Monday, July 2, 2012

ADB says loans to Burma could resume in one year

Monday, 02 July 2012 16:24 Mizzima News

A top Asian Development Bank (ADB) official said resumption of development loans and other aid to Burma could resume in about one year, if further progress is made in talks.

Stephen Groff, vice president of Asian Development Bank Photo: ADB

But before aid can resume, Burma must settle outstanding debts from nearly 25 years ago when the military put down a student-led uprising and locked up pro-democracy leader Aung San Suu Kyi that caused the ABD and the international community to shun the military regime that took power.

The debt totals nearly US$ 500 million to the Manila-based ADB and $393 million to the World Bank in Washington, according to an article by Reuters news agency.

The ADB recently opened an office in Rangoon, the commercial centre, and by August it plans to have three full-time staff in the country and a second official working in the capital of Naypyitaw.

During his four-day visit, Stephen Groff, the ADB vice president for East Asia, Southeast Asia, and the Pacific, met with President Thein Sein, government ministers and opposition lawmakers during his four-day visit.

“There is huge potential in the country,” he said. “They have got abundant energy resources. They have abundant renewable energy resources. But it is largely at the moment untapped potential. Quite a bit needs to be done on the part of basic capacity development, institution strengthening.”

“I left this visit of four days with a real sense that across the board all of the people I spoke to are very engaged in the reform process, are very keen to see it through," Groff told the news agency.

In Bangkok on Sunday, Groff warned that Burma could face unrest because of its high poverty rage, saying nearly three-quarters of the people in Chin State, roughly half in Rakhine State, and a third in eastern Shan State are classified as poor.

 “You have to address the regional differences in poverty and economic growth,” said Groff. Lifting up the poor will be a “daunting” task, but he said there are reasons for optimism. Investments in agricultural production and farmers’ access to new markets inside Burma and overseas could lift many millions out of poverty in the medium-term, he said, according to wire reports.

“The needs are immense but there are rays of light... rural areas need to be connected to the rest of the country and the rest of the world,” he said, noting Burma is already the world’s second largest exporter of pulses.

He said President Thein Sein told him at a meeting last week that the agriculture-dependent country lacks basics such as a regular supply of seeds, leaving future harvests vulnerable to natural disasters.

“Even if the economy grows at 5-6 per cent a year, it’ll take 30 years to reach Thailand’s current level,” said Groff. “It’s a generation that we are talking about... we’re not going to see change in 10-15 years.”

Any loans would have to be approved by the member-nations of the ADB.

The ADB says Burma's per capita income is about $715 per person, and about 26 per cent of the people live below the poverty line on less than $1.25 per day.

Since its founding in 1966, the ADB has helped member nations through investment in infrastructure, health care services, financial and public administration systems, or to better manage their natural resources.

The main devices for assistance are loans, grants, policy dialogue, technical assistance and equity investments.

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