News / Asia

Lending Agencies Restart Burma Loan Programs

International lending agencies have agreed to restart loan programs for Burma after a 25-year break, rewarding that nation for reforms introduced since the end of a military dictatorship in 2011.
 
The Asian Development Bank and the World Bank said Monday that Burma's existing $900 million debt to the two agencies will be restructured, allowing them to offer additional loans in the future. 
 
Burma became ineligible for new development loans in 1987, when its then-military rulers stopped paying down existing debts. 
 
But, the reformist government that took office in 2011 received a $900 million loan from a Japanese development bank this month, enabling Burma to clear its debts to the two lending agencies. 
 
The two lenders said that move enabled them to offer $900 million in loans to Burma, so that it can repay its debt to the Japan Bank for International Cooperation. 
 
Asian Development Bank economist Kelly Bird said the restructured loan also will facilitate a resumption of work on developing the impoverished Burmese economy. 
 
"Over the next several months, we will be doing two things. ADB will be looking at what resources can be allocated to Myanmar. Secondly, we will develop our assistance program to build the capacity of authorities in economic policy. It also may include some projects focussing on infrastructure and agriculture," he said. 
 
Bird said the renewal of the lending program is a recognition of "wide-ranging" Burmese economic reforms in the past year. 
 
"They have introduced a new foreign investment law which has helped to open up opportunities for foreign investors. They are in the process of drafting amendments to the central bank law which would provide it with autonomy and lead to better macroeconomic stability. So they have got a number of these reforms that have been implemented," he said.
 
In a related move, an informal group of creditor nations agreed last Friday to cancel about $6 billion of Burmese debt in appreciation of what it called Burma's "strong commitment" to economic reforms. 
 
The canceled amount is half of the total debt owed by Burma to the 19 industrialized nations known as the Paris Club. The group said the remaining half of Burma's debt will be rescheduled over 15 years. 
 
Macquarie University analyst Sean Turnell said the renewal of the ADB and World Bank lending programs is a more significant step because it involves future loans to rebuild dilapidated Burmese infrastructure. 
 
"The cancelation of debts is not such an issue in that the old government of Burma just ignored them anyway, they were not repaying them. So, in a direct sense, it is not going to make too much of a difference. But of course symbolically and in terms of being embraced by the international community again, this is very significant," he said. 
 
A Burmese envoy to the Paris Club praised the debt cancellation as marking the start of a "new era" of cooperation with the industrialized nations. U Zaw Oo said Burma will devote resources made available by the move toward "development projects and poverty reduction programs."
 
Paris Club member Japan agreed to cancel $3 billion in Burmese debt, half of the group's total. 
 
Turnell said Japan has several motives for its generosity toward Burma, including commercial interests, with Japanese construction companies vying for infrastructure projects. 
 
"Also, Japan has an interesting relationship with Burma -- a sentimentality that goes back to the Second World War. There are many people in Japan who see their role as a bit of a mid-wife of Burma's independence. The final aspect though is strategic. Japan is involved in a big long-term struggle with China for influence throughout Southeast Asia. So this is also part of [Japan] sending that signal that they are close to Burma, and in that way, checking China, just a little bit," he said. 
 
The Paris Club said the cancellation of the $6 billion in Burmese debt will happen in two phases over several years. Turnell said Burma will be under pressure to make progress with economic reforms in order to qualify for the final phase of that debt relief.

VOA's Victor Beattie contributed to this report.

Michael Lipin

Michael covers international news for VOA on the web, radio and TV, specializing in the Middle East and East Asia Pacific. Follow him on Twitter @Michael_Lipin

You May Like

Multimedia Obama Defends Immigration Action

Obama says with his executive action on immigration, enforcement resources will be focused on 'felons, not families; criminals, not children' More

US-Led Airstrikes in Syria Kill Over 900: Monitoring Group

British-based Syrian Observatory for Human Rights says the toll includes more than 50 civilians, five of them women and eight of them children More

Report: Obama Broadens US Combat Role in Afghanistan

The New York Times says resident Barack Obama has signed a classified order extending the role of US troops in Afghanistan for another year More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Skateboard Defies Gravityi
X
November 21, 2014 5:07 AM
A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.

All About America

AppleAndroid