Mekong Monitor: Cambodian government allocates additional US$475 million to fight COVID-19
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TRADE, ECONOMY, AND INVESTMENT
Cambodian government allocates additional US$475 million to fight COVID-19
(9 April 2020) Cambodia has allocated an additional US$475 million from the state budget to fight COVID-19. The announcement was made by Cambodian premier Hun Sen at a press conference held on 8 April. In February 2020, the premier had already allocated US$443 million from the state budget to curb the pandemic. Together with the recently additional allocation, the country has set aside approximately US$918 million to control the outbreak. According to its Ministry of Economy and Finance, Cambodia’s budget expenditure for 2020 amounted to US$8.2 billion, marking an increase of 22.7% compared to its budget in 2019. Cambodia is also set to receive US$20 million in funding from the World Bank to help it source much-needed medical supplies and facilities to diagnose and treat COVID-19, reduce the spread of infection, strengthen pandemic response capabilities, and shorten the recovery time for people and the economy. In the latest annual report by the ASEAN+3 Macroeconomic Research Office (AMRO), Cambodia’s economic growth in 2020 is projected to reach only 2.7%, but will rise to 6.8% in 2021.
Lao government to provide tax breaks, reduced rates to combat pandemic
(3 April 2020) The Lao government will reduce and defer the payment of tax, customs, and other administrative fees during the COVID-19 outbreak, Deputy Prime Minister Sonexay Siphandone said on 2 April. One of the measures includes the vehicle road tax payment deadline, which will be extended from 31 March to 30 June. The payment of personal income tax will be exempted for low-income workers (those earning below US$569) until June 2020. For businesses, profit tax will be exempted for companies earning between US$5,600 and US$44,700 for the second quarter of 2020 while tourism-related businesses will also receive a tax deferral for three months beginning in April 2020. Tax exemptions will be applied to certain goods related to the prevention and control of the COVID-19 virus, while the price of fuel will be regulated. Commercial banks will be expected to reduce interest rates and fees and offer new loans to debtors and affected enterprises.
Government calls off investment forums, approves US$550 million in FDI in March 2020
(7 April 2020) Four state and regional investment forums in Myanmar have been cancelled due to the COVID-19 pandemic. According to Permanent Secretary of the Ministry of Investment and Foreign Economic Relations, U Aung Naing Oo, as a result of the cancellations, investments could decline by as much as 40%. Forums that were to be held in Yangon, Bago, Monywa of Sagaing and Mandalay were postponed. Nevertheless, the Myanmar Investment Commission (MIC) approved more than US$550 million in foreign direct investment (FDI) on 3 April for 11 projects and another US$35 million in local investments, amid the COVID-19 outbreak. The approved amount in FDI is being directed to sectors including manufacturing, construction and services. The MIC further added that the investment projects are estimated to create a total of 3,234 jobs, once operational.
Cabinet approves US$58 billion (1.9 trillion baht) third economic stimulus package
(7 April 2020) The Thai cabinet approved on 7 April a US$58 billion spending to support individuals and businesses affected by the COVID-19 pandemic. The package is the third phase of the country’s stimulus programme to shore up the economy and includes the allocation of US$18.3 billion for six-month cash giveaways and the implementation of health-related plans, and US$15.3 billion worth in soft loans for small and medium-sized businesses. The financial aid includes US$150 monthly handouts to an estimated 9 million self-employed and laid-off people affected by the outbreak, which is now extended to six months from three previously. More than 140,000 employees have lost their jobs in March 2020 due to the fallout from the COVID-19 pandemic, according to Thailand’s Department of Employment.
Online shopping surges as Vietnam embarks on social distancing campaign
(5 April 2020) During its 15-day nationwide social distancing campaign that began on 1 April, Vietnam has seen an uptick in online shopping, particularly online grocery shopping. A spokesperson for a supermarket chain said its stores in the south reported 3,000 orders in March, up from 1,000 in February. In the north, the average order value during the week of 5 April has increased 80%-120% compared to the past. Ride-hailing firms have also caught up with the trend by launching new services that enable people to buy food and groceries without leaving home. Ride-hailing service Be Group receives 15,000 orders every day for buying goods, an increase of 200% from late January. A recent survey by Nielsen Vietnam and Infocus Mekong Mobile Panel showed that consumers have reduced the frequency of their visits to supermarkets and grocery stores by 50% and to traditional and fresh food markets by more than 60%.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.