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The World Bank announced Thursday it will open an office in Burma in June, a quarter century after it shut its aid program down as the country fell under the harsh rule of a military junta.
Pamela Cox, vice president for East Asia and the Pacific, said the bank would staff the office in Rangoon with a new country manager and begin collecting the economic data needed to support a new aid program for the impoverished country.
But another key priority will be to sort out how to handle Burma’s hundreds of millions of dollars’ worth of unpaid debts to the World Bank and other development lenders, said Cox.
“Our primary goal is to help the people of Myanmar,” she said.
“This is a country which has been closed to the outside world for decades – so we’re now preparing a strategy to guide our work with the government to improve services for the people – and assist in tackling the country’s development challenges.”
However, she added, “Before we can launch a full-fledged program, we would need to clear our arrears.”
The development lender will begin talks with other aid donors to Burma to determine how to best deal with debts left unpaid from previous programs: $393 million to the World Bank, some $500 million to the Asian Development Bank, and others.
The World Bank froze its Rangoon program in 1987 after the country stopped making payments on its debt to the bank.
The move comes after the EU on Monday suspended a wide range of trade, economic and individual sanctions against Burma in response to moves to open up the government and institute democratic reforms.
Other countries have also moved to drop or reel back sanctions, but the United States has yet to do so.
Cox said the bank does not want to get out ahead of the international view of whether Burma’s reforms will stick.
“We also realize that there are risks. We will move with the consensus of other key stakeholders.”
“I think the mood of the whole development community is that we have measured progress,” she said.
“We are not linked to sanctions per se. We are linked more to the fact that we need to get basic data and knowledge.”
Cox will travel to Burma in June with a team including representatives of the World Bank’s private-sector investment arms, including the International Financial Corp., for talks with the authorities “to get an assessment of what needs to be done.”
“We need to understand what are the development needs, what are the priorities.”
“What we want to focus on are issues around poverty, around creating jobs, around livelihoods… the sorts of things that we can do as development partners to help kick-start higher incomes for local people, so that they receive some of the benefits of the reform measures that their government is undertaking.”