RANGOON — European Commission on Thursday announced a proposal for aid to Burma, which could see an extra US$121 million a year donated to the Southeast Asian nation’s development for the next seven years.
During a press conference in Rangoon—as part of this week’s high level meetings under the banner of the EU-Myanmar Task Force—Andris Piebalgs, the European Commission’s chief on development and cooperation, announced the main sectors the 28-nation bloc planned to fund from 2014 to 2020—rural development, education, governance and peace building.
He said the European Union was increasing its assistance to Burma in recognition of reforms that have taken place since a quasi-civilian government took power in 2011. Europe has in recent years canceled economic sanctions, instated preferential trade terms and given financial support to the Myanmar Peace Center, a government-linked body involved in solving Burma’s conflicts.
“The main purpose of the current program is on education and health,” said Piebalgs. “We plan to support about 600,000 children who are in the poorest primary schools across the country. Our development program also includes a government development plan, with particular focus on rural development, education, governance and supporting the peace process.”
Since 1996, the European Union has given a total of 300 million euros (US$413 million) in aid to Burma, and the bloc’s mission in Rangoon said last month that 70 million euros of projects were ongoing.
“Although the bilateral assistance budget hasn’t been formally approved by the European Parliament and the European Council, EU support could increase up to €90 million [$121 million] per year,” a statement released Thursday said. Over seven years, the that would mean Burma would get an extra $847 million in aid.
Piebalgs said that he is believed the aid will create jobs for the people of Burma. “Support for trade is one of the priorities of the EU’s development cooperation with Myanmar. This project is to inform and to build up skills that could raise the skills and also develop the enterprises of Myanmar. We hope this will welcome opportunities for a lot of Myanmar citizens,” he said.
Piebalgs also launched a 2 million euro ($2.7 million) grant to fund a three-year program titled SWITCH-SMART, which will target Burma’s small- and medium-sized enterprises (SME). The program will try to improve the environmental approach, accountability, corporate responsibility and transparency of Burmese firms, with a particular focus on the garment industry, he said.
“The objective is to improve the competitiveness of SME and the garment sector through more sustainable production and consumption within Myanmar,” said Khine Khine Nwe, local coordinator for coordination and implementation of the project.
The project will involve European organizations, including Sequa from Germany, the Sheffield Chamber of Commerce and Industry in the UK, the Confederation of German Textile and Fashion Industry, and the Association of Development Financing Institutions in Asia and the Pacific, as well as local business associations .
“We are working together with the [International Labor Organization] on labor standards at work places…. To have at least 10 showcase factories by the end of 2015, is our goal”, Khine Khine Nwe said.
The European Union’s “Everything But Arms” trade scheme means that Burmese goods get duty-free and quota-free access to European markets. Burma’s garment sector is expected to expand in coming years as manufacturers take advantage of the preferential terms, and low wages that suit the labor-intensive garment industry.