New Delhi: The World Bank Group’s support for Myanmar’s economic and political transition will be marked by a strong focus on social inclusion, including in conflict-affected areas, under the new Country Partnership Framework (CPF) for Myanmar, which lasts from 2020 to 2023.
The new CPF, which was discussed by the World Bank Group’s Board of Executive Directors on May 12, focuses on three areas: building human capital and fostering peaceful communities, stimulating responsible private sector-led growth and inclusive economic opportunities, and enhancing the resilience of Myanmar to cope with natural disasters while ensuring that natural resources and the environment are managed sustainably.
Since 2011, Myanmar has transitioned to a civilian government and achieved significant economic growth and measurable improvements in social welfare. Poverty has almost halved, falling from 48 percent to 25 percent between 2005 and 2017. However, many parts of the population have yet to benefit from the gains made during this period. One-third of Myanmar’s townships remain affected by conflict. The crisis in Rakhine State, together with intensified conflict in other states, poses a serious threat to Myanmar’s goal of becoming “a peaceful and prosperous” nation.
“Myanmar will need to invest in all its people to maximize the benefits of economic growth and ensure a more equitable and stable future,” said Mariam Sherman, World Bank Country Director for Myanmar, Cambodia and Lao PDR. “Under the new partnership framework, we will support national reforms that are critical to the transition process, help build well-governed and capable institutions, and target our support to benefit poor and underserved parts of the country, including those affected by conflict.”
The COVID-19 pandemic also brings new challenges to Myanmar. Economic growth is now expected to decline sharply from 6.3 percent in 2018-2019 percent to 2 percent in 2019-20 with significant downside risks. While the economy is expected to regain momentum next year if the global pandemic is brought under control and global trade resumes, serious risks remain which could delay the country’s recovery.
“The economic impact of COVID-19 is expected to take a severe toll on Myanmar’s poor and vulnerable people who make up about half the workforce of the country’s garment and tourism industries and up to two thirds of workers in the agricultural sector,” said Yuan Xu, IFC Country Manager for Myanmar and Thailand. “With the impacts threatening people’s livelihoods, it’s all the more important to focus on responsible private sector led growth to generate jobs and inclusive economic opportunities for all the people of Myanmar.”
Under the CPF, IFC will aim to support inclusive growth and job creation by working with the private sector to help meet development challenges in areas such as infrastructure, agriculture, tourism and increasing people’s access to finance, which are critical for the future of small and medium sized enterprises.
The CPF has benefitted from extensive consultations with a wide range of stakeholders. Sixteen face-to-face consultations were held in seven States and Regions of Myanmar, as well as in the capital, Naypyitaw, and in Chiang Mai, Thailand, engaging 644 participants from national, state and region government and parliaments; development partners; international NGOs; civil society organizations; private sector representatives; and local community representatives, including internally displaced persons in Sittwe, Rakhine.
World Bank Group COVID-19 Response
The World Bank has provided a US$50 million loan for the Myanmar COVID-19 Emergency Response Project to help Myanmar fill a critical gap in its contingency plan to urgently increase hospital preparedness and surge capacity in order to reduce the spread of COVID-19, protect health workers, and minimize the severity of illness and associated deaths.
A grant of US$8 million of the Pandemic Emergency Financing Facility (PEF), created by the World Bank to provide financial support to IDA-eligible countries in case of major multi-country disease outbreaks, has been allocated to Myanmar to support surge response in the health sector, with special attention on benefiting the most vulnerable groups and communities in conflict affected areas.
Existing and upcoming World Bank projects in Health, Energy, Agriculture, Education and Community Development are under review to reallocate funds to Myanmar’s economic recovery from COVID-19.
Globally, IFC is providing US$8 billion in financing to help private companies affected by the pandemic to preserve jobs, with the response part of the World Bank Group’s $14 billion fast track financing package. IFC will support existing clients through direct lending to companies affected by the outbreak as well as support to financial institutions clients so they can continue lending to micro, small and medium enterprises with a view to preserve jobs and private sector activity.
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are increasing disease surveillance, improving public health interventions, and helping the private sector continue to operate and sustain jobs. Over the next 15 months, we will be deploying up to $160 billion in financial support to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery, including $50 billion of new IDA resources in grants or highly concessional terms.