BURMA, RENAMED Myanmar in 1989 by its military regime, is one of the poorest countries in the world after decades of oppressive rule and punishing sanctions, but if the process of political reform continues at the present rate, Burma is odds-on to be Asia’s next investment star.
The latest positive development for the southeast Asian nation is that the World Bank is opening a country office there and preparing €79 million in grants for community-driven development programmes, the first aid from the bank in 25 years.
The funds can be used to develop infrastructure, schools and other projects, the global lender said.
“We are committed to eradicating poverty and the new office opening in Myanmar will allow us to reach some of the poorest people in East Asia. They have been cut off from the global economy for too long and it’s very important that they receive real benefits from the government’s reforms,” World Bank president Jim Yong Kim said in a statement.
Denis O’Brien’s Digicel, which specialises in difficult emerging markets, has been here since 2010, just before President Thein Sein’s reforms were introduced, advising the MPT telecoms company.
Jim Rogers, co-founder of the Quantum Fund with George Soros, said recently he believes Burma to be “the best investment opportunity in the world”.
Burma has introduced political and financial reforms recently, including limited elections and freeing Nobel Peace Prize winner Aung San Suu Kyi after decades of house arrest and allowing her to stand in elections. These and other reforms are slowly persuading the international community it is time to lift its sanctions against Burma.
There is still a way to go, including freeing all political prisoners and ending border wars with ethnic minorities, and it will also take a long time to unravel the complex web of sanctions imposed on the country over the years, but the World Bank’s move is a major step towards opening up Burma.
This could mean new interest-free loans to Burma being issued from the start of 2013, followed by access to interest-free loans from the International Development Association, the World Bank’s fund for the poorest countries.
The World Bank will also help Burma to clear arrears of €322 million run up during a quarter-century of not making any payments.
“Actions in these areas will help the government attract responsible foreign investment, expand trade, manage its resources better and create more jobs and opportunities for people,” said Pamela Cox, the World Bank’s East Asia and Pacific region vice-president.
The bank’s private sector development unit, the International Finance Corporation (IFC), has started to make assessments in areas seen as critical to private sector growth, such as infrastructure, investment climate and access to finance.
“As we have witnessed in other economies in transition, the private sector plays a critical role in job creation and in providing the means for all to benefit from economic growth,” said Karin Finkelston, IFC vice-president for Asia Pacific.
“We are committed to helping the people of Myanmar in the reform process and to supporting the private sector to create jobs and opportunities for businesses to grow,” she said.
During a trip to Rangoon, Ms Cox and Ms Finkelston met Thein Sein and Aung San Suu Kyi, and other members of parliament. This was the first visit by senior leadership from the World Bank since the reform process began.
The next step for the bank is to come up with an interim strategy with the Burmese government and development partners ahead of a full country programme.
The bank has named Kanthan Shankar as country manager. He has previously worked in a number of conflict and post-conflict environments, including in East Timor, the West Bank, Gaza and Kosovo.
