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Jade sales have taken a hit as a result of poor demand from China in the wake of COVID-19 and prices of the green mineral have halved in recent month. Demand from China has fallen. The Chinese government does not encourage investments or trade in this area. Meanwhile, production of high-quality jade in Hpakant, Kachin State, has also declined amid the pandemic.

There are just a few active jade miners currently, even through small-scale jade mining blocks have been granted. As a result, commercial-quality jade has become more affordable in the market.The other reason for the lower demand is the cancelling of gems emporiums, where jade is legally auctioned to foreign buyers. Before COVID-19 , Myanmar typically held large-scale emporiums twice a year in Nay Pyi Taw. Other jade and gems fairs in Yangon, Mandalay and Myitkyina have also been called off, although there have been enquiries on when these will resume.

The majority of Myanmar jade is exported to China. As a result, the Myanmar government has potentially lost billions in revenue from having to suspend this year’s gems emporiums due to the outbreak of COVID-19. Each fair typically draws revenues of €500 million each. As the state receives a 40 percent share of capital emporium sales in the form of taxes, its revenue has declined about €400 million this year.

Source: Myanmar Times

Government travel restrictions and orders to defer repayments and lower interest rates on loans due to COVID-19 have reduced the ability of Myanmar’s microfinance companies to help rural people who desperately need capital. The inability to collect repayments from borrowers has hurt the companies’ liquidity and cash flows, limiting their ability to make loans. The Planning, Finance and Industry Ministry’s Microfinance Business Supervisory Committee overseas about 190 companies with 4.6 million members, most of them low-income.

The country hit by a second wave of COVID-19 infections, Daw Phyu Yamin Myat, general secretary of the association, shared her views on the challenges facing microfinance companies. They are following the Health and Sports Ministry’s guidelines and practicing social distancing as much as possible at their offices. Few clients can repay their loans. They cannot recover the money if the clients cannot repay their debts. The amount of money available to us has become less and less as they have loaned money to people who cannot make repayments. They think if people get back to work, the situation will improve and they will not have large losses. They are in semi-lockdown or lockdown, which can interfere with work.

Microfinance companies have not been able to grow during this time. All have been badly hit. If they compare business expansion with population growth, the development ratio is zero. Over 40 of the 200 financial companies are practicing corporate social responsibility under some of the government’s plans. There has been no damage to microfinance firms yet, but it could happen at any time. The lending of money to businesses is essential. Although there is an income stream from repayments, the companies might have other problems. They haven’t fully recovered loans from our clients. A business going belly-up might set off a chain reation, so they should advise their clients to consult with the association if they have problems.

Source: Myanmar Times

Japan’s aid agency is to provide US$280 million of concessional loans to the Myanmar government in support of the country’s economic recovery from the downtown brought up by the pandemic. The Myanmar government and the Japan International Cooperation Agency (JICA) signed a concessional loan agreement of ¥30 billion (US$280 million) in Nay Pyi Taw on Tuesday (September 1), called the COVID-19 Crisis Response Emergency Support Loan.

Based on the loan agreement, JICA is providing US$280 million concessional loan to the Myanmar government to support resilient economic recovery through implementation of COVID-19 Economic Relief Plan (CERP) and related policies for investment and trade promotion as well as financial sector strengthening. The CERP was announced in April by Daw Aung San Suu Kyi’s government and is estimated to cost $2 billion in total. The loan proceeds are going to be spent on this. This implementation of the policy reforms is also supported by JICA’s ongoing technical cooperation projects in the field of investment promotion, industrial development, trade facilitation and financial sector reform. JICA highly appreciates Myanmar government’s swift policy response to the economic impact of COVID-19 embodied in CERP.

The emergency support loan not only fills the critical financial gap for the implementation of short-term relief measures but also lays the groundwork for the sustainable long-term recovery through supporting prioritized economic policy reforms, leveraging JICA’s technical cooperation projects.This is the second measure from JICA to support Myanmar’s COVID-19 response. The aid agency in June rolled out a JPY5 billion SME financing programme. Last week, the EU and Myanmar inked a financing agreement support agriculture and nutrition in Myanmar. The EU will invest K180 billion over the next five years to support the Ministry of Agriculture, Livestock and Irrigation.

Source: Myanmar Times