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I NTERNATIONAL F INANCIAL I NSTITUTIONS IN M YANMAR ’ S D EMOCRATIC R EFORM Yin Myo Thu Professor Department of International Relations University of Yangon.

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Presentation on theme: "I NTERNATIONAL F INANCIAL I NSTITUTIONS IN M YANMAR ’ S D EMOCRATIC R EFORM Yin Myo Thu Professor Department of International Relations University of Yangon."— Presentation transcript:

1 I NTERNATIONAL F INANCIAL I NSTITUTIONS IN M YANMAR ’ S D EMOCRATIC R EFORM Yin Myo Thu Professor Department of International Relations University of Yangon 18 February 2014

2 CONTENTS 1. Introduction 2. New Myanmar Government’s National Development Strategy, Policies & Duties 3. International Financial Institutions in Myanmar Democratic Reform – IMF, World Bank & ADB 4. Paris Club 5. Japan Fund for Poverty Reduction (JFPR) 6. Conclusion

3 INTRODUCTION  Domestic political development as reflection to international environment  Domestic Political Development & International and regional financial institutions  Technical assistance, debt relief & debt cancellation in increasing reform momentum  Critical Questions  New Myanmar Government & policy on national development  Major financial institutions on Myanmar reform process  Risky factors in financial assistance

4 N EW M YANMAR G OVERNMENT ’ S N ATIONAL D EVELOPMENT S TRATEGY, P OLICIES & D UTIES  Myanmar in International arena – Myanmar Spring  Trial and error methods in internal financial Organizations  Myanmar community and reform process - nation building, state building & peace building  Two Wishes of People  To live in peace  To develop national economy  National Development Strategy  Development for all works of life  1 st Reform – Financial Reform as priority together with information technology & transportation

5 C ONTINUED N EW M YANMAR G OVERNMENT ’ S N ATIONAL D EVELOPMENT S TRATEGY, P OLICIES & D UTIES  Three Major Duties on National Development  Nation’s transition, building of new nation & improvement of nation as a whole  Three National Development Policies  Economically, socially & economically sustained development policy National Development & International Assistance  National Development & International Assistance  Capital investment & technology as underlying factors for national development  Financial reform as priority area

6 C ONTINUED N EW M YANMAR G OVERNMENT ’ S N ATIONAL D EVELOPMENT S TRATEGY, P OLICIES & D UTIES  President’s remark on importance of international assistance in democratic transition “ Investment and assistance of one dollar in Myanmar by the international community …for the flourishing of democracy and the interest of Myanmar people. So the international community is urged to extend a helping hand to Myanmar … so that our country with democracy still in its infancy will not collapse”.

7 IMF, W ORLD B ANK & ADB IN M YANMAR D EMOCRATIC R EFORM  Domestic political development as signal to resilient country  Governance of IMF  IMF Regime in HIPCs  Voting Share of IMF or Bank as legacy of succession in the Fund & the Bank  Before 2010 Myanmar – IMF Relations  US & EU sanction  Two Major reasons of the Bank & IMF in delaying development efforts  Deteriorated Relations between Myanmar and the fund

8 C ONTINUED.. IMF, W ORLD B ANK & ADB IN M YANMAR D EMOCRATIC R EFORM  2004 IMF Review & Two IMF Investigation Missions  2010 Multiparty General Election as significant Turning point in history  Abolition of multiple exchange rates  Private banks in foreign exchange transitions  CBM Law & Japan’s Daiwa Securities Group in  IMF in Myanmar Socio-economic Reform  Foundation for continued macroeconomic stability  IMF Mission Reports and Joint Assessments

9 C ONTINUED.. IMF, W ORLD B ANK & ADB IN M YANMAR D EMOCRATIC R EFORM  Importance of financial organizations in financial market & poverty alleviation ( ) “ While encouraging the promotion of the private sector in economy,.. Changes and reforms are also taking place in collaboration with international organizations for the flourishing of capital market and financial market as well as for the emergence of conglomerates.”  IMF Remarks on Myanmar Socio-economic Development  Out of reach to meet requirement  Myanmar as Asia next dynamic economic force

10 C ONTINUED.. IMF, W ORLD B ANK & ADB IN M YANMAR D EMOCRATIC R EFORM  Financial liberalization achievement within 30 moths  Financial & monetary stability as national development plans  National Reform Leading Committee & 11 Work Committees  Government’s seven tasks for socio-economic development  Legislative Branch on Financial Liberalization  CBM Law & Micro Finance Mechanism by Government’s ministries, NGOs & INGOs  Micro Finance Activities (4 major ministries in Micro Finance

11 C ONTINUED.. IMF, W ORLD B ANK & ADB IN M YANMAR D EMOCRATIC R EFORM  World Bank Governance  IBRD in comprehensive risk management framework  IDA Credit of the World Bank  IDA in world’s poorest countries  2013 Telecommunication Law & international telecommunication companies (Ooreedoo & Telenor)  World Bank Projects in Myanmar  World Bank Projects in Myanmar –  Integrated Approach to the Development of ICT Sector  MDRI for MDGs  World Bank in eGovernment  US $ 31.5 million credit in support of MPT & ICT sector

12 T ABLE 2 T OTAL A MOUNT OF THE W ORLD B ANK L OANS, C REDIT AND G RANT TO M YANMAR StatusIBRCIDA CreditIDA GrantTotal Original Principal33,350, ,383,950, ,000, ,497,300,000 Cancellation226, ,969, ,195, Disbursed33,123, ,172,417, ,822, ,208,364, Undisbursed ,066, ,855, ,922,740. Repaid30,378, ,013, ,392, Repaid by Third Party2,744, ,744, Due ,829, ,829, Exchange Adjustment0000 Borrower Obligation0850,829,

13  World Bank in Water Supply Management  Water supply as priority for national economic development  The Netherlands as a development cooperation partnership for water supply  ADB Governance  ADB Experts in studying prediction on county- by-country basis  ADB Seminars, Workshops and Conferences in Myanmar for sustainable environmental conservation  ADB in Myanmar Country Safeguard System (CSS)

14 C ONTINUED.. IMF, W ORLD B ANK & ADB IN M YANMAR D EMOCRATIC R EFORM  The Paris Club  Official major forum – to renegotiate official sector debts  Paris Club Treatment – Reduction or Renegotiation of a developing countries  Nature and Characteristic of Paris Club  International credibility in national development project  Debt Cancellation and Restructuring – Debt SWAP Agreement  US as key member of Paris Club (HIV/AIDS) under USAID

15 J APAN ’ S F UND FOR P OVERTY R EDUCTION (JFPR)  Tokyo’s Policy in SEA  Government of Japan’s Debt Relief Measure on Myanmar ( )  National Planning as cooperating agency  ODA and Japan in developing countries – Japan’s Yen Loan, Debt Relief, short term and long term loan

16 J APAN ’ S F UND FOR P OVERTY R EDUCTION (JFPR)  Japan’s ODA in FY -  Japan’s ODA in FY - US $ 727,387 Yen Loan  Yen Loan – 63.2 Billion approved by Hluttaw SNGGP ProjectProject LocationGGP Amount (US$) 1Construction of BEHSKyindwe Village, Kanpetlet Township, Chin State153,379 2Construction of BEHSLetpaden Township, Ayeyarwady Region112,346 3 Construction of Agricultural Produce Transport Road NoeKoeYwar Ma &NoeKoe San Pya Villages, Loikaw Township, Kayah State 120,907 4Extension of Township HospitalPekhon Township, Kayah State218,912 5Construction of Bridge Pye Si Kyun Village, Nyaungdon Township, Ayeyarwady Region 121,840 Total GGP ( )727,387

17 I NTERNATIONAL T ECHNICAL A SSISTANCE TO M YANMAR (FY ) Country/ Organizations Type of Technical Assistance (including ODA & Debt Cancellation) Total Amount (In Donor Currency) Japan (JICA, SEAMEO-SERCA), Swiss AID, IFAD, SIDA Debt Relief Human Resource Water Supply ODA (Poverty alleviation, Electricity Supply, SEZ) JP ¥ billion JP ¥ 456 million JP ¥ 1900 million JP ¥ 51.5 billion US AID (IRI, The Carter Center) Sustainable Democracy Development Electoral Process Tilapia Fish Export to International Market US $ 150 EU Anti-Land Mine, IDP Relocation & PHC and Primary Education Euro 100 million ADB (Japan Fund for Poverty Reduction) High Way Construction (Yangon Region- Kayin State on East-West Corridor &Maubin - Pyapon Highway cum oversea underwater cable) US $ 1.5 million World Bank Capital Investment to SMEs (4 ministries - Education, Fisheries, Livestock Breeding & Agriculture ) Debt Cancellation on 25 January 2013 (Of US$ 892 million) US $ 60.4 million US $ 430million FranceDebt CancellationUS $ 550 million FRGBanking Service Training for Private BanksUS $ 45 million

18 C ONCLUSION  Myanmar democratic transition – right track with right direction  Strong support of international assistance as momentum of transition  Importance of Sovereign Wealth – own capacity, institutional logics & public confidence  Grant, loan and debt cancellation as breathing space conduction  Economic experts & scholar view on Myanmar – Myanmar as dynamic economic factor  Government responsibility in financial liberalization – tools to control credit flows, decision in quick relinquish from independent monetary policy  Awareness on Ponzi Financial Market  Negative impact of liberalization  International credibility in peddling democratic reform momentum  Remarks at the 22 nd WEF


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