European companies in Myanmar feel the heat from COVID-19
A majority of European companies in Myanmar say they are affected by the COVID-19 pandemic with some expecting a loss of revenue of more than 50 percent, according to the latest corporate survey conducted by the European Chamber of Commerce in Myanmar.
Yangon-based EuroCham Myanmar last month conducted a survey to map out the expected economic impact with European businesses operating in the country. It seeks to address investor concerns to the Myanmar government and to seek ways in which the authority may provide support.
It surveyed 33 representatives of European businesses.
According to the respondents, more than 60pc claim they are already either significantly or moderately affected, with a forecasted loss of revenue averaging from 30pc to above 50pc.
Small and medium-sized enterprises (SMEs) would be the most affected while automotive, fast-moving consumer goods, retail and manufacturing are sectors feeling the damage.
Key manufacturing, agriculture and tourism industries in Myanmar have been severely hit by the pandemic. Factories have been forced to halt operations while farmers and fruit producers relying on the China market have suffered huge losses.
Two-thirds of the European companies said that the preventive measures taken by the Myanmar government have had little impact yet on their business operations and almost the same proportion forecast they would still be able to cope if those measures would double down.
Thirty-four percent of the respondents reported that the recovery from the economic shock would depend on how the supply chain across all industries would react post-pandemic, while 51pc expect a recovery within six months.
Beyond the immediate economic disruption, the pandemic has derailed efforts by the government to boost investments and growth ahead of parliamentary elections in November.
For now, foreign and domestic businesses want more government support and stimulus to mitigate the short-term disruptions.
The top three policies that European businesses want to see are faster import procedures and customs clearance procedures to support the import and export industries cope with the sudden drop in trade volume; subsidies and relief for importers and exporters to maintain a supply chain; and corporate tax rebate for 2020 to cushion the economic shock among affected companies.