Pyi­daungsu Hlut­taw agrees to US$100m loan from World Bank

The Myanmar Times - - News - SWAN YE HTUT swanye­htut@mm­times.com

WITH the goal of de­vel­op­ing Myan­mar’s fi­nan­cial sec­tor, the Pyi­daungsu Hlut­taw voted to bor­row US$100 mil­lion from the World Bank yes­ter­day.

The Min­istry of Plan­ning and Fi­nance and the Cen­tral Bank of Myan­mar, two Union­level or­gan­i­sa­tions, pitched the loan and ex­plained how they would spend it be­fore MPs cast their votes.

“The loan for the project is not to­tally con­cerned with rais­ing the salary of civil ser­vants,” Plan­ning and Fi­nance Deputy Min­is­ter U Maung Maung Win told the room.

“Sim­i­larly, it is not con­cerned with the ground­less al­le­ga­tions that the min­istry has to bor­row money be­cause it does not have enough money to pay its staff’s salaries.”

The gov­ern­ment spent K216 bil­lion rais­ing salaries in 2014, he said, and K834 bil­lion in 2015.

The min­istry it­self will re­ceive $60 mil­lion of the loan, or more than K70 bil­lion, which they can with­draw four times over four years. It would not be suf­fi­cient to pay salaries, he said.

The loan will give the min­istry re­lief from its bud­get deficit, he said, al­low­ing money to be used for other im­por­tant ex­pen­di­tures for the coun­try and the peo­ple.

The Cen­tral Bank will re­ceive $25 mil­lion of the 38-year in­ter­est-free loan, U Maung Maung Win said, with the re­main­ing $15 mil­lion be­ing in­vested by the min­istry into the de­vel­op­ment of the fi­nan­cial sec­tor.

Of the money ear­marked for the fi­nan­cial sec­tor, $7 mil­lion would be in­vested in re­struc­tur­ing and re­form­ing the coun­try’s four un­com­pet­i­tive state-owned banks, $5 mil­lion would be used to de­velop le­gal frame­work about and in in­vest­ment in in­for­ma­tion tech­nol­ogy for the mi­cro­fi­nance and in­sur­ance sec­tors, and $3 mil­lion would be spent build­ing the ca­pac­ity of the min­istry staff.

The Cen­tral Bank would use its $25 mil­lion for four projects, deputy gov­er­nor Daw Khin Saw Oo told law­mak­ers in par­lia­ment. An ac­count­ing and fi­nance train­ing school would take $6 mil­lion, $2 mil­lion would be spent on IT and ca­pac­ity build­ing, $2 mil­lion on build­ing staff ca­pac­ity, and $15 mil­lion on up­grad­ing pay­ment sys­tem and fi­nan­cial in­fras­truc­ture.

Be­fore the Plan­ning and Fi­nance Min­istry can draw down on the $60 mil­lion ear­marked for op­er­a­tional sup­port, it will need to meet sev­eral dis­burse­ment-linked in­di­ca­tors, U Maung Maung Win said.

While the 38-year loan is in­ter­est-free, he said, the gov­ern­ment will pay an an­nual ser­vice charge of 0.75 per­cent af­ter a six-year grace pe­riod.

– Trans­la­tion by Thiri Min Htun

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