World Bank OKs first Myanmar aid in 25 years

Agence France-Presse

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The World Bank will inject $245-M of aid into Myanmar to support its reform drive

YANGON, Myanmar – The World Bank will inject US$245 million of aid into Myanmar to support its reform drive, resuming assistance for the former pariah nation after a quarter-century absence, officials said Friday, November 2.

The Bank has earmarked $80 million for a grant and $165 million for a no-interest loan for poverty alleviation schemes, including microfinance, according to the bank’s office in Yangon.

Infrastructure projects in villages in rural areas would be among the beneficiaries, the bank said after its board of directors in Washington approved a new strategy for helping the former junta-ruled country.

“We want the people of Myanmar and the poor in particular to see the reform can lead to real benefits,” said Kanthan Shankar, the World Bank’s country manager for Myanmar.

“We are here to help Myanmar reduce poverty by strengthening institutions… supporting projects for the poor,” he added, citing building the capacity of banks and providing funds for microfinance and infrastructure as priorities.

Despite rich natural resources, almost one-third of Myanmar’s population lives below the poverty line, according to the World Bank.

The Washington-based institution closed its Yangon office in 1987 and ceased new lending after the then-ruling junta stopped making payments on debts worth hundreds of millions of dollars left from previous programmes.

A hurdle for the resumption of aid has been how to deal with the unpaid money, including arrears of almost $400 million owed to the World Bank.

Dramatic reforms

The Bank, which opened a new office in Yangon in August, said Friday that it was working with Japan and the Asian Development Bank to resolve the issue and expected to clear the arrears in early 2013.

Myanmar President Thein Sein has overseen a series of dramatic reforms since taking office last year, including the release of political prisoners and the election of Nobel Peace Prize winner Aung San Suu Kyi to parliament.

In response, the West has begun rolling back sanctions and foreign firms are lining up to invest in the country, eyeing its huge natural resources, large population and strategic location between China and India.

Japan agreed in April to forgive $3.8 billion of Myanmar’s bilateral debt, as donors rally to help the nation’s battered economy.

Myanmar also owes roughly $500 million to the Asian Development Bank, which is returning to the country for the first time since 1988.

The country was once known as the “rice bowl of Asia” because of its agricultural riches. But economic mismanagement during nearly 50 years of direct military rule left the country deeply impoverished. – Agence France-Presse

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