WORLD BANK VIEW OF MYANMAR Interview with Abdoulaye Seck
Interview with Abdoulaye Seck
Abdoulaye Seck is the Country Manager for the World Bank Group in Myanmar. Mr Seck has been in his position for about three years and is about to transfer to Afghanistan.
In a wide-ranging interview, the World Bank Country Manager talked to Mizzima’s Aung Thura about the bank’s involvement and priorities in Myanmar.
What have been the main focuses of the World Bank for Myanmar during your tenure as country manager?
The World Bank has a broad mandate which is applies to all countries in eliminating extreme poverty and in making sure the prosperity is shared by doing it in a sustainable way; environmental sustainability, fiscal sustainability and social sustainability. Of course, all countries are different, so when we come to a country, we would like to listen to the counterparts of the community, from the government and see how the goal is and we shall be mandated to the World Bank Group to translate in Myanmar.
We have a number of systematic country diagnostics. As the diagnostic tools, we listen to all communities and stakeholders and the media. The World Bank Group would be supporting Myanmar in three focused things. One thing is about reducing rural poverty because it is extremely high in the country. The second thing is about the investing in the people, in the effective institutions for people, and the third that we have been supporting in Myanmar is about helping the dynamics of the private sector for jobs. These three focus areas are what we have under the country partnership framework between the World Bank Group and Myanmar, which basically started with my tenure. It was the three-year agenda ended in June this year. We have been ascending this engagement along the same lines for another two years to give time and space for the new administration and the new World Bank Group management structure to create a longer term strategy. So we have two more years to prepare the longer term strategy.
The World Bank reengaged with Myanmar in 2012 after more than two decades. Can you tell us about the country diagnostic and other analytical work that the World Bank has carried out for Myanmar?
First of all, I should say that the country partnership framework is really about Myanmar. Myanmar should be extremely proud with the achievements over the past few years, when it comes to the first focus area of reducing rural poverty that Myanmar has presented to the World Bank Group for supporting as a National Community Driven Project. This is the very first one and it is also really a good programme to support. We started with an initial grant of over US$80 million in 2012 and we added another US$400 million to support this programme.
What did it do? It started by listening, listening to communities. What do you want to build basic infrastructure. As of today, over 5 million people from the rural areas of Myanmar got better schooling, they got better birth methods, sanitation, and they got better access to clean water and so on. They design the system themselves and they brought women who have been representing at least 50 percent of the village community to decide what infrastructure to do. When I visited some villages, women told me, “The men wanted to do this, I said no and I wanted to do something else”. It has really given people power and a voice and it is really a tool so that what we talk about when it comes to support empowers people for inclusive growth. So that is one expectation.
Better electricity in the rural areas is important for household growth and development. How has the World Bank been involved in this?
In terms of access to better electricity, I think that is the larger programme. We shared the National Plan from now to 2030 to achieve universal access to electricity. As of the time when we (World Bank) arrived in Myanmar, less than 16 percent of people in rural area had access to electricity. So in this programme, now you do have a number of solar-systems being provided to communities across the country. Suddenly a lot of more can be done there in terms of bringing electricity to the community.
I believe the World Bank has is providing more than US$400 million from 2016 to 2021 for better electricity in rural area. So where has that investment been used?
This US$400 million has been supporting in grid expansion and off-grid expansion. So there has been a split between grid expansion and off-grid expansion.
Basically, we estimated US$310 million for the grid to build and US$90 million is about off-grid that is mostly for rural areas. That is the World Bank Group’s concrete and specific support. The National Electrification Plan is actually more important for Myanmar and it described very clearly the list of costs for the universal access to electricity.
Myanmar should undertake offgrid and on-grid so that everybody will have electricity at the least cost. It was a very nice well-designed plan, and it will be done in a very effective way involving the private sector. The plan is also a platform for everybody to come in the private sector, for example, IFC of that World Bank Group that also supports the large programme for access to electrification in rural areas using that platform.
Is there other additional loan plus 400 Million USD?
Under the National Electrification Plan, the estimated cost of bringing electricity to everybody by 2030 is US$6.5 billion, so the World Bank’s contribution is US$400 million, but then IFC from our group is bringing more of a contribution as a private sector player.
What does US$6.5 billion cover?
That is the total cost of investment that Myanmar needs to invest in terms of distribution, not in generation. This is also the cost of the National Electrification Plan. The World Bank has helped Myanmar design this plan and we estimated the cost, and then the World Bank will provide US$400 million of this US$6.5 billion. Of course, it means there is still US$6.1 billion that needs to be mobilized. That is where good reforms are most important and Myanmar also should implement reform, policy and should look at the tariff issue. There are other needs and our donors’ review and analysis have shown that Myanmar will need in addition to distribution, transmitting, so you need about US$2 billion a year and will also need US$30 billion for 15 years to provide access for everybody. Myanmar government will have requirements for the private sector to come in.
What do you think are the challenges for the private sector to come in?
lems is tariffs. If tariffs are below cost, the private investors will not be able to collect a return on their investments. So they will not come in. So tariffs in Myanmar right now is below cost. The Myanmar government is also subsidizing the consumer. All people in Myanmar are getting electricity below cost, it is happening in Myanmar to produce the electricity. I estimate the subsidy is about US$420 million and the government losses a little bit less than US$500 million every year. The Ministry of Planning and Finance will subsidize the electricity.
That needs to be addressed because that is not still addressed and the private investors will not be willing to invest. They expect a return. So the tariff is one aspect that Myanmar should be working on. But happening right now we are supporting the country prepare and review the financial viability of the power sector in the country. The people who can afford will pay the full cost but the poor households should be protected. Access is very important, and we are looking at universal access. Instead of the current situation, only 30 percent of the population is getting access to electricity but at a subsidized cost. And the rest of the percentage of families as well as poor households do not have access, so they use candles and they use a very expensive source of energy. We need to bring them to the grid to have access.
Do you believe the National Electrification Plan for 2030 will be successful?
Absolutely. When you look at the countries like Laos PDR, Cambodia and Vietnam, they have achieved that. Why not Myanmar. Absolutely. We should make it happen. When the Ministry of Electricity and Energy makes sure of the right decision, they should be some internal ministerial coordination structure, but some are missing. Energy is a crosscutting issue, it does not directly belong to the Ministry of Electricity and Energy, it belongs to the Ministry of Transport to deliver, it also belongs to the other ministries and it belongs to the Ministry of Planning and Finance. They should be some high level of coordination structure for which they can think of the plans considering the role of the private sector, and the role of the public sector. Decisions should be made quickly, there should be transparency and there should be competitive tender for the private producer. IFC, the member of World Bank Group, has supported and invested in Myingyan. Moreover, Myanmar should apply the IPP (Independent Power Producer) framework in a very competitive way. It will save the country billions of US dollars.
What are the most successful programmes during your assignment in Myanmar?
When we came back to 2012, we supported the Ministry of Finance at that time to do public expenditure and financial accountability, rating how the Myanmar government designs the budget and implements the budget, make accounting reports on budget. As a result of this assessment supported by the World Bank, the World Bank can mobilize other partners UK, Australia, and Denmark to come and support the public management project on how to modernize public financial management. I think it is very important. In my view, it is really by far, I mean this is the most important programme. Myanmar receives the financial resources from the World Bank and the others as well. Here, the most important resources are government’s revenue through tax. Tax paying in Myanmar provided to the government to deliver the services is the most important part of the engine. We work through the government system through the budget, which leverages our support to have a bigger impact because it is about a largest profitable resource in the country. So we have this programme that looks at more transparency that gives you a better understanding of how the government is using your tax pay to give you better schools, to give you better health care.
Could you explain the sustainability that the World Bank is trying to achieve?
We are really looking at what we do in a sustainable way. We also look at the three dimensions of sustainability. One is the environmental sustainability which basically we can translate as how we ask, we can use resources that we have without geo-polluting, affecting the ability of future generations to use the same resources, that is very important.
Then we have social sustainability, developmentof the community, talking to the community’s men to ensure they support the programme.
It is very important. We shall be looking at every time we support a programme, we inform the public that we, the World Bank, would like to support this programme and we think that from our preliminary analysis, these are the safeguard issues. This is what we plan to do to make sure. It will be done in a very healthy and sound way. We request feedback and we ask people about the projects whether they agree.
The last one is about fiscal sustainability because we are the lending institute and we provide grants to the countries that are really heavy in debt. But for other countries that have the capacity to borrow so we provide loans.
For Myanmar, we provide highly concessional loans with zero interest rate over 38 years of maturity and rise period of 6 years. We grant elements of over 60 percent but we advise also the government in terms of the debt strategy. We work with the Ministry of Finance to ensure that each centralized public debt management, you know the new public debt management law that we supported.
What has been the focus areas of the World Bank for rural growth in Myanmar?
We supported a lot community access to basic infrastructure that is the national community driven project about agriculture. Agriculture is very important for the community in Myanmar. So we are supporting better irrigation in the dry zone and we committed actually to do more in terms of agriculture. We have an extension of country partnership framework and we will be helping a second agriculture project going forward. And we are supporting rural electrification.
We have a commitment to support agriculture. We are working the project through the government system. We are not driving the development agenda in Myanmar, it is really true. We have got requests from the Ministry of Planning and Finance and Ministry of Agriculture, Livestock and Irrigation to support agriculture.
We have plenty of ideas and we want to import the ideas to Myanmar. So we are ready to support and our team comes and talks with all people, talks with government, talks with the community. The World Bank would like to support your agenda and your programmes (as a guide to) what we should be doing.
Do you think that the development agenda of government and your ideas are synchronized?
Absolutely. We are different organizations. We are working with most of the traditional donors or implementing agencies outside of the government. We are an organization and Myanmar is a shareholder. Planning and Finance Minister U Kyaw Win is a governor and he will be sitting in a room with all the other regional ministers of finance and they decide what the World Bank should be doing. I am not the alien to the country. I am here to serve the people of Myanmar.
Of course, we listen to what the people of Myanmar who are articulate in terms of vision, in terms of programmes and we would like to support that. We are in many countries, so there are many experiences that we can be collecting. We brought experiences from Myanmar to other countries and we can also bring other experiences to Myanmar. Vietnam is extremely successful in agriculture. This is what we have done. So we can grow together.
What has the World Bank accomplished in terms of providing support in education, particularly trying to keep children in school?
I will give some examples. Ten kids entering school in Myanmar are kindergarten and less than 3 kids will get to matriculation. It is a huge loss for Myanmar because seven kids could not go to matriculation. For those who study in school, in terms of what they learn and how then can read, let me tell you one example, this is very important. When we ask the kids how they read a word, 77 percent of the kids in Grade 1 cannot read even a single word.
It grows to 27 percent in Grade 2 and 10 percent in Grade 3. You can imagine some of the students in Grade 3 cannot read a single word. So the quality is very low and what we have done? I would like to thank Australia here because they have been helping us from the very beginning in the education sector by working to support the Ministry of Education. First of all, we said let’s keep kids in school. Let’s make sure that we have ten all the way to matriculation.
The reason why they do not go to school is that they cannot afford to pay for the cost. All parents cannot afford for the expenditure for school because they worry about the loss of income if he or she went to school as he or she will not be able to sell jasmine flowers or something else.
So we give stipend programmes, and now this programme has 115,000 young kids who can study in school. And it provides the programmes to school so they can improve the quality of education. Now the other partners because of that platform are joining, Denmark, Finland bringing more resources to support the education programme for teaching mentoring. Many teachers have been higher, but they do not have enough training. So we need to help them to make sure to give quality education.
Can you tell us about the World Bank’s support for health in Myanmar?
In Myanmar, out of 100,000 live births by women, 200 of them die during delivery. That is really sad. Out of 1,000 kids who are born in Myanmar, about 51 will not have the chance to blow the candles and to cut the cake on their fifth birthday. Even worse, out of 51, half of them die in the first six months. It is also sad and it is preventable. The reason why is that one needs to ensure that package of services. You make sure the delivery assisted by the people who have the skill, not just in the remote villages.
You make sure of the services before delivery, during delivery, after delivery. So that is exactly what we have done for the health project, access to the basic health services to support maternal health care, newborn health care.
Additionally, we are supporting the reforms around better health financing for universal health coverage. That is a very important agenda. The State Councilor and Ministry of Health and Sports presented the National Health Plan in March. It is very good plan to work universal health coverage and we would like to support it. And we have second additional financing hopefully by September and October and we are able to go to the board of directors to request their support to bring more financing to this agenda of basic health care but also to improve health financing.
For about 16 percent of households in Myanmar, they spend 10 percent of their expenditure for health. In terms of government budget, the government has done extremely well over the past five years. Myanmar increased public health spending by nine fold. It is unique. And the government increases the public education spending by four fold.
Even after having an increase in public health spending and education, Myanmar has one of the lowest public spending in education and health because it was extremely low for many years. So there a lot more needs to be done. Myanmar would like to bring good education and health to the people so that people can see opportunity in the job market. You have to bring more resources in the sector, but you need to do it more efficiently because it is not just about increasing the volume, you need to increase the efficiency.
What is your message for Myanmar as you are leaving?
Firstly, I would like to thank Myanmar and its people who have been extremely kind to me. I think this is my best professional and personal years by far. I feel very much that it has been a privilege being in Myanmar at the time of transition because that there are wonderful movements that Myanmar has done in the peace process, NCA (National Ceasefire Agreement) signing, and the election in November 2015.
There are many measured developments in Myanmar. I think Myanmar will do extremely well and there are some steps that the country can undertake. The future is bright, but of course, some of the reforms are important to keep doing.
Abdoulaye Seck, Country Manager for the World Bank. Photo: Mizzima