The World Bank and the International Monetary Fund (IMF) were both created at the 1944 Bretton Woods Conference. The World Bank’s mandate is to lend to developing countries to fund capital programs to alleviate poverty. The IMF, an organisation of almost 200 countries, helps alleviate problems among member countries. Since the onset of the global financial crisis in 2008, the IMF has taken part in rescues of countries such as Greece.
World Bank grants US$245m in aid for Myanmar
Reuters in Washington
The World Bank on Friday earmarked US$245 million in credit and grant funding for Myanmar under an 18-month work plan, the first lending to the southeast Asian nation in 25 years and another sign the country is opening up after years of military rule.
The interim country strategy, endorsed by the World Bank board at a meeting in Washington, will guide the institution’s work in Myanmar, also known as Burma. The bank also approved an US$80 million grant for community-driven rural projects.
Pamela Cox, World Bank vice president for East Asia and the Pacific, said another US$165 million will be made available to Myanmar once the country has cleared its overdue debt to Bank, whi ch totals roughly US$400 million.
Talks on how the US$165 million will be allocated will take place in coming months, she said.
“Based on the strategy we are stepping up our support for reforms we want to target to creating opportunities for all the people of Myanmar, especially the poor and vulnerable,” Cox told reporters on a conference call.
Meanwhile, a spokesperson for the International Monetary Fund said it will send a mission to Myanmar in early November for talks with Myanmar on a possible staff-monitored program.
The programme will not include funding but will help Myanmar’s efforts to deal with its debts to the Paris Club of creditors.
After five decades of brutal junta rule, Myanmar has stunned the world with rapid economic and democratic reforms, which has led to an easing of sanctions imposed by the United States and European Union to encourage further reforms.
Myanmar’s pariah image has been transformed by the release from house arrest of Aung San Suu Kyi, the 1991 Nobel Peace Prize winner, who in September visited the United States where she received the US Congressional Gold Medal. She has urged the United States to ease sanctions to support Myanmar’s reform process.
It is Asia’s second-poorest country, but as it opens up its economy, at stake is influence in one of Asia’s last frontier markets rich in natural and other resources.
“I am heartened by the reforms that have been taking place in Myanmar and encourage the government to continue to push forward with their efforts,” World Bank President Jim Yong Kim said in a statement.
The World Bank’s strategy will focus on helping Myanmar improve economic governance and create conditions the country needs for growth and job creation. It will hone in on three main areas: the budget and how public money is spent, regulatory reform to boost transparency, and private sector development.
In addition, the World Bank is involved in analytical studies that include a financial accountability assessment, a public expenditure review and an investment climate evaluation.
Cox said the World Bank’s efforts would try to shore up international confidence in Myanmar’s reform efforts.
The country is just opening up to the world after nearly 50 years of military rule, with international investors lining up to tap its vast resources. Asian firms, especially from China, Thailand and India, have dominated foreign investment in Myanmar’s oil and gas sector, although Chevron and Total also operate there.
“Going forward one of the most important things to do is to establish that there is transparency,” Cox said, noting that the government had taken steps to publish its budget earlier this year.
The government has also signed up for the Extractive Industries Transparency Initiative (EITI), an international scheme that helps developing countries better manage their natural resource wealth.