Reaffirming support for reforms to improve the lives of the Burmese people, the World Bank on Thursday approved a new interim strategy that will focus on accelerating poverty reduction and cleared a US $80 million financial grant for the country.
“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,” the World Bank President Jim Yong Kim said after the strategy was approved by the institution’s board of directors.
Under the interim strategy that will guide the World Bank in Burma for the next 18 months, the Washington-headquartered financial institution will help the Naypyidaw government improve economic governance and create conditions for fiscal growth and social improvements.
This will be achieved through policy advice and technical assistance in three main areas of public financial management—regulatory reform, private sector development to promote broad-based economic growth and job creation.
“Our strategy has a strong focus on inclusive development and reforms that create real opportunities for all the people of Myanmar,” said Pamela Cox, World Bank East Asia and Pacific Regional vice-president.
“Transitions take time, but we are committed to working with all our partners to ensure that poor people start to feel the benefits of reforms quickly, especially through better services from the government,” she added.
The World Bank has an additional $165 million in loan assistance committed for Burma after it clears its $900 million in arrears to the World Bank and Asian Development Bank. Japan is helping that process, which is expected to be completed by the new year, claims Cox.
The World Bank opened an office in Burma’s commercial hub of Rangoon in August and is reengaging with the military dominated nation after a gap of two decades. This comes as President Thein Sein’s nominally civilian government undertakes economic and political reforms, shifting from a half-century of catastrophic junta rule that left it one of Asia’s most impoverished nations.
The current average annual income in Burma is estimated at between $600 and $800, with a quarter of the population living in poverty. Burma is ranked third from bottom of 182 nations in the nongovernment group Transparency International’s corruption perceptions index for 2011.
And activists remain concerned that as international trade sanctions are eased, cronies with connections to the former ruling military junta will be first to benefit from the influx of foreign funds.
“We hope to move ahead as part of a united global community to deliver solutions to address people’s most urgent development needs, especially in areas such as health, education and infrastructure, and we’ll also work to build up the private sector so jobs can be created,” said Jim Yong Kim.
The World Bank also approved an $80 million grant aimed at benefitting poor and vulnerable people. It aims to empower rural communities to choose investments they need most, such as roads, bridges, irrigation systems, schools, health clinics or local markets, the bank said in a statement.
The National Community Driven Development Project will operate in 15 townships—one in each state, region and Union territory—with poverty as the key criteria for selection. Under the project, the communities will elect representative councils that will identify priority needs, prepare development plans, design projects, contract materials and labor and transparently manage and report on the use of project funds, the bank said.
The Interim Strategy, which was developed through extensive consultations with different stakeholders, aims to build confidence in reforms by bringing visible benefits to local communities, and strengthening the role of civil society to engage with the government.
Observing that developing Burma’s private sector will be important to generate concrete benefits for the citizens of the country, the International Financial Corporation (IFC) Vice-President for Asia Pacific Karin Finkelston said the institution is seeking to improve access to finance in the country so that businesses can expand and hire workers.
The IFC is also working together with the World Bank in assessing Burma’s investment climate and infrastructure needs, with an initial focus on helping to connect people and businesses through better telecom services and providing reliable power that will help firms to thrive, she said.