Reopen domestic tourism, support local employees, Mandalay businesses urge

Myanmar should look to reopening tourist destinations to boost the domestic market in the absence of foreign travellers for the rest of this year, Mandalay’s top business body says.Mandalay, the economic powerhouse of northern Myanmar, undertook lockdown measures earlier this year to contain the spread of the coronavirus. Those restrictions, as well as disruptions to trade have taken a toll on businesses in Myanmar’s second largest city.

In an exclusive interview, Mandalay Region Chamber of Commerce and Industry (MRCCI) President U Kyaw Win, who is also the owner of Sein and Mya Mattress
Industry Co, a Mandalay-based business distributing and selling mattresses, furniture and bedding products, talked to The Myanmar Times about the region’s
economy under the pandemic and how local businesses perceive the government’s relief package:
How has the COVID-19 pandemic affected businesses and the local economy in Mandalay Region?

COVID-19 has hurt the Mandalay Region. One of the major problems arises from the travel ban and mobility restrictions put in place to contain the pandemic. With
many Chinese investments here in Mandalay, the restrictions imposed prevented key foreign employees, especially those in technical and managerial
responsibilities, from traveling.Although these restrictions have not led to the collapse of businesses, some companies were forced to suspend their operations. Compared to big companies or multinationals, small and medium-sized local businesses were the most affected.
Luckily, however, trade was not significantly disrupted because Myanmar was only hit by the coronavirus in late March, when China had already managed to flatten
the curve and control the situation.

The Myanmar government launched the COVID-19 Economic Relief Plan (CERP) in late April as a response to the global health crisis. Not many
businesses in Mandalay secured the loan from the government’s emergency loan. Why is that the case?
Not many businesses qualify for the emergency loan, which is targeted at three types of businesses – those in hospitality and tourism, manufacturing and small and
medium-sized enterprises (SMEs). The maximum set by the government is up to K500 billion [US$360 million]. Based on the criteria, only 417 business entities in
Mandalay are eligible for the fund.

For most small businesses, the loan support was too little. Over 90 percent of the 400-odd businesses eligible for the loan programme did not apply because they did not see a need to. What is more important than support for enterprises is financial support for employees and workers, particularly those working in small businesses.The CERP includes a wide range of tax and fiscal policies as well as reforms to the business environment. How effective is it and what else should the
government do to help struggling businesses survive this economic shock?

The MRCCI recognises the business-supporting measures and tax incentives rolled out by the authorities. The central bank has cut interest rates since the COVID-19
outbreak. Bank deposit rates have been lowered to a minimum of 5pc and lending rates will not exceed 10pc for collateralised loans. We believe that the lending rate limit should be further reduced, but understand why the government has concerns in doing so.

Many businesses in Mandalay feel that the top priority is to resume operations and manufacturing, so their employees can go back to work.
Also, the CERP emergency loan can reach up to K500 billion but most of the money has not been given out yet.
At the same time, the tourism industry is severely hurt. It is unlikely that Myanmar will be fully open to foreign tourists until next year, exacerbating the need to support the domestic market. There is a need to consider reopening pagodas, temples and other popular destinations for local tourists in order to help the hotels and service industries survive.

Do you think describing Mandalay as a “Chinese city” is a fair description?
Over 80pc of Mandalay economic and trade activities are linked to China and people from China. Goods could be transported from Mandalay to Yunnan Province’s major border city of Ruili within a week. But I don’t accept such a portrayal of Mandalay as a “Chinese city” or “a city of Yunnan Province”, a popular phrase
people tend to joke about.

Though there are a fair amount of ethnic Chinese in Mandalay, the majority of them are Myanmar citizens of Chinese ethnicity. They are similar to those Chinese
diasporas elsewhere, like those in Malaysia, Indonesia and Thailand. In terms of nationality or citizenship, these Myanmar Chinese people in Mandalay should be
considered as Myanmar, and many have lived here for generations.

Furthermore, it is unfair to describe Mandalay or Myanmar as reliant or dependent on China. We see the economic activities as two-way cooperation: Chinese
investors creating jobs and Myanmar workers providing the workforce.

What is your view on the Chinese government-led Belt and Road Initiative projects in Myanmar?
As a businessman, I would like to see the projects be completed as soon as possible because they are beneficial to Myanmar’s development. In reality, however, it
depends on how the two governments – Myanmar and China – negotiate and cooperate.
We have seen how other Southeast Asian countries have benefited from the Belt and Road Initiative, such as railways being built. But Myanmar seems to lag behind
others in terms of these projects. If the various proposals could be implemented, they will facilitate Myanmar’s economic growth and development of local
businesses.The interview was translated and has been edited for length and clarity.

To see the original article click link here

Source : Myanmar Times

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