(Project report) Coping with COVID-19: Protecting lives, employment and incomes in Myanmar

IGC publication
Emanuele Brancati
Paul Minoletti
Nilar Win
Guillem Riambau
Abstract

This project report forms part of the International Growth Centre project Policy options for Government of Myanmar to provide economic support to households in response to COVID-19.

Myanmar has already experienced significant economic shocks as a result of COVID-19, due to both domestic and international effects. GDP growth for 2019/20 will be much lower than had been anticipated, and Myanmar may even go into recession. Some areas of the economy have been particularly badly affected, such as tourism, manufacturing and remittances.

In April 2020 the Government of Myanmar (GoM)introduced a range of domestic restrictions on peoples’ movement and economic activity and then, in the context of low rates of infection, was able to relax many of them. But after a second and much larger wave of cases started in August 2020 new restrictions have been enforced leading to renewed major economic disruptions. Further, Myanmar continues to be affected by international economic effects eg a reduction in foreign tourists to Myanmar, restrictions on Myanmar migrants working in recipient countries, difficulty in accessing certain imports, barriers to exports, declines in foreign investment, and an overall global decline in aggregate demand.

Going forward, there remains a high level of uncertainty around the factors influencing virus transmission for COVID-19, a high level of uncertainty about the development of the pandemic around the world,and a high level of uncertainty for the global economic outlook. In addition,it is clear that how consumers change their behaviour with respect to issues such as visiting public spaces, and how much money they spend and what they spend it on, will play a huge role in determining the overall impact of COVID-19 on the Myanmar economy. All of this means that it is not possible to accurately predict the economic and health situation of Myanmar in 3 months’, 6 months’, or 1 year's time.

In the context of such a high level of uncertainty, it is more important than ever that policymaking in Myanmar is flexible, well-informed and able to respond quickly to emerging trends. In particular – and because GoM is quite constrained in the extent to which it can provide economic support to workers, households and/or businesses – it will need to be very cautious about introducing health measures that have a large negative impact on economic activity, employment and incomes. The social costs of health measures also need to be considered, for example increased domestic violence and child abuse as a result of stay-at-home orders, or negative social and educational impacts on children if schools are closed for extended periods. Clarity of communications and messaging to the public about the health situation, what is and what is not safe, what appropriate behaviour to follow, and about planned support measures will also be very important in building trust and influencing consumer behaviour.