Faced with the COVID-19 outbreak and an appreciating currency, the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) has requested the republic’s central bank to intervene.
“COVID-19 will adversely impact Myanmar’s economy. At present, tourism has plummeted, and regular exports of fruit to China have slowed to a trickle. From a global perspective, many foreign governments and central banks are instituting quick responses to the current situation. In Myanmar, another recent issue is the fluctuation of foreign exchange rates. The kyat has strengthened against the US dollar, making local products more expensive for foreign buyers,” said UMFCCI Secretary-General U Aye Win on March 5.
“We could foresee how far the ramifications will reach. COVID-19 may affect all local businesses, including severe reverberations on agriculture-related sectors,” U Aye Win added.
Since agricultural products form a considerable portion of Myanmar’s exports, the sector may face troubles due to the strong kyat.
Many business owners are asking the Central Bank of Myanmar (CBM) to step in to help stabilize the exchange rate as they already have to deal with the virus outbreak. Although CBM is responsible for the stability of the monetary system, it also needs to ensure the country’s economic development as well.
Local business professionals have been asking the UMFCCI what action CBM will take on interest rates to mitigate economic impacts and current exchange rates.
The garment, tourism, and export sectors, as well as small and medium-sized enterprises and farmers, are facing hardships due to the current situation, said Daw Khine Khaine Nwe, secretary-general of the Garment Manufacturers’ Association.
According to the authorities in China, the production of raw materials such as textiles and fabrics will return to normal by the end of April. Currently, the raw material manufacturing industries in China are operating at just 30 percent capacity.
So far, 13 Myanmar-based garment factories have reported to the Ministry of Labour that they will shut down due to shortages of raw materials.
During this crisis period, all relevant authorities and business entities need to prepare to overcome this socio-economic crisis, said Daw Khine Khine Nwe.
Myanmar should brace for the possibility that the virus outbreak will stretch on longer than expected, said U Maung Maung, chair of Myanmar Trade Union.
At the same time, the parties involved should discuss necessary preparations in case the country’s export market collapses, said U Maung Maung.
The government, employers, and workers have reached an agreement to hold meetings more frequently among them to find solutions to cope with possible factory shutdowns.
The Yangon Region government has said no one has been identified with COVID-19 yet and reiterated that it would release relevant information about the outbreak.
The Shwedagon Pagoda in Yangon, Myanmar. Picture credit: Sharon Ang from Pixabay
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