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