RANGOON—Burma’s Parliament has approved the government’s decision to borrow US$100 million from China, despite opposition from the National League for Democracy (NLD) and other parties.
Lawmakers from the ruling Union Solidarity and Development Party (USDP) and military-appointed MPs were among those who agreed on Thursday to approve the loan, which the government says will fund a cooperatives program that support farmers and the urban poor.
At a meeting last weekend at the Ministry of Cooperatives (MOC), President Thein Sein informed lawmakers that the government had already borrowed the money. He also set out the loan conditions and planned usage of the funds.
But despite Parliament’s approval, NLD lawmaker Phyo Min Thein expressed concern about the loan, saying its interest rate was higher than rates offered by other countries. Japan offers an interest rate at about 2 percent and European countries offer rates at about 2-3 percent, lawmakers said. China’s interest rate is up to about 4.5 percent.
Upper House lawmaker Phone Myint Aung, from the New National Democracy Party, agreed that the interest rate for the Chinese loan was high. “And this loan won’t really change the lives of farmers,” he added.
Lawmaker Tin Nwe Oo also opposed the loan, saying Burma was mired in debt and should not borrow money at such a high interest rate. She added that there had been no clear explanation about where the loan would be used.
“If we have to pay a high interest rate, even in the beginning, it’s taken for granted that farmers will have to pay higher interests if they borrow the money from the Ministry of Cooperatives.If they can’t repay their debts, those farmers will surely lose their land,” she said.
“The Minister for Cooperatives, Kyaw Hsan, said the ministry would increase its loans to farmers who regularly repay their debt. Tell me, how many times has the cooperatives system succeeded in our country?”
Minister Kyaw Hsan previously served as minister of information and was seen as a hardliner during his tenure at that ministry. He told Parliament that although the cooperatives system had failed in the past, he was taking charge with reforms that would move it in the right direction, as the country continues to transition from decades of military rule.
“Cooperatives systems are amazingly successful in foreign countries,” the minister said. “That’s the answer for us.”
China has reportedly offered to loan $600 million to Burma, but only $100 million has been approved so far.