivity, and entry of major international players. However, the COVID-19 pandemic affected the country’s trade activities. Exports in the past nine months (October 2020- June 2021) of the current financial year 2020-2021, with a drop of 13.5 per cent as against last FY. Moreover, the neighbouring countries have restricted the flights as well as border posts to limit the transmission of the variant COVID-19. In the current situations, the entry of international players to the Myanmar freight and logistics market is under threat. It cannot be denied that the impacts of COVID-19 restrictions have affected the country in various sectors and these sectors can turn into recovery state only after the pandemic has controlled.

Impact of COVID-19 Restrictions on Domestic Transport

12 July, 2021

Passenger transport

Once COVID-19 has spread around the world especially in neighbouring countries, the government has been taking precautionary measures to control and limit the risk of the spreading of corona virus in Myanmar. In order to limit the spreading of corona virus, the restrictions on domestic transportation of passengers and cargo has also been set.

Regarding urban transport in Yangon city with over 5 million population, people in Yangon mostly use public transport such as Yangon Bus Services (YBS) since the use of motorcycles has limited in the Yangon City. In order to reduce the contact among people, the number of passengers on the bus has to be reduced according to maintain a physical distance of 2 meters (6.5 feet). The operation of YBS buses has dropped to 2,300 from 4,500, which are running on 126 routes because of the declining number of passengers. The number of daily commuters is estimated to be over 400,000 which are dropped from about 2 million in normal condition.

Unlike Yangon, with the absence of a functioning public transport system like YBS, Mandalay is the city of motorbikes. However, during the time of COVID-19, people in Mandalay are not allowed to ride the motorbikes with two or more people together on a bike. This policy causes motorbike taxi drivers harm.  

Regarding highway passenger transport, they mostly use highway buses since it is fair price. Since the beginning of COVID-19 period, the number of highway buses has reduced and in some bus lines, the passengers are not allowed are travel but only the goods. Moreover, the number of available passenger seats in a bus has decreased to half, as people cannot sit next to each other as usual. So, the price of the seats has risen. These things make people more difficult in such pandemic period. Highway passenger volume was dropped by 60-80% that made huge losses for transporters during the pandemic period in 2020.

Another public transportation is Myanmar Railway. In order to control the spread of COVID-19 in Myanmar, Myanmar railways have reduced the numbers of trains for long distance as well as circular trains such as Yangon Circular Railway. Before the first COVID-19 outbreak, over 90,000 passengers took the circular train every day with a total of 220 trains were in service. However, during the lockdowns, Yangon Circular Train only served commuters during peak hours.  For some people, they believed that it is better to take circular train instead of taking bus during the COVID-19 period as trains are much roomier inside and have many windows, letting in the fresh air, so it is safer than an air-conditioned bus.

Concerning airlines, both domestic flights and international flights have been under COVID travel restrictions since 2020. Although most domestic airlines are operated in 2021, it has been slow down in COVID Third Wave period.  Myanmar Airways International (MAI) and Air KBZ suspend flights between Yangon and several other areas, including Dawei, Kalay, Kawthaung, Kyaing Yong, Myeik, and Tachileik where they are closed to neighbouring countries in June,2021. Besides, the Department of Civil Aviation (DCA) has continued to suspend all operations of international commercial passenger flights to and from all Myanmar airports until July 31, 2021. This suspension does not apply to relief flights, all-cargo flights, medical evacuation flights and special flights specifically approved by the DCA. All types of visa to all foreign nationals are currently halted until July 31, 2021.

Cargo transport

This has an impact not only on the passengers and the bus lines’ owners but also on the traders throughout the country. Goods cannot be arrived with normal cost or in time according to the limitations and the reducing number of bus lines. However, all of them need to operate their specific tasks despite of the danger of virus. More than 400 express bus lines are providing transport service from Yangon-based highway terminals to the regions and states. The express buses and cargo trucks had to pass the necessary COVID tests and inspections by the related teams to get terminal access. Some highway express bus lines are turning to freight transport mode and some bus lines are providing parcel forwarding service. Moreover, the transport cost for commodities from other states and regions to Yangon has increased more than double amid the coronavirus crisis. Following the double increase rate, only 20 to 30 trucks are entering Yangon cargo terminal while hundreds of trucks were flowing into before the COVID period. The local products could not easily be transported to the other regions owing to high truck fares and COVID restrictions in 2020. Cargo Transport Association estimated that the cargo volume was dropped by more than 60% during COVID Wave one and two. Passenger and cargo transport will be faced similar challenges during COVID Third Wave in 2021. These transport difficulties directly affect not only transporters but also consumers.

Impact of COVID-19 on Job Opportunity and HR

5 July, 2021

The global pandemic, COVID-19, has various impacts on different sectors. Among these sectors, job opportunity and human resource is also the one which is strongly affected by the restrictions of the COVID-19 since these restrictions lead even the temporary closure of some businesses. There are also many businesses which are adopting the work-from-home policies.  This effect has direct impact on the employees. The number of unemployment has increased throughout the pandemic period while the incomes of employed ones are decreasing.

According to the International Labour Organization (ILO), July 2020, the pandemic had led to temporary business closures, especially in Yangon Region and Mandalay Region by Mid-May. Moreover, temporary closures among formal establishments registered with the Social Security Board were reported by more than 5,100 firms as of 18 May. At the time of reporting the closure, these enterprises employed a workforce of more than 129,000 in total. Geographically, around 51 per cent of the impacted workers were based in Yangon Region. Conversely, the bulk of the affected establishments (60 per cent) were concentrated in Mandalay Region. The survey conducted in May found that 16 per cent of firms reported stopping operations for an average of eight weeks due to the pandemic.

The ILO estimated that at the onset of the COVID-19 crisis in Myanmar nearly 19.9 million women and men worked in the industries at medium to high risk of economic disruption. Half of these workers were based in agriculture, which has suffered a notable decline in exports primarily due to supply chain disruptions with China. More than one-quarter of the workers in the medium to high-impact sectors were employed in construction and wholesale and retail trade, the latter of which has been hurt by restrictions on the opening of retail outlets and on the movement of consumers.

Likewise, manufacturing, which employed 2.4 million workers before the onset of the pandemic, has witnessed a marked drop in exports. In addition, a sizeable workforce at risk was also employed in transport and accommodation and food services, which underpin the tourism and hospitality industries. An estimated 6.9 million to 7.3 million jobs could be disrupted in Myanmar during 2020 as a result of the pandemic and related containment measures.

The disruptions will vary from unpaid leave to reduced earnings and working hours to complete job and income losses. By industry, the disruption in jobs could amount to nearly 3.5 million working women and men in agriculture, 1.5 million in wholesale and retail trade, 1.2 million in manufacturing, and around 400,000 in both construction and transport. Overall, the impact on jobs could equate to nearly 37 per cent of total pre-crisis baseline employment, with the disruption in manufacturing even higher.

Currently, the danger of COVID-19 third wave and political instabilities in Myanmar has led not only local brands and businesses but also international brands like Auntie Anne’s, KOI, Jelly Bunny to closure. Such cases are threating Myanmar labour market with a lot of unemployment and decreasing job opportunity. Myanmar Garments Manufacturers Association (MGMS) said over 130,000 workers in 500 garment factories were out of jobs in difficult times. Nevertheless, even the COVID-19 pandemic and other cases have exposed many long-standing social and labour market fragilities, it also presents a rare opportunity for Myanmar to build a new and better normal that is environmentally sustainable and inclusive of all. So, it will be better if Myanmar could overcome current situations and build a strong labour market with well-established brands and businesses.

(Reference: Covid-19 Impact on Employment and Labor Market in Myanmar, July 2020, ILO)

Economic impact of COVID-19 restrictions on business

28 June, 2021

The first COVID-19 case was confirmed on 23 March, 2020, and then the Myanmar government initiated measures including social distancing, cancelation of public gatherings, and limited business hours in order to reduce people’s risk of exposure to the virus. Although these measures are potentially effective in slowing the pandemic, it had serious negative impacts on businesses.

According to the Myanmar Business Environment Index (MEBI), COVID Impact on Business 2020 survey, about 90 percent of businesses had suffered a fall in sales due to COVID-19 restrictions. Moreover, three out of four businesses had faced sharp revenue decreases of half or more of their normal transactions. For more than one-fifth of businesses, sales had ceased completely.

It can be assumed that about half of the businesses reported their business survival being at either moderate or high risk due to COVID-19 restrictions. According to the survey, the manufacturing sectors of textiles, garment & apparel, and leather, as well as the accommodation sector (hotels, motels and guest houses) are among the industries facing the highest levels of risk.

The Joint survey on the impact on business operating in Myanmar by 10 foreign chambers in April 2021 shows that the most impacted sector was the tourism and hospitality sector with 68% of the companies recorded a decrease in their activity between 25% to 75%, and nearly 16% of them had to completely terminate all their activities in 2020.

Accommodation and food and beverage services are suffering from the stalled mobility of national and international travellers, while instructions to stay home and limitations on gatherings of groups of more than five are particularly impacting the food and beverage sector. These measures have also affected the manufacturing sector where a high number of workers usually share the same space but are now limited by social distancing regulations. The retail and wholesale industry reported facing relatively smaller risks to survival. Among different locations, businesses in townships belonging to the Yangon City Development Committee (CDC), Mid-dryzone and Lower Valley expressed the highest risk to their survival.

The surveys show that the COVID-19 pandemic is having a severe impact on businesses in Myanmar. While most businesses had either closed or reduced their operations due to COVID-19, the survey results highlight that this was often not a direct result of government restrictions but due to other reasons such as market decline for health concerns or buying power of customers. However, almost all businesses reported practicing the forms of measures to protect their employees and customers from COVID-19.

In order to give those businesses a hand, the Myanmar government launched the COVID-19 Economic Relief plan on 27 April, 2020. Under that plan, there was an initial K100 billion COVID-19 Fund to provide immediate loans with 1% rate of interest  to businesses in priority sectors hit hard by the COVID-19. The priority sectors of the first batch included Cut Make Pack (CMP) manufacturing enterprises, hotels and tourism and small and medium enterprises. Then the second batch of K100 billion COVID-19 loans was paid out to the businesses in the last week of September. At that time, the priority sectors were agriculture and livestock enterprises, manufacturing businesses, import-substitution businesses, food and beverage businesses, overseas employment agencies, export and import businesses, and vocational schools.

Currently, a large majority of the businesses are trying to maintain employment contracts and salaries by limiting the amount of salaries and bonuses to the minimum as long as they could. Indeed, data showed that in January 2021, most of the companies were planning to maintain or even to increase their operations and investments in Myanmar. However, these plans came to a halt after the political event of February 2021 which has a stronger impact on businesses than a whole year of pandemic. Moreover, businesses should do preparations for the possible COVID-19 third wave restrictions since the rate of positive cases in Myanmar is increasing day by day in June 2021.

Economic impact of COVID-19 restrictions on households

21 June, 2021

Restrictions resulting from COVID-19 have had an almost universal economic impact. It affects all three types of households such as poor, vulnerable, and secure conditions. According to the Household Vulnerability Survey (2020) conducted by Central Statistical Organization (CSO), the containment measures have been particularly harmful to small-scale, family-owned businesses, further increasing the vulnerability of the households owning them. More than four-fifths (83.3 percent) of households have reported a drop in income since the beginning of 2020. Evidence also pointed to disruptions across sectors and reduced remittances due to global and regional lockdowns. Among 15 states and regions, households in the regions have experienced a larger drop than those living in the states. Household businesses that are not a farm, for example, selling goods at the market, hairdressing, and, tailoring etc. have been hit hardest, and those households in the regions running their own business reported a 62 percent drop in their household income.

The survey results show that previously financially secure households have experienced the biggest drop in their incomes. Only 35.8 % of workers were working as usual while over a third were temporarily not working because of COVID-19 restrictions. Professionals, permanent job holders and urban households were most likely to be temporarily not working. Overall 4.9 % of the waged workers have lost their job because of COVID-19 issues. Poor and vulnerable households, however, who are even less able to afford a loss in income, have also suffered large losses. By the end of 2020, reduced incomes and minimal coping mechanisms among vulnerable households, in the wake of the COVID-19 pandemic, have set the stage for an estimated increase in the poverty rate from 6 to potentially 11 percentage points.

In addition, the major impact on food insecurity runs through loss of income, which limits household economic access to food. It is reported that almost a half of the households living in the states are eating less than usual since March 2020. Moreover, almost two-fifths of households had purchased food on credit or borrowed food from shops or neighbours. The situation was worse for poor households where more than half of households had resorted to this. Concerning farming households, overall 44.0% of them had eaten most of their crop production and this rose to 59.4% in farming households without a tractor or tiller. Eating the majority of own production was particularly widespread in households relying on paddy as the main source of agricultural income.

During the COVID-19 period, nearly half of surveyed households had received cash allowance from the government in relation to the COVID-19 situation. Payments had generally been targeted with poor households almost twice are more likely to receive cash than secure households. The majority of poor households have received one or more support packages. However, since March 2020, nearly half of households have to borrow money, as borrowing is most common in the regions and in rural households. Among them, 37.6% had taken on a formal debt which is the highest among households with children and vulnerable households while 21.3% had relied on the help of extended family members to cover living expenses which is highest among financially secure households and urban households.

Furthermore, the current situation of the country is disrupting economic activity such as factory closures and lost in remittances as the bank activities can’t perform as usual. It can be assumed that the ongoing crisis in the country will further compound the socioeconomic impact of the pandemic, reducing incomes. In the worst-case scenario, nearly half of the population of Myanmar (48.2 percent) will live in poverty (compared to the 24.8 percent in 2017), reversing gains made since 2005. If the situation on the ground persists, the poverty rate could double by the beginning of 2022. By then, the shock from the crisis will have resulted in significant losses of wages and income of households, micro and small businesses, and a drop in access to food, basic services and social protection.

Relevant ministries of the government sector, NGOs and international organizations should prepare a plan and other initiatives to response similar situation for the danger of COVID-19 third wave in Myanmar.

(Ref: Household Vulnerability Survey, Dec 2020, CSO)

Current Situations of COVID-19 in Myanmar, June 2021

14 June,2021

Coronavirus Disease (COVID-19) is spreading all over the world and cause many people had suffered since 2019. Myanmar is still threatened and hit hurt by COVID-19. In Myanmar, the first wave of COVID-19 was from late March to early August 2020 and recorded 360 cases and 6 deaths. The second wave started in mid-August, after almost a month without local transmissions. There was a dramatic increase in the number of cases in the second wave compared to the first wave. The number of total cases on 31 January 2021 was 140,145 with 3,131 deaths.

Starting from 27 May 2021, the number of COVID-19 infections has been rising again with about and over 100 new cases however situation in June is more serious. According to the Ministry of Health and Sports, the daily infection rates from 1 to 13 June 2021 were 7.28% with 148 new cases on average per day:

DateInfection RateConfirmed Cases
1 June6.05%122
2 June4.5%27
3 June8.4%122
4 June11.9%212
5 June6.5%96
6 June5.9%64
7 June6.3%139
8 June6.1%123
9 June7.78%136
10 June6.86%161
11 June6.76%188
12 June4.8%166
13 June12.8%373
(Source: Ministry of Health and Sports)

Myanmar’s COVID-19 positive cases rose to 145,603 after 373 new cases were reported on 13 June 2021. Among these confirmed cases, 132,928 have been discharged from hospitals. Death toll stands at 3,244 after 3 died on 13 June 2021.

According to the released data on 13 May 2021, the number of fully vaccinated people was 1,222,723 which was only 2.3% of the country’s population while 3.3% of the population, 1,772,177 people has received at least one dose.

As the infection of the disease remains increasing in most of the countries, the current effective period will be further extended with the approval of the Central Committee on Prevention, Control and Treatment of COVID-19, until 30 June 2021, to prevent infection of COVID-19 to Myanmar through passengers of international airlines. Moreover, Kalay in Sagaing Region and the four cities in Chin State; Teetain, Phalan, Htan Ta Lan, and Hakha are under the Stay at Home order on 2 June and 4 June respectively, with the increasing number of  positive cases.

Currently, the B.1.617.1 variant was recorded first in India and it was also found in Pakistan, Nepal and Bangladesh. In Southeast Asia, Singapore, Malaysia, Indonesia, and Thailand have detected the same variant. Thus, the Myanmar Government made announcement on the restrictions for travelers from the India and Bangladesh visiting Myanmar since 27 April 2021 in order to control and limit the risk of transmission of the new COVID-19 infection to Myanmar.

Moreover, the Ministry of Health and Sports is conducting genetic testing to determine whether the recent infections are caused by the variant COVID-19 or not. Since the outbreak of the neighboring countries, disease surveillance has increased while preparing to make protections in various fields such as provision of medicines and medical supplies. Although the infection rate in Myanmar is not as high as neighboring countries, everyone in the country must follow the COVID-19 rules and regulations to avoid the danger of COVID-19 third wave in Myanmar.

Possible areas for digital economy and online payment during the crisis period, June 2021

7 June,2021

Due to COVID restrictions that limited people to people engagement, Myanmar’s digital economy and online payment was active during COVID crisis period in 2020. Online payment system has faced a lot of difficulties and challenges during February to April 2021 according to limitation of internet accessibility.

The bank services couldn’t perform as usual and customers could withdrawal only a limited amount of cash from the banks and ATMs. Thus, people are increasingly reliant on cash payment transactions. As the demand for cash is much higher than before, the economy is moved back to cash-based economy.

Due to relaxations of mobile internet in May, there are many places where people can do online payment. There are some supermarkets which accept cashless payment such as City Mart, Market Place, Makro Myanmar, Ocean and etc. But the convenience store like City Express doesn’t accept online payment. There are only a few petrol stations which accept online payment such as Max Energy; it accepts only with AYA pay or MPU. Moreover, if people don’t want to use cash in buying food, they can use the applications like FoodPanda, Grab Food, Yangon Door2Door, etc. and pay with MPU or debit/credit cards.

Besides, people can pay for the internet bill, some ticketing bill, insurance bill, and also entertainment bill (E.g., Skynet bill / Canal+ bill) by using mobile pay applications of the banks depending on the business that they are partnered with. 

Concerning paying taxes, the mobile banking or internet banking are possible with arrangement of Internal Revenue Department. Bill payments (like Meter bill and YCDC bill) are still impossible on some mobile banking yet. According to the meeting of State Payment System Supervision Committee on 1 June, the electronic payment system is planned to use for national payment with the enactment of the law to protect service provider and customers. By using the CBM-Net System which is the payment platform of Central Bank of Myanmar, tax payments (such as taxes on building and lands, water tax, meter bill and other payments) can be done via digital payment platform of Mobile Financial Service Providers like Wave Money, OK Dollar, MPT, Ooredoo,MyTel, and MMQR system besides the mobile banking system of the banks.

Income tax payment by company employees can now be done via online payment, mobile banking, or MPU Debit Card by linking with relevant banks. In order to contribute financial stability of the country in current situation, people should try using online payments as much as possible. And a secure national payment system is also needed to establish.

Some retail shops and services are accepting payments through mobile banking or other payment system like AYA Pay, CB Pay. Some hospitals and polyclinics accept half cash and half online payment for medical services. There are many rooms to expand online payment system in trading and service sector that will encourage digital economy and be convenient to buyers and sellers. If we can buy things by mobile phone like India /China , we don’t need cash any more. 

Brief Note on Current Banking Services, May 2021

31 May,2021

  1. The situations of the banks in April/May are as follow:
  • People who join in CDM and against military government forced to stop the banking services to break down the country’s economy. Besides, the numbers of staff in banks were absence as some joined in CDM and some were not able to come back from their native towns since Thingyan holidays. As the Central Bank of Myanmar (CBM), they took actions on CDM staffs, analyzed money transactions in banks, and set strict regulations.
  • Therefore, there were a lot of inconveniences to the customers due to the slow services of the banks which couldn’t run as usual. Since the banking transactions couldn’t perform normally and people couldn’t withdrawal the requited amount or could get only a small amount from ATMs, the number of people who line up and withdrawal money at the banks has increased.
  • Those who forced the banks were doing political attacks but people were overly worried so they withdrew their money from the banks.
  • The businesses and importers/exporters were not able to do regular payment transactions under the tight control of the Central Bank of Myanmar.
  1. There are (3) types of people in the queue:
  • Those who do regular transactions for businesses
  • Those who deposit/withdrawal interest to/from the saving books/certificates for demand deposit or time deposits
  • Staffs and SMEs who do regular withdrawal from ATMs
  1. The cooperation among the Central Bank of Myanmar, private banks and customers is required to function the banking services normally. The things that the banks should do are:
  • To release the restrictions so that there will be no difficulties and delays of regular domestic /foreign transactions of the businesses (especially the import/export businesses)
  • To encourage online payment system and to make sure there is no technical error concerning online transactions, and if so, try to fix the error immediately.
  • To widely arrange the number of businesses, services and fees and charges of government utilities to accept the MPU, Credit Card/Online payments.
  • To manage the services of all private banks to be standardize
  • To provide full banking services as usual without any booking and token system except for the cash withdrawal.
  • To open new internet banking, mobile banking, and MPU card applications without delay
  • To provide a more systematic system for cash withdrawal, have transparency and an easier one.
  • To arrange to announce the available daily services of every private bank constantly.
  • To arrange to be able to withdrawal in cash when the remittance is in cash (including bank to bank transfer or other cities).
  1. The things that the customers should do for the banks to function normally are:
  • The market in which people who have cash in hand take benefits with percentage in exchanging cash on those who need cash without making any deposit to the banks is growing and the amount of percentage becomes 1-5% to 15%. So, a lot of customers are harmful, so do the public because of those who exploit upon others’ need.
  • The accounts opened at the banks and the money saved at the banks is receiving the stated interest monthly so that your savings will be safe and increased.
  • Considering that people who encourage to withdrawal all the money from the banks are those who try to make the banking system collapse, customer shouldn’t be overly worried.
  • Customers should understand that the tight bank rules and regulations are to make their money secure.
  • Instead of using cash, people should apply and use mobile banking, MPU and Credit card by linking with the banks.
  • Instead of lining up at the ATMs for many hours or exchanging cash with percentage, people can buy at the shopping center, sale center and online shopping which accept MPU and Credit Card payment (such as City Mart).
  • In order to facilitate the banking process, taking advantage over the linking of two systems which tend to ease the processes should not be done. (For e.g., the linkage between Mobile Banking and Wave Money).
  1. Small money transfer businesses- such as Wave Money. It is the one mostly used by the staffs who work at the city in transferring money to their parents at the small towns. It is also the financial service that most working class people use. So, the authorities should take control and action to such unsympathetic agents who are earning extra service fees with percentages besides the normal transferred fees.

Brief Note on Energy Sector May 2021

24 May,2021

Oil & Gas Sector

  • According to the petrol stations in Yangon, the petrol prices in domestic market has continuously increased.
  • On February 17, the world oil price (WTI) was around $60 per barrel and the domestic market price rose by 105 MMK per liter compared to February 1.
  • On April 24, the world oil price (WTI) was US $62.14 per barrel and the domestic market price rose accordingly.
  • On May 13, the world oil price (WTI) was over $65 per barrel and the average price of petrol has risen by more than 33% in three months, from 990 MMK to nearly 1,100 MMK per liter.
  • The increasing fuel rate within three months can be seen as follow:
          Petrol Type DateDiesel (per liter)Premium Diesel (per liter)Octane 92 Ron (per liter)Octane 95 Ron (per liter)
February 3660 MMK670 MMK620 MMK750 MMK
February 17800 MMK810 MMK760 MMK870 MMK
April 25920 MMK930 MMK920 MMK1,005 MMK
May 13995 MMK1015 MMK995 MMK1080 MMK

(Source: The Global New Light of Myanmar/ Daily Eleven)

  • According to the Ministry of Commerce, Myanmar imported nearly US$1.2 billion worth 2.7 million tonnes of diesel and gasoline during the past seven months (Oct-Apr) of the current financial year 2020-2021, indicating a sharp drop of 1 million tonnes ($663.347 million) compared to the corresponding period of last year.
  • In the current budget year, Myanmar imported 1.6 million tonnes ($721.173 million) of diesel and over 1 million tonnes (536.113 million) of petrol.
  • There are about 2,000 fuel stations and over 50 oil importer companies in Myanmar, Myanmar Petroleum Trade Association stated. Typically, a monthly oil import is estimated at $400 million, yet the oil importers face banking restrictions for maritime trade. 
  • Ninety per cent of fuel oil in Myanmar is imported, while the remaining 10 per cent is produced locally. In the Q1 of the current financial year2020-2021, about $600 million worth of petroleum products were imported. The figure plunged by half compared to a year-ago period.
  • Moreover, Myanmar’s exports of natural gas in the seven months (Oct-Apr) of the current financial year, 2020-2021 was US $ 1.238 billion, due to the data released by Ministry of Commerce.
  • These figures indicated a sharp drop of $800 million compared to the year-ago period. During the corresponding period of last FY, Myanmar’s natural gas export generated an income of $2.124 billion.
  • Natural gas is included in the list of major export items of Myanmar which stands over 10 per cent of the country’s total export earnings.

Electric Power Sector

  • Myanmar emphasizes the improvement of the renewable energy sector by generating 40 per cent of electricity from hydropower, 14 per cent from solar, 34 per cent from natural gas and 14 per cent from LNG up to the end of 2020. Current generation mix is 54 per cent from renewable energy and 45 per cent clean energy.
  •   Rural electrification has been implemented since the 2012-2013 financial year. In 2020-2021 FY, the household solar system will be implemented to benefit 48,974 houses from 757 villages, while 17 small-scale solar power projects will be undertaken with 4,704 sets of public solar systems.
  • On May 8, the Myanmar Investment Commission (MIC) approved the project to generate electricity from LNG with a large capital intensive investment amount of US$2.5 billion which is expected to support the goal of 100% nationwide electrification from the national grid by 2030.
  • Collection of meter bill payment is still in cash. All players (MOEE, YESC, MESC) should implement online meter bill payment through mobile banking and other payment methods for the convenience of consumers and smooth bill collection.

Brief Note on Transportation and Logistics Sectors 2021

18 May,2021


Land transport

  • Highway passenger transport was controlled due to prevention of COVID and Cargo transport was allowed under COVID control measures in 2020. Passenger transport bus lines have been active since March 2021 although some COVID restriction is to follow.
  • Yangon Region Transport Authority (YRTA) was reformed to be Yangon Region Private Transport Committee (YPTC) in April 2021.  Yangon Bus Service (YBS) is being operated by 55% of its strength in May with 2,400 buses in 97 lines out of 6,600 buses in 102 lines.


  • Myanmar Railways has stopped operations for various reasons since the beginning of February.
  • On 24 March, Yangon Circular Railway service has resumed, so does freight train operations. Besides, starting from 7 May, the Ministry of Transport and Communications has increased the numbers of operation of Yangon circular train into two shifts.
  • Moreover, on 4th April, passenger trains run along Yangon-Nay Pyi Taw-Yangon, Nay Pyi Taw-Mandalay routes. Myanmar Railways  has expanded other routes like Yangon- Mawlamyaing and Yangon -Pyay.


  • Starting from 23 March, State-owned Myanmar National Airlines and Air KBZ resume domestic flights.
  • According to a statement from the Ministry of Health and Sports, all passengers on domestic flights will no longer need the COVID-19 test but have to comply with other health standards.
  • International flights are under restrictions till end of May.


  • Myanmar Port Authority has reported a drop in container arrivals at Yangon Port and rising demand for export containers since the COVID-19 incident.
  • Moreover, the number of ships arrive at Yangon ports was low between February and March. During February and March, export containers were 19,594 and import containers with 22,417 that totaled 42,001.  It is still far below the average volume of containers in 2019 before COVID (93,000 TEUs /month)
  • So, it is needed to increase the volume of shipping and reduce the need of containers for international trade. In order to facilitate international trade, import and the flow of goods, a total of 24 container vessels are to be launched by each shipping line in May.
  • According to the Yangon Port Authority, special routes will be added to meet the market demand.
  • Working Committee on Ensuring Smooth Flow of Trade and Goods is facilitating export and import cargos in Yangon Ports which handled over 80% of foreign trade volume in Myanmar.
  • Domestic transport and logistics services move to normal position but they are facing with high fuel cost which is over 30% higher in May than April.

Brief Note on Investment Sector 2021

11 May,2021

The number of new registered companies declined in four months

  • According to the statistics released by the Directorate of Investment and Company Administration (DICA), the number of new companies registered on the online registry system, MyCO, topped 1,978 in the first four months of 2021 which was only half in compared to 2020.
  • In 2021, the number of registered companies on MyCO was 1,373 in January, 188 in February, 163 in March and 254 in April while in 2020, the figures stood at 1,415 in January, 1,298 in February and 1,015 in March, and 348 companies in April that totaled 4,076.
  • At present, 100 per cent of the applicants are using the online registration platform.
  • All registered companies need to file annual returns (AR) on the MyCO registry system within two months of incorporation, and at least once every year (not later than one month after the anniversary of the incorporation), according to Section 97 of Myanmar Companies Law 2017.
  • As per DICA’s report, more than 16,000 companies were suspended as of September 2020 for failure to submit AR forms within the due date.

Foreign Investments in Myanmar

  • New Myanmar Investment Commission (MIC) is formed with 9 members and the new team has approved 25 new investment projects in 2021.
  • The meeting held by Myanmar Investment Commission (MIC) on 4 March approved ten new projects for telecommunication service, manufacturing, hotel and electricity sectors, with approved amount of US$ 580 million. The meeting held by Myanmar Investment Commission (MIC) on 7 May approved 15 new projects for electricity generation, livestock, manufacturing and other services sectors, and the increase in capital of two existing projects. The approved projects amounted to US$ 2,784 million and K153.67 billion.
  • A total of 25 projects are expected to create 3,418 job opportunities for the local labours. 
  • By the end of April 2021, the countries with the largest investment out of 51 countries/ regions investing in Myanmar were Singapore, China, and Thailand.
  • The electric power sector leads the list of most invested sectors out of 12 business sectors with 26.57% of total investment.  It was followed by the oil and gas sector, accounting for 25.72% and the manufacturing industry, accounting for 14.61%.

A Brief Note on Manufacturing Sector 2021 (Feb-April)

Sector growth

  • Myanmar’s manufacturing sector recorded an accelerated downturn in February 2021 according to the political changes.  
  • Due to the current situation, in March, the last month of the first quarter, Myanmar’s manufacturing sector declined significantly and factories and customers remained closed.
  • At the same time, volatile demand led to a near-record decline in the workforce leading to the largest number of unfinished jobs in survey history.
  • According to the IHS Markit Myanmar Manufacturing PMI, Myanmar fell from a record low of 27.7 in February to 27.5 in March and 33 in April 2021. (Average index should be 50)
  • Both production and new orders in Myanmar’s manufacturing sector fell fivefold in April. The April PMI data show that manufacturing conditions across Myanmar are declining sharply, with many businesses continuing to close due to the current situation. Around 60% of firms recorded lower production in April than in March.
  • A garment expert estimated that about 200,000 garment workers lost their job during February to April 2021.
  • Looking to the future, large companies expect output to rise by April 2022 but overall expectations were the weakest in over two years.

Manufacturing sector export

  • Exports of finished industrial goods drastically plummeted to US$3.209 billion between 1 October 2020 and 19 March 2021 in the current financial year 2020-2021, a severe drop of $1.7 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce.
  • Myanmar’s manufacturing sector is primarily concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, contributing to its 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, according to the Ministry of Commerce.
  • The government reformed that Ministry of Planning, Finance and Industry to Ministry of Planning and Finance and Ministry of Industry on 3 May. Ministry of Industry will emphasize more manufacturing and processing sector for the development of industry sector.

New Rules and Regulations on Finance and Banking Policy 2021(Feb-April)

Announcement of the Central Bank of Myanmar

March 1

  • In order to reduce cash based transactions, bank customers are encouraged to apply electronic payment system in transaction as much as possible
  • Current restrictions on cash withdrawal will be-  maximum amount of withdrawal from ATM/POS (including cardless withdrawal) is 5 lakh each day, maximum amount of withdraw from the bank account of an individual person is 20 lakh a week and for the company/ organization, it is 200 lakh a week. 
  • Above restrictions could be relaxed for salary payment of government departments and large organizations and restrictions will be reviewed and revised as necessary.
  • Cask withdrawal /account transfer will be provided when time deposit saving is dued as normal

Relief measures on taxation

March 19

  • The government has been conducting relief measures on taxation to help ease for businesses affected by the COVID-19 pandemic, and made an exemption for the 2-per-cent withholding tax on exports from 1.4.2020 to 31.4.2021.

Announcement of the Central Bank of Myanmar

April 15

  • It is known that a new market has emerged in which some business owners keep cash in hand instead of depositing money in the banks and provide people in need of cash at a profit percentage.
  • It is notified such actions are against the law and will be taken in accordance with the law.

Press Release of the Central Bank of Myanmar

April 27

  • Due to current situation, people are worried about safety of cash in hand. If the people wish to entrust their cash to the banks, they will be allowed to open new bank accounts at the banks as of 3 May 2021 to authorize their money. If they wish to take out the cash from the new bank accounts, they will be allowed to take out cash from the entrusted amount without limit.
  • Those who opened the accounts at the banks before 3 May 2021 will be allowed to take out cash in line with the original restrictions adopted by the Central Bank of Myanmar.
  • Arrangements are underway to ease such restrictions.

Press Release of the Central Bank of Myanmar

April 30

  • Efforts were made to regularly apply the monetary systems and applications that bank and mobile monetary service providers operate through the Internet during the period of temporarily interrupting the mobile Internet.
  • The Central Bank of Myanmar has announced some banks that can provide services to customers on 29 April.
  • Currently, Ayeyawady Bank, Kanbawza Bank, Cooperative Bank, Innwa Bank and Ayeyawady Farmers Development Bank give services of account to account transfer, Wallet to Wallet, Bank to Wallet, Wallet to Bank and CCT function of CBM Net through the mobile banking, Internet banking, mobile top-up, other cards top-up, bill payments, Visa/Master credit card payment, MPU cards, all ATMs and bank pay.
  • Mobile monetary service providers, namely Wave Money, OK$, M-Pitesan, MyTel Pay and MPT Money, are giving their services as usual for a mobile top-up, wallet to wallet, bank to the wallet, wallet to the bank, air time top-up, and merchant cash in/cash out.

New Rules and Regulations on Trade Policy 2021(Feb-Apr)

The Ministry of Commerce (MoC) extends import permit on reconditioned machine for SMEs

3February, 2021

  • The Ministry of Commerce has extended import permits on the reconditioned machine for the small and medium- sized enterprisesd
  • Those reconditioned machines are to be remained usable up to 10 years starting from the import date. The machines shall be repaired to have the usable condition.
  • The import requires a 10-year warranty by foreign sellers. Moreover, the machine parts and accessories of those imported machines shall be easily purchased in the domestic market.
  • The preshipment inspection certificate with six-month validity is also required to ensure the running condition of those machines, as per the notification.
  • Nevertheless, the permit does not cover home appliances such as refrigerator, air-conditioner, washing machines, copier, printers, televisions, computers and office machines. Those machines which are designated for commercial sales are also not included.
  • The notification comes into effect within 60 days of the issue date (20 January 2021). Those reconditioned machines can be imported only via maritime trade.

Temporary Relaxation of Licensing Requirement for Importation and Exportation of Certain Goods in Myanmar

10 March, 2021

The Ministry of Commerce (“MOC”) recently issued Newsletter no.02/2021, dated 3 March 2021, granting a temporary exemption for obtaining import/export licenses when importing/exporting certain goods into or out of Myanmar due to the current situation in the country.

According to the list of goods, there are 72 items that will be exempted from obtaining import licenses. Most of the exempted goods are essential items, including basic foods, medical products, and certain other items that are important for the development of the country. In addition, 32 items are listed as export license-free items; these are all agricultural products. Details are provided in the table below:

List of goods exempted for import licenseList of goods exempted for export license
Fish and fish fillet (HS code 0320)Onion and garlic (HS code 0703)
Wheat goods (HS code 1001 and 1101)Rice and broken rice (HS code 1006)
Soybean (HS code 1201)Raw sugar and refined sugar (HS code 1701)
Oil goods (HS code 1511 and 1516)Natural rubber (HS code 4001)
Raw food products (HS code 2102 and 2106)Cotton (HS code 5201)
Cement products (HS code 2523)
Petroleum, diesel (HS code 2710, 2713)
Medical products (HS code 3006)
Fertilizer (HS code 3102, 3105)

This temporary relaxation is aimed at speeding up the importation and exportation procedure, particularly throughout the current situation. However, this exemption is currently in place from 8 March to 7 May 2021 .

Department of Trade announced the four food commodities which are temporarily restricted for import via the border trade

12 April, 2021

According to the Department of Trade, under the Ministry of Commerce, the following four food commodities are temporarily restricted for import via the border trade starting from 1 May.

  1. Various beverages
  2. Coffee mix and tea mix
  3. Instant coffee
  4. Condensed milk and evaporated milk

However, they can be imported through maritime trade.

Development of Digital Economy in Myanmar (3)

Digital Economy and Online Payment

Cash payment has been widely used for a long time and it is very convenient in paying between the customers and businesses while they are together at the same place and the payment is small. But it has limitations. While these people are at different places, or large amount of payment, there will be inconveniences in keeping a lot of money and problems of transferring money from place to place. Moreover, especially, in the time of COVID-19 pandemic, cash payment is quite dangerous as the virus can spread through the cash. So, in order to overcome these inconveniences, it is needed to use digital payment than cash based transaction.

Concerning next new normal lifestyle, it is believed that there will be many competitions in information technology field so that digital economy will widely take place in the future. In transforming into digital economy, one of the most important things is changing into online payment. There are different types of payment like payment between individuals, payment between businesses and people, payment among the businesses, payment between government and businesses; payment between government and public, etc., The next thing is about transferring the possessions according to the sharing economy. In this case, online payment is the most effective way as payments are done easily from different places.

For businesses, they begin to use Information and Communication Technology (ICT) in their core business processes. Schools begin to teach from online and shops also sell their products online. In this case, services should be provided without any regional limitations. At that time, online payment is needed. Moreover, in the time of pandemic, online payment has a lot of benefits. It can save time, cost effective and safety.

Online Banking and Digital Payment in Myanmar

Myanmar has been using 11 million automated teller machines (ATM) cards which are linked with the bank account since 2012. Then there is point of sale machine (POS) which these cards can be used in shopping. There are also gateway for shopping from e-commerce. Moreover, there are internet banking and mobile banking which can be used by linking with the bank account since 2013. On the other hand, for those who don’t have a bank account, mobile money or mobile wallet is available when telecommunication sector has been developed since 2015. Later, they are called mobile pay. Numbers of people using the digital payments have been increased years to years.

After the COVID first wave, it is noticed that digital payment is mostly used in paying bills to government especially the meter bills. People pay for their bills from mobile banking, internet banking and mobile pay. In November 2020, Ministry of Commerce permits the applications of export and import via online and the payment also can be done online. The government also actively participates in transforming into online payment. The other prominent changes are having one stop service from online in registering the new company and extension of the companies’ registrations on DICA.

COVID-19 is not only a big challenge for our community but also a good chance in transforming into digital economy.  People do businesses from online and payments via online. Schools offer online classes with online payment. Moreover, there are health care and consultant services online with online payment. It can be seen that transforming into digital economy happens very fast after the second wave of COVID-19 in Myanmar.

Transforming into Digital Payment

In order to transform into digital economy, it is needed to educate all people about the pros and cons of online payment. People need to know that the passwords of the bank accounts must not tell anyone, how does online payment work, how to use internet effectively, and also about cyber security. On the other hand, the government has plans to engage online payment. According to the MERRP plan, government will use online payment in providing supply to the households and giving pension fees.

The main points of transforming into online payment include being convenient, secure and easy to use. Apart from the ATM, mobile banking and mobile pay, the Central Bank of Myanmar is planning to provide the QR code system in payment as in international. This system is currently termed as MMQR. In MMQR system, only one application is needed to scan the code and payment can be done even from different pays. The government should also offer tax incentives, for example, in the cash payment, there will be 5 percent of commercial tax, but if people use online payment, the percentage of commercial tax will be reduced. Myanmar needs to improve numbers of bank account holders which is currently 26% of adult population and the figure is far below than other countries.

All in all, it can be said that online payment is beneficial to government sector, public sector and economy sector. Indeed, digital payment is more secured than cash payment as there are many security steps in online payment system. So, all we have to do is to use and follow up the changing digital economy and online payment systems occurring in new normal life bravely. [1]

[1] Myanmar Alin Newspaper (3.12.2020) Discussion on Digital Economy

Development of Digital Economy in Myanmar (2)

Digital Economy in Agriculture Sector

Myanmar is an agricultural country and most people make their living on the agriculture sector. So, economic growth of Myanmar and food security is mainly concerned with the development of agriculture sector. In the time of COVID-19, everything has been changed. The international market needs have also changed, so does the domestic market. Regarding to these changes, both small, medium and large enterprises are trying to adopt the changes and work together. The point is that the agricultural, and fisheries sector depends mainly on the market demand. During COVID-19 when the market demand is low, the digital platform which provides online sales processes is needed. 

Moreover, there are some plans which are established more quickly because of COVID-19. The first one deals with ‘wholesale traders’. They are situated at different parts of the country. People trade agriculture and livestock products from them. So, there is a plan to transform the wholesale market into an e-marketplace which is an online market so that not only domestic producers, traders, technicians, and experts but also international companies can understand the demand and supply of the Myanmar market easily. The next plan is to adopt ‘sharing economy’ policy which encourages the businesses to share with partners and work collaboratively. In some villages, sharing economy has already established as people share their tractors, harvesters, dryers and warehouse with other people.

Transforming into digital agriculture sector

Besides the points mentioned above, it is important to encourage all players in agriculture sector to be involved in the digital platform. Based on the digital platform, they can have not only the domestic buyers but also international buyers. In addition, even the small and medium enterprises can sell their agricultural products directly to the buyers based on that digital platform. The next point is to create job opportunities for Myanmar employees who came back from foreign countries. So, it is needed to do investments in the infrastructures of agriculture, livestock and fisheries. There can have some foreign investment. So, domestic businesses need to upgrade their production process from the normal one to the more advanced one. 

The next point is building the habit of working together in the time of COVID-19. People in both urban and rural areas use online technology and find ways to work together. When the government gave loans according to CERP, food production industries and upgrading agricultural businesses have received a lot. Concerning MERRP, it will create opportunities for Myanmar employees who came back from the foreign countries and MERRP will also encourage food production enterprises, including agriculture and livestock sectors. The development of rural areas is a fundamental need for the country’s development. Therefore, in order to develop agriculture and livestock sectors, a digital law has already reformed in the year 2019-2020. On the other hand, based on MERRP, there is a plan to provide loans and support from the government’s Myanmar Agricultural Develop Bank and other private banks to agriculture and livestock sectors.

Information is very important in the time of COVID-19 pandemic, so do the digital technology and online platform. So, it is needed to build the social platform which can provide a network where people can search domestic job opportunities by sharing experiences and knowledge from all over the country. Besides, in order to avoid keeping the experts at one organization, it will be better to stand as a freelance and self-contract so that the whole economy can share the experts and it will be more beneficial. This process is termed as ‘gig economy’ in international. In carrying out this process, MERRP will build an online or digital-based platform which can fulfill the market needs and find the suitable expert for the business. When domestic businesses can use the digital technology based website in selling their products, it will be able to sell Myanmar’s products on international online platform broader. From these steps, Myanmar market can have a chance to extend to the global market.

Growth of agriculture sector in 2021

The development of agricultural sector can be achieved by changing traditional practice to new normal during COVID crisis period. Everyone in the sector has to work together and cooperate together. On the other hand, those who are doing agriculture have to work together with those doing livestock businesses. For these processes, MERRP has planned how to carry out the development projects and reorganizing procedures in agriculture and livestock sectors. So that, businesses, themselves, will have to prepare in order to adopt the changing situations.

If players in the agriculture sector transform into digital economy, it can be believed that 2021 will be a big changing year in Myanmar Agricultural Sector. [1]

[1] Myanmar Alin Newspaper (27.11.2020) Discussion on Digital Economy

Development of Digital Economy in Myanmar (1)

Digital Economy and MERRP

Digital Transformation during COVID-19

During the COVID-19 period, there has been a dramatic increase in the use of digital technology in various aspects of daily life. Companies are adopting ‘work-from-home’ policy to reduce contact and hold online meetings by using social applications like zoom, Microsoft teams and google meet. This is the ‘new normal’ lifestyle of COVID-19. Even after the COVID-19 period, there will still be some businesses which prefer work-from-home policy. They will have online meetings and even their whole business-processes will be changed. Businesses are under digital transformation. In the first step ‘digital awareness’ which means knowing the benefits of digital technology has been gradually improved. The second one is the ‘digital presence’ which refers availability of technologies. Every business is using its own Facebook Page, Google Map address, Website and Email address. The third one is ‘integration’, instead of a phone-call order, businesses have to make it possible to order from online and deliver to the customers’ home. The fourth one is about the changes in working processes. The last one is about ‘innovation’. If Myanmar can grab a chance and change these five steps in digital transition, it can be believed that the stronger businesses and social sector will be created.

MERRP and Transforming Digital Economy

Concerning the Myanmar Economic Recovery and Reform Plan (MERRP) to be launched in near future, it is the plan not only for all types of businesses but also for the different social roles such as farmers, women, entrepreneurs and etc., Moreover, the most prominent part of MERRP is to develop transforming into digital economy of the country. There are five main sectors in transforming digital economy. The first sector is to change ‘cash based payment system’ to ‘online payment system’ through mobile or computer. The online payment can be done at anywhere and anytime and relied on its security. Since there are many security steps in transferring the money and the amount and the beneficiary account can be checked again and again before the actual transfer. Besides, during this COVID-19 period, online payment can reduce contacts among people. So, to meet this first sector, the first plan of MERRP is to support the household hit hurt by COVID pandemic by transferring the money to their phone from online. The second plan is for the public sector. The government has arranged the online payment system to pay for the individual tax and bills. The third plan is for businesses; they can also transfer the tax and charges to the government from online.

The second sector deals with the government’s online services to businesses. For example, in applying the business licenses and allowances, the government is planning to work form online so that people do not need to go to the different ministries or government offices during the COVID-19 period. The third sector concerns with the release of announcement and information by the government to the public or to the businesses. MERRP aims to create the central website of the government so that every announcement and information from different ministries can be reached to the public together.

The fourth sector is about ‘e-commerce’ which will be a very important factor in the future economy development. First of all, the government will set the rules and license procedure of businesses. Moreover, there is a plan which promote the online payment system so that MERRP aims to create new technology to make the transitions process of the different banks as one. Moreover, once the e-commerce process is managed to be carried out well, the government will release the rules to encourage selling domestic and foreign products at the e-commerce website. In this case, not only the large businesses but also the small and medium business, also farmers will have a chance to buy and sell the products at the online information network created by the government.

The fifth sector is about finding the job opportunity from online. This can be done at the network mentioned in the fourth sector. This is for both the local employees and the employees who come back from the foreign countries by using the mobile system. Besides these five sectors, the government also has extension plans which will be carried out under the MERRP. The first plan is ‘online education’- online library and online classes, which allow everyone to learn different kinds of topic from online. And the last but not least plan is ‘sharing economy’ which is a successful model in foreign countries. In the ‘sharing economy’, people share things that are exceeded to the other needed people so that they can make use of it.

The Next New Normal and Digital Economy

After the new normal lifestyle, there will be the next normal lifestyle which is more concerned with digital technology in almost all aspects like education, health and economy. In general, technology is used in almost everywhere. It is used in finding new diseases and vaccine. In transforming the normal education system to digital system, it is not about the teaching anymore. It becomes learning focus and known as ‘outcome-based’ education. Later, the learning management system is widely used in our country. For businesses, sharing economy will become a fundamental change for the country’s economy as it can create a win-win situation.

All in all, the main thing here is not the technology only. It is ‘people, process, and technology’. Firstly, people need to learn about the new things and they have to give their time and effort in learning these things. They also have to think for their employees. And they need to know how to make well use of it and what kind of benefits they will get. Then, it is needed to change the ‘process’ to adopt the next new normal features. Then, at the final stage, ‘technology’ comes. It is believed that if Myanmar could make the MERRP work well, we can catch up digital transformation achieved in the other countries. [1]

[1] Myanmar Alin Newspaper (26.11.2020) Discussion on Digital Economy

MERRP and Economic Recovery in Myanmar

Myanmar Economic Recovery and Reform Plan (MERRP)

As an extension of the CERP (COVID-19 Economic Relief Plan), the government set out a recovery plan, Myanmar Economic Recovery and Reform Plan (MERRP), aimed at rebuilding Myanmar economy over the long term[1]. The MERRP will focus on macroeconomic and financial stability and prioritise growth strategies in energy sources that are renewable. It will also include support for agriculture, infrastructure that boosts connectivity as well as human capital and innovation.[2] The MERRP will also align with the long term Myanmar Sustainable Development Plan by reinforcing exciting economic reforms started by the current government.

According to an early draft seen by Asia Focus, the MERRP comprises six broad goals:

  1. Strengthen the macroeconomic environment,
  2. Strengthen private sector participation and promote private sector-led growth,
  3. Promote inclusive rural growth through agricultural development,
  4. Promote financial sector stability,
  5. Facilitate reverse migration,
  6. Mitigate economic shocks and aftershocks affecting the most vulnerable groups.

This is broken down into 16 strategies and more than 130 action plans, some of which involve extending some of the support packages that were part of the CERP for sectors still struggling to survive the effects of COVID-19. Meanwhile, the government is putting the finishing touches on the Myanmar Economic Resilience and Reform Plan (MERRP), in response to the economic damage triggered by the pandemic. This plan is meant to cascade down through the ministries into effective plans of action. Already ministries are developing their individual recovery plans. For example, the ministry of tourism has just released its strategic recovery roadmap, based on what it touts as “enchanting Myanmar’s health and safety protocols for safe tourism”. The states and regions are also in the process of announcing local five-year economic plans.[3]

Recovery projection of the World Bank

The COVID-19 pandemic has severely affected Myanmar’s economic stability and growth, and while Myanmar is expected to narrowly escape a recession, helped by a strong start to the fiscal year, policy responses, and the limited disease outbreak, the growth recovery is at great risk. Prior to the COVID-19 pandemic, economic growth in Myanmar was projected to pick up to 6.3 percent in FY2019/20 and 6.4 percent in FY2020/21. However, Myanmar’s economy is now decline sharply due to direct and indirect impacts of the pandemic. Economic growth in a baseline scenario was to drop from 6.8 percent in FY18/19 to just 1.7 percent in FY2019/20 as all sectors are hit. [4]

According to WB’s Myanmar Economic Monitor, Dec 2020, the economy is projected to grow by 2 percent in FY20/21, with domestic economic activity gradually recovering. The report said partial recovery is expected in subsequent quarters as mobility restrictions are gradually relaxed and cases of local transmission slow. The medium-term growth outlook is positive, with growth estimated to recover to 7 percent on average supported by: (i) new investments in construction activities in industrial and urban development projects; (ii) road transport and communication infrastructure development; (iii) power and energy; (iv) a gradual resurgence in manufacturing activities and (v) increased use of digital technology, which could boost productivity across a broad range of sectors. Due to the slowdown in economic growth, poverty rates are simulated to increase from 22.4 percent in 2018/19 to 27 percent in FY20/21.

How MERRP will support economic recovery of Myanmar

Myanmar government forecasts its GDP growth by 6% in 2020-21. For building a resilient economy during and in the wake of pandemic, the MERRP will be the base since it includes expanded expenditure on health, infrastructure – for both long-term economic development, as well as counter-COVID stimulus. This plan is meant to cascade down through the ministries into effective plans of action. According to the data, the two key areas for future development are agriculture and the digital economy. So, most business leaders strongly endorse the MERRP’s strategy of promoting value-added industries. It is also believed that the government should provide more assistance to the agriculture sector, such as for improving access to markets and access to the latest technology to digitize the agribusiness market. [5]

Economic recovery in Myanmar would be depended upon capability of new government, successful implementation of MERRP and transforming into digital economy.


[2] Myanmar Times (18.10.2020)

[3] Bangkok Post (23.11.2020)

[4] The World Bank, Myanmar Economic Monitor , Dec 2020

[5] Bangkok Post (23.11.2020)

Myanmar New Normal under COVID in 2021

COVID situation in Myanmar at the end of Dec 2020

COVID-19 was first found in Myanmar on March 23, 2020. The first wave of COVID-19 infections began from end of March till mid-May. Since the first wave was well controlled, there were only 374 confirmed cases and eight deaths. The second wave of infections began in Sittwe, Rakhine State in August and spread Yangon Region quickly through September to December 2020. During the second wave, daily infections surged to around 2000 and the number of deaths also increased. The Ministry of Health and Sports and related authorities issued orders on Restriction Measures relating to control the COVID-19 Pandemic.

At the end of December 2020, the number of new COVID cases was declining in Yangon and other areas in Myanmar by 600 cases per day on average. The number of infections was declining as the year ended. As of 31 December 2020, there are altogether 124,630 confirmed cases of COVID-19 with 2,682 deaths in Myanmar. The daily new cases can be seen as follow:

Government control measures on COVID in Myanmar

The government extended Stay at Home townships and restrictions as below:

26 December 2020- the government issued orders on Stay at Home township;

  • 39 townships in Yangon Region
  • 7 township in Mandalay Region
  • 1 township each in Bago and Ayeyawaddy Regions
  • 17 townships in Rakhine State

30 December 2020- the government issued Announcement on Extension of the Precautionary Restriction Measures Relating to Control of the COVID-19 Pandemic until 31 January 2021.

30 December 2020- the government issued Announcement on Extension of the Restriction on International travels and visas until 31 January 2021.

How Myanmar will be healthy in 2021

The Ministry of Health and Sports announced on December 23 that the public must learn to coexist with COVID-19 as it had ushered in a “new normal” in the social, education and health spheres during the past nine months in Myanmar.[1] Myanmar is trying to get COVID-19 vaccines once they become widely available. There is a joint programme implemented by the WHO and GAVI for vaccination against COVID-19, named COVAX programme. Under the COVAX programme, Myanmar is due to receive Covid-19 vaccine only for 20 percent of its population. Besides, all doses will not come at a one time, said the Union Minister for Health and Sports during the meeting of the COVAX National Coordinating Committee, on December 5, 2020.[2]

According to the State Counsellor on 24 December 2020, a Myanmar team has been to India to buy the COVID-19 vaccines for 15 million Myanmar citizens.[3] It is also claimed that everyone in the country will get the vaccine. But for the injections, health workers and old people are the first priority. It will take several months to provide vaccine for the whole country. Private hospitals will be allowed to provide vaccines to increase coverage in 2021. Moreover, the efficacy of the vaccine needs to be closely monitored and Myanmar has to overcome challenges in cold storage facilities in rural townships due to electricity supply. Myanmar would be building back better in 2021.

[1] Myanmar Times (31.12.2020)

[2] The Global New Light of Myanmar (12.12.2020)

[3] Mizzima (26.12.2020)

Growing Delivery Services in Myanmar during COVID-19

Before the time of COVID-19, delivery services were not widely used as most Myanmar people like to buy things by checking with their own eyes. Nevertheless, since COVID-19 is mostly spread through coughing, sneezing and droplets left on surfaces, the local authorities ordered the bars, dine-in restaurants, entertainment facilities throughout Myanmar to close. Besides, more and more people are practicing social distancing and staying at home. Therefore, services that deliver food, groceries, home essential, clothing, cosmetics, electronic devices, medical supplies and packages are widely used since March, 2020.

Yangon Delivery Services (Popular Food Delivery Services)

  • Food2u
  • Food Panda
  • Grab Food
  • Hi-so Mall
  • Yangon Door2Door (Not only for food but also for packages and letters)

During COVID-19 period, these food delivery services are spreading their network with as many restaurants as possible in order to provide more varieties of food to the customers. They also offer a lot promotions with free of charge delivery to customers. Colorful bicycles from these companies can be seen in the streets of Yangon delivering food and goods to customers everyday.

People use delivery services in order to avoid the risk of getting infected by the corona virus. However, there is still risk of being infected between customers and delivery staffs. As delivery staffs have to enter several restaurants, touching the doors, counters and cash. To reduce the contact, customers can choose to leave the deliveries at doors. In addition, cashless payment can be chosen rather than cash on delivery.  But there are many customers who still use cash on delivery payment. So, it is needed to wash the hands for 20 seconds before eating to be safe.

Moreover, the delivery staffs also need to pay attention to the condition of food in delivering to the customers. If something happened to the food while delivering, they make sure to satisfy the customer as soon as possible or they will lose a customer soon as there are many choices.

In addition, customers can set the time and date to deliver as they want. So, if you set the perfect time for breakfast, your food will be at the door by the time you wake up.  Since the location can be changed each time, customers can also send food to their friends and families by paying for them from online.

Direct distribution and Door to door delivery services are widely used today’s distribution channels. Manufacturers/distributors deliver their products directly to retailers and end consumers through online sales. Mini vans are being used to carry goods during COVID period.

City to city Delivery Services in Myanmar

During this pandemic, there is an increase in demand of delivery services not only within the city but also city to city in Myanmar. Since people are not allowed to go to other cities without any apparent reasons so far, these deliver services are mainly used to deliver the packages or letters. There is also the door to door service which can keep the customers safe in their house. In delivering other cities, customers can choose the relevant packaging as well as shipping according to the kind of package. Moreover, the instant tracking is also available so that people can feel secure about their shipping. People mainly use the parcels andcourier services such as Royal Mail, Royal express, SBS Express and Marathon Express to deliver their packages or letters. They provide same day pickup and delivery in Yangon city. In the time of COVID-19, the Marathon Express also connect with taxi drivers and freelance cyclists in order to cover the increased delivery demand within the city. Moreover, the highway express company like Shwe Thia also offers city to city delivery services of packages even their main service, the passengers transportation, isn’t allowed so far. For major cities within Myanmar, overnight or next-day delivery service is provided since these companies have partnered with many local buslines and transportation providers nationwide. Efficient delivery services become active from China border (Muse) and Thai border (Myawaddy) to domestic market.

Inbound and Outbound Delivery Services

  • DHL Express
  • UPS
  • EMS (International)
  • Royal Express
  • BeeXprss Courier Service Myanmar
  • Others

Inbound and outbound delivery services are widely used especially during the COVID-19 period. These companies offer delivering small packages to oversized packages and products to and from other countries. There are also a number of available services such as pick-up services, door-to-door service and internet tract and trace services etc. Based on the size of package, the cost of shipping and shipping methods are differed. The common words they all assure are “security and reliability”. They are offering the secured and reliable inbound and outbound delivery services to the clients all across the world.

Other delivery services

With a population of 54 million and 22 million internet users, and 6.6% annual growth in those users, the country’s digital transformation is now very underway, alongside increasing demand for online services. There are also delivery service providers who work privately without connecting with express companies. These providers mainly use social media like Facebook in finding the clients. They post about their services on their personal pages as well as on the public groups. They also assure the safety and hygiene of the track and package so that the clients feel safe with the delivering process. Development of cold chain logistic in Myanmar is expected and huge market potential along with growing advanced delivery services.

Growing Online Shopping in Myanmar during COVID-19

In the first week of the official announcement about COVID-19 in Myanmar in March 2020, there was a panic buying especially among people who lives in urban areas. However, it is controlled after one or two weeks as consumers aware that COVID-19 will be a long-term battle. Then people started to reduce panic buying and try to adapt the situations during the time of COVID-19. The COVID-19 demands social distancing which makes most people stay at their homes. They have to work from home and even shop from home that is a better option that keep them safe. Therefore, the number of internet users in Myanmar has increased followed by the number of online shops. Especially during COVID-19, the online shops are useful to us from buying groceries to even cars and apartments.

After social media has become a part in our daily life, in Myanmar, Facebook is the most popular one. So, many retail sellers are using Facebook in order to reach their customers easily. Moreover, there are a number of online shopping websites, which become more popular during COVID-19.

Popular Online Shopping Websites in Myanmar during COVID-19

  • OneKyat
  • MogoZay
  • City Mall Online

These websites are also available in applications which be installed in the mobile phones. These websites sell both local and international products in many categories such as clothes, shoes, groceries, mobile phone gadgets, household products, beauty care products and much more. Especially in the time of COVID-19, they also focus from vitamin supplements which support antibody and health to products like mask, face shield and hand gel. Unlike other websites, OneKyat is a Buy and Sell C2C marketplace where users can sell, buy or trade used or news items with each other. OneKyat is especially popular for mobile phones, electronic items and cars. Nevertheless, it is sure that every website manages to provide quality products in order to satisfy people who don’t want to go out.

In placing the order, the customers can buy the goods on the website or from the hotline call. They can also put the order via Facebook Page, too. Then, the customers can choose whether to pay by online payment like credit or debit cards or cash on delivery. They also have delivery service to cities across Myanmar.

Food and Restaurant

During the time of COVID-19, most of the restaurants are starting to do home deliveries by connecting with different food delivery companies or by their own. They mainly used facebook for informing the customers about their new delivery services. On facebook, almost all kinds of food, from breakfast toast to seafood dishes and nearly all restaurants, from fast food shops like KFC, Lotteria to first class restaurants are available. Moreover, many homemade food like fish paste sauce to Burmese curry dishes are also available on their personal facebook pages.  Customers can place the order by a hotline call or from chatting.

Facebook Live Sale

Apart from Facebook Online Shopping Pages selling by chatting or phone calls, the current popular method is Facebook Live. Currently, many online shops especially jewellery shops are selling their products from Facebook Live by inviting actress, actors or social influencers to get good engagement from people. In Myanmar Facebook Live Sales trend, the current most popular actress is Htet Htet Moe Oo and she is selling for different jewellery shops and even luxury car and house companies on Facebook Live. There are also some people selling clothes, shoes, bags and their homemade food from Facebook Live.

Benefit of Online Shopping

The main benefit of online shopping to consumers is being convenience and having anything you need. Shopping can be done within a minute without moving an inch as well as almost anytime. Moreover, we can shop anything we need from online, from a paper to even a house. The second benefit is having variety of choices with better prices. Almost every brand or item can be found in online shopping. Moreover, when the product comes to the customers from the manufacturers directly, better prices are available since there are no traders in the middle. The third benefit is that consumers can send gift easily even to the person in different city. All they need to do is to choose the item and pay for the gift. Then, all packaging and shipping will be done on the day and time they want. For the fourth, online Shopping has always been a good choice for those who don’t like crowd. Especially during this COVID-19 period, it can also ensure safety.

Online sale creates benefits to businesses

Almost all businesses are suffered by the impact of COVID-19. At that time, they have to manage the risk and look for the opportunities to survive. Then, they become to sell their products from online by using their own websites or from facebook pages. Even though online sales cannot normally reach their normal sale, it creates benefits to business. By selling from online effectively, their brand name is reached to more consumers and can gain new consumers even from other regions. It can also help save their marketing, operation and labour cost.

Challenges of Online Shopping

The biggest challenge in online shopping business is ‘trust’ between business and consumers. In buying from online, customers have to give their personal information like their address and phone numbers. In this case, it is important for the online shops to keep these data private. The other problem is the quality of the products. They have to give to the customers as they promise. In the earlier times, there were some cases about lying people from online shopping pages. But now, people know that they must check carefully about the pages or the person when they buy from online or else, they can choose the official websites and pages which are more secure.

For businesses which sell from online, they have to care about their reputation. They need to have good reputation for quality of their products. In such case, they need to manage good packaging and delivery system well. They have to make sure their products reach to the consumers as promised.

Prospect for future online shopping

All in all, it cannot be denied that online shopping businesses are great help to people especially in the time of COVID-19 and it is surely to continue growing in post COVID period.  Potential products and services via online shopping in future can also be customized items for a specific consumer based on that consumer’s preferences and choices.

Assistance and Support for COVID affected business and communities in Myanmar (1)

Assistance and support to businesses

In an effort to meet the exigencies faced by Myanmar as a result of the COVID-19 pandemic, the Myanmar Government has launched the COVID-19 Economic Relief Plan since 27th April, 2020. The COVID-19 Economic Relief Plan (CERP) comprises seven goals, 10 strategies, 36 action plans and 76 actions, each with an estimated timeline and designated authority in charge, covering a broad range of extraordinary fiscal measures, combined with a set of human-focused and commonsense policy responses. Moreover, the implementation of the plan is monitored in order to enhance transparency and accountability of the government. Therefore, Goals and Action Plans contained within this Comprehensive Response Plan are taken place in a coordinated manner, with appropriate and sufficient oversight. The flow of information must be organized, timely and coherent. Among the actions the government has committed to, a total of K1908 billion were provided including K200 billion from COVID-19 MSME fund, K100 billion to restaurants and teashops, K600 billion to the local farmers at MMK 50,000 per acre of farmland through Myanmar Agricultural Development Bank according to the data on 4th September, 2020. [1]

First MSME Fund Loan

The Myanmar Government set up an initial K100 billion (K50 billion from the Social Security Fund and K50 billion from the government budget) COVID 19 Fund to provide immediate loans to enterprises designated in priority sectors hit hard by the COVID-19 shock in late March,2020. The categories included Cut Make Pack (CMP) manufacturing enterprises, hotels and tourism, and small and medium enterprises. These businesses can submit loan applications to COVID 19 Fund at 1% rate of interest for a one-year period. Loan applications can be submitted via online as well as in person and the application period is from 30th March to 9th April,2020. In this batch, more than 4,250 businesses applied through Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) for the loan and 3,393 of them received the loan in line with the loan procedures, according to the Ministry of Investment and Foreign Economic Relations. [2]

The businesses are distinguished into six different sectors under the categories of (1) Garment industry, (2) Hotels and Tourism, (3) Manufacturing and Production sectors, (4) Basic commodities and Restaurants, (5) Service sectors, and (6) others. Allocation of the first MSME loan with types of business can be seen below:

Allocation of Financial Assistance and Loan to the Affected Businesses

No.BusinessQuantityAmount (Kyat mln)Percentage
1CMP (garment)456,3126.24%
2CMP (others)2750.07%
4Tour Industry2363,7573.72%
6MSME for foodstuffs, commodities, Products manufacturing industry and services2,55070,08169.30%
 Total Amount3,393101,128100.00%

Source: Global New Light of Myanmar

Second SMSE Fund Loan

The second batch of COVID-19 loan is planned to be paid out to the businesses stricken by the coronavirus impacts starting from end of September. The loan applications were received between 29th July and 10th August. Over 7,600 businesses from the regions and states other than Yangon manually applied for the loan at the UMFCCI State and Region offices. The UMFCCI received more than 10,000 applications including 800 online applications. The amount of second loan will be K100 billion but only K20.77 billion was issued to 1,041 businesses in the first round. 

The priority sectors for the second batch of COVID loan are agriculture and livestock enterprises, manufacturing businesses, import-substitution businesses, food and beverage businesses, overseas employment agencies, export and import businesses, and vocational schools.[3]

Agriculture Loan

Myanmar Agricultural Development Bank (MADB) under the Ministry of Planning, Finance, and Industry has lent agricultural loans to farmers every year. The MADB lent Ks 1,684 billion in 2018-19 FY and Ks 1,747 billion in 2019-20 FY. The government increased the per-acre agricultural loan from Ks 100,000 to Ks 150,000 in 2016-17 FY. The loan for other crops is raised from Ks 50,000 to Ks 100,000 per acre during 2019-20 fiscal year.  During COVID-19 period, the ministry arranges up to K600 billion COVID-19 special loan for 12 million acres of land with an interest rate of five percent. The plan is to support an additional loan of K50,000 per acre to farmers in addition to the regular agricultural loan for the monsoon season. [4]

Other remedies

Other non-financial assistance can be seen as follows;

  1. Interest rate cut

      The Central Bank of Myanmar (CBM) has cut its key interest rates for three times, 3 percentage points in total within two months. The changes on the rates were effective on 1st May 2020.

  • 1st time – 0.5 percentage point cut on 12 March 2020
  • 2nd time – further 1 percentage point reduction on 24 March 2020
  • 3rd time – a further 1.5 percentage point cut on April/May 2020 [5]

2) Extend tax payment deadline

In late March 2020, the government pushed back the income tax deadlines for both the second and third quarters, as well as the monthly commercial tax deadlines. Income tax payments that were originally supposed to be paid by March 31 for the second quarter, June 30 for the third quarter and September 30 for the fourth quarter can now be made through December 31st. The monthly commercial tax for the period from March to November in the current fiscal year can also be paid by 31st December 2020.[6]

3)   Relief license and registration fees

As part of the COVID-19 relief programs, the Road Transport Administration Department (RTAD) has relieved overdue payment of vehicles and driver licenses by notifying those people who did not register their vehicles and driver’s licenses in March, April, May and June. [7]Moreover, RTAD has also lowered the vehicle registration fees for imported private used cars starting from August 7 to mitigate the impact of the COVID-19. For the vehicles with the engine power of 1,350 CC and below, the department reduced the registration fees to 15 percent from 30 percent, and to 25 percent from 50 percent for 1,351-2,000 CC engine power, 40 percent from 80 percent 2,001-5,000 CC and 60 percent from 120 percent for 5,000 CC and above.[8]

Additional support for businesses

Other support and remedies are essential for business to survive under COVID crisis. The government should provide fiscal support without endangering debt sustainability. It includes tax concessions and cash flow support to business sector other than MSMEs. More measures will be required to achieve economic recovery in Myanmar and proper arrangements for smooth supply chain are also essential.

[1] The Global New Light of Myanmar (27.9.2020)

[2] Eleven Media (19.6.2020)

[3] The Irrawaddy (28.4.2020)

[4] Myanmar Times (8.7.2020)

Assistance and Support for COVID affected business and communities in Myanmar (2)

Assistance and support to community

It has already been 6 months since Myanmar was suffered due to the coronavirus pandemic. Even though some people have learned to adapt their day-to-day living with the current pandemic, there are still many people in Myanmar who are having a hard time coping up with the aftermath of COVID-19. The 2017 Myanmar Living Conditions Survey (MLCS) reveals that 24.8 percent of the population was poor.[1] Urban poverty in 2015 was 14.5% according to Myanmar’s Urbanization Report of the World Bank. So, the Myanmar government is making the necessary effort to remedy the impact of COVID-19 from different aspects.

The Government has taken a number of concrete measures to ease the impact of COVID-19 on industries as well as households, including rolling out an electricity subsidy scheme across the country and distributing basic food items to people without regular income.  According to the released data in September 2020, the government provided a total of K1655 billion to community. [2]

Government assistance to community

No.TitleSubjectKyat Billion
1.Household Support1st time (5 Rations) 5.3 million 2nd time (Kyat 20,000 for 2 times) 5.4 million71.103 218.112
2.Household (3rd time)(Insurance of 20,000 kyats rate) 5.6 million113.535
3,Ministry of Social Welfare, Relief and Resettlement35.923
4.Exemption of Electricity ChargesApril, May, June  107.379
5.Electricity Charges in Taninthayi Region 1.518
6MFI loanMicrofinance sector100
7Health careMinistry of Health and Sports provides intensive care, personal protective equipment and healthcare services915.38
8Department of Rural Development (MOALI)Cash for work for rural populace92.6
 Total 1,655.55

(Source: Official sources)

Other supports

There is an underway plan to provide the loans to the people engaged in the film, music, theatre, periodical and media fields under separate programmes according to the committee to remedy the economic impacts caused by the pandemic.[3]

Since Myanmar confirmed its first COVID-19 cases in March 2020, volunteer groups across the country have helped local authorities and health workers to transport patients and prepare quarantine centers. In the response to the pandemic, the Myanmar government formed a new National Volunteer Steering Unit to systematically organize volunteers. According to the President Office, the new unit will track the number of volunteers at quarantine centers across the country, monitor the needs of quarantine centers, prepare free health care and medical checkups for volunteers and arrange preventive equipment, food, drinks and transportation for volunteers. [4]

Donation and support of well-wishers to the community in various means such as donation of test machines and testing equipment, food and medicines, support in quarantine centres and hospitals are also much effective to community.

Support for poor community

As one fourth of population in Myanmar are poor, COVID-19 affected poor communities. Poverty is related to rural residents, bigger household size with more young children, education level of household heads and main income earners, agro-based livelihood, disabled persons and limited access to infrastructure and market. Urban households have been affected by lost employment and lost income since May 2020. According to food security survey, many households are facing in security and adequate diet. COVID has also impact on negative education outcome. Since less than 20% households received government support, the government should plan for well-targeted and social assistance programs to cover all poor communities.[5]

[1] Myanmar Living Condition Survey 2017 by Central Statistical Organization

[2] The Global New Light of Myanmar (27.9.2020)

[3] The Global New Light of Myanmar (11.9.2020)

[4] The Irrawaddy (27.4.2020)

[5] Ending Poverty in Myanmar, World Bank Webinar 15 Oct 2020

Assistance and Support for COVID affected business and communities in Myanmar (3)

International assistance to Myanmar to response COVID

Assistance from other countries

In order to recover from the economic and social impacts of the COVID-19 global pandemic, the implementation of COVID-19 Economic Relief Plan (CERP) is estimated to cost US$2-3 billion. So, Myanmar is set to receive around US$2 billion from other countries as well as international organizations. In the early stage of COVID in June 2020, Myanmar received the loans of US$700 million from International Monetary Fund, $270 million from Japan, $250 million from the World Bank and $30 million from the Asian Development Bank, in total $1.25 billion. [1]Mobilization of funds from government budget and international assistance has reached over 4 trillion kyats (about US$ 3 billion) topping 3.4% of GDP.[2] Myanmar has to receive more than US$ one billion from other countries (government to government support) and UN and international organizations.

During April to October 2020, Myanmar receives over US$ 300 million in cash and other medical assistance from other countries to response COVID as follows;

  • Japan provided US $280 million on COVID-19 Crises Response Emergency Support Loan

On 1st September 2020, the Ambassador of Japan and the Deputy Minister for Planning, Finance and Industry of the Republic of the Union of Myanmar signed Exchange of Notes regarding COVID-19 Crisis Response Emergency Support Loan (Investment Promotion and Financial Sector Development Program Loan) of 30 billion yen (approximately 280 million US dollars), with the aim to provide emergency budget support for the coronavirus crisis response in Myanmar. The repayment period of the loan is 40 years (including a 10-year grace period) with 0.01% interest rate per annum. [3]

In addition, the loan is the second financial support provided under the overall emergency support package for Myanmar, following 5 billion JPY low-cost financing for SMEs launched in June. In parallel with the implementation of such projects, JICA is working on the next emergency support project under the package in close cooperation with the Myanmar government to provide greater thrust to the recovery of the private sector and the livelihoods of the people.[4]

  • US$18.5 million support from U.S Government Health and Humanitarian Assistance

As one of the largest bilateral donors to Myanmar’s COVID-19 response, the U.S Government is providing more than US$18.5 million including approximately US$10.3 million for health and US$8.2 million in disaster and humanitarian assistance, including to support vulnerable people and host communities.

  • Support from EU

Six European Union states deferred debt payments from Myanmar worth nearly US$100 million for 2020 in July 2020 to help the country’s efforts to focus on economic recovery from the COVID-19 pandemic. EU also set up Euro 5 million (Kyat 7.9 billion) emergency cash fund through Myan Ku project. The fund has supported over 5.4 billion kyats to over 70,000 garment and footwear workers.

  • Support from India

India also pledged to assistance to Myanmar to help treat the growing number of COVID-19 positive patients. At the meeting of 5th October 2020, India officials handed over 3,000 vitals of Remdesivir, an antiviral medication approved for the treatment of COVID-19.  [5]

  • Support from China

The Chinese government has donated medical supplies to Myanmar by four times to assist in the fight against COVID-19. The medical supplies included disposable masks, N95 masks, googles and personal protective equipment (PPEs).[6]

  • Support from Korea

The Export-Import Bank of Korea will provide US$ 30 million Emergency Equipment loan from its Economic Development Cooperation Fund (ECDF). The loan term is 40 years with 0.01% interest rate.

[1]   State Counsellors discusses remedies to lessen COVID-19 impacts on economy, Global New Light of Myanmar, 17 June 2020

[2] Election 2020: Key Issues for business webinar by AustCham and EuroCham Myanmar, 16 Oct 2020



[5] Myanmar Times (6 October 2020)


Assistance and Support for COVID affected business and communities in Myanmar (4)

International assistance to Myanmar to response COVID

Assistance from UN and international organizations

During April to October 2020, Myanmar receives over US$ 680 million in cash and other material assistance from UN and international organizations to response COVID as follows;

  • Support from UN organizations

More than 20 UN agencies in Myanmar are joining to respond to the COVID-19 pandemic, and support the organization’s efforts to protect lives and boost livelihoods. These efforts have involved technical and capacity building support, including delivery of 95,000 test kits to scale-up testing capacities, provision of personal protective equipment (PPE), support to migrant workers returning from abroad and socio-economic and livelihoods support. The United Nations emergency agency World Food Programme (WFP), one of the UN in Myanmar agencies, has provided food and nutrition to tens of thousands of people affected by COVID-19 in Myanmar. WFP has teamed up with the Government to provide food and nutrition assistance to the migrants who have arrived Myanmar which contributes to a well-organized quarantine management system. In July, WFP has provided nutritious meals for 41,500 returning migrants upon their arrival through various border gates, and for 43,000 in quarantine sites in Kachin, Kayin, Mon and Shan states; as well as Ayeyarwaddy, Bago, Magway, Tanitharyi and Yangon regions. [1]

  • International Monetary Fund (IMF) approved US$ 356 million emergency assistance

IMF Executive Board Approves a US$ 356.5 Million Disbursement to Myanmar to address the COVID-19 Pandemic. To address the urgent balance-of-payments and fiscal needs, the IMF has approved US$ 356.5 million emergency assistance for Myanmar under the Rapid Credit Facility and the Rapid Financing Instrument.

  • The Asian Development Bank (ADB) approved a US $250 million loan

On 21st August,2020, The Asian Development Bank (ADB) approved a $250 million loan to help the Government of Myanmar respond to the coronavirus disease (COVID-19) pandemic by mitigating the impacts on people’s health, livelihoods, and the economy, while also ensuring that the poor and vulnerable benefit from the country’s economic recovery.

Moreover, as safe piped water with better sanitation and hygiene is critical in controlling the spread of COVID-19, the Asian Development Bank (ADB) has approved a US $180 million loan to develop and upgrade the water supply system in Yangon.[2]

  • US$ 50 million credit from the World Bank for the Myanmar COVID-19 Emergency Response Project

In April 2020, the World Bank approved a US$50 million loan for the Myanmar COVID-19 Emergency Response Project to help Myanmar fill a critical gap in its contingency plan to urgently increase hospital preparedness and surge capacity in order to reduce the spread of COVID-19, protect health workers, and treat patients. [3]

  • The U.S Agency for International Development (USAID)/ Burma support

Since February 2020, the U.S. Agency for International Development (USAID)/ Burma provided a total of US$ 8.3 million in Heath funding for COVID-19 activities. In April and May 2020, USAID provided US$ 6.5 million in COVID supplemental funding to the multi-donor Access to Health Fund. USAID assistance through this fund has already supported 350 health facilities and community quarantine centers and facilitated reaching 135,275 people through community-based surveillance work including contact tracing and fever testing.

Moreover, USAID allocated US$ 1.8 million of its Emergency Response Fund to Myanmar through existing global agreements with the World Health Organization (WHO), UNICEF, and the Breakthrough Action activity, implemented in Myanmar by Save the Children, for health activities beginning in late March. In addition, USAID donated 31,500 surgical masks, 1,500 each of face shields, face masks, gowns, and shoe covers and 1,000 safety goggles. [4]

  • US$ 15.8 million support from Livelihoods and Food Security Fund

Livelihoods and Food Security Fund LIFT has announced funding of USD 15.8 million to support Myanmar’s COVID-19 preparedness and response. The funding is estimated to benefit 5.9 million people in Myanmar at a time when the country is making urgent preparations to respond to the challenges of the COVID-19 pandemic. LIFT’s assistance will be delivered through a front-line response by its implementing partners and it focuses on supporting the most vulnerable: migrants, the elderly, internally displaced people, pregnant women and those with children under the age of two. LIFT’s donors are the United Kingdom, the European Union, Switzerland, Australia, the United States of America, Canada and Ireland. [5]

Myanmar Economic Recovery and Reform Plan (MERRP)

Myanmar Economic Recovery and Reform Plan (MERRP) is a new, comprehensive and inclusive medium-to longer-term plan, being developed by the government to achieve speedy recovery of Myanmar economy. The plan consists of six goals, 16 strategies and 135 action plans. Myanmar needs more support from International organizations and other countries for the implementation of the MERRP.

[1] United Nations in Myanmar (15 July 2020)

[2] Asian Development Bank (21 August 2020)

[3] The World Bank (29 September 2020)

[4]  U.S. Embassy in Burma (21 July 2020)

[5] Relief Web (9 April 2020)

Changing Business Model During and After COVID Crisis in Selected Industries (1)

Impact of COVID-19 and Business Sector Respond to Crisis

All ASEAN countries are suffering from the socio-economic impact of the Covid-19. In the early stages of the pandemic, the rapid spread of the virus in China led to the disruption of supply chains and freezing demand limiting the flows of travel, trade, and investment. As the rate of infection increased in Southeast Asia, the impact of the pandemic brought immediate interruption in all sectors of the economic activity, primarily by containment measures imposed through lockdowns, community quarantines, temporary business and school closures, necessary social protection for the vulnerable population and measures to further assist SMEs and other affected firms, according to the Organization for Economic Co-operation and Development (OECD).

Containment Measures in ASEAN Member States

   Source: OECD

Governments of the ASEAN Member States imposed strict domestic containment measures. The restriction of large-scale events, restaurants and travel, as well as school closures and lockdowns are having a negative impact on economic activities. These lockdown measures, although to a different scale and scope, imposed by the ASEAN countries are slowing down or even stopping economic activities in certain sectors, having a ripple effect to others. Other western countries were also significantly affected by the outbreak, including the US and the EU, are also among the region’s largest trade and investment partners. The WTO has estimated that world trade is expected to fall by between 13% and 32% in 2020, exceeding the decline brought on by the Global Financial Crisis.[1]

Since the COVID-19 crisis struck, organizations in vulnerable sectors worldwide have seen their revenues drop substantially in a matter of weeks. Countless companies have taken reactive steps to ward off major losses, such as establishing remote work arrangements, securing supply chains, reducing employee workload, cutting costs, and applying for government support. One of the business sector responses to COVID-19 was offering the same (or similar) products and services through an online channel, which occurred through the digitization of physical products or through a technology-mediated delivery solution. Another response was by companies and factories which took advantage of market demand by deploying existing infrastructure to produce different products or to offer new types of services. Suddenly struggling to meet the demand for their products and services, some companies needed to quickly maximize their infrastructure to increase production and delivery capacity. As a response, a number of organizations worldwide are changing their business models and taking inventive steps to find new infrastructure and collaborate with external partners to increase their production or delivery capacity amid Covid-19. For example, Amazon hired an additional 100,000 employees in the United States to meet increased demand from homebound online shoppers, so it partnered with the ride-booking company Lyft. Lyft was encouraging its drivers to pursue positions as warehouse workers, delivery people, or grocery shoppers to earn additional income, and applications for Amazon positions are available through the Lyft driver web portal.[2]

[1] COVID-19 crisis responses in ASEAN Member States. OECD

[2] Three Response Strategies to COVID-19 Business Challenges, MIT Sloan  Management Review

Changing Business Model During and After COVID Crisis in Selected Industries (2)

Changing Business Model during COVID-19 Crisis

All the companies and businesses in all sectors have to be predictive and proactive in their decision-making to preserve business continuity and build enterprise resilience. According to the EY, the immediate responses and implementing plans by the businesses and companies worldwide during the Covid-19 pandemic are as follow.[1]

Source: MMR/ Ref: EY

  • Prioritizing employee and customer safety with continuous engagement

Ensuring the safety and wellbeing of the employees in the workplace is essential as it would help to engaging and reassuring the business continuity plan (BCP). One of the adjustments companies make is to initiate or expand flexible work arrangements and other policies that allow people to work remotely and safely. Depending on the sector, companies reorganize teams and reallocate resources, and establish employee wellbeing programs and policies that support a safe working environment. Additionally, companies produce regular communications that align with current government and health authorities’ policies to help employees remain engaged as they and the organization navigate through the crisis.

  • Developing strategy for business continuity plan (BCP)

Most businesses were experienced significant disruption to their business-as-usual operations and faced business underperformance throughout the duration of the COVID-19 crisis. To responses this, companies and businesses evaluated short-term liquidity, assessed financial and operational risks, considered alternative supply chain options and determine how the COVID-19 crisis affects budgets and business plans.

  • Communicating with relevant stakeholders

Clear, transparent and timely communications are necessary when creating a platform to reshape the business and to secure ongoing support from customers, employees, suppliers, creditors, investors, government and regulators.

  • Applying the government support programs

Government from ASEAN nations has released several financial, social insurance and tax-related policies to support companies. Companies identified and determined which support from the government is best for their organization.

  • Planning for business recovery

Companies made decisions and took actions during crisis with recovery in mind. Companies plan to reshape their business strategy to thrive in the future when the crisis is over.

Covid-19 also accelerate the developing new business models and improving risk management process, restoring the supply chain management, promoting the digital platform applications, and producing customized products and services are included in the changes of business models in the medium-term.

Prior to the COVID-19 crisis, the drivers of technology were focused on cost reduction and productivity. The goal was to make well run businesses run better. As businesses adapt to the new realities caused by COVID-19, the roles of technology will be a critical for developing the long-term business model changes as follow, according to the SAP survey developed by the South Asia Press Room.[2]

  • Achieve resiliency – to steer the company through challenging times with agility.
  • Deliver profitability – with transparency across both the top and bottom line, supporting business growth and increased productivity and
  • Act sustainably – by reducing carbon footprint, minimizing waste and transitioning to the circular economy.

Adapting and aligning marketing, sales and customer service techniques will be vital if businesses are to survive in the future. Smart businesses will align insights and behavior data across teams to build a digital picture of their prospects and customers. Digital led businesses will be data driven and would not be focused on aligning their processes internally.  In the Longer term, companies will need to consider how robust their business, management team and initiatives were in facing the crisis. It will also be important to consider and reset the business assumptions that support the supply chain and other concentrations that many businesses have been exposed to over time.

[1] COVID-19 business continuity plan: Five ways to reshape, EY

[2] Businesses must ‘innovate and transform’ post Covid-19 disruption to be competitive, South East Asia Press Room

Changing Business Model During and After COVID Crisis in Selected Industries (3)

Changes and Development of Business Models in ICT Sector

The ICT sector has the potential to be one of the more resilient segments and would rise again quickly. The sector does not appear to have been as badly hit as others. In the immediate days and weeks after the Covid-19 crisis hit, most of the companies have changed to digitize at least some part of their business to protect employees and serve customers facing mobility restrictions as a result of the COVID-19 crisis. The crisis has stimulated company observations and the need for businesses to re-evaluate near-term and long-term supply chains, resource deployment, and liquidity. Major technology companies have ceased marketing operations, canceled essential events and conferences, and announced financial results below market expectations. For example, Microsoft lowered its revenue estimates in the quarter ended March 2020 due to the impact of the epidemic with lower sales of Windows software and surface devices.

During the Covid-19 pandemic, there was historic deployment of remote work and digital access to services across every domain as part of plan to change the business models. Most B2B, G2B and G2G meetings are online. People use all types of teleconferencing such as audio, audio graphic, computer, video, business television (BTV), and distance education etc. Banks have transitioned to remote sales and service teams and launched digital outreach to customers to make flexible payment arrangements for loans and mortgages. Grocery stores have shifted to online ordering and delivery as their primary business. Schools in many locales have pivoted to 100 percent online learning and digital classrooms. Doctors have begun delivering telemedicine, aided by more flexible regulation. Manufacturers are actively developing plans for lights-out manufacturing which are fully automated and require no human presence on-site. Thus, players in ICT industry shifted their business models in targeted customers by directly providing ICT services to all players from various industries which are in need of computing platforms to operate their businesses. In the short-term, ICT players are providing a lot of the tools to enable companies, schools, hospitals, etc. to operate remotely and there has been a huge push to make that happen. For the longer term, companies are holding discussions and engaging with their customers to work out what more robust, sustainable solutions ought to be implemented.[1]   

  Source: MMR

As a common, ICT companies reduce the cost base and capital of their operations, supply chains, and organizations overall and to transition their fixed costs to variable costs aggressively wherever possible. Many organizations have shifted to remote-working models almost overnight. A remote-first setup allows companies to mobilize global expertise instantly, organize a project review with 20 or 200 people immediately, and respond to customer inquiries more rapidly by providing everything from product information to sales and after-sales support digitally. In effect, remote ways of working have driven the faster execution and this step change in remote adoption is now important enough to reconsider current business models, according to the McKinsey. Moreover, companies have already launched analytics and artificial-intelligence (AI) initiatives in their operations. Companies have laid out an agenda that focuses on four efforts: refocusing and accelerating digital investments in response to evolving customer needs, using new data and AI to improve business operations, selectively modernizing technology capabilities to boost development velocity, and increasing organizational agility to deliver more quickly.[2]

While the major impact in ICT industry is expected to be on Hardware business, the Software and Services businesses are also expected to slow down as the spread of Coronavirus goes beyond the boundaries of Asia. Thus, the ICT companies are focusing on the adoption of collaborative applications, security solutions, cloud services, big data and Artificial Intelligence (AI) which have huge potentials to see big growth in the future.[3] Meantime, ICT companies are strategically looking for funding and investment over the next six months as institutions focus on existing portfolios, and waiting to see the longer-term impact of the economic shock. As ICT companies need funding and investment for the long-term to operate businesses, they are reorganizing to form the quality management team and develop new business plan to attract the investors. In addition, ICT companies apply business models that support changes to the way companies work, such as working from home, virtual meetings, online consultations, and the accelerated use of data to allow businesses to be more agile. On the other hand, well capitalized ICT companies are accelerating their strategic plans through acquisition.

Furthermore, ICT companies are changing their business model to focus on providing technology services such as digital media, Over the Top (OTT) content players, Virtual Private Networks (VPNs), Big Data, Cyber security, and Data security technologies which would become rapid growth as most workforces are operating remotely. In addition, most of the ICT business are more investing on providing cloud services which is significantly growing due to the higher usage of content, gaming downloads, video conferencing, and the impact of remote access to corporate networks. For example, Huawei, equipment maker, recently posted a surge in its technological services comprising AI, video conferencing, and wireless network coverage across the Asia Pacific, given the on-ground communication challenges to ensure smooth connectivity.[4]

As the Covid-19 pandemic increases the reliance on digital technologies, the ICT sector expects the growth opportunities. ICT firms are anticipating introducing new services, products and solutions as part of plan developing new business model. ICT companies in the sector are substantially investing in their digital strategy and balancing short-term efforts with long-term measure along with practical steps such as refreshing plans, updating employee policies, communicating frequently, and carrying out succession planning. Even though businesses are struggling with current losses, the ICT industry might be one of the few sectors which would be growing in the long run.

[1] How new Covid-19 realities impact ICT sector M&A, Comms Dealer

[2] The COVID-19 recovery will be digital: A plan for the first 90 days, McKinsey Digital

[3] How Covid-19 will change and open new opportunities for ICT Industry, Industrial Automation India

[4] COVID-19: Consequences and opportunities for the ICT sector, Fractal

Changing Business Model During and After COVID Crisis in Selected Industries (4)

Changes and Development of Business Models in Food and Beverage Sector

Covid-19 is having a profound effect on the business world. Recent community lockdown and quarantine in many countries have forced people to stay home, which have dramatically reshaped the food and beverage sector by surging the demand for retailers and decreasing for food service. During the Covid-19 pandemic, disruption in supply-chain has forced businesses to search for alternative delivery routes and types of products. According to Reuters, a decline in air traffic, as well as world-wide enforced quarantines have reduced the capacity for companies to move fresh produce long distances, which have caused issues for both farmers with product they cannot move and importers needing raw materials.[1] Some food & beverage businesses that are able to keep up with demands have been doing very well, when startups, which usually can adapt faster to the changes, are having an advantage when they seek and obtain funding. Some changes in the Asia food and beverage industry is as follow:

(a) Packaged-food businesses, retail services and online sales are on the rise while the restaurants’ revenues have decreased substantially.

(b)  Restaurants have been forced to rely solely on takeout and delivery options rather than dine-in customers for revenue, which has changed many of their business models.

 (c)   Smaller manufacturers are being shutout as large retailers are not placing orders with them and are instead focusing on big orders from larger manufactures to satisfy customer demands.

Source: MMR

While online grocery sales are growing rapidly, it cannot take additional demand because of the logistics capacity. Businesses are trying to resolve the rapid increase in the number of orders and shortage of labor to fulfill these orders. One of the significant business model changes in food & beverage sector is that liquor companies re-directed their production lines to manufacture sanitizer hand sanitizer to supply the rising market demand. Furthermore, food and beverage businesses alter shifts to around-the-clock, take new safety precautions, change product mixes, increase delivery options and redefine business as usual. With these measures, the food and beverage industry has adapted at a rapid pace, responding with ideas and plans to protect employees and customers, and keep up with demand.

Additionally, many businesses changed the way to reach their customers by selling through via mobile order-and-pay system along with free delivery services.  Stores and restaurants found that they could no longer rely on their old business models, so they changed from traditional sales to online selling. Supplier such as farmers began selling direct to consumers, although some simply dumped produce, creating images of a severed supply chain. Manufacturers stepped up to shift production for safety and medical equipment, while grocers started working around the clock to restock shelves, and big food companies shifted production to meet the needs of the public.[2]Most of businesses are trying their best to keep staff as long as they can by utilizing them to perform multiple functions such as delivering, cooking and cleaning.  For example, PepsiCo, Mondelez and Hormel Foods are a few among the businesses rewarding their workers with bonuses, additional leave time and raises. As for the workplace safety, stores and manufacturers took precautions to protect their workforce and customers. Restaurants and retailers are also limiting the number of shoppers permitted through their doors at any one time, with monitors managing lines at three or six feet intervals.

As people have adapted to working from home, business in food & beverage industry are also establishing D2C (Direct to Consumer) delivery and investing in food delivery directly to homes and offices is a key growth area during the Covid-19 pandemic. Using digital and online platform becomes the main strategy for most of the food % beverage companies. For example, Carlsberg Malaysia is pinning its hopes on digital marketing and e-commerce to recover from huge revenue and profit drops suffered during the Covid-19 pandemic outbreak. In hopes of recovering from this revenue decline, Carlsberg Malaysia has opted to shift focus away from the traditional on-trade channel such as coffee shops despite this having customarily always been its strongest performer, and focus on digital efforts instead.[3]Moreover, it has planned to optimize its cost saving measures, building on an existing business strategy along with other initiatives such as offering limited-edition packaging promotion, changing the packaging styles to attract the customers, and take away services.

Thus, continuing the business successfully in amid and post Covid-19 pandemic will depend on the each company’s ability to shift with the demand for current products needed in the market with changes and development of the new business models. Food & beverages companies and businesses which can survive in the crisis are the one which can develop the adaptive business model by fulfilling the customer demand with effective and innovative ways such as offering free online food delivery services to customers, making value added products, and changing the production line to manufacture products which have huge market demand.

[1] Changes in Food and Beverage Industry, Green Hasson Janks

[2] Food And Beverage Companies Evolve, Innovate And Contribute Amid COVID-19 Crisis, Forbes

[3] Carlsberg Malaysia pins hopes on e-commerce after Covid-19 sinks financials, Food Navigator Asia

Changing Business Model During and After COVID Crisis in Selected Industries (5)

Changes and Development of Business Models in Garment and Fashion Sector

Covid-19 pandemic has shaken the global fashion industry which is worth US$ 2.5 trillion by destabilizing the whole supply chain. The industry has been hit hard by the COVID-19 pandemic. Billions of dollars of clothing orders placed with manufacturers around the world have been cancelled. COVID-19 has exposed a fundamental weakness in the traditional fashion system: matching supply and demand. Industry leaders have aware that the old way of doing businesses, for example, seasonally manufacturing items abroad without any advance customer feedback and then these items sell in retail stores around the world does not work. Thus, apparel and fashion companies have put their assets to good use in the crisis, for example, turning over their factories to make face masks or hand sanitizer, donating products and services to healthcare workers, or helping employees find temporary roles with companies that are hiring. Industry expert in apparel and fashion sector assume that on-demand manufacturing is an important part of the plan of changing business model during Covid-19 pandemic. Major players believe that there would be no inventory, no fabric waste, and no warehousing if the major players practice the on-demand manufacturing in the garment and fashion sector. On-demand production allows fashion brands to reduce their upfront cash need and minimize excess inventory. Therefore, top players in the industry are changing their business model with both economical and sustainable plan.[1]

Meanwhile, the common immediate responses of apparel and fashion companies during Covid-19 pandemic are – (a) lead with compassion and protect the employee (b) manage the cash flow (c) review in-year inventory position and assess the supply chain (d) increase digital marketing and online platform and (e) maintain decent connections with consumers. As the plan for medium term, companies anticipate on preparation of reopening stores which were closed in huge amount, reassessing merchandising plans for fall 2020 and spring 2021, and connecting with brand loyalists. For the long-term plan, many companies in the sector focus on developing the portfolio and financial resilience, building their operating model around digital and Omni-channel marketing, and anticipating shifts in consumer sentiment and behavior.[2]

Source: MMR/ Ref: McKinsey

As for the garment sector, development of a new business model by Bangladeshi apparel makers would be relevant and applicable for other ASEAN nations during the pandemic. The new business model state that suppliers and buyers will hold similar responsibility for placing orders and buyers will contribute to purchasing raw materials to avoid the order cancelation.

Source: RMG Bagladesh

As a way to save bank charges, almost all brands/retailers have stopped working through irrevocable letters of credit which are usually called “Master LC.” Instead, they have started the practice of using sales contracts or purchase orders. An irrevocable letter of credit is a financial instrument used by banks to guarantee a buyer’s obligations to a manufacturer. It is irrevocable because the letter of credit cannot be modified unless all parties agree to the modifications. In addition, brands and retailers or clients need to engage in financial investment in the supply chain.[3]

[1] How Fashion Manufacturing Will Change After The Coronavirus, Forbes                                                                   

[2] Perspectives for Fashion Industry in a time of crisis, McKinsey

[3] Covid-19 pandemic: New business model a must for the sustainable fashion industry, RMG Bangladesh

Changing Business Model During and After COVID Crisis in Selected Industries (6)

Business Model Changes and Recommendations for Businesses in Myanmar

Rapid growing of COVID cases in Myanmar and the global COVID-19 pandemic is dealing a severe blow to Myanmar’s economy and business sector. Economic growth in a baseline scenario is projected to drop from 6.8 percent in FY18/19 to just 0.5 percent in FY2019/20, according to the World Bank’s Myanmar Economic Monitor. All restrictions together clearly have negative impacts on businesses and socio-economic sectors, including international trade (border, air and maritime). As various containment measures were imposed, companies located in the main business hubs ensure that employees were able to work remotely. Some firms in Yangon began to trial work from home policies in mid-March, following the lead of international companies with remote working experience. By the end of that month, the list of firms allowing at least part of their workforce to operate from home included banks, media outlets and telecoms operators. Working remotely in Myanmar has been made more feasible in recent years by expanding internet access: the total number of internet users rose from 18m, or 33.1% of the population, in July 2019, to 22.2m, or 40.8%, in January 2020 and it is believed to increase more in July 2020.[1]

These factors led to the development of the digital economy in Myanmar, with the pandemic leading to the businesses rising online sales. Grocers, pharmacies, and e-commerce marketplaces are sustaining consumer access to essentials food, medication, toiletries, and others via online. Thus, most of the retail and service businesses in Myanmar shifted to online and digital purchasing. Consumers who would like to avoid going crowded area and direct interactions orders foods and other products via online, so smaller retailers and brands are having opportunity to deliver goods and take online orders. For those businesses which does not set-up with solid E-commerce capabilities can reach consumers and take orders through social platforms such as Viber, Twitter, Instagram, Facebook accounts and local Facebook pages.

With COVID-19, people are cooking more at home. As a result, the supply may shift more towards local producers, whose focus was mainly on the grocery stores, rather than more exotic foods that are often ordered by restaurants. This may also find the support from the government to secure the production of the essential product within the county borders as a precaution to secure the supply chain in case of future pandemics. Farmers began selling direct to consumers, although some simply dumped produce, creating images of a severed supply chain. Hence, investing in food delivery directly to homes and offices is a key growth area in Myanmar, as people have adapted to working from home and establishing D2C (Direct to Consumer) delivery will be likely be prevailing trends even after COVID-19. Due to the rising e-commerce activity, there is also huge demand for the warehouse services.

For the garment sector, it is recommended that manufactures must attract the foreign investors by number of certified green factories and the apparel makers have invested a lot in technology to make the industry sustainable in terms of environment and labor rights. Meanwhile, government should provide technological support to the local companies and businesses for producing value added services and products to substitute the imported goods and products.

The future of businesses circumstances in the post-pandemic period would be a lot different from the old situations. The expected Covid 19 -driven macro trends would be look like as the following:

Source: OC&C Consultants

[1] The post-Covid-19 future of Myanmar’s office market, Oxford Business Group

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (1)

COVID-19 and World Economy

The COVID-19 pandemic is an ongoing global pandemic of coronavirus disease 2019 (COVID‑19), caused by severe acute respiratory syndrome coronavirus 2 (SARS‑CoV‑2).[1] The outbreak was first identified in Wuhan, China, in December 2019. Then, the World Health Organization declared the outbreak a Public Health Emergency of International Concern on 30 January 2020, and a pandemic on 11 March. As of 30 July 2020, more than 16.8 million cases of COVID-19 have been reported in more than 188 countries and territories, resulting in more than 662,000 deaths; more than 7.37 million people have recovered. (WHO Report)

Starting from mainland China, the pandemic spread across the world, killing people in the North America, Europe, Asia and Latin American and pulling the world economy down.  The pandemic has spread with alarming speed, infecting millions and bringing economic activity to a near-standstill as countries imposed tight restrictions on movement to halt the spread of the virus.

The economic impact of the COVID-19 pandemic on emerging market economies far exceeded that of the global financial crisis. According to the World Bank, the coronavirus pandemic has taken a devastating toll on the global economy, and the global economic growth is forecasted to shrink by 5.2 percent in 2020 when the IMF said it shrink by 3 percent. Advanced economies are anticipated to shrink 7 percent when the emerging and developing economies will shrink by 2.5 percent.

The economic impacts have been even more severe as emerging market economies were hit by multiple shocks. Particularly hit are tourism-dependent countries due to a decline in travel and oil exporters as commodity prices dropped down. With global trade and oil prices projected to drop by more than 10 percent and 40 percent respectively, emerging market economies are likely to face massive struggles.[2] Moreover, the situation of global stock markets raises serious concerns as the stock prices seem to be dropped down since the beginning of the crisis.

Many people have lost their jobs or seen their incomes cut due to the coronavirus crisis. Unemployment rates have increased across major economies as a result. Millions of workers have also been put on government-supported job retention schemes as parts of the economy, such as tourism or hospitality, came to a standstill under lockdown. Even in the countries with low unemployment levels presently, there are no guarantees that employers can avoid layoffs after the wage supports end, but all of these countries have seemingly traversed the worst wave of peak COVID-19 deaths and cases, and they are gradually re-opening.

The decline of World Economy due the Covid-19 pandemic is the worst since the Great Depression of the 1930s, according to the IMF. The travel industry has been badly damaged, with airlines cutting flights and customers cancelling business trips and holidays as many countries introduced travel restrictions to try to contain the virus.

According to OECD, the GDP declines more than 20% and a surge in unemployment in many countries. Even in countries where containment measures have been relatively light, early data are already making clear that the economic and social costs of the pandemic will be large. Growth prospects depend on many factors, including how COVID-19 evolves, the duration of any shutdowns, the impact on activity, and the implementation of fiscal and monetary policy support. In the wake of the Global Crisis, uncertainty in the world economy led many firms to reassess their business models.[3] Rather than relying on global supply chains, an increasing number of firms invested in robots and advance technologies.  

[1] Naming the Coronavirus disease (Covid-19), WHO

[2] COVID-19 Response in Emerging Market Economies: Conventional Policies and Beyond, IMF

[3] OECD Economic Outlook June 2020

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (2)

Impact of COVID-19 to Myanmar economy

The coronavirus was confirmed to have reached Myanmar on 23 March 2020. As of 31 July 2020, about 353 confirmed cases have been reported in Myanmar and resulting as 6 deaths and 295 recovered, according to the Ministry of Health and Sports (MOHS).

Since the world economy is slow down as a result of the Covid-19 pandemic in worldwide, the growth of Myanmar’s economy also drastically declined due to its major trade partners in Asia and Europe are at risk for economic recession due the virus impacts.

Initially, economic growth is expected to reach 6.4% in 2019-2020 FY due to the growing investment in the transport and telecommunication sectors and government’s planned infrastructure spending before the 2020 elections, according to the Ministry of Planning, Finance and Industry (MOPFI) and the World Bank. Myanmar had strong performance in the first six month period from October 2019 to April 2020 and its GDP growth rate was estimated to 6.3%.

However, the GDP growth for Myanmar will likely slow down significantly to 4.2% in 2019-20 due to the Covid-19 pandemic, but if the virus is confined quickly, it would recover to 6.8% in 2021, according to the Asia Development Bank (ADB). Meanwhile, the World Bank has downgraded Myanmar’s GDP growth forecast for 2019-20 fiscal year to 0.5% percent down from 6.4%,[1]  as all sectors are hit, with adverse effects of varying intensity projected across all sectors.

Among the various sectors which are highly affected by the Covid-19 impacts in Myanmar, Tourism, Cut-Make-Package (CMP), and Small-Medium-Enterprises (SME), are in high vulnerability. People in poor conditions are impacted by the loss income and negative impacts of the economy. The net profits of private banks went negative for the first time in a decade as their ability to lend at a profit is severely limited by high interest rates required by the Central Bank of Myanmar, according to the World Bank.

Still, Myanmar has seen a moderate domestic impact from the global COVID-19 due to its reliance on international trade, investment and technology. Export volumes for simple manufactured goods have seen the biggest impact. The garment sector, which employs over 700,000 workers and accounts for $4.6 billion in export revenue, has faced both supply and demand shocks and Myanmar exports 70% of garment products to European countries. China supplies 90 percent of raw materials for the sector; however, exports to Myanmar were halted between January and March. Just as supplies were returning to normal in April, demand for Myanmar garment products collapsed.[2] According to the Ministry of Labour, Immigration and Population, more than 60,000 factory workers in Myanmar have already lost their jobs since the start of the crisis, including those working in the garment factories that supply some of the world’s biggest fashion brands. About 175 factories stopped operations and 105 factories have not been able to pay wages to the workers yet, according to the Myanmar Times on 28 April 2020. Many garment factories have reduced working hours and cut jobs, while some have permanently or temporarily shut down. Without new orders, many factories will be forced to reduce their workforce and working hours, and close either temporarily or permanently.

Meanwhile, the foreign investment sector is unable to provide the desired investment flows. Outbreaks in key investment partners have already caused delays to projects valued in the billions of dollars. Most of the foreign investors and infrastructure developers has been suffering financial losses due to the outbreak and scaling back on the planned projects. However, investments are unlikely to be enough to rise up the entire economy and Myanmar must formulate a medium-term economic plan to deal with the uncertainty in the future.

According to the World Bank, the COVID-19 pandemic has interrupted Myanmar’s economic expansion, and while Myanmar is expected to narrowly escape a recession, helped by a strong start to the fiscal year, policy responses, and the limited disease outbreak, the growth recovery is at great risk.

[1] Myanmar Economic Monitor June 2020, World Bank Myanmar

[2] Covid-19 Threatens Myanmar’s Economy, The Diplomat

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (3)

Impacts of COVID 19 on Myanmar Business Sector

The impacts of COVID-19 on Myanmar businesses shows that nearly two-thirds of businesses expect to face cash flow problems and the majority of the businesses are operating with lower turnover, according to the Asia Foundation. The survey developed by The Asia Foundation, backed by the DaNa Facility and aid from the UK, revealed on June 8, 2020 that the businesses in the survey estimated that they require about 18 million kyats (US$12,851) in additional cash flow in order to survive until September 2020. The survey also estimated that as a nationwide, businesses need an additional 900 billion to 2.1 trillion kyats (US$642 million-1.5 billion), equivalent to 0.7-1.7% of the International Monetary Fund ’s (IMF) projection of Myanmar’s GDP for the 2019-2020 fiscal year.

That survey is a nationwide poll of 750 local businesses and is the largest survey so far of the impact of the pandemic which covered the two weeks ending May 10. During that period, 29% had completely closed and 92% reported lower sales due to Covid-19, with 74% losing more than half of sales. The key reasons for reducing operations or closing were employee safety and lack of customers[1]. The manufacturing sectors for textiles, apparel and leather as well as the accommodation sector are among the industries facing the highest levels of risk. Additionally, accommodation and food and beverage services were also suffering because potential national and international customers have been unable to travel. The government’s instructions to people to stay home and avoid gathering in groups of more than five have had a particularly large impact on the food and beverage sector, according to the survey. The retail and wholesale industry reported facing relatively smaller risks to its survival. The profitability of enterprises were declined and it was reported that only 22 percent being profitable due to the Covid-19 impacts.

The Asia Foundation survey found that businesses had laid off on average 16% of their employees due to Covid-19. With many small businesses yet to access government funding, many could run out of cash soon. Among the composition of the laid-off employees due to Covid-19 impacts, the non-executive and non-managerial employees of the companies such as manual rank and file employees are the most with 84% while the technicians follows with 10%. Only a few amounts of accountants, supervisors and managers are laid-off during this covid-19 period, according to the Asia Foundation.

Moreover, 9 out of 10 businesses in Myanmar are severely affected by the Covid-19 impacts according to the Business Sentiment Survey released by the Myanmar Marketing Research & Development (MMRD). MMRD has conducted online survey and face to face interviews to around 2,000 businesses in Myanmar, and the survey on 30 June 2020 revealed that about 94% of the businesses replied their businesses are running in poor situation.

Businesses from export sector were also largely affected by the Covid-19 pandemic according to the “Myanmar COVID-19 Impact Survey” conducted by the Market Research Association of Myanmar and International Trade Centre (ITC) in May 2020. Nearly 300 exporters, which are operating in the 12 priority sectors of the National Export Strategy (NES) 2020-2025, were surveyed and it was reported that all the companies interviewed were affected by the pandemic and its containment measures in varying degrees. Nearly 30% of the businesses were strongly affected, while 46% were moderately affected. The tourism sector was hit the most, followed by the textile and garment sector, and micro-businesses with less than five employees were disproportionately affected. Resulting from the containment measures and lockdown order, many companies had to reduce the logistics services and shut down the businesses temporarily. Delays due to increased border checks/closures, additional sanitary regulations/procedures, logistics arrangements, shipping, new circulars and temporary measures from the Covid-19 Control and Emergency Response Committee were the most cited issues according to the survey.

Small businesses are essential for Myanmar’s economy to recover fast from the pandemic as the economic growth is forecasted to slow down to the 0.5% in 2019-2020 FY. Meantime, Covid-19 is threatening to devastate Myanmar’s business community, especially the developing MSMEs, which are the backbone of the economy and main drivers in the economic recovery. Thus, it is recommended to increase more of the publicity of government policies and schemes to support MSMEs, and to encourage businesses and banks to actively seek an agreement to restructure loan interest and principal payments, according to the Asia Foundation.

[1] Covid-19 shuts down a third of Myanmar businesses, Myanmar Times

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (4)

Government Measures to response COVID-19

In order to tackle the socio and economic issues resulted by the coronavirus pandemic in Myanmar, government and stakeholders from private sectors are cooperating and attempting to recover the country’s economy with relief plans and business models. This pandemic has extensively disrupted economic activities and it is expected to have a long-term impact on various sectors.

The coronavirus was confirmed to have reached Myanmar on 23 March 2020. On 31 March, the Committee for Corona Virus Disease 19 (COVID-19), headed by Vice President-1 and made up of members from the various union ministries, was formed by the President to combat the spread of COVID-19 in Myanmar.[1]

To relieve the impact on the country’s economy, the government announced a series of stimulus packages in late March, including a COVID-19 fund for small or medium-sized enterprises (SMEs) and textile and tourism businesses. The government also announced a deferral of commercial taxes and quarterly income taxes as well as exemptions from the 2 percent advance income tax on exports. The deadline for payment of income tax, which is due on 31 March and 30 June 2020, has been extended to 30 September 2020 for the most affected sectors such as hotel & tourism, manufacturing, and SMEs. Similarly, the deadline for payment of commercial tax, due from 31 March to 31 August, is also extended until 30 September, 2020.

On 18 March, the Ministry of Planning, Finance and Industry (MoPFI) announced the establishment of the Covid-19 Fund to help boost the economy. The initial 100 billion Myanmar Kyats (50 billion from Revolving Fund, and 50 billion from Social Security Board Fund), equivalent to approx. EUR 64.5 million, will be managed by the Myanmar Economic Bank. The fund is to provide support, in the form of low-interest loans, to the business sectors that are most affected by Covid-19 such as Cut-Make-Pack (CMP – i.e. garment companies), Hotel & Tourisms and SMEs. The fund is aimed to help the local business owners run the business and be able to pay wages. The loan with 1% interest rate will be available for one year. On 19 March 2020, the Ministry of Health and Sports issued guidelines with instructions for factories and workplaces to prevent infections of Covid-19. [2]

On 27 April, the government launched the ‘Overcoming as one: Covid-19 Economic Relief Plan’ which includes seven short term goals to be completed before the end of year. This includes the plans to provide monetary stimulus packages, exemption of tax and fees, easing the strains on banking sector and affected firms, promoting investment and international trade. For labour and workers, the plan is to provide health care benefits including medical and travel benefits for unemployed workers registered under the Social Security Board from six months to one year from the date of unemployment.

The Ministry of Labour, Immigration and Population (MoLIP) has provided social security benefits to a total of 26,305 workers of factories, workshops and workplaces affected by the restrictions against COVID-19 pandemic on 26 May 2020. As part of a move to contain the spread of COVID-19, all local factories had to close from 20 April to 15 May for mandatory inspections by the ministry concerned. Garment factories are allowed to reopen only after inspection, because they are not listed under ‘essential businesses’. Workers from those factories who registered for social security under the Social Welfare Program will receive 40 percent of their salaries for the unemployed days in accordance with the Social Security Law.[3]

On 6 July 2020, the MoPFI announced the government’s decision to provide additional 100 billion Kyats to the “Covid-19 Fund” which had set up in April 2020 to assist local businesses which are the most adversely affected by the covid-19 situation. The MoPFI also notified that the special loans with the 1% interest rate for 1 year have been made available by the government as a measure for the businesses to survive in the Covid-19 period. The additional loan would be granted as priority to the businesses in the agriculture and livestock sectors.

Currently, the government has allocated about 101 billion Kyats in loan to the 3,393 businesses which conform to the specifications in announcement dated 29 March 2020 of the work committee by diving into seven times.

Allocation of Financial Assistance and Loan to the Affected Businesses

No.BusinessQuantityAmount (Kyat mln)Percentage
1CMP (garment)456,3126.24%
2CMP (others)2750.07%
4Tour Industry2363,7573.72%
6MSME for foodstuffs, commodities, Products manufacturing industry and services2,55070,08169.30%
 Total Amount3,393101,128100.00%

Source: Global New Light of Myanmar

In addition to the current financial assistant to the affected businesses, government will allocate around 1.5 trillion Kyat in 2020-2021 FY to support those struggling from disruption caused by Covid-19, according to the MoPFI. The funds have been provided by international institutions such as IMF and JICA.

Regarding with the measures related with foreign direct investment (FDI) and foreign workers, the Directorate of Investment and Company Administration (DICA) is facilitating the stay permit and visa extension process to be conducted digitally. Meantime, the MoPFI called for investments for manufacturing COVID-19 related medical products using vacant state-owned factories. Initiatives have also been taken to better support and ease processes for high impact investments, e-commerce, infrastructure, and agriculture enterprises. For the trade sector, government announced on March 17, 2020 that the advance income tax of 2.0% on exports will be waived until the end of the fiscal year on September 30, 2020. As for the measures regarding with protection of essential products, the Ministry of Commerce (MOC) has banned speculation in the market of selling and distributing health aid equipment related to COVID-19, medicines, and consumer goods. Moreover, there will be waiver of the “specific goods tax,” customs duties, and commercial tax on “critical” medical supplies and products related to the prevention, control, and treatment of COVID-19.[4]

[1] Myanmar leader forms new anti-COVID-19 committee, Myanmar Times

[2] Covid-19 impact and responses: Myanmar, Fair Wear

[3] Myanmar gov’t provides social security benefits to Covid-19-affected workers, Xinhua Net

[4] Government and institution measures in response to COVID-19, KPMG

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (5)

COVID-19 Economic Relief Plan (CERP)

The COVID-19 Economic Relief Plan (CERP) was launched on April 27, 2020 by the government to tackle the coronavirus crisis which resulted impacts on socio and economic problems. 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.

The CERP comprises seven goals, 10 strategies, 36 action plans and 76 actions, each with an estimated timeline and designated authority in charge, covering a range of fiscal and social measures. It also includes commitments to increase funding for local businesses from 100 billion kyats (US$71.4 million) to 200-500 billion kyats. Under the plan, the government plans to establish a separate 100-billion-kyat fund by the end of 2020 for designated commercial banks to promote trade financing. According to the Ministry of Planning, Finance and Industry (MoPFI), the government is preparing to spend up to 5 percent of GDP for economic recovery from the pandemic. Myanmar’s GDP is more than US$70 billion, which means that $3-3.5 billion is expected to be spent on stimulus efforts.[1]

The goals of the CERP are as follow:

  • Goal 1: Improve macroeconomic environment through monetary stimulus
  • Goal 2: Ease the impact on the private sector through improvements to investment, trade & banking sectors
  • Goal 3: Easing the impact on laborers and workers
  • Goal 4: Easing the impact on households
  • Goal 5: Promoting innovative products and platforms
  • Goal 6: Health care systems strengthening, and
  • Goal 7: Increase access to Covid-19 response financing.

The CERP is a timely intervention by the Myanmar Government to cushion the financial, social and economic impact of the Covid-19 pandemic. Several of the measures have already been implemented and has gradually aided the management of the crisis. It has received a positive response from the public as it benefits both businesses and individuals. The CERP will see the government increasing its spending to the extent necessary to support the Myanmar economy and its people. The measures are targeted at both large and small enterprises as well as the at-risk population who are undoubtedly feeling the adverse impact of the pandemic harder.[2]

Still, there are concerns regarding with the government’s CERP. It was pointed out by the researchers and academics that the two major concerns about the CERP were the lack of a clear implementation strategy and the huge amount of borrowed funds it requires as Myanmar loans could end up being an additional burden on the country. Nevertheless, CERP is intended to support the trade and investment environment and with the concrete measures to protect and promote MSMEs. It is included easy access to credit, tax incentives, credit guarantee and waiver and deferent of different types of levies and fees. All are aimed to ensure that the sectors can recover and restore production capacity and employment as soon as the movement restrictions are eased. In order to ensure the efficient and effective relief plan for the businesses and all relevant sectors, government should work in close coordination with stakeholders from private sectors, trade bodies like UMFCCI and trade promotion specialists like ITC for investment and exports especially for the MSMEs, and the researchers and academics for the policy recommendations.

[1] Two-Thirds of Myanmar Businesses Struggle to Survive Pandemic, The Irrawaddy

[2] Myanmar: The COVID-19 Economic Relief Plan, Global Compliance News

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (6)

Impacts on Garment and CMP Sector in Myanmar due to Covid-19

Myanmar garment and CMP industry constitutes one of the main exports of the country, bringing substantial revenues to the country and employing around 600,000 workers, more than 90% being women, in over 600 factories, according to the Myanmar Garment Manufacturers Association (MGMA).  Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the cutting, making, and packaging (CMP) basis, and it contributes to the country’s GDP to a certain extent. The CMP industry has emerged as a very promising one in the export sector. The garment sector’s export earnings are projected to reach up to 10 billion US dollars in 2024, according to the government’s initial goals.

However, as the Covid-19 pandemic occurs globally, a number of garment factories in Myanmar are shutting down or limiting their operations due to a shortage of raw materials, a consequence of the closure of factories in Mainland China and cancelled and reduced orders from Europe and elsewhere. Moreover, the majority of the CMP enterprises import raw materials, mainly from China. These businesses have faced shortages of raw materials starting from February-end, owing to the current negative impact of the corona virus. At present, some CMP garment factories have shut down on the reason for the lack of raw materials due to the Covid-19 negative impacts, leaving thousands of workers unemployed.

Thus, exports of garments in Myanmar under the cut-make-pack (CMP) system were only worth $3.6 billion from October to July in the past ten months of fiscal 2019-2020 FY, according to data from the Ministry of Commerce (MOC).[1] The export volume of CMP garment decrease about US$ 60 million compared to the same period in the last fiscal year. Anyhow, the CMP and garment products export accounts for over 25% of overall country exports during 10 months in 2019-2020 FY. When garment export markets are analyzed, Myanmar exported 45% of garment to EU and the rest were Japan, South Korea and the US in 2019 and show that the sector is diversified.

Currently, the Covid-19 pandemic is having a significant impact on global garment supply chains.  Global brands and retailers are cancelling orders from their supplier factories and many governments are imposing restrictions on travel and gatherings.  As a result, many garment factories are suspending production and either firing or temporarily suspending their workers and trying to reduce the overall wages. The apparel industry in Asia is also highly sensitive to labor costs increases. Many garment manufacturers have relocated from China where wages have been increasing steadily for over a decade. 

One of Myanmar’s big advantages is that its labour costs remain extremely competitive, and in particular are significantly lower than labour costs in Cambodia and Vietnam, where both of those countries have large garment manufacturing sectors.  Wage costs in Myanmar can be as low as approximately USD$64 per month. In Thailand, the monthly wage for a factory worker is approximately USD$358, in Vietnam approximately USD$150, and in Cambodia approximately USD$88. In the post Covid-19, the setting and scene are most likely that many economies and industries of the world would be pulling out of China, and that new investors might be looking for fresh territories for investment.[2] Therefore, lower labour costs in Myanmar could attract the global garment companies which are trying to reduce their worker wages and Myanmar garment and CMP industry would have huge potential for the post Covid-19 scenario.

[1] Myanmar exports CMP garment worth $3.6 bn in 10 months, Fibre2Fashion News Desk (DS)

[2] Manufacturing in Myanmar, Charltons

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (7)

Manufacturing and Processing Sector

Manufacturing and processing sector contributed 24% of GDP in 2018-19 FY. The Myanmar manufacturing sector was recorded an accelerated downturn in April as a result of Covid-19, according to a survey from IHS Markit. The manufacturing Purchasing Managers Index (PMI) is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of the sector.[1] Indicators for output, new orders and employment, accounting for 75 percent of the weight of the PMI, all sank to new record lows in April.

The IHS Markit pointed out that Myanmar Manufacturing PMI was 29.0 in April, 38.9 in May and 48.7 in June 2020 from 45.3 in March, which signal a severe decline in manufacturing business conditions in Myanmar. Although the PMI figures seemed to improve, the manufacturing sector was continued to decrease in June with a manufacturing PMI score of 48.7. It remained beneath the boom-or-bust line of 50 that separates expansion from contraction. Individually, output and new business both expanded for the first time since February, while there was a further drop in employment.

However, Myanmar manufacturing sector was recovered in July 2020 and the PMI score increased to 51.7. It is stated that recovery of Myanmar manufacturing sector and economy is faster than regional countries due to the China’s quick economic recovery, according to the Oxford Business Group (OBG). Although demand from Japan, India, Europe and US decreased, manufacturing and new orders from China have increased and thus, the Myanmar manufacturing sector has recovered from the downturn cause by the Covid-19 pandemic. Still, the local manufacturing labor force is on a decline although manufacturing and new orders increased in July, 2020.[2] 

According to World Bank’s Economic Monitor June 2020, industrial production is expected to contract by -0.2 percent in FY2019/20 as lockdown measures restrict access to labor, the closure of the overland border with China disrupts the supply of industrial inputs, and both domestic and international consumer demand remain soft. Myanmar which has a labour force of 22.4 million in over 50,000 registered industries and other SMEs offers a large pool of low-cost workers for foreign manufacturers and has emerged as one of the most popular production bases in Southeast Asia for labour-intensive industries, namely industries that require substantial amounts of human labour to produce products. The government of Myanmar and international organizations focused and committed to support small firms to mitigate the Covid-19 impact. Despite Covid-19 crisis period, FDI approved amount for Manufacturing Sector stood third place by 18% (US$ 795 million) after the investment in Real Estate Sector of 21% (US$ 896 million) and Power Sector of 39% (US$ 1.7 billion) in 2019-20 FY (from October to June).  The manufacturing businesses permitted up to June in 2019-20 FY are rubber, shoes, animal feeds and aqua feeds, purified drinking water, lighting fixtures and accessories on CMP basis, assembling and manufacturing motor vehicles, processing rice and rice related products, garment, processing value added agriculture products,  and fiber cement board.

[1] Myanmar PMI, The Global Economy

[2] Myanmar economy to recover fast from pandemic, PMI rising: business report, The Myanmar Times

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (8)

Agro-based food industry Sector

An agriculture account nearly a quarter of Myanmar’s GDP and employs over 12 million people, or around 54% of the labour force. It has also contributed to around 20% of export value over US$3 billion annually. Rice is the most common crop in the country, followed by pulses and maize. Impacts of Covid-19 on agriculture sector were delayed commodity flow, loss of markets, suspension of export sector, crops destroyed due to lack of supply chain facilities, strict restriction on trade policy of neighboring countries and decline of investment.[1] The Ministry of Agriculture, Livestock and Irrigation (MoALI) announced on May 13 that jobs and financing for farmers will be made available under the CERP plan.  MoALI will harness a total of 400,000 acres of farmland on which it will work under a joint venture with the Myanmar Rice Federation to produce seeds for planting. This will take up half the land. The remaining half will be used for the growing and harvesting of crops. Funds are expected to come from the government budget as well as international financing. This also aligns with the CERP plan, under which the government has pledge to support farmers with small-scale faring and seed production.[2]

The CERP plan also details specific measures to support the agricultural sector, including cash or lending support for smallholder farmers who have lost revenue in order to support input purchases in time for monsoon planting, the establishment of rural cash-for-work programs, to be implemented by the end of the year, and the facilitation of rice exports to maintain incentives for farmers to plant this season.

World Bank approved on 26 June 2020 for a $200 million credit from the International Development Association (IDA) to increase agricultural productivity and diversification and enhance market access for Myanmar farmers.[3]

Agriculture sector (20 % of the economy in 2019-2020 FY) has proved resilient with growth estimated to slow by less than in other sectors, to 0.7 percent in 2019-20, thanks to strong crop production offsetting a weakening livestock and fisheries sector. Therefore, both governments’ measures for agriculture industry and incoming demands of agriculture products from abroad made the agro-based food industry as one of the potential sector to be growth under the Covid-19 crisis. Currently, the exports of agriculture products have been valued at about US$ 3.07 billion for the 9 months since October to June in the 2019-2020 fiscal year, an increase of US$ 504.7 million compared with the year-ago period which earned US$ 2.56 billion, according to the Ministry of Commerce. The chief items of export in the agricultural sector are rice and broken rice, pulses, corn, and rubber. Fruits and vegetables, sesame, dried tea leaves, sugar, and other agro products are also shipped to other countries.

Currently, the Ministry of Commerce is working to help farmers deal with challenges such as high input costs, procurement of pedigree seeds, high cultivation costs, and erratic weather conditions.[4] Myanmar has already set the goal of turning itself into an agro-based industrial country as it possess huge swathes of vacant and fallow land, plenty of labour, and ready internal and external markets. Moreover, the government has added Fresh Fruits and Vegetables Sector and Food Processing Sector as part of the potential export sectors to prioritize under the National Export Strategy (NES) 2020-2025. Meanwhile in 2019, Myanmar signed a memorandum of understanding (MoU) with Japanese business entity to set up a new industrial zone in Yangon, where quality food-based products will be manufactured and in which the main raw material will come from domestic sources. Thus, Myanmar has huge potential to become value-added exporters of agriculture products and to fulfill the world’s food requirement under the global Covid-19 pandemic.

[1] Discussion on Impact of COVID-19 on Agriculture sector, The Global New Light of Myanmar, 19 June 2020

[2] Myanmar Livestock sector decline may pose longer term food security issues as the result of  COVID – 19, ThaiBizMyanmar

[3]   Press Release-Myanmar: Project to Boost Agricultural Productivity, Support Farmers in Wake of COVID-19, World Bank, 26 June 2020

[4] Agro exports up $466 mln as of 12 June, The Global New Light of Myanmar

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (9)

Rise of E-Commerce and E-Payment amid Covid-19 pandemic

The size of Myanmar’s E-commerce (electronic commercial) market was approximately USD 6 million in 2018. However, it is expected to see strong growth in 2020 and expand rapidly within the next 5 years. To avoid being infected by the Covid-19 virus, consumers who have formed the habit of online shopping are becoming more likely to order food and choose daily necessities and fresh food online instead of going to an offline supermarket. Food and clothes e-commerce is seeing an explosive growth in Myanmar under the Covid-19 epidemic. Current foundations in place to spur future growth in Myanmar’s E-commerce sector include a growing young and tech-savvy population, increasingly innovative door-to-door logistics solutions that have been adapted to meet local needs, and a vibrant start-up scene, with more of the young entrepreneurial generation looking to develop new business solutions.[1] Growth is set to begin in Yangon and Mandalay, the two largest economic cities, and sectors set to benefits from the growth of E-commerce are retail, healthcare, clothing and entertainment. With 30 percent of Myanmar’s people living in cities, and 70 percent of the population is under 40 years old, there is a massive potential for huge growth of E-commerce industry.

E-commerce is getting more active in Myanmar due to COVID.  Most activities are;   

  1. Online shopping by retail sales direct to consumers
  2. Online marketplaces, which process business-to-consumer (B2C) or consumer-to-consumer (C2C) sales
  3. Business-to-business (B2B) buying and selling
  4. Digital marketing
  5. E-payment

One of the factors to boost the E-payment in Myanmar, the Department of Trade under the Ministry of Commerce announced in April 2020 that it will grant e-license for over 190 import items in the third time. To carry out the fully online licensing system during the emergency period of Covid-19, H.S codes for 91 import items and 73 export items have been issued for the first time, 455 more import items are available for the online licensing system in the second time, and 196 import lines for the third time. Government has launched the online licensing system for export and import businesses starting from 1 April, intending to reduce the person-to-person contact and mitigate the spread of Covid-19. Therefore, the process of license applications, fee payment and receiving licenses can be done with the MPU E-commerce pay and the MCB E-commerce Pay of the Myanmar Citizens Bank under the new service.[2]

Meantime, local retailers have called for a law to regulate E-commerce and help grow the industry. The government needs to improve its legislative and regulatory framework to effectively govern the industry and take care of concerns regarding consumer protection, information privacy, security of financial transactions and cybercrimes, as well as a need for better logistic infrastructure and higher online payment penetration to improve the better E-commerce industry. Thus, the Ministry of Commerce (MOC) aims to increase trust between the buyers and sellers by increasing selling through marketplaces and platforms and so, voluntary registration of online shops is setting to do with the announcement in July 2020. This registration system will build further trust between online businesses and consumers. Moreover, it will also allow disputes to be settled in a fair and legal setting. Therefore, the informal social e-commerce businesses are going to transform into registered marketplaces. In addition, the MOC is regulating the E-commerce industry via instructions and orders as it prepares to draft a policy framework to adopt E-commerce laws and guidelines at the end of 2020.

Myanmar’s Covid-19 Economic Recovery Plan (CERP) also identifies the need for expanding the digital connectivity to support e-commerce, digital mode of service delivery and in giving a big push for e-governance. According to Myanmar Economic Monitor June 2020 released by the World Bank, developing ICT skills among entrepreneurs, building out electronic-payment systems, expanding digital literacy, retailed licensing and clarifying the legislative and regulatory framework for e-commerce could enable the retail sector to cope with the impacts of social distancing while providing a digital platform to support the development of small and medium enterprises (SMEs). 

[1] E-Commerce in Myanmar: A Rising Tide, AEC Business Advisory

[2] Third-time e-licence for 190 import items to be granted: MoC, The Global New Light of Myanmar

Impact of Covid-19 on Myanmar and Potential Industry Sectors, July 2020 (11)

Covid-19 Impacts on Transports and Logistics

Movement restrictions imposed to prevent the spread of COVID-19 have left many people confined to their homes. Offices have instituted work from home policies, while factories and workshops were forced to close in late April pending government inspections. Some businesses have shuttered altogether, either permanently or until COVID-19 prevention rules are rolled back. While COVID-19 has brought parts of the economy to a halt, the transport and logistics sectors have to keep moving. Although demand for transport had dropped because of the pandemic, there were still exports to send to port and imports to deliver to factories and warehouses, shops around the country in need of restocking and markets that require fresh produce.[1]

Many orders for garments being cancelled and shutdown of some factories led to the less need for trucking industry. Of the 2,500 trucks under the Myanmar Container Trucks Association, only about 30 percent were on the road at the moment during the April and May 2020. Ships were still coming to the ports and unloading goods and still picking up exports, but many of the goods were resting around at the ports because many factories were closed, or there were not enough workers at the factories or warehouses to accept deliveries. To ease the cost on businesses and to help keep the transport system running, the Myanma Port Authority reduced charges for demurrage, imposed when a ship is not loaded or unloaded within an agreed time, as well as storage fees on April 6, 2020.

Moreover, the customs department has announced that importers will be able to secure online customs clearance for their goods on a national basis as a measure to support businesses during the ongoing coronavirus outbreak. This can be secured via the Myanmar Automated Cargo Clearance System (MACCS) which is the country’s existing online customs clearance system. By using the MACCS, the user can pay duties via any computer that has an Internet connection. So, the user will not need to go to the Customs Department offices to pay duties and the trade would be faster.

Although demand for transport and logistics services in Myanmar decreased in April and May 2020 due to the containment measures and lockdown orders from the government, rising online shopping customers makes the market opportunities of logistics companies goes up. Starting from June 2020, transportation services become normal again after government lifted the lockdown orders and night curfews.

Meanwhile, the small package delivery businesses under the logistics industry increase in huge amount when the trucking industry declined in the April and May. This is due to the increasing e-commerce and online shopping industry as the packages bought by the customers are needed delivery services. Community lockdown led to the more people staying at home and bought the things they need via online, so the small package delivery businesses needed to recruit more people to deliver the packages door to door on time. These courier services and small package delivery businesses will increase more in the future along with the growing E-commerce industry.

Currently, there are over ten express and delivery service companies registered officially, but there are more than 150 small package delivery businesses which are unregistered. Growing express, couriers and parcel delivery services, which is part of the logistics sector, could generate taxes for government budget if the government could release the new postal law and regulations to license the unregistered delivery businesses. 

[1] Keep on trucking: transport sector remains on the move despite COVID-19, Frontier Myanmar

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