Monday, November 19, 2012

Burma: Debt Relief and Democratization - Blog the Debt


Burma: Debt Relief and Democratization

By: Gianna Rendano

Today, President Obama became the first U.S. president to visit Burma (Myanmar).? On his visit, he met with President Thein Sein and opposition leader Aung San Suu Kyi and spoke about the nation?s progress while calling for more reform.? Just a month ago, at the IMF and World Bank annual meetings held in Tokyo, Japan, there was a sideline meeting with officials from the World Bank, IMF, Japan and the Asian Development Bank to discuss debt relief efforts for Burma. Though they did not decide on a specific course of action, they discussed Japan waiving up to $1 billion of Burma?s overdue loans sometime early next year.[i] ?Japan is Burma?s largest creditor and earlier this year Japan cancelled roughly 60% of Burma?s loans.[ii] ?The World Bank also recently announced a $60 million community development grant program to be put in place.[iii]

Burma has been experiencing transformations within its political, economic and social spheres, with the country in the process of democratization after a brutal dictatorship. The Burmese government has been increasing its transparency and has recently elected Aung San Suu Kyi to parliament. Suu Kyi is the leader of the democracy movement in Burma, the National League for Democracy, and was recently released from many years under house arrest for speaking out against the past dictatorship. Due in part to the election of Suu Kyi and Burma taking steps towards greater transparency, the United States recently revoked sanctions against the state, which allows Burma to receive new loans and opens the country for foreign investments.[iv]

Since Burma has been taking steps towards democracy, different financial institutions and states are able to give new loans to Burma. Though debt relief will have positive implications, there must be caution with regards to new loans and foreign investments received so the debt cycle does not continue. Local activists fear that the government might repeat history and use the loans for its self-interest instead of societal needs.[v] Burma may be transforming into a democracy but that does not mean it is a liberal state. The citizens of Burma have been ruled under a dictatorship for decades and the military still has a lot of power within the parliament today.[vi] Though Burma has presented evidence to the international community that they have been taking steps to increase transparency, this transparency is often not seen within the public sector. There should be caution because while democratization is a positive step forward, this process is a slow and fragile progression.

The continuation of Japan?s debt cancellation towards Burma will have short- and long-term effects; it will help improve infrastructure along with aiding the political, social and economic roads towards democracy. Burma has been labeled as the ?last frontier? by many different news outlets and statesmen, as the nation finally begins to open up.[vii] By having sanctions lifted and debt relief granted, Burma can now attract foreign investors, develop its economy and shed the image of being a pariah state.

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[i] Wallace, Rick. "Burma to Lose Debt Hurdle." News. The Australian, n.d. Web. ??????????? <http://www.theaustralian.com.au/news/world/burma-to-lose-debt-hurdle/story-e6frg6so-????? 1226493936360>.

[ii] Son, Johanna. "Donors Urged to Tread Carefully in Myanmar." Southeast Asia. Asia Times Online, n.d. ?? Web. <http://www.atimes.com/atimes/Southeast_Asia/NJ16Ae02.html>.

[iii] Wallace, Rick. "Burma to Lose Debt Hurdle." News. The Australian, n.d. Web. ??????????? <http://www.theaustralian.com.au/news/world/burma-to-lose-debt-hurdle/story-e6frg6so-????? 1226493936360>.

[iv] "Plan Would Eliminate Burma?s International Debt next Year." Mizzima, 11 Oct. 2012. Web. 23 Oct. ?????? 2012. <http://www.mizzima.com/business/8216-plan-would-eliminate-burmas-international-debt-? next-year.html>.

[v] Son, Johanna. "Donors Urged to Tread Carefully in Myanmar." Southeast Asia. Asia Times Online, n.d. ?? Web. <http://www.atimes.com/atimes/Southeast_Asia/NJ16Ae02.html>.

[vi] Son, Johanna. "Donors Urged to Tread Carefully in Myanmar." Southeast Asia. Asia Times Online, n.d. ? Web. <http://www.atimes.com/atimes/Southeast_Asia/NJ16Ae02.html>.

[vii] Wallace, Rick. "Burma to Lose Debt Hurdle." News. The Australian, n.d. Web. ??????????? <http://www.theaustralian.com.au/news/world/burma-to-lose-debt-hurdle/story-e6frg6so-????? 1226493936360>.

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Photo credit:?Jason Reed/Reuters

Source: http://jubileeusa.typepad.com/blog_the_debt/2012/11/burma-debt-relief-and-democratization.html

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