April 27, 2012 4:28 pm

Ban and Ashton pave way for Myanmar aid

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Visits to Myanmar this weekend by Lady Ashton, the EU foreign policy chief, and Ban Ki-moon, UN secretary-general, highlight the country’s rapidly growing diplomatic ties after decades of being shunned by the west.

In separate talks with leaders including President Thein Sein and key cabinet ministers, Lady Ashton and Mr Ban are expected to discuss plans that would vastly increase aid to Myanmar.

The meetings will take place days after the EU moved to suspend sanctions against Myanmar and come amid a stream of high-level visits. The German and South Korean foreign ministers will arrive in the coming days after their Italian counterpart, Giulio Terzi, left Myanmar on Friday.

The trips underscore moves by multilateral organisations and donor countries to plan for the resumption of large-scale assistance.

Officials from the UN and Japan have started organising an informal gathering of multilateral aid organisations and 20 to 30 bilateral donor countries, to be held in Myanmar in mid-May. This would be an informal, preliminary meeting to discuss how best to co-ordinate what one diplomat described as “the tidal wave of aid” heading towards the country.

The attendance list is not yet finalised, according to diplomats, but could include “non-traditional” donor countries from Asia and elsewhere – possibly including China and Thailand.

“Essentially we want to avoid Myanmar becoming another Cambodia,” said one western diplomat, referring to the lack of co-ordination among donors when Cambodia opened up in the early 1990s. “It makes sense for everyone to talk to each other now before concrete commitments are made.”

The World Bank confirmed on Friday that it would open an office in Yangon in June. The Asian Development Bank and International Monetary Fund are likely to follow in the coming months.

The World Bank, which is already planning technical missions to assess the country’s aid needs, stopped lending to Myanmar in the late 1980s after the country suspended debt repayments.

Re-establishing a full programme would require clearing Myanmar’s arrears of about $393m to the World Bank and about $500m to the ADB, said Pamela Cox, the World Bank’s regional vice-president for east Asia and the Pacific.

World Bank officials have ruled out debt forgiveness, but have privately said a debt restructuring is likely to take place on “extremely lenient terms”. These would be decided by the bank’s stakeholders and would be under the Paris Club, an informal framework under which donors can discuss debt issues.

Timeline: Myanmar

Myanmar timeline

This interactive timeline shows key events in Myanmar’s history since 1940

Japan, Myanmar’s main creditor, announced on the eve of a visit by Mr Thein Sein last week that it would forgive bilateral debt of $3.7bn. The president and accompanying ministers and business executives agreed some informal deals aimed at expanding bilateral business and government ties, including possibly co-operation on electricity projects and business ventures.

Meanwhile, some of the main potential donors, including Australia, the EU, Norway and the US, have moved to ease or suspend sanctions, and have started planning for a resumption of large-scale aid, largely in recognition of the government’s democratic reforms over the past year.

In February, the US, the World Bank’s largest shareholder, dropped its opposition to giving limited technical assistance to Myanmar, although a congressional vote will be required to enable Washington to support new lending.

Mr Ban is likely to raise the issue of assistance by UN agencies to Myanmar on his visit to Naypyidaw, the capital, from Sunday. Both he and Lady Ashton will also meet Aung San Suu Kyi, the opposition leader, who last week refused to take her parliamentary seat, won in the April 1 by-election.

Ms Suu Kyi is in negotiations with government and parliamentary leaders over her objection to the wording of an oath for new MPs.

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