Myanmar Impacts of COVID-19 on Economy, Agri-Food System, Jobs & Incomes Feed the Future Myanmar Agriculture Policy Support Activity (MAPSA) Policy Note Updated: May 22, 2020 Contact : Xinshen Diao (x.diao@cgiar.org) This policy note was prepared by Xinshen Diao, Nilar Aung, Wuit Yi Lwin, Phoo Pye Zone, and James Thurlow from International Food Policy Research Institute (IFPRI), and Khin Maung Nyunt from Myanmar Development Institute (MDI). We acknowledge COVID-19 pandemic-related insights and information provided by individuals from the public and private sectors whom we interviewed in the recent weeks on the current situation in Myanmar, and the helpful comments and suggestions from colleagues of the MAPSA team. Disclaimer : This work was undertaken as part of the Myanmar Agriculture Policy Support Activity (MAPSA) through the CGIAR Research Program on Policies, Institutions, and Markets (PIM) led by the International Food Policy Research Institute (IFPRI). Funding support for this study was provided by the CGIAR Research Program on Policies, Institutions, and Markets, the United States Agency of International Development (USAID) and the Livelihoods and Food
Overview Updated: May 06, 2020 Analysis 1. Preview of Results 2. COVID-19 Outbreak & Policies in Myanmar 3. Measuring Economic Impacts 4. Economic Impacts During the Lockdown Period 5. Economic Impacts throughout 2020 Under Fast & Slow Easing of Restrictions & Recovery 6. Policy remarks This document is based on a MAPSA policy paper “Assessing the Impacts of COVID-19 on Myanmar’s Economy – A Social Accounting Matrix (SAM) Multiplier Approach,” which updates the previous assessment dated April 30, 2020
Updated: May 06, 2020 1 Preview of Results
Lockdown Imposes Heavy Economic Costs Updated: May 06, 2020 • National GDP is estimated to fall by Economic impacts during 2-week 41% during the 2-week lockdown lockdown period (compared to a no-COVID situation) (compared to a no-COVID situation) -41% Percentage decline in national GDP • Food system is adversely affected by Percentage decline in agri-food falling consumer & export demand -24% system GDP (14% AgGDP decline and 24% AFS GDP Percentage decline in agricultural -14% decline, despite exemptions for GDP agriculture) • Nonfarm jobs fall by 5.3 million Declines in number of nonfarm -5.3 employment (mil. Persons) during the lockdown Percentage declines in rural farm -69% • Rural household income is negatively income affected during the lockdown Percentage declines in rural -73% nonfarm income (69% Rural farm household income fall and 73% nonfarm household income fall) Source: Myanmar SAM Multiplier Results
Economic losses Likely to Persist Throughout 2020 Updated: May 06, 2020 • Economy is gradually Losses in GDP are 6.4 - 9.0 trillion Kyat in 2020 from projected normal growth reopened & some In trillion Kyat, constant 2019 price 9.0 w normal growth rate 6.4% restrictions are eased w COVID & slow recovery, negative growth rate -2.2% 7.0 w COVID & fast recovery, positve growth rate 0.5% 5.0 Different easing scenarios • But economic losses are 3.0 start in June Huge, at 6.4 – 9.0 trillion 1.0 Kyat in 2020 -1.0 End Sep 2019 Oct-Dec 2019 Jan-Mar 2020 Apr May-Jun Jul-Sep -3.0 (A recession is possible and fast Agricultural GDP growth, compared with same period in 2019 recovery can only lead to a Oct-Dec 2019 Jan-Mar 2020 Apr-Jun Jul-Sep Annual stagnant growth in 2020) 2.0 1.1 1.1 percentage change from 2019 0.0 • Agricultural growth is -0.8 -0.8 -1.1 -2.0 negative even with fast -2.4 -2.4 -4.0 recovery Ag GDP growth, slow -6.0 recovery -7.0 -8.0 -7.6 -8.0 -10.0 Source: Myanmar SAM Multiplier Results
Updated: May 06, 2020 COVID-19 Outbreak & 2 Lockdown Policies in Myanmar
COVID-19 Cases & Policy Timeline 1.Suspension of visa-on-arrivals and e-visas for all countries. Stay-at-home order (10 -19 April) 2.Suspension on entry of foreigners at border gates. 1.Yangon government extended Ban on festive activities; gatherings of 3. Health screening measures at border check points night curfews to 2 months 2. more than 5 people; closure of non- Yangon circular train cut down by essential businesses and factories; 90%. reduction of public transportation night curfews in some states 1.Suspension of all international commercial 1.Central bank limits banking flights End of holiday and lockdown hours to all banks. 2. Dine-in services banned at restaurants and Order to factories for mandatory health 2.Suspension of passenger teashops inspection airlines extended to May 15. 3. Notification of laws to protect essential Semi-lockdown measures in 10 goods from price gouging and exploitive prices townships 4. Reduction of passengers in bus lines 1.Yangon Bus Lines resumes operations 5. Reduction of trains 2.Commodity exchange centers and Previous orders extended until wholesale markets limits opening hours 14 days quarantine May 15: mandatory health 3.Employees order to enter 21 day rule to incoming inspection, closure of beaches quarantine if returned from Yangon regions travelers from 17 and pagoda, suspension of after holiday high risk countries international airlines Civil servants rotational work policy Confirmed New Cases First confirmed 25 Big Economic Relief Plan cases in released 20 Myanmar Covi-19 Microfinance institutions Emergency suspended 15 fund (US$ 72 million) 10 5 0 15-Mar 16-Mar 17-Mar 18-Mar 19-Mar 21-Mar 23-Mar 24-Mar 25-Mar 26-Mar 27-Mar 28-Mar 29-Mar 30-Mar 31-Mar 1-Apr 2-Apr 3-Apr 4-Apr 5-Apr 6-Apr 7-Apr 8-Apr 9-Apr 10-Apr 11-Apr 12-Apr 13-Apr 14-Apr 15-Apr 16-Apr 17-Apr 18-Apr 19-Apr 20-Apr 21-Apr 22-Apr 23-Apr 24-Apr 25-Apr 26-Apr 27-Apr 28-Apr 29-Apr 30-Apr 1-May 2-May 3-May 4-May 5-May 6-May 7-May 8-May 9-May 10-May 11-May 12-May 13-May
Sectors Affected by Lockdown Policies (1) Updated: May 06, 2020 Sector Lockdown restrictions or exemptions in targeted regions Directly Affected? • Farming activities are in essential sectors and exempted • Reduced trading volumes due to closure of restaurants and food services Agriculture • Suspended development projects and reduced extension activities Minimal • External shocks from trading countries (mainly China and India) • Monsoon lending may be hurt as microfinance activities suspended • Many mining blocks and extracting activities were ordered to close without registration in last two years Mining Minimal prior Covid-19;existing mines allow to operation during lockdown period • Food processing & medicines exempted (essential sector) • Movement restrictions have affected operations even for essential sectors Manufacturing High • Nonfood producing companies closed during lockdown and factories required mandatory inspection post- lockdown in 4 weeks until May 15 before reopen • Electricity & water distribution exempted (essential sector) Utilities Minimal • Three hydro power construction projects delayed, but no major effect on current capital • Construction projects/sites closed, including most public works • Lockdown policies placed in the busiest season. Projects will be delayed as the monsoon comes and workforce were reduced. Construction • The industry have underlying conditions that are sensitive to economic shocks and disruptions; projects High are contracted with deadlines, banks loans are limited for the sector, mortgage system is underdeveloped, high reliance on real-estate industry which is currently frozen. • Proper relief channel has not been identified yet. Covid-19 loan program highly excludes the sector. • Retailers of essential goods exempted, with limited trading times Wholesale & retail trade • Social distancing restrictions may have affected some markets Some services • Reduced customers and trade volumes due to travel restrictions and • Air travel closed; cargo/freight transport exempted (essential sector) Transportation, storage • Inter-district passenger transit suspended over a month. High & cargo • Urban passenger transit reduced to 25%. Interstate train routes reduced and inter-city circular trains cut by 50-90% in numbers for a month and half.
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