UK fund­ing for Myan­mar likely to fall, but will con­tinue ‘in or out of the EU’

The Myanmar Times - - News - MALARVILI MEGANATHAN news­room@mm­

FOR the past two weeks, Bri­tain’s stun­ning de­ci­sion to leave the 28-mem­ber Euro­pean Union (EU) bloc has dom­i­nated the world’s at­ten­tion, send­ing shock­waves through global mar­kets. Sev­eral key is­sues have emerged at the heart of the bruis­ing post-Brexit de­bate, rang­ing from im­mi­gra­tion, po­lit­i­cal fall­out and eco­nomic melt­down to reg­u­la­tion on ba­nanas.

But one of the big­gest is­sues pushed to the side­lines of the largest po­lit­i­cal fi­asco for decades is hu­man­i­tar­ian aid. Ac­cord­ing to a sur­vey by the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD), Bri­tain is se­cond only to the US in the world league ta­ble of aid spend­ing. It was one of a hand­ful of states to meet a tar­get to give at least 0.7 per­cent of na­tional in­come to over­seas as­sis­tance. As other G7 coun­tries fail to meet the UN’s 45-year-old tar­get, the UK’s for­eign aid bud­get has soared by 144pc in 10 years, hit­ting £13.2 bil­lion (US$17.8 bil­lion) in 2015.

In Fe­bru­ary, some of the most in­flu­en­tial peo­ple as­so­ci­ated with UK over­seas aid or­gan­i­sa­tions cau­tioned that the out­come of the ref­er­en­dum would have a di­rect im­pact in achiev­ing the UN’s sus­tain­able de­vel­op­ment goals, which in­clude end­ing poverty, in­creas­ing ac­cess to ed­u­ca­tion and achiev­ing gen­der equal­ity. In a signed ap­peal let­ter, the lead­ers warned that with­draw­ing from the EU would di­min­ish the UK’s role as a global leader in pro­vid­ing in­ter­na­tional hu­man­i­tar­ian aid.

The UK gov­ern­ment’s bud­get for the Depart­ment for In­ter­na­tional De­vel­op­ment (DFID) for this year stands at £11.8 bil­lion, with a com­mit­ment to al­lo­cate 50pc of its bud­get to “global sta­bil­ity” and to “re­gions of strate­gic im­por­tance”, which in­cludes South­east Asia.

In Myan­mar, the DFID has been a key player in pro­mot­ing good governance, hu­man­i­tar­ian sup­port and eco­nomic de­vel­op­ment. As the UK gov­ern­ment con­tin­ues its close ties with Daw Aung San Suu Kyi’s Na­tional League for Democ­racy gov­ern­ment, it re­mains one of the largest donors to Myan­mar, com­mit­ting £291 mil­lion to sup­port the coun­try’s tran­si­tion over four years, from 2011 to 2016.

How­ever, the to­tal amount that the UK spends on in­ter­na­tional hu­man­i­tar­ian as­sis­tance is pegged to its gross na­tional in­come (GNI). In the wake of the Brexit an­nounce­ment, the UK’s £11.8 bil­lion aid bud­get lost more than £1 bil­lion in global value overnight.

Gavin McGillivray, head of DFID Burma, told The Myan­mar Times that the UK’s hu­man­i­tar­ian bud­get is guided by the UK Aid Strat­egy. De­spite the out­come of the ref­er­en­dum, it re­mains com­mit­ted to sup­port­ing Myan­mar’s fu­ture de­vel­op­ment.

“Un­der the UK law, in­ter­na­tional aid spend­ing re­mains at 0.7pc of UK gross na­tional in­come, which fluc­tu­ates in real terms in line with the econ­omy,” he said. He also said that the DFID’s sup­port for Myan­mar echoes Prime Min­is­ter David Cameron’s com­mit­ment to keep­ing Bri­tain’s prom­ises to the poor­est peo­ple in the world.

In a state­ment ear­lier this week, the Bri­tish em­bassy in Yangon also pledged its sup­port to strengthen Myan­mar’s democ­racy. “We are one of its great­est de­vel­op­ment part­ners, and our busi­nesses and in­sti­tu­tions are build­ing sig­nif­i­cant ties. Burma con­tin­ues to hold a spe­cial place in the hearts of Bri­tish peo­ple,” it said.

Strong bi­lat­eral ties be­tween the two coun­tries will be fun­da­men­tal in en­sur­ing Bri­tain’s en­gage­ment in Myan­mar’s hu­man­i­tar­ian is­sues. Hu­man rights ac­tivist Bene­dict Rogers said both coun­tries have a “par­tic­u­larly close re­la­tion­ship”, and most likely the “great in­ter­est” in the Bri­tish par­lia­ment in is­sues re­lated to Myan­mar will re­main.

“It is fair to say that within the EU, the UK has been the strong­est voice for Myan­mar over many years. Par­tic­u­larly be­fore the re­form pe­riod in 2012, the UK fought hard within the EU to en­sure that hu­man rights and the strug­gle for democ­racy were very much at the heart of EU pol­icy on Myan­mar,” saod Mr Rogers, who serves as Chris­tian Sol­i­dar­ity World­wide’s team leader for East Asia.

Mark Far­maner, the di­rec­tor of Burma Cam­paign UK, said that de­spite a pos­si­ble re­duc­tion in the value of UK aid, peo­ple in Myan­mar are un­likely to no­tice any dif­fer­ence when the UK is out­side the EU.

“There will be a pe­riod of volatil­ity with the pound and it will re­cover some of its strength, but it could re­main lower and this will mean less aid. How­ever, the DFID plays a key role co­or­di­nat­ing aid within Myan­mar, both with EU and non-EU mem­bers, and this will con­tinue whether the UK is in or out of the EU,” he said.

Rights groups had ear­lier raised red flags on the fu­ture of in­ter­na­tional aid fund­ing post-Brexit. Based on the re­cent fig­ures by the EU’s emer­gency aid depart­ment ECHO, Bri­tish NGOs re­ceived 145 mil­lion euros ($161 mil­lion) in 2015. UK-reg­is­tered non-prof­its will no longer be el­i­gi­ble for that fund­ing, and the ECHO an­nual bud­get is also likely to shrink in the ab­sence of UK con­tri­bu­tions.

Be­sides in­ter­na­tional hu­man­i­tar­ian aid, eco­nomic de­vel­op­ment in Myan­mar post-Brexit is also a con­cern. As some of Asia’s big­gest man­u­fac­tur­ing com­pa­nies take a hit fol­low­ing the con­tro­ver­sial de­ci­sion, solid eco­nomic ties be­tween Bri­tain and Myan­mar are ex­pected to re­main, said Peter Beynon, pres­i­dent of the Bri­tish Cham­ber of Com­merce Myan­mar.

“The Bri­tish cham­ber re­mains com­mit­ted to pro­mot­ing trade and in­vest­ment be­tween the UK and Myan­mar, and to sup­port­ing ex­ist­ing and de­vel­op­ing new busi­ness part­ner­ships be­tween our two coun­tries,” he told The Myan­mar Times.

Ac­cord­ing to the Direc­torate of In­vest­ment and Com­pany Ad­min­is­tra­tion, the UK main­tains its po­si­tion as the largest Euro­pean in­vestor in Myan­mar. From 1988 to the 2014-15 fis­cal year, UK in­vest­ments in Myan­mar amounted to $31.59 bil­lion. The em­bassy’s fig­ures also show that UK ex­ports to Myan­mar in­creased from £13 mil­lion to £44 mil­lion be­tween 2012 and 2013, a stag­ger­ing 239pc in­crease.

While po­ten­tial in­vestors re­main vig­i­lant for more Brexit fall­out in the re­gion, Myan­mar is poised to be­come a new, at­trac­tive low-cost des­ti­na­tion for ASEAN-bound in­vest­ments, said Dustin Daugh­erty, an an­a­lyst at the re­gional busi­ness in­tel­li­gence firm Dezan Shira & As­so­ci­ates.

Ac­cord­ing to the lat­est World Bank fig­ures pub­lished in May, Myan­mar’s eco­nomic out­look re­mains strong, driven by sound macroe­co­nomic poli­cies. GDP growth in Myan­mar is also pro­jected to rise to 7.8pc in 2016-17.

“If the UK be­comes ex­cluded from the EU-Viet­nam Free Trade Agree­ment [FTA], which looks in­creas­ingly likely, Myan­mar could fur­ther in­crease its chances of cap­tur­ing UK for­eign di­rect in­vest­ment by con­tin­u­ing its po­lit­i­cal re­form and be­com­ing party to an in­creas­ing num­ber of FTAs,” Mr Daugh­erty said.

Photo: EPA

A man waves an EU flag dur­ing the “March for Europe” rally in Lon­don on July 2.

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