TOKYO (Reuters) - The United States will support Myanmar’s efforts to fully restore relations with global lenders like the World Bank as long as the Southeast Asian nation pursues political and economic reforms, a senior U.S. Treasury official said on Saturday.
The U.S. Congress last month approved a bill that will allow the Obama administration to waive a ban on U.S. participation in providing development loans from the World Bank to Myanmar, also known as Burma.
In an interview with Reuters Television, U.S. Treasury Undersecretary for International Affairs, Lael Brainard, said the United States was in the beginning stages of lifting an import ban that would have huge benefits for Myanmar’s economy, which suffered under decades of military rule and isolation.
“As the reform process continues we will be able to do more,” Brainard said. “We think it’s very significant for the World Bank and the Asian Development Bank, as well as the International Monetary Fund, to be able to re-engage with Myanmar as they undertake these very significant reforms.”
Re-engaging with the global lenders will also open the door for creditor nations to write off Myanmar’s bilateral debts through the Paris Club, Brainard said.
While the United States is not part of that effort, Brainard said it was important that the donor community work together to ensure Myanmar proceeds with democratization.
Japan this week said it would start to waive most of Myanmar’s debt arrears of more than $6 billion as of January. Tokyo has also said it will help clear the arrears to the World Bank and Asian Development Bank that have prevented Myanmar from borrowing from the institutions.
“In the months ahead we will work closely with Japan and other major countries that have an interest in Burma’s reform process,” Brainard said.
“We are not among the bilateral lenders, but we think it is important for the donor community to work together and to match the action-for-action framework as they proceed on reforms.”
She said it was vital that everyone in Myanmar benefit from the changes. Foreign investors have rushed to tap one of Asia’s last frontier markets, a country that borders the booming economies of India, China and Southeast Asia with an abundance of oil, gas, timber and precious stones.
Added to that are cheap labor and opportunities in tourism, manufacturing, banking and heavy industry.
Brainard said U.S. companies were keen to invest in Myanmar, although more work needed to be done by the government to improve the environment for foreign businesses.
“They are going to need to work on transparency, governance, on their rule of law, so it is going to be the beginning of a process that will take some time,” she said, “but our business community is enthusiastic and, of course, we are very enthusiastic to be re-engaging with this part of the world.”
Separately, World Bank President Jim Yong Kim said the institution was working with the government to sort through Myanmar’s debt arrears to the Bank.
He said it was vital that a development plan for Myanmar be compiled by the government, which has a better grasp of its own needs for better services and infrastructure.
“We are working with them to get a full understanding of the nature of the arrears and we are very anxious to move forward together with other donors,” Kim said at the conclusion of IMF-World Bank meetings. “There is great concern about providing basic services to the people and so we will follow Myanmar’s lead.”