The World Bank on Wednesday pledged $85 million in development grants to Myanmar and assistance for the former pariah state to clear its arrears as part of efforts to support political reforms.
The announcement came as the World Bank and the Manila-based Asian Development Bank both opened offices in the impoverished country, which is emerging from decades of military rule under a new reformist government.
“We are committed to eradicating poverty and the new office opening in Myanmar will allow us to reach some of the poorest people in East Asia,” World Bank president Jim Yong Kim said in a statement.
“They have been cut off from the global economy for too long and it’s very important that they receive real benefits from the government’s reforms.”
The World Bank froze its Yangon program in 1987 after the country, then known as Burma, stopped making payments on its debt to the bank.
A hurdle for the resumption of aid had been how to deal with the unpaid money, including arrears of almost $400 million owed to the World Bank.
But the issue has been resolved and Myanmar will receive a bridging loan to help it to clear the arrears, a senior official at the Washington-based multilateral lender told a news conference in Yangon.
“We are not forgiving the debt. We are just clearing the back interest payments. Then they’ll start repaying it again,” said the World Bank vice president for East Asia and the Pacific, Pamela Cox.
The new grants will go towards schemes that will allow communities to decide whether to invest in schools, roads, water or other projects, she said.
Myanmar President Thein Sein has overseen a series of dramatic reforms since taking office last year, including the release of political prisoners and the election of Nobel Peace Prize winner Aung San Suu Kyi to parliament.