Myanmar firms slow to adapt to COVID-19 impact, survey shows

Due to COVID-19, the majority of Myanmar firms have experienced lower sales and cash flow shortages, resulting in reduced access to credit needed to support operations, according to the results of a World Bank survey to gauge the firm-level impact of the pandemic, released August 14.

The survey included 500 firms spanning a wide range of industries and firms of various sizes, as well as the formal and informal sectors. The first round of the survey was completed in May, and seven subsequent rounds will be conducted between June and December to provide continuous information on the evolving impact of COVID-19 in Myanmar.Overall, 83pc of firms experienced a reduction in sales, at least half face cash flow shortages and a third saw a reduction in access to credit.

The survey revealed that 16 percent of firms temporarily closed their operations for an average of eight weeks as a result of COVID-19. Representatives of those firms estimated that an average of four weeks would be required to resume their operations.

Firms in the service sector were worst hit by COVID-19, with 39pc of respondents reporting temporary closures. Services, manufacturing, retail and wholesale and agriculture were among the sectors worst hit.
The survey showed that starting or increasing delivery services was the most common adjustment mechanism adopted by firms in response to the new business environment following the outbreak of COVID-19. 36 percent of firms reported introducing such measures.

Only 26pc of the firms reported a partial or complete change to existing operating models, while 19pc said they have adopted digital platforms or online systems to perform business functions. Just 6pc embraced remote-work arrangements.

While agriculture and micro-sized firms were the least likely to report adopting new mechanisms to cope with COVID-19, the Information and CommunicationsTechnology sector is experiencing a surge of activity driven by a sharp increase in technology and e-commerce.The survey also showed that while more than half the firms were aware of economic support programs offered by the Union and regional governments, most had not applied for government support. The firms suggested that access to loans and credit guarantees, tax deferrals, or tax relief were the most urgently needed forms of government support, but only 9pc reported applying for support.
Myanmar’s economic growth, which was 6.8pc in fiscal 2018-19, is projected to drop to 0.5pc or less in fiscal 2019-20, according to the World Bank.

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Source : Myanmar Times

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