July 2, 2012
Reposted from the Financial Times
By Gwen Robinson
The calls came in an ADB report that amounts to one of the most sweeping assessments on the state of Myanmar’s bureaucracy in sectors such as energy infrastructure, agriculture and education.
The report stops short of detailed project proposals, reflecting restrictions on ADB funding for Myanmar due to $500m of arrears from 1988, when the country’s previous military regime halted debt repayments.
The new report is one of the first sectoral assessments of the government under President Thein Sein by an international financial institution. It comes ahead of the government’s presentation of a five-year economic development plan to parliament, which returns from a long break this week.
It also follows Mr Thein Sein’s ambitious pledge in a recent speech to triple Myanmar’s economic growth within three years.
The report is part of the ADB’s efforts to re-engage with Myanmar after a 25-year hiatus, according to Stephen Groff, the ADB’s vice-president for east Asia.
“The intention is to get it out there and use it as a basis for discussions [with donor countries and organisations] for further steps,” he said.
It would be followed, he said, by a “deeper process” to draft more detailed recommendations for ADB projects and eventually the resumption of such projects.
The report urges the government to issue detailed regulations to implement recent legislation in key areas such as mining and agriculture. It also details the problems in the energy sector that have led to crippling power shortages.
In meetings last week, Mr Groff said Mr Thein Sein and ministers had reiterated their commitment to the reform process, and to resolving Myanmar’s debt overhang.
Mr Groff signalled the ADB’s interest in a wide range of projects beyond its main focus on infrastructure, including in areas such as education and healthcare.
Meanwhile, diplomatic sources said that Japan, which has already agreed to waive $3.7bn of Myanmar’s bilateral debt, has indicated it may also help clear the country’s remaining arrears of nearly $900m to the World Bank and ADB.
Even if arrears were cleared speedily, however, it could take at least one year to resume full lending, warned Mr Groff. The real hurdle to full ADB and World Bank re-engagement, say other aid officials, is continuing opposition from the US, a large donor to both organisations, despite Washington’s May announcement that it would suspend bilateral sanctions on the country.
The ADB has been able to recommence technical assistance to Myanmar under its regional Greater Mekong Sub-region programme. It has opened an office in the commercial centre, Yangon, and will open its main office in Naypyidaw, the capital, in August, to be headed by the ADB’s Cambodia country director Putu Kamayana.
Photo Credit: ADB