(1) Preparedness:
Timing: Should have been more prepared – President Xi’s visit – Outbreak in China – Myanmar was fully aware of the dangers. However, we did not take any actions until March 13. As the paper said, the committees for COVID-19 was formed only in mid March of 2020. Comparatively, Vietnam and Thailand has already taken full-swing preparations since February. Although the outcomes were not significantly different between Myanmar and Vietnam, we had 6 deaths and Vietnam had zero casualty rate.
(2) Testing: The paper mentioned about the testing capacity, which is the lowest in Southeast Asia or even compared to many other LDCs. It implied that the infection rate may have been under-estimated, but more importantly, it showed lack of serious mitigation strategy on part of the government. At this point, we have huge risks of importing cases (our case zero and almost all new cases are imported ones since May) because we have huge migrant worker populations living in Thailand, Malaysia and the rest of Asia. They constitute about 10% of population and they keep returning home due to economic fallouts in these countries. Despite of all these risks, we did not significantly improve our testing capacity although we now had our own certified laboratories and sufficient testing kits donated by several donors.
Weaknesses in timely preparations and weak testing capacity have huge implications for economic management.
(3) Our late timing made us impossible to restore our normal border trade relations with China when Yunnan has become completely free of virus and they started importing agriculture goods from Myanmar. We cannot sell them efficiently because Chinese health authorities have tightened up health check ups very thoroughly and slowed down the trade flows. Our truckers had to bear a long delay (three or four times longer than normal time) and suffered from higher transaction costs and our farmers got lower price due to these costs.
Our poor testing capacity made the government timid in reopening the economy; and we still had restrictions against travels (need several medical certificates) and gatherings (no more than five persons). Comparatively, Vietnam has fully restored their economic operations a month earlier.
In short, our economy was hit badly more from government’s restrictions and non-responses rather than from health effects.
Legal and regulatory responses:
(a) Factory Directives: I like to pick up the devastating incidence of factory directive on April 19 which the authors have highlighted. Although this incidence was seen as a “small error” on part of the government, the unpublished report done by a business association in Myanmar has counted the economic losses of unexpected and sudden factory closure to the businesses (employers) was amount to 30 billion kyat because it affected almost all factories around the country including those in the regions where there is no viral infections. The Social Security Board, the government entity, also had to compensate the workers who were forced to stay home during these factory closures up to 13 billion kyat. The total losses incurred to the employers and workers in the private sector was around 43 billion kyat by this single misstep. The amount of losses is equivalent of 50 billion kyat, the amount the government offered to rescue the hotel and tourism industry, garment industry and SMEs out of its emergency fund—three worst hit industries under COVID-19. You can imagine how costly is a policy misstep and how inadequate is the amount of rescue package.
Legal and social enforcement
(b) Widespread usage of the laws’ punitive provisions, and sometimes draconian nature of unequal enforcement from one case to the other. The famous case was the trial against a Christian preacher under the Communicable Diseases Law for organizing a gathering of more than five persons. The charge was made by Yangon Regional Government. During the trial period, Yangon Chief Minister was found on record that he organized a religious gathering of more than thirty followers and officials, which he defended as “carrying of official duties as a regional official to kickstart the renovation of religious sites.” Again, Daw Aung San Suu Kyi noted her embarrassment of the double standards; however, the preacher continued with his trial until today and he is likely to be penalized under the law and the Chief Minister continued to serve his duties.
Evaluation of response and challenges ahead
(c) I would like to compliment my own evaluation of response from economic point of view. We cannot evaluate the responses just from political and regulatory perspectives since COVID-19 affects economies more than public health or political conditions of a country. Although one can conclude the effectiveness of containment measures on the pandemic, we should not overlook very negative consequences of economic fallouts from these containment measures. In case of Myanmar, such measures can be even more devastating than other Southeast Asian economies because we did not have a proper risk-management plan.
(d) For example, in Vietnam, they divided the provinces into the category A, B or C, or as in India, red, orange and green. They imposed containment measures based on perceived risk of community transmission so many A list or green zones were less disrupted by the containment measures. In Myanmar, we applied a single treatment on every region, so the economies of many regions that are free of virus were also disrupted by the containment measures.
Priorities are given more to public health measures and policy considerations lack proper assessment of economic consequences to the private sector. So far there is no proper assessment of regulatory impact on the businesses nor serious dialogue with business leaders. So far, the government provided relief fund of 100 billion to the private sector, which is about 0.1% of GDP. The fund was established in April and the disbursements were still carried out until today – more than 90 days have passed but not all the eligible private business received these rescue funds yet.
These are just some examples of how short-comings on economic dimensions of government response, and I hope we have another seminar like this discuss more on the economic side of the crisis.
