NAYPYITAW — Union Parliament lawmakers on Tuesday complained that they could see no signs of progress on the projects paid for with the $700 million in foreign loans the government paid back over the past year.
“Of the annual $700 million repayment, we had to pay about $550 million in principal and interest to China alone — about 80 percent. But taking a look at the projects being implemented with the loans, there is nothing noticeable,” Lower House lawmaker Daw Khin San Hlaing said during discussion of a new report on the 2017-18 fiscal year debt.
She said two steel mills being run by the Ministry of Industry in Mandalay and Bago regions, with loans from the China Development Bank and the Export-Import Bank of China, were only adding to Myanmar’s debt burden, as were loans from the same banks being passed on to local farmers to set up cooperatives.
The previous Parliament approved $300 million in loans from the Export-Import Bank of China at 4.5 percent interest to fund the cooperatives.
Daw Khin San Hlaing, who opposed the loans, has urged the government to negotiate with Beijing to convince it to either cancel the debt or to reduce the interest rate and extend the repayment period.
According to the latest debt report, Myanmar had racked up some $4 billion in loans by 1988 and another $2.7 billion after that up to 2011, 97 percent of it from China. It says the government amassed another $3.1 billion in loans between 2011 and 2016 and $91 million more since then.
Myanmar currently owes a total $10 billion to international lenders, $4 billion of it to China.
“According to the report, it is clear in which period the burden was heaviest,” said Upper House lawmaker U Hla Hsan.
Lower House lawmaker Daw Thet Thet Khaing called on the government to adopt a clear borrowing policy.
“As most of the loans are long-term, the current government is enticed to take them because only its successors will have to pay the loans back,” she said.
Lawmakers also noted with concern that the kyat’s ongoing depreciation against the US dollar will make it increasingly costly for Myanmar to finance its long-term loans.
“As a result, the government might have to either increase taxes or reduce its budget,” Daw Thet Thet Khaing said.
Translated from Burmese by Thet Ko Ko.