Govt seeks foreign loans totalling over $200 million
IN a letter sent to the Speaker of the Pyidaungsu Hluttaw, the President’s Office has proposed taking loans totalling more than US$200 million from the Asian Development Bank and the French Development Agency to implement a handful of development projects. The loans would be divided among three ministries – Agriculture, Livestock and Irrigation; Education; and Health and Sports.
The 24-year loan from the ADB, worth $185.5 million, would come at a 1.5 percent interest rate, while a 12year loan worth 25 million euro ($28 million) from the French Development Agency would be borrowed with interest set at the six-month Euro Interbank Offered Rate.
Under the terms of the loan agreements, both would offer an eight-year deferment.
The Ministry of Agriculture, Livestock and Irrigation would take the lion’s share of the funding, slated for $75 million from the ADB loan and the entirety of the French Development Agency loan. The money would go toward implementing a development initiative for the agricultural sector in Myanmar’s dry zone, roughly covering Magwe and Mandalay regions and the Nay Pyi Taw Union Territory.
U Tun Win, deputy agriculture minister, told members of the Pyidaungsu Hluttaw on September 12 that under the project, the ministry would seek to increase production of oilseed crops, beans and pulses, and vegetables, as well as expand irrigation networks and improve water resource management in the dry zone.
The Ministry of Education would be granted an allocation of $98.5 million from the ADB loan. Union Education Minister U Myo Thein Gyi told parliament that the loan would go toward a scheme to create job opportunities for young people. As part of an educational reform program covering the kindergarten through grade 12 system, the ministry will develop new middle and high school curricula, and promote vocational education and training schools.
U Myo Thein Gyi also gave a presentation on a project to be implemented by the Ministry of Health and Sports with the ADB loan’s remaining $12 million. The health and safety initiative would cover 12 townships in the Mekong River Basin across Kayah, Kayin, Mon and Shan states, and Tanintharyi Region.
The project seeks to promote cooperation in the Greater Mekong Subregion (GMS) in carrying out preventive measures and monitoring of communicable diseases, such as HIV, and mosquito-borne illnesses such as dengue fever and malaria, at border checkpoints.
In June, the ADB announced it would “dramatically” increase lending to Myanmar. Loans to the government at low interest rates are set to jump from $150 million to $350 million a year for the five years starting in 2017.
However, several international financial institutions, including the International Monetary Fund, have warned of the dangers of an overheating economy, saying it is “essential” to tighten monetary and fiscal policies, and not drive up the budget deficit. The 2016-17 budget deficit is K3.9 trillion.
Pyidaungsu Hluttaw Speaker Mahn Win Khaing Than announced that MPs wishing to discuss the proposed loan programs can register to do so before September 15.