The Asian Development Bank (ABD) has brought Myanmar back on its radar by resuming donor aid to assist the “new chapter” of the re-emergent nation citing improvements in governance and the financial sector.
The $512 million loan is the first issued by the ADB to Myanmar in 30 years and will target banking services, ultimately leading to other major investments in road, energy, irrigation and education projects.
The developmental bank, headquartered in Manila, the Philippines, has chosen to re-enter the country just after the government conducted its first ever study on unemployment, concluding that Myanmar suffers from an astounding 37 per cent unemployment rate with an average of 26 per cent of the population living in poverty.
Rural areas in particular are vulnerable due to a lack of infrastructure, restrictions on land usage, poorly developed support services. The government-led study found the highest poverty rates in Chin State (73 per cent), Rakhine State (44 per cent) and Shan State (33 per cent).
The new loan will address the woes of these states and other impoverished rural areas by seeing that farmers have access to financial services and that banking in general becomes more available.
According to the ADB, their resumption of assistance will initially work towards making Myanmar’s economy more competitive by “focusing on improved public finance, trade, investment, small and medium-sized enterprises, and financial sector development, building on significant measures the government has already taken, including major reforms to its central bank and trade and investment liberalisation.”
The ADB’s loan was made possible through a bridge financing deal made with Japan Bank for International Cooperation (JBIC) on January 17, 2013.