Yangon: The World Bank will provide a restructuring loan to help Myanmar clear $397 million in arrears by January, a senior official said on Wednesday, as the Washington-based development bank opened an office in the country and prepared to step up aid work there.
The World Bank has not made any loans to Myanmar since 1987 but is returning to the country, along with other big donors, after its former junta stepped aside in March 2011 and a quasi-civilian government embarked on political and economic reforms. Clearing the arrears is a condition for restarting loans.
“We have worked out a way to clear those arrears and we hope to do that by January,” said Pamela Cox, the World Bank’s vice-president for East Asia and the Pacific.
“We need to do it together with the Asian Development Bank (ADB); we’re working very closely with them on a common schedule,” she said during the opening of the office in Yangon. “I do want to emphasize we’re not forgiving the debt to Myanmar. We’re just clearing the back interest payments and Myanmar will resume paying its debts to the World Bank and the ADB,” she added.
Myanmar also owes nearly $500 million to the ADB, which has played a lead role in advising the government’s economic teams.
The International Monetary Fund is opening an office in neighboring Thailand aimed at providing technical assistance to Myanmar.
Paying off the loans and restoring aid flows is crucial for Myanmar, struggling after decades of army rule, trade-crippling sanctions and economic mismanagement.
Cox also said the World Bank was considering $85 million in grants for community-based projects, subject to approval by its board and shareholders.
The bank aimed to grant the money by October. (Reuters)
