Socio-Economic Implications in Myanmar during COVID-19 Pandemic
Dr Cchavi Vasisht, Research Associate, VIF

Initially in March 2020, Myanmar’s leader Aung San Suu Kyi stated that the country stands out as a global exception with zero cases of COVID-19. The government Spokesperson- Zaw Htay said that the lifestyle and diet of Myanmar citizens are beneficial against COVID-19. However, the first case was reported on 23 March 2020, and in addition to these, there were reports on social media about respiratory-related deaths in parts of the country.1 According to Myanmar’s Ministry of Health and Sports COVID-19 dashboard, a total of 77,766 tests have been conducted, with 303 confirmed COVID-19 cases and six deaths.

State of Healthcare Infrastructure

The Ministry of Health and Sports’ (MoHS) key focus in tackling communicable diseases in the past has ensured the functional capacity to conduct contact tracing of COVID-19. The mobilisation of schools, meditation centres and madrassas has supported initial capacity to isolate suspected cases. Emergency upgrades have been initiated, such as the establishment of 2,000-bed COVID-19 Medical Centre at Yangon. Various ministries, volunteer organisations, and the private healthcare sector have contributed to enhancing capacities to fight against COVID-19. As support from the international organisations’, the World Bank has approved an emergency financial aid of USD 50 million and the United Nations has provided 75,000 testing kits. Individual nations such as India, China, Singapore, Japan, South Korea and Russia have sent medical support too. There has been a collective response to boost support to the Government of Myanmar’s testing capacities and vital medical response.

However, the health system remains at the risk of being overwhelmed once the cases grow. The testing capacity remains limited, with only three facilities - two in Yangon and one in Mandalay. Limited testing kits have restricted the tests only to people with symptoms, suspected cases, or close contacts of established cases. Nonetheless, there has been an increase in government procurements and donations from international partners and the private sector.

In 2018, the World Health Organization (WHO) reported that Myanmar had around 6.7 doctors and ten registered nurses and midwives per 10,000 of population. Also, there are an estimated 600 critical care beds in the country, roughly estimating around 1.1 beds per 100,000 people.

Key Fiscal and Monetary Policy Responses

To ensure adequate liquidity in the economy, the Central Bank of Myanmar (CBM) has cut the policy interest rate by three percentage points in three phases. In order to maintain liquidity in the interbank market, the deposit auctions have been suspended. On 9 April, a reduction in banks’ Reserve Requirement Ratio was announced from 05 per cent to 3.5 per cent of deposits till 30 September 2020. This reduction was made to ensure that banks have extra liquidity to lend out and support the economy. To boost the investments, Myanmar Investment Commission (MIC) has announced that the investors, both foreign and local, will only have to pay half the regular application fees.2

The key fiscal policy measures undertaken are mentioned in the table below:

However, there are shortcomings of the COVID-19 Economic Relief Plan (CERP), which announced numerous fiscal and monetary measures to address the challenges caused due to COVID-19. The given plan has mentioned about various measures under macro headings such as workers and labourers, banking sector, investments and international trade among others, but has not elaborated on the mechanisms on how these measures will be integrated and in what ways measures will be prioritised. Walden Bello et al. (2020) have specified other shortcomings of the given plan.3 They compared the economic relief or stimulus with other countries in the neighbourhood and stated that Myanmar had allocated less than 03 per cent of its GDP, whereas Thailand and Singapore have allocated almost 09 per cent and 08 per cent of their GDP respectively.

Further, specific amounts are given for loans for small- and medium-sized businesses in selected sectors(up to Kyats 500 billion or USD 360 million); and for trade financing (Kyats 100 billion or USD 72 million). However, other than these sectors, no finances have been specified. The government has not defined the criteria on which the amounts of transfer have been made. The first round of emergency cash transfer consisted of 30,000-40,000 kyats per household. However, if translated in terms of daily income for each person, the amount allocated is well below the officially defined poverty line of 1590 kyats per person. The eligibility criteria for cash transfer is also not been specified; will it be based on the number of individuals in a household or based on income levels of a household.

Across the ministries, a ten per cent cut deduction has been proposed to transfer the amount in the COVID-19 Fund; however, each ministry is differently affected and has different financial needs in these times. For instance, the MoHS and Ministry of Labour, Immigration and Population (MoLIP) needs more funds and support vis-à-vis the armed forces and security services. Walden Bello et al. (2020) suggested that a 25 per cent cut in the military budget would yield about USD 550 million. This extra budget could relieve the government from increasing its foreign debt and have peace dividends as well.

Economic Impact of the COVID-19 Pandemic

According to the latest World Bank’s Myanmar Economic Monitor, a drop from 6.8 per cent to 0.5 per cent is predicted for the current fiscal year.4 The International Monetary Fund (IMF) in April 2020 edition of World Economic Outlook slashed Myanmar’s 2020 growth forecast from 6.4 per cent to 1.8 per cent. However, post COVID-19 crises, the IMF report projects optimistic economic growth scenario for Myanmar, placing it among the 10 per cent of the world economies, when other nations will be expected to slip in recession. According to a study conducted by Xinshen Diao et al. (2020), Myanmar GDP is estimated to decline by 41 per cent during the lockdown period, which is likely to push the economy into recession or stagnation.5

Agriculture and Framer’s Crises

The Agri-food sector is the primary contributor to the national GDP estimated at around 44 per cent and employs 50 per cent of the labour force. It includes the agriculture sector (crops, fisheries and forestry), food processing and value-added production. The agri-food sector is estimated to fall by over 14 per cent, to be around 1.1 and 2.4 percent in the current year as it is adversely affected due to fall in consumer¬ - due to decline in income and remittances, and export demands - due to closing of borders (Xinshen Diao et al. 2020).

In the short run, the substantial impact of COVID-19 will not be on the availability of labour services, but on the ability of households to pay for them. The slack in ability to make payments will be because a third of Myanmar rural households depend on remittances from an estimated 3.8 million migrants. There are input supply delays due to border closures or obstacles to internal distribution. The shock of decline in remittances income and input supply chain disruptions is occurring at the most crucial time- at the start of planting the monsoon rice, which accounts for 80 per cent of Myanmar’s paddy crop production (Duncan Boughton et al.).

The travel restrictions imposed during the lockdown have led to lower sales of agriculture produce and farmers are facing significant losses and unable to pay the loans. The sector has also contributed to around 20 per cent of export value at USD 03 billion annually. The transport constraints and price volatility could lead to food production concerns and disruptions in food supply chains. The overall impact could lead to a breakdown in social order according to the UN Food and Agriculture Organisation (FAO).

The microfinance sector grew exponentially since 2012-2013 and operated in 252 of 330 townships in Myanmar, has served around 15 million people as of mid-2019. The sector had substantially provided in the previous years’ loans for sustaining operational costs of agriculture and consumptions requirements of rural households. The MFIs due to the current crises voluntarily suspended repayment of loans and group meetings. Later, Financial Regulatory Department of Ministry of Planning, Finance and Industry (FRD-MoPFI), officially suspended loan repayments and directed that no new client could be taken up for a period of 06 to 30 April 2020. Due to suspension of loans repayment and expected withdrawals combined with operating costs, MFIs have cut back on their lending, which has severely affected farmer’s access to finance to purchase inputs to plant for the coming season.16 The inability to plant for the season would further lead to a decline in food production and food security concerns along with disruptions in supply chains.

Even though the government has set out plans to support farmers under CERP, to provide cash and loans to affected small farmers by the end of this year, Dr Ohnmar Khaing - an agricultural consultant & Adviser to the Non-Governmental Network Myanmar Food Security Working Group has warned that the finances should be given in next two weeks.7 The Myanmar Agricultural Development Bank (MADB) under the Ministry of Planning, Finance and Industry (MoPFI) will provide farmers nationwide the loan of Kyats 50,000 per acre from 22 June from the “Special COVID-19 Relief Loan”. However, the condition is that farmers who fully paid their previous loans are eligible for the relief loan. 8

Myanmar’s fisheries sector will face immense losses between March and August 2020 if demand does not pick up, said U Myo Nyunt, Secretary of the Myanmar Fisheries Products Processors & Exporters Association (MPEA). The reasons are -the decline in exports, cancellation of existing orders and no new orders for the sector, especially from the European Union (EU) has led to the challenges for the sector. The EU and other western countries account for about 45 per cent of Myanmar’s fisheries exports, while China and Thailand account for the remaining 55 per cent. With restrictions on factories to remain closed, operations of the cold storage facilities are hampered. Fisheries exports, including border and maritime trade, generate an average of USD 700 million in revenue, according to the Ministry of Commerce. Before COVID-19, the sector was forecasted to generate USD 750 million in export revenue in fiscal 2019-20. 9

Slump in the Manufacturing Sector

The manufacturing sector accounted for more than 20 per cent of national GDP and was growing at an annual growth rate of 09 per cent during 2014-2019. The industrial production is expected to contract by 0.2 per cent in the current year due to lockdown measures and closure of borders, as per the World Bank’s Myanmar Economic Monitor, World Bank. The sector has been most adversely impacted with estimates suggesting a decline of around 40 during the lockdown period (Xinshen Diao et al. 2020). The latest survey from IHS Marketing revealed a record low manufacturing PMI score of 29. 10

Several sectors are affected, such as garment sector due to supply chain disruptions and losses for SMEs, which have resulted in large layoffs and factory closures. The disruptions in the imports of raw material and intermediate goods, especially from China, have obstructed the production processes such as shoe, bag and garment factories.11 The export-oriented manufacturing sectors were affected due to cancellation of orders, especially from western countries. Rubber exports reported a decline of about USD 30 million compared with the corresponding period of the previous fiscal due to falling demand and restrictions on trade, revealed the data by the Ministry of Commerce. Around 70 per cent of rubber produced in Myanmar is exported to China and the rest is exported to other countries, such as Singapore, Indonesia, Malaysia, Vietnam, Korea, India, and Japan.12

The Ministry of Labour, Immigration and Population (MoLIP) announced support of 40 per cent of salaries to workers of factories and workshops, which are temporarily closed for inspection amid the Covid-19 outbreak. Only those workers are covered who have registered under the Social Welfare Programme. 13 However, the World Bank reported that in the formal sector, only 37 percent are covered under the government’s “Social Health Protection Scheme”. Further, 83 percent of the country’s workforce was in the informal sector, meaning a substantial number of workforces lack social protection.

There have been vast numbers of factory closures leading to non-payment of salaries and lay off of workers. Workers in the few factories of Yangon Region’s South Dagon Township and Hlaing Tharyar Township had to go on strike to receive their salary for March and full compensation entitlements after they were suddenly terminated. The workers received support from the Myanmar Industries Craft and Services Trade Union Federation and Federation of Garment Workers. However, many workers have yet not received their salaries such as Royal Apollo and Su Xin factories. 14 The Deputy Minister of MoLIP, U Myint Kyaing has stated that more than 140,000 individuals have become unemployed due to suspension or closure of around 5,700 factories or workplaces.15

Decline in Revenues of the Services Sector

The services sector, which represents 42 per cent of the economy, is expected to fall to one per cent, according to recent World Bank forecasts. Between January and May 2020, the hotels and tourism industry received around USD 53.2 million revenue compared to USD 114 million during the same period in 2019. Due to COVID-19, the Union of Myanmar Travel Association (UMTA) predicted half of the individuals working in the hotel and tourism industry would lose their jobs. 16 The Ministry of Hotels and Tourism (MoTH) announced a COVID-19 Tourism Relief Plan. The plan aims to rebuild the tourism industry and will be implemented in three phases from April 2020 to January 2021. Furthermore, the government has eased the pressure on hotels and tourism businesses by giving exemption on the fee for license renewal for one year up to end of March 2021.

Trade has fallen with major partners, i.e., India, China and Thailand. In March, Manipur (India) speeded up the border fencing activities to contain the spread of COVID-19. According to a report by Thura Swiss, Myanmar-India trade fell 40 per cent due to COVID-19 border trade posts closures for the current fiscal year. 17 India is the fourth largest export destination for Myanmar and source of imports according to the World Bank.

Myanmar-China border trade registered a decrease of USD 162.6 million between 01 October 2019 and 15 May 2020, according to the Myanmar Ministry of Commerce. The decline in trade is attributed to the suspension of trading activities, clamping down on illegal trade and the tight security measures amid COVID-19 worries.

According to the Myawaddy Chamber of Commerce, trade with Thailand has also fallen from about USD 10 million per day in February to USD 03 million per day in April. The vast scale of informal trade through the 34 gates in Myawaddy Township which are controlled by ethnic armed groups are now closed without opening an alternative route. The armed groups operating the gates are not in active conflict with the government and Tatmadaw. However, closing them without an alternative route could potentially spark renewed conflict and political instability as there are huge losses of income. The demand for Myanmar agricultural products have also dried up as Thai traders were unable to cross the border to inspect products.18

Return of Migrants and Impact on Households Income

Myanmar shares one of the highest migrant populations in Asia, with approximately four million international migrants. Due to lockdowns and closure of factories across China, Thailand and other countries, international migrants have lost their jobs. In a press briefing reported from March to June 2020, the Deputy Minister of MoLIP - U Myint Kyaing has stated that more than 110,000 individuals from Thailand, Korea, China and Japan have returned. Domestically, due to lockdown restrictions and halting of economic activities, migrant workers have lost their jobs.

Remittances constitute an essential source of income for the households of Myanmar, especially in rural areas. In 2015, the country received remittances equivalent to 05 per cent of GDP from legal migrants. Furthermore, with the inclusion of illegal remittances, the contribution would be around 13 percent of the GDP. Xinshen Diao and Kristi Mahrt (2020) conducted a study to assess the impact of the decline in remittances on household incomes and poverty rates during the lockdown period. Due to the current pandemic, the study assumed that if there is a 50 percent decline in international remittances and 30 per cent decline in domestic remittances, the poverty rate would increase by 7.5 per cent points among remittance-receiving households.19 This increase in poverty rates raises worries, as 24.8 percent of Myanmar’s population are poor and a further 32.9 percent vulnerable to falling into poverty due to unanticipated shocks such as food crises or decline in agricultural prices, as per Myanmar Living Conditions Survey (2017).20

The return of migrants from International and Domestic regions exaggerates another pertinent issue faced by Myanmar economy, i.e., unemployment. As mentioned above, the combined effect of suspension or closure of factories and return of migrants have put pressure on the government to create employment opportunities in the country. The CERP aims to create employment for workers and labourers by initiating mega infrastructure projects; however, fail to provide any time-bound targets and implementation mechanisms.

Potential impact of Pandemics in Conflict Zones

The Crisis Group has examined the potential implications of the pandemic for twelve conflicts affected regions in the world. It included Myanmar as a conflicted region, where it mentions about the government and the Tatmadaw exploiting the circumstances created by the pandemic to advance pre-existing agendas. An attempt has been made to apply other potential impacts of pandemics in Myanmar, which the report has not examined.

The Vulnerability of Conflict-affected Populations

The government has formed a COVID-19 Coordinating Committee to synchronise efforts with Ethnic Armed Organisations (EAOs), and Tatmadaw has deployed COVID-19 diplomacy by sending special conveys to different EAOs. However, the limited and delayed response by the government has deterred the fight against COVID. The Tatmadaw initially rejected calls of a national ceasefire and declared ceasefire as late as 09 May, which is effective from 10 May to 31 August 2020.

Tatmadaw troops and Karen National Union (KNU) in the Hpa-pun region have engaged in clashes since 11 November 2019, which further intensified since February 2020. Other major conflicted regions are, Rakhine and Chin states. The Arakan Army (AA) has declared a unilateral ceasefire, due to the need to combat COVID-19 pandemic, but the government declared the organisation as an unlawful organisation and terrorist organisation. Moreover, the ceasefire declared by the Tatmadaw excludes areas in which groups declared ‘terrorist organisations’ by the government are active. In practice, this means that the most affected and AA’s operational regions - Rakhine and Chin states are excluded from the ceasefire. The organised violence between the Tatmadaw and AA has increased by 74 per cent from January to April 2020.

(Source: ACLED

Yanghee Lee – the UN special rapporteur (2014-2020) accused the military of “systematically violating the most fundamental principles of international humanitarian law and human rights”. Lee cautioned about the continuous air and artillery strikes by the military in the Rakhine and Chin States. 21 The clashed between the Tatmadaw and AA in these areas since 2018, has led to the displacement of more than 160,000, and killing of hundreds of people.

The areas of active conflict are at the immediate risk of COVID-19 outbreaks as many people are fleeing clashes to reach Internally Displaced Persons (IDPs) camps where the basic hygiene and social distancing practices are made impossible. Although the EAOs are working to provide health care amenities and the Ministry of Social Welfare, Relief and Resettlement is providing medical supplies and aid. Nonetheless, the potential of virus spread is large. The implementation of the CERP has not considered the social and humanitarian context of the country, as it does not mention how the plan will coordinate and support EAO’s health care infrastructure.

The government imposed ban on internet and mobile phone services in the conflicted regions has further limited access to vital preventive information. The government decided to continue the ban on internet services for the second year in nine townships in Rakhine and Chin which has raised concerns. In a respite, on 01 May, the internet services were restored in Maungdaw Township because of stabilised conditions. Moreover, MoTC ordered mobile network providers to block 221 websites and to prevent “fake news”. However, worries are raised as the blocked websites include ethnic media outlets such as Development Media Group, Narinjara, and Karen News, and several Rohingya news sites.

The conflicted regions severely weaken the capacity of international institutions to serve in these areas. On 10 April, the Myanmar government granted access to international organisations in the conflict zones to provide humanitarian assistance to the displaced civilians. On 29 April, a convoy transporting relief aid donated for the local people in Paletwa Township in Chin State was attacked. Both Tatmadaw and AA are blaming each other for the attack. 22 On 20 April, the World Health Organisation (WHO) vehicle was attacked in Minbya Township of Rakhine State. The vehicle was transporting swabs taken from suspected COVID-19 patients from Rakhine State to Yangon.23

Political Exploitation of the Crisis and Risks to Social Order

Amidst the background of crises, there is ample room for political leaders to try to exploit COVID-19 to solidify power or pursue their interests. The civilian and the military governance, both claim rights to govern Myanmar effectively, but the fragmentation of authority has undermined any practical countrywide efforts. The Tatmadaw has mobilised donations and pledged its facilities well resourced to support government-led initiatives, projecting itself as effective in efforts against COVID-19. State Counsellor Daw Aung San Suu Kyi, representing the civilian government, has assumed a central and visible role in the government’s response. The government has used social media as a tool and hosted virtual meetings with union ministers, health staff, officials, volunteers, and businesses. 1

The pandemic has the potential to create stress on resources and political systems, creating the space for new outbreaks of violence. Currently, the threat of disease is acting as a deterrent to prevent widespread unrest. Nevertheless, the social and economic impacts of the pandemic are liable to strain the relations between the government and its citizens. To contain the spread of COVID-19, Myanmar government has adopted aggressive measures. Around 8000 people have reportedly been prosecuted for violating curfews under Article 18 of Myanmar’s Prevention and Control of Communicable Disease Law, 1995.25

The Way Forward

The COVID-19 pandemic presents era-defining challenges to public health and the economies worldwide. The pandemic threatens to be long and draining, eventually making the functioning of government difficult. The government must, therefore, ensure that every citizen of Myanmar, including IDPs and communities in conflict-affected areas, have access to the health care amenities and economic opportunities. Testing for COVID-19 remains one of the most effective ways of ensuring medical support to the people.

The government, along with other stakeholders, must use the crises as an opportunity to embark on an alternative route to the socio-economic development of the country. There is an immediate need to strengthen the agriculture sector, especially small and marginal landowners, to safeguard the food security concerns and livelihood of many. An adequate mechanism for quicker identification and more massive enrolment in the social security scheme is essential. Also, economic opportunities in the country must be created for the individuals who have lost their jobs and the massive number of returnee migrants. Most importantly there is an immediate need to end clashes between Tatmadaw and Arakan Army, the group that has been left out of the ceasefire.

  2. IMF. 2020. Policy Responses to COVID-19. Available from:
  3. Walden Bello, Doi Ra Lahkyen, Jennifer Franco, Pietje Vervest, Tom Kramer. 2020. How to Improve Myanmar’s COVID-19 Emergency Relief Program. Transnational Institute, 09 June 2020,
  4. Maw, Aka Kyaw Min, 2020, Myanmar Economic Monitor: Myanmar in the Time of COVID-19, World Bank, Report, 26 June 2020,
  5. The study was conducted using a Social Accounting Matrix (SAM) multiplier model to assess the effects of COVID-19 pandemic. The model is a simulation tool suited to measure short-term direct and indirect impacts of economic shocks, such as pandemics. To characterize Myanmar economy in 2019, SAM captured 63 distinct activities or sectors. The study considered both external shocks and policy-induced shocks.
    Xinshen Diao, Nilar Aung, Wuit Yi Lwin, Phoo Pye Zone, Khin Maung Nyunt, and James Thurlow. 2020. Assessing the Impacts of COVID-19 on Myanmar’s Economy. Strategy Support Program Policy Note 05, IFPRI, May 2020.

  6. Russell Toth. 2020. Sustaining Myanmar’s Microfinance Sector during the COVID-19 Economic Crises to Support Food Security, Resilience, and Economic Recovery. Strategy Support Program Policy Note 03, IFPRI.
  18. Naw Betty Han and Thomas Kean, On the Thai Myanmar Border COVID-19 Closes a Billion Dollar Racket, Frontier Myanmar, 07 June 2020
  19. Xinshen Diao and Kristi Mahrt. 2020. Assessing the Impact on Household Incomes and Poverty of Declines in Remittances due to COVID-19. Strategy Support Program Policy Note 06, IFPRI.
  20. UNDP. 2019. Myanmar Living Conditions Survey 2017. Poverty Report 03. June 2019.
  24. Kyaw San Wai, 2020, Myanmar and COVID-19. The Diplomat, 01 May 2020,

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>

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