COVID-19 has rapidly spread around the world impacting economies, healthcare systems and daily life. The challenges that it poses are real and consequential. To help policymakers and donors better understand the impact on Asia’s social sector, CAPS (virtually) sat down with our partners across the region to understand the challenges they are grappling with, the strategies they are employing to contain the fallout and their take on the future of the social sector.
To discuss the impact in Myanmar, we spoke with Vicky Bowman, Director at the Myanmar Centre for Responsible Business (MCRB) on 9 April 2020. A joint initiative of the Institute for Human Rights and Business (IHRB) and the Danish Institute for Human Rights (DIHR), MCRB seeks to encourage responsible business activities across Myanmar. The Centre aims to provide a trusted, impartial forum for dialogue, seminars and briefings to relevant parties as well as provide access to international expertise and tools.
CAPS: Vicky, thank you for taking the time to speak with us today. What is the situation like on the ground in Myanmar in the wake of Covid-19?
MCRB: The government has put in place certain measures to limit the spread of the virus in Myanmar. Travel and festivities related to holidays have been canceled. People have been advised to stay at home and only go out for essential needs. These measures are generally in place and enforced in urban parts of the country. In the villages, however, people are relatively unaware of the current situation.
Our biggest risk is the hundreds of thousands of migrant workers who are returning to Myanmar, mainly from Thailand, but also from China. The government initially quarantined them in community village facilities, but due to concerns around enforcement they are being moved to quarantine facilities in the capital. Testing migrant workers in more remote regions of the country is also proving to be a challenge.
CAPS: Is Myanmar’s healthcare system able to cope?
MCRB: One of the biggest challenges is healthcare capacity. Testing facilities are limited. The only people that are really being tested are those that have returned through international airports, or the contacts of people that have tested positive for Covid-19.
CAPS: What has the economic impact of Covid-19 been so far?
MCRB: It depends on the sector. Around 80% of the labor force is made up of informal workers who are the hardest hit. Day laborers—such as those working at massage parlors, karaoke bars and tea shops—do not have formal employment contracts and have been out of work without pay for weeks.
The garment and tourism sectors are suffering, and they are the largest employers in Myanmar’s private sector. H&M, which doesn’t have an online selling presence in Europe, and Primark, which has too much surplus stock, have both contracted, which has had a knock-on effect on factories here in Myanmar. The tourism industry was already suffering, initially because of a lack of Chinese tourists and now, with Covid-19, because of a sharp drop in domestic tourism.
CAPS: How has the government responded? Have any support mechanisms been put in place to mitigate the economic fallout?
MCRB: Overall, the government is trying to follow the Korean and Singaporean approach and focusing on contact tracing. However, this is difficult to implement in Myanmar where the population is transient, and many enter the country through informal channels.
On the economic front, the government has announced some support for small and medium enterprises in the form of low interest loans. However, to access this funding organizations must prove they have been operating for a few years, which many small enterprises do not have documentary evidence of.
In addition, microfinance and other non-bank financial institutions have been instructed by the government to allow borrowers to defer repayments. A majority of these borrowers are low-income workers and owners of small businesses that have been particularly hard hit.
In an effort to ease the pain of businesses, the government has announced that the payment of income and commercial tax can be deferred till the end of the year. Exemption from the 2% advance income tax on exports is also available till the end of the fiscal year.
The two main political parties have been distributing sacks of rice and masks with their logos on them to rally support—this is an election year, after all!
CAPS: What about MCRB? How has the Centre been managing during this time?
MCRB: Our work includes online research, and producing briefing papers and handbooks for companies and commentary on the legal framework and proposals for legislation, all of which can luckily be done at home and online. One of the pieces of analysis we are doing is how businesses are responding responsibly to coronavirus. We are fortunate to have the resources from our six development partner donors to sustain our organization for now. However, face-to-face training workshops and large meetings we convene have been impacted and have had to be postponed. Apart from that, we are able to continue with our work.
CAPS: What do you think a post-Covid world will look like? Are there any lessons that can be deployed in a post-Covid world?
MCRB: It will be tough, and we expect many companies to struggle. Companies in Myanmar, even before Covid, needed financing, and one of the challenges they have faced is demonstrating to potential investors and partners that they have the corporate governance in place to be investable. Our annual benchmarking report Transparency in Myanmar Enterprises (TiME), also known as Pwint Thit Sa, is intended to motivate Myanmar companies to raise their game on transparency and online corporate disclosure. While company bosses and owners are working from home, one of the things they could do is see how they appear online through their company websites. They can also take this opportunity to think about their corporate governance and that of their competitors.
There is one other area where we are cautiously optimistic. Since the government is looking into how to make life easier for businesses, as a response to Covid-19, with less red tape and paperwork and moving administrative processes and paperwork online, we hope that this will continue into the post-Covid period. This would make doing business easier in the future, with less scope for corruption.