In this webinar, Dr Sean Turnell shares insights from the inside on Myanmar’s plan to tackle the impact of the pandemic and recover its economy amidst continuing Covid-19 concerns.
MYANMAR STUDIES PROGRAMME WEBINAR
Tuesday, 18 August 2020 – The ISEAS – Yusof Ishak Institute invited Dr Sean Turnell, Associate Professor at Macquarie University, and Special Economic Consultant to Myanmar’s State Counsellor, to discuss Myanmar’s Covid-19 Economic Relief Plan (CERP)’s implementation and implications for the country’s economic reforms and performance. The National League for Democracy (NLD) government had announced the CERP in April 2020 as a key feature of its Covid-19 response, with an objective to “flatten the curve without flattening the economy”. The webinar was held on 18 August 2020, with Ms Moe Thuzar as the moderator.
Dr Turnell opened his presentation with an overview of the impact of Covid-19 on Myanmar’s economy, then went on to detail the government’s efforts to work with international and bilateral partners to respond to the pandemic, weaknesses and exigencies that affected the pandemic response, He concluded with some reasons for optimism in the current recovery effort.
According to Dr Turnell, the Myanmar government had started assessing the potential impact of and recovery needs for Covid-19 in the country in February 2020, taking the “best epidemiological advice” available at the time from world-renowned sources. Projections for Myanmar were that the country would need to be prepared for about 20 million infections and some two to three million casualties from the virus. The actual numbers have been much lower. At the time of this webinar, there were 375 confirmed cases (although a recent spike in new infections has brought the number of cases up to over 600 as of August 28) and six deaths recorded (the number of deaths remains unchanged). Dr Turnell acknowledged that these were “ballpark” figures, as the pandemic had also showed up weaknesses in the healthcare system, including manpower and equipment limitations. The pandemic made an urgent case to realise Myanmar’s aspirations for universal health coverage sooner rather than later.
Myanmar’s under-developed tax revenue system presented a challenge to obtaining resources necessary for mounting an economic response. Myanmar has drawn heavily on resources and options available from international and bilateral partners for debt relief and recovery needs. For example, Myanmar is one of over 100 countries accessing the International Monetary Fund’s Rapid Credit Facility. Dr Turnell also emphasised for the record that China had not provided any form of debt relief to Myanmar in the Covid-19 context.
Dr Turnell observed that although the projected growth rate forecasts for Myanmar by the World Bank (6.8 percent in FY2018/19) for Myanmar had either dropped very low or disappeared, there were some “green shoots” that presented some room for optimism. The Purchasing Managers Index (PMI) figure for Myanmar’s manufacturing sector jumped to 51.7 in July 2020, the first increase in the sector since January. This indicates that there are increases in output and new orders and the country is starting to recover from the Covid-19 shock to the economy. Dr Turnell also observed that the policies under the CERP framework also constituted a programme of reform that the government had intended as an indicator of its continued commitment to getting the economy back on track. This was an important consideration in an election year, and Covid-19 had accentuated the importance further. The team of economic planners responsible for preparing the CERP were mainly key senior officials in the Ministry of Planning, Finance and Industry. They had viewed the CERP as an opportunity to revisit and accelerate reform measures that had either lagged or required a boost during the first term (2016-2020) of the NLD administration.
To fully realise the CERP’s main objectives, however, Myanmar would need to use the CERP as a platform for tackling obstacles to reform. The Project Bank, launched in February 2020 under the Myanmar Sustainable Development Plan (2018-2030), could serve as a productivity champion and ensure that priority infrastructure projects are better coordinated with a view to provide equality of opportunity (including health, education and other basic social services) in the areas (including ongoing and post-conflict areas) where these projects are sited.
Dr Turnell concluded by noting that one of Myanmar’s main challenges lay in ensuring sufficient financial resources for the CERP implementation, as there were now heightened expectations worldwide on the obligations and duties of governments. A resilient recovery from Covid-19 and its effects entailed responsibilities beyond the health and economic sectors, with more attention now on ensuring a sustainable and just recovery. To this end, tax reforms would need to consider a measure of fiscal autonomy for local/state governments, and an expansionary/stimulative monetary policy that addresses the concerns of the private sector. The latter would entail several measures, including, among others, developing a state-owned ‘anchor’ agribank, developing State Development Banks in the different states and regions of Myanmar (as 80% of all private bank-lending is currently concentrated in Yangon), liberalising interest rates while maintaining prudential scrutiny on banks, continuing support for the progress of mobile money in Myanmar, as well as for microfinance institutions.
Dr Turnell then responded to comments and questions posed by webinar attendees. Questions ranged from queries on the various implications of Covid-19 impact on Myanmar’s political and economic landscape. These included: Myanmar’s participation in the overall ASEAN response to Covid-19, the longer-term impact on the size and shape of the state in Myanmar, sequencing economic reforms in Myanmar, the extent of preparation necessary for digital or e-governance, the role and resource requirements of different market actors in the Covid-19 response, dollarization of the economy and performance of local-currency bonds, the role of Myanmar’s Central Bank, the NLD government’s economic performance and how the Covid-19 response may affect or influence votes in the upcoming general elections in November 2020, and China’s economic footprint in Myanmar during and after the pandemic.
The webinar attracted 64 participants from Singapore and abroad.