17 - Prospects for a Policy of Engagement with Myanmar: A Multilateral Development Bank Perspective

Summary

The Asian Development Bank (ADB) is the region's most significant multilateral development bank (MDB), providing financing and expertise that supports projects and programmes across Southeast Asia. Since the mid-1980s, however, neither the ADB nor the World Bank has provided significant direct assistance to Myanmar.† Although it is in arrears to both banks — approximately US$450 million to the ADB and US$373 million to the World Bank — these arrears could be waived, as has been done for other countries, if a political consensus of donor countries was reached. The real reason for the lack of engagement stems from the sanctions regimes against Myanmar of the major Western donor countries, particularly the United States. Through its Greater Mekong Subregion (GMS) project, the ADB still provides small amounts of indirect technical assistance to non-government actors in Myanmar, but because of the sanctions, this is relatively insignificant compared with the direct assistance provided to other non-democratic GMS states such as Laos and Vietnam. Much of this indirect assistance relates to proposed “economic corridors” such as the East-West Economic Corridor (EWEC), a GMS Flagship Initiative that aims to facilitate trade and investment and reduce poverty across Myanmar, Thailand, Laos, and Vietnam (Asian Development Bank 2010d; 2010e).

While the MDBs and Western interests stay away, the economy of Myanmar has been dominated by Asian corporations, primarily from China and Thailand, investing in Myanmar's burgeoning cross-border energy market (Simpson 2013b). These investments are undertaken with little social or environmental assessment, making the ADB's procedures, such as its social and environmental safeguards (Asian Development Bank 2009b), virtuous in comparison. Any kind of investment in Myanmar is difficult, however, due to the challenging international and domestic political environments that face both private and public actors (Cheesman, Skidmore and Wilson 2010; Roberts 2010). The long-term effectiveness of MDBs can be dependent on the perceived integrity of their reputations as good institutional citizens, and as public organizations they face a large array of competing interests and elements that require consideration. In particular, they are judged on their ability to raise communities out of poverty.