Friday, April 27, 2012

World Bank to assess Burma debt; open local office

Friday, 27 April 2012 12:52 Mizzima News

(Mizzima) – In preparation for restarting aid programs, the World Bank said on Thursday it would open its first office in Burma in June.

World Bank LogoThe bank suspended programs in Burma in the late 1980s and has never had an office in-country.

In a news release, World Bank Vice President for East Asia Pamela Cox said she would visit Burma to meet government officials.

Among the bank’s first priorities are determining the country's unpaid debts and getting accurate economic data, a senior bank official told Reuters news agency.

Cox said the global bank was “heartened by the government's steps in Myanmar” and would respond step-by-step in line with member countries and other agencies.

“We've been working very closely with our board and our shareholders, the other bilateral partners, the IMF, and, of course, the government of Myanmar on plans for moving our relationship forward,” she told reporters in Washington.

Burma owes the World Bank $393 million from lending from the late 1980s, Cox said. Burma’s debt to the Asian Development Bank were approximately $500 million. Officials were still trying to determine debt levels to other countries.

The World Bank will work with the International Monetary Fund on debt-sustainability analysis to see “how much debt stress this country is going to be under once it normalizes relations and how much debt should be forgiven,” Cox told the news agency.

A basic analysis includes questions such as, “Does the government have a functioning financial system? Does it have a functioning budget system? Does it have a government that actually works?” she said.

Before restarting loan programs in Burma, the bank said it would make an economic assessment of Burma's arrears and the country’s economic condition and needs.

“We recognize that reforms are fragile, and we are well aware of the risks. The speed of our engagement in Myanmar will depend on whether reforms can be sustained,” Cox said.

During the past week, a host of western and European nations have announced that they were dropping sanctions and re-engaging with the former military regime.

U.K. Prime Minister David Cameron became the first Western head of state to visit the country since a military coup in 1962.
The U.K. announced Thursday it would cease discouraging trade with Burma. Japan has waived previous debt and Canada has eased sanctions.  

The U.S., however, has not yet taken the steps to begin easing sanctions.

“We continue to emphasize that much work remains to be done in Burma and that easing sanctions will remain a step-by-step process,” Assistant Secretary for East Asia and Pacific Affairs Kurt Campbell told the House Foreign Affairs Committee on Wednesday.

“We have pursued a carefully calibrated posture, retaining as much flexibility as possible should reforms slow or reverse, while pressing the Burmese government for further progress in key areas,” he said.

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