COVID-19 plan will cost USD 2 billion

The final price tag of the COVID-19 Economic Relief Plan (CERP) will reach USD 2 billion, the Ministry of Investment and Foreign Economic Relations has revealed. The cost will be covered by a combination of government spending and foreign aid.

International assistance will cover the bulk of the expense for the comprehensive relief plan, supplemented by direct government spending. On social media, U Set Aung, Deputy Minister for Planning, Finance, and Industry, wrote that “the amount that 4-5 partners agreed to provide has reached nearly USD 2 billion so far.” This assistance will come in the form of foreign concessional loans. Myanmar is eligible for that type of assistance because its debt to GDP ratio is below 15 percent, U Set Aung said. Additionally, 22 ministries have pledged to set aside 10 percent of their own budgets to pay for CERP measures, according to Daw Thida Tun, director general of the Budget Department, Ministry of Planning, Finance and Industry. “Some departments may submit less than 10 percent as their funds are necessary for national development. For example, income tax revenues will not be approved for the fund,” the Myanmar Times quoted her as saying.

The relief measures include a fund of up to MMK 500 million to provide soft loans for pandemic-affected industries. Other measures include tax credits and exemptions, lowered interest rates and support for businesses transitioning to digital platforms. It could also fund a public credit guarantee company designed to encourage banks to lend money despite a high volume of non-performing loans. That company would depend on the passing of the Credit Guarantee Corporation Law, which is currently being drafted.

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