2010 Jan 29
January 29, 2010

World Bank holds aid talks with Burma

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The World Bank is considering providing Burma with assistance more than two decades after relations were frozen following the bloody suppression of the 1988 democracy movement .

James Adams, a senior World Bank official, told the Financial Times that officials from the bank and the Asian Development Bank had recently travelled to Burma to look at “possible future analytical work that could have a positive development impact for the people”.

But Mr Adams stressed that any co-operation with Burma would be limited to providing technical assistance on projects.

“The World Bank has not provided financing to the government of Myanmar since 1987 and we have made clear to government, shareholders and development partners that we have no intention of doing so under current circumstances,” said Mr Adams, the bank’s vice-president for east Asia and the Pacific.

While the scope of the co-operation is limited, however, the renewed engagement marks a significant step forward. The World Bank suspended loans in 1988 after soldiers killed thousands of demonstrators who were pushing for greater democracy.

The move follows an increase in engagement in the past year between US officials and the generals who run Burma.

After concluding that the previous US policy of isolation had not produced democratic reform in Burma, the Obama administration decided to re-establish high-level contacts and offered incentives if the junta took steps towards reform.

The European Union followed suit, pledging substantial funds for humanitarian assistance and a geographical extension of the assistance programme set up for victims of cyclone Nargis, which killed about 140,000 people in 2008.

However, so far there has been little sign of a softening of the line from the generals in the newly built capital of -Naypyidaw.

The junta has extended the house arrest of Aung San Suu Kyi , the opposition leader and Nobel peace laureate. Journalists, democracy activists and regime opponents continue to be imprisoned, and few analysts believe the elections due to be held this year will yield a democratic outcome.

One of the projects being discussed with the World Bank involves updating the country’s antiquated system of preparing its national accounts.

While the World Bank does not intend to provide any finance while the political repression continues in the country, the Burmese regime would need to solve another problem before it could receive financial assistance from the bank. The regime still owes $300m to the international financial institution.

“They understand clearly that, under our formal rules, we will not lend to a country until their arrears are cleared up,” the official said. –Tim Johnston in Bangkok, http://www.ft.com/intl/cms/s/0/3c509d3c-0c75-11df-a941-00144feabdc0.html#axzz1SXRITO4g