COVID-19 will lead to slower Myanmar economy: MIC

COVID-19 will lead to slower Myanmar economy: MIC

A pedestrian wearing a face mask walks among a crowd in front of Sule Square in Yangon. Photo: Mar Naw/The Myanmar Times

Myanmar should brace for the consequences of COVID-19 on the local and global economy. The Myanmar Investment Commission (MIC) said the economic slowdown caused by the virus outbreak is already being felt in other countries and will likely have an impact on Myanmar.

Major economies such as China and the US have announced large stimulus packages in attempts to counter the effects that the pandemic are having on businesses and stock markets, so the dramatic economic impact the virus has had around the world is bound to dampen the ability of businesses to invest in countries like Myanmar.

Right now, many garment factories in Myanmar are already shutting down or limiting their operations due to a shortage of raw materials from factories that were closed by the virus outbreak in China. Such supply chain disruptions may factor into the decision-making process of investors looking at Myanmar.

Additionally, a protracted slowing of the global economy would mean consumers are likely to limit spending on things like clothing, which in turn would cause investors to delay or abandon investments in garment factories in Myanmar.

Already the Yangon Region Investment Forum that had been set to take place this year has been postponed indefinitely due to travel restrictions imposed around the world to curb the spread of the virus.

The number of Chinese investors inquiring about opportunities in Myanmar has also decreased since the end of December when the virus started spreading.

Economist and researcher U Zaw Oo pointed out in an article about the effects of COVID-19 on Myanmar’s economy that 26pc of FDI in Myanmar is from China and four major projects under the Belt and Road Initiative – the Muse Cross Border Trade Zone, China-Myanmar Economic Corridor, Kyaukphyu Special Economic Zone, and New Yangon City Project – could be delayed or suspended depending on China’s economic situation.

While China is one of Myanmar’s top investors, Singapore, Thailand and Hong Kong are also important and since COVID-19 has affected those countries, the impacts on Myanmar will be huge.

However, some observers say they can only watch and hope that Myanmar will be able to ride out the slowing of economy of major economies around the world.

Source: Myanmar Times

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