Following its transition to democracy after over half a century of isolation under military rule, Myanmar is a clear “donor darling” with vast potential both for economic growth and development progress.
One suitor planning to win the hand (and heart) of the Southeast Asian nation is the United Kingdom, and the "marriage" could happen sooner than later, if recent calls to significantly increase official development assistance are heeded.
In a report on democracy and development in Myanmar released on Thursday, the International Development Committee of the House of Commons urged the U.K. Department for International Development to “promptly” raise U.K. ODA to Myanmar to £100 million ($166.3 million) from £62 million “to allow for what we believe to be necessary support for education, the peace process and parliamentary strengthening.”
However, there are fears that political and economic instability might undermine any development initiatives in the country — which member of parliament and committee chair Sir Malcolm Bruce acknowledged.
“Yes, some of [that aid] may not work and you need to be prepared to turn the tap off if you have to,” Sir Malcolm explained, arguing that the risk would be worth taking given Myanmar’s potential and the financial capability of DfID with its £11 billion annual budget.
Donors seeking opportunities
In January, World Bank President Jim Kim visited the capital Naypyidaw to pledge $2 billion in development assistance to the country, while ADB has ongoing energy, infrastructure, health, and education projects in different parts of the country.
DfID is currently one of the biggest bilateral donors to Myanmar, second only to Japan in 2012, according to data from the Organization for Economic Cooperation and Development, with more than half of all aid coursed through multi-donor funds. The agency also leads on donor coordination in the country.
“[Myanmar] presents a unique development opportunity ... [and it has] become a fashionable country for donors,” said the parliamentary review paper. “The situation [in the country] is rapidly changing so DfID needs to act flexibly.”
The report also highlighted the need to “seize the moment” — emphasizing the recommendation that DfID takes the risk on Myanmar. "[There is a] high return on acting now [with] a real prospect of graduating from international aid within a generation.”
The U.K. will also be eyeing up long-term economic returns to this resource-rich nation at the heart of booming Asia.
In the meantime, according to the review, the U.K. has an opportunity to contribute to the democratic development of the former military state, including through the delivery of more support for governance through British organizations, which — according to Sir Malcolm — could help promote the “Westminster brand.”
Despite the renewed interest from development agencies, many obstacles still remain in the way of the country’s pursuit of development progress, including governance, peace, and sustainability concerns, among others.
Myanmar, despite its achievements the past three years, remains desperately poor with a GDP per capita of about $800 and continues to struggle with a weak governance system, a fragile peace situation, and human rights violations.
For instance, the future of a Norwegian-led peace initiative in the border areas aimed at ensuring peace and stability between ethnic communities and armed groups is now hanging by a thread following lack of confidence and trust of these local communities to the peace process. Jim Kim, on the other hand, recently warned the government to get more serious about tackling corruption if it truly wants to meet development goals.
These issues can make or break development programs — something the British lower house has acknowledged, although at the same time MPs argue that “progress will not happen by standing back, adopting a cynical attitude to change."
“There is currently an opportunity to help bring about transformational change in [Myanmar],” the House of Commons said in the report.
Increasing aid to Myanmar, however, is met with contrasting views from the British aid community. Local NGO Burma Campaign U.K. warned that the government has overestimated reform progress in the Southeast Asian nation and should not engage at all with authorities in Myanmar. The IDC disagreed.
“I think the beginnings of real change are there,” Sir Malcolm said, adding that the right thing to do now is to “step in and help push [the change].”
The final decision — taken by DfID — may fuel a broader debate on the role of donors in politically sensitive contexts and disagreement is likely to persist on whether being cautious or being daring does more for development.
Although no detailed breakdown was given for the suggested increase in aid, IDC set out some priority actions, including:
1. Budget support and government capacity — The U.K. government has a conservative stance regarding direct funding to the Myanmar government, but IDC recommended that overlapping or “parallel systems of delivering basic services are not created and government capacity [be] enhanced” to ensure sustainability.
2. Donor coordination — Given Myanmar’s status as a donor darling, the number of donors, bilateral and multilateral, has increased dramatically, creating a semi-chaotic development environment with overlapping programs that waste resources. IDC suggested better coordination that involves the government as well as encouraging small development partners to pool resources in a multidonor trust fund.
3. Peace process — Ethnic conflicts remain active in Myanmar, displacing millions. IDC call for a stricter stance on pressuring the government for a more effective peace process with an increased aid appropriation.
4. Fixing the national census debacle — The national census planned for this year and funded by donors including DfID has sparked ethnic sensitivities from indigenous groups who have been fighting for recognition for a long time. IDC said DfID should take a more active stance in handling such issues sensitively, “without inflaming tensions”.
5. Governance — IDC urged DfID to be “more engaged in the political nature of [Myanmar’s] development” and “press for constitutional reform. We support DfID’s work to assist the peace process, improvements to public financial management and military reform.”
6. Health — Given that health comprises the bulk of U.K. aid to Myanmar — with positive assessment results — IDC said it “welcomes DfID’s spending on strengthening the health system. We recommend that even more emphasis be given to addressing drug resistant malaria in Burma, which threatens to spread to the rest of the world with the most serious consequences.”
7. Education — Currently, funding for education remains minimal. Given current needs, IDC recommended a significant increase with a major focus on teacher training to ensure sustainability.
Responding to the recommendations, Alan Duncan, U.K. minister of state for international development, said in a statement: “We are pleased the IDC supports our approach. Without doubt, we have an opportunity to deliver further transformational change and we will be working across government to make the most of this. We will give full consideration to the IDC's recommendations, while ensuring we deliver value for taxpayers' money in Burma and elsewhere.”
A detailed response from DfID is expected in May, and its Myanmar operational program is due for annual review during the summer.
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