World Bank and Asian Development Bank Freeze Myanmar Funds at Shun Junta | Voice of America
KUALA LUMPUR, MALAYSIA – Steps taken by the World Bank and the Asian Development Bank to freeze funds destined for Myanmar after the coup could worsen the situation for many vulnerable communities, even as lenders seek ways to prosecute some projects without the government, according to analysts and experts.
The World Bank said on February 19 that it was freezing spending in Myanmar “as we closely monitor and assess the situation.” The AfDB followed suit on March 10, suspending new contracts and funds for existing public sector projects.
Together, the institutions have suspended hundreds of millions of dollars in aid to Myanmar to avoid working with the country’s new military junta, which has gunned down more than 400 people since taking power on February 1 to quell protests, according to local media and activists.
Count the cost
Losing the average $ 500 to 600 million to the two affected banks in Myanmar each year alone will not cripple the country’s $ 76 billion economy, said Bryan Tse, country analyst for the Economist Intelligence Unit and former consultant specializing in international development projects.
However, much of the work they fund has a disproportionate impact on the communities they target, he added, from malaria treatment in the south to harm reduction programs for drug addicts in the north and to village agricultural projects across the country.
“If these projects are put on hold for an extended period of time, it would have an impact on the well-being of people, and these are things that are not necessarily visible in overall GDP. [gross domestic product] numbers, ”Tse said.
“If you are part of this community, then there will be a direct impact. So at the end of the day, it’s not necessarily the economy at large, but the people, especially the vulnerable population, who will suffer the most. “
Their projects are also often the kind that the private sector or the state are unlikely to take over on their own, Tse added.
“These are not the kind of populations that would generate a lot of income for private companies, or it might not even be worth the government to do,” he said. “This is where a lot of these development organizations come in.
Their grants and loans also cover large infrastructure projects, from highways to power grids.
The banks haven’t said exactly how much money is on hold.
The World Bank declined to give details and referred VOA to its February 19 statement, which offered no numbers or other details. AfDB also did not provide figures to VOA.
According to its website, the World Bank has 24 active projects in Myanmar with a combined value of $ 2.73 billion and another 13 with a value of $ 1.68 billion in preparation. The AfDB claims to have committed $ 3.57 billion to Myanmar in the years to the end of 2019, with 99 projects active or approved in February and 10 more planned.
Moe Thuzar, a Burmese analyst for the Institute for Southeast Asian Studies in Singapore, said banks will try to continue projects where they can find ways to bypass the military government.
In his statement, the world Bank said it was stepping up efforts to monitor projects already underway to ensure compliance with the group’s policies, while the ADB’s announcement left open the possibility of continuing private sector programs.
“They are not stopping projects that would affect the lives of communities, grassroots, people across the country in these difficult times and where I think direct delivery or assistance can be done without necessarily having to [to work with] entities that claim to represent the government as it is now, ”said Moe Thuzar.
“It is about the principle” do no harm “, which is really not to let any action taken by the banks, by these financial institutions, [have] no negative or unfavorable consequences on the population, ”she added.
However, as most grants and loans from banks go to, or at least through government agencies, many of their projects are sure to come to a halt, said Jared Bissinger, a development economist who has worked as consultant for the World Bank, United Nations and other organizations in Myanmar.
While healthcare projects may lend themselves to new partnerships with private clinics and independent charities that can help them continue to operate, others do not.
“For a lot of what they’re doing, it’s going to be very difficult, if not impossible,” Bissinger said. “You are not going to work on the national electrification network without the government; it is simply not possible.
Moe Thuzar said strikes at local banks, which are part of a national civil disobedience movement against the junta, will make it difficult to send money to anyone in Myanmar, the government or elsewhere. She said local charities were also under increased scrutiny by authorities for overseas ties, making any activity with even a hint of resistance to the new regime risky.
Earlier this month, the junta arrested a local employee of the Open Society Foundation, a US-based philanthropic group that defends democracy and human rights around the world. State media claimed the group broke money transfer rules, which the group denies.
The donor dilemma
The coup also risks derailing donor plans to help Myanmar tackle the COVID-19 pandemic, which has hit the country harder than most in Southeast Asia.
Both the World Bank and the AfDB had committed tens of millions of dollars to the effort before the coup.
“It’s a no-win situation,” Bissinger said.
“The World Bank simply cannot continue to work with this military-controlled government and therefore implicitly support this government,” he said. “But at the same time, by not doing that, yes, it’s going to interfere with plans to tackle the COVID pandemic. So that really puts organizations like the bank in a very difficult position. “
The Burmese military says it took power because the country’s civilian government failed to respond to its allegations of widespread fraud in last year’s general election, which the winner’s National League for Democracy party Nobel Prize winner Aung San Suu Kyi had won in a landslide. Local and international election observers raised concerns about the poll, but said the results overall reflected the will of the people.
The UN, local media and nongovernmental groups say police and soldiers have killed hundreds and arrested thousands since the coup in an unsuccessful attempt to crush almost daily protests and strikes. The United States, the European Union and others have imposed sanctions on top generals and some of their business interests in response.