Just a few years ago, Myanmar was isolated, politically and economically, from the rest of the world. Now, it is opening up and growing strongly, but it faces challenges, including access to electricity – more than 70% of the population has no access.
“Myanmar’s potential for growth is huge,” World Bank Group President Jim Yong Kim said last week at an event at the United States Chamber of Commerce to interest the business community in the Bank Group’s work. But Myanmar needs to expand access to energy to lock in a “democracy dividend” so the country can continue to grow, Kim said.
Kim was speaking to companies whose resources and know-how could help countries like Myanmar. In the post-financial crisis world, private sector investment in international development has been on the wane, and access to finance has become difficult, especially for initiatives in countries perceived as risky.
Closing big infrastructure gaps in poor and middle-income countries will cost an extra $1 trillion a year through 2020, according to Bank Group estimates. Official development assistance (ODA) from organizations like the Bank Group amounts to only about $125 billion a year.
“There is no way ODA is going to be anywhere near adequate,” said Kim. “If you have high aspirations for poor people in the world, you have no choice but to embrace the private sector.”
To that end, the World Bank Group is reaching out to the private sector as part of an effort to achieve two goals endorsed by the Bank’s shareholders this year: End extreme poverty by 2030, and share prosperity by boosting incomes of the bottom 40% in every developing country.
Kim took these messages to the Chamber of Commerce, where CEO Tom Donahue said the Bank and the business community could “advance a common good together.”
“For us, it’s not just an opportunity to develop new markets for our products and services, but to ensure that millions of people are lifted out of poverty, can live up to their full potential, and contribute to global growth, which we badly need,” said Donahue.
Some 1.2 billion people in the world don’t have electricity, at least 780 million are without clean water, and 2.5 billion don’t have basic sanitation. It’s a situation that costs thousands of children’s lives every day, and billions of dollars in economic losses every year.
Kim was joined at the U.S. Chamber by IFC Executive Vice President and CEO Jin-Yong Cai, of the Bank Group’s private sector arm, and Keiko Honda, executive vice president of the Multilateral Investment Guarantee Agency (MIGA), which provides political risk insurance and credit enhancement products.
Under a new organizational strategy, the three Bank Group heads will work more closely together to combine grants and concessional finance, private sector business investment, and investment guarantees to leverage financing, attract investment, spur growth and cut poverty in developing countries.