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Yangon, Myanmar, February 5, 2013—The World Bank Group and Myanmar reinforced their commitment to grow the economy, create jobs and reduce poverty through accelerated reforms and a focus on energy infrastructure development during a three-day visit by a high-level delegation led by IFC Executive Vice President and CEO Jin-Yong Cai. Mr. Cai was joined by World Bank East Asia and the Pacific Vice President Axel van Trotsenburg, IFC Asia Pacific Vice President Karin Finkelston, and MIGA Vice President Michel Wormser. The delegation agreed to support Myanmar in meeting its urgent need for electric power and in improving the telecommunications and banking sectors.
“Connecting people and businesses to a reliable electricity grid is critical for Myanmar to realize its enormous social and economic potential,” said IFC Executive Vice President and CEO Jin-Yong Cai. “IFC is working with the government to establish a strategy that will promote investment in the power industry, and help deliver electricity in a reliable and sustainable way to all citizens.”
Improving electricity supply is a strategic development priority which requires large investments from both the public and private sectors in a country where only one in four people have access to reliable electricity.
“Turning on the lights in Myanmar will enable children to read at night, and encourage villagers to start new businesses which will lead to growth and jobs,” said World Bank East Asia and the Pacific Vice President Axel van Trotsenburg. “Sufficient, reliable and affordable electricity will help relieve poverty in rural areas and create opportunities for all.”
The World Bank Group delegation met with President Thein Sein, government ministers, members of parliament – including Daw Aung San Suu Kyi – as well as representatives of the private sector, civil society, academia and development institutions. Discussions focused on how the World Bank Group can support reforms aimed at improving the lives of all the people in Myanmar, especially the poor and vulnerable.
The World Bank’s recent East Asia and Pacific Economic Update shows Myanmar’s economy continued to accelerate in fiscal year 2011-2012 with GDP growth at 5.5 percent. Growth is expected to reach 6.3 percent in fiscal year 2012-2013.
Electricity demand is also growing fast with current supply 30 percent or more below demand. Myanmar needs to address strategic power sector reform to ensure sustainable access to electricity, which will be important to attract investment.
The power of electricity to transform lives is evident in Lao PDR and Vietnam where the World Bank Group has supported dramatic expansion of access – in Lao PDR more than 80 percent of citizens are connected and in Vietnam over 97 percent of citizens have access to power.
“Access to infrastructure and access to finance hold the key to economic development,” said IFC Asia Pacific Vice President Karin Finkelston. “Mobile phone connections, ports, and power lines create jobs and link people to markets, enabling the flow of goods and services. IFC is also working with ACLEDA Bank to bring sustainable microfinance to the people in Myanmar.”
“We can work with the government of Myanmar to provide risk guarantees to investors. This would help them obtain financing at competitive rates, speeding up project implementation,” said Multilateral Investment Guarantee Agency Vice President Michel Wormser.
Much work remains to realize Myanmar’s full potential, and the government needs to continue with bold reforms to put people first. The visit comes as the World Bank Group has started a full country program to support these reforms.
The World Bank is providing Myanmar with $165 million in zero-interest loans for its priority needs. This is in addition to a $80 million grant for community driven development that will enable villagers to improve schools, clinics, roads and water supply. The Bank is supporting the ongoing peace process, peace is critical to development success. The Bank is also working with the government to improve the management of its budget and public finances and discussions are ongoing on other priority areas for investment, including agriculture.
IFC, the member of the World Bank Group focused on private sector development in emerging markets, has invested $2 million in ACLEDA Bank Plc to help set up a new microfinance institution in Myanmar to provide loans to more than 200,000 people – mostly micro and small businesses run by women – by 2020. IFC also recently co-published the study “Microfinance in Myanmar – Sector Assessment,” highlighting the need to build-up the sector quickly as demand for microfinance in Myanmar exceeds supply four times. IFC is also working with the government and chambers of commerce to support the establishment of a business forum aimed at improving the business climate in the country.
Myanmar is now in discussions to become a member of the Multilateral Investment Guarantee Agency which provides risk guarantees to investors.
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.ifc.org, www.worldbank.org, and www.miga.org.