Social services


World Bank’s Burma spending spree

27 February 2014

Used with the permission of Radio Free Asia

After its prolonged absence from Burma (also known as Myanmar) the World Bank has been making up for lost time (see Observer Winter 2014, Update 84, 82.) During a late January visit Bank president Jim Yong Kim outlined a $2 billion “multi-year” package aimed at improving “access to energy and health care for poor people”.  $200 million of International Development Association (IDA, the Bank’s low income-country arm) funding was set aside for meeting the goal of universal health coverage by 2030, whilst $1 billion of the package, which includes International Financial Corporation (IFC, the Bank’s private sector arm) funding was allocated for electricity.

Alongside a press release quoting that over 70 per cent of people in Burma do not have access to reliable electricity Kim declared end January that “electricity helps bring an end to poverty”.  He also confirmed that the Bank will pursue private investments, and “public-private joint ventures for large new power stations”. The Bank’s investment comes on the back of a $140 million World Bank loan for a gas power plant refurbishment, agreed in October 2013 (see Observer Winter 2014) $60 million loan from the Asian Development Bank (ADB), announced in December 2013.

Details emerged end February of the IFC’s plans to transform the country’s power supply into what the Wall Street Journal described as a “corporate entity” in which the IFC would take “an equity stake”. Karin Finkelston, IFC vice president for Asia-Pacific, said:“A big part of our goal is to bring in private sector partners”. She confirmed that one of the project aims was to turn the Yangon City Electricity Supply Board, one of the city’s largest power distributors into a “”sustainable, self-financing institution.”

“A big part of our goal is to bring in private sector partners" - Karin Finkelston, IFC vice president for Asia-Pacific

The energy sector reforms, linked to unaffordable price rises, remains heavily controversial. In mid-November the government announced it was pressing ahead with planned reforms which would incur a 43 per cent increase to household bills (see Observer Winter 2014) however, in a concession to protesters it delayed the price rises until the 2014-15 fiscal year. According to the Myanmar Times in mid February the reforms have been subject to further parliamentary delays, officially to allow the president to comment, “based on suggestions from the World Bank”; unofficially a senior government source said: “The two ministries cannot negotiate [a solution] on matters related to electricity charges”.  The ADB, itself an interested partner,  has weighed in:  “In order to ensure the financial viability of the power sector … either tariff rates need to be increased, or even greater government subsidies, paid for by taxpayers, will be required,” Jong-Inn Kim, lead energy specialist at the ADB, told the Diplomat international magazine end January. Financial viability may come at the expense of affordability for poor people.

Telecoms controversy

Bank investment in Burma’s telecoms sector has also proved divisive. A $31.5 million IDA loan, approved by the board in early February,  aims to “expand quality mobile phone access and affordable communications” and develop an e-government portal for citizens to conduct transactions including “provid[ing] … feedback about poor service delivery or incidents of corruption”.  Civil rights groups are increasingly concerned about potential human rights violations by the project. An end January letter to the Bank, signed by over 60 civil society groups from Burma, accused the Bank of choosing “to ignore … fundamental issues of privacy, human rights, and surveillance” and holding a consultation process which was a “disappointment”. During “one brief and hastily scheduled meeting” in November 2013, groups were told that the serious concerns identified by the Bank itself in October 2013, that Burma “presently does not have explicit privacy, right to information or cybercrime legislation”, were “secondary concerns” which will not be addressed in the telecoms project.  The letter went on to warn that “the World Bank has downplayed the impacts of moving international service operators into rural, ethnic areas” in the face of “Burma’s pervasive business and land corruption, and ongoing ethnic conflict”.

Additional projects in the Bank’s pipeline include a $30 million loan to modernise Burma’s public financial management, an $80 million loan for the Ministry for Education to fund cash stipends and scholarships in schools, along with a $80 million loan for a luxury Yangon hotel and apartments (see Bulletin Feb 2013). Civil society groups have accused the Bank of neglecting to consult with community groups and civil society to establish their real needs and priorities. Khin Omar from Thailand-based NGO the Burma Partnership commented:  “The Burma government still spends a disproportionate amount of its annual budget on its military at the expense of health and education. The World Bank … must consult widely with civil society and affected communities and follow its own safeguard policies. Otherwise it potentially risks legitimising the Burma government’s debilitating and counterproductive policy of prioritising military offensives over the dire need for improved health and education for its own people”.