World Bank loans US$400m for rural development

The loan is to encourage government reforms, peacemaking and people-centred rural development, with only a service charge of 0.75 per cent needing to be paid, Khin Zaw told a press conference at the Ministry of Livestock, Fisheries and Rural Development, Nay Pyi Taw, on May 16.

The project is currently being implemented across 15 townships with a US$80 million grant from the World Bank.

“One township per region or state will initially be targeted. It is intended to make people benefit by operating small-sized infrastructure on their own,” said Khant Zaw, director-general of the Department of Rural Development.

The project would be implemented in reference to health and education indexes, GDP and data from NGOs, Khant Zaw said.

The US$400 million project would start this financial year, according to the ministry.

According to Xinhua news agency, in the fiscal year 2013-14, the people-centered projects were implemented in townships of Chin and Shan states as well as Taninthayi Region, while in 2014-15, the projects were undertaken in Rakhine State and Sagaing, Yangon and Ayeyawady Regions as well as in Nay Pyi Taw Council area.

Parliament approved the loan on May 11. 

Supporting the borrowing, U Nu, a member of House Joint Public Accounts Committee, said the ministry is carrying out compulsory services for livelihoods of rural populace, while it is promoting the capabilities of government staff, the early response system to natural disaster and the emergency management.

He added that the ministry needs the loans to expand implementation of people-centered projects for rural people.

Myanmar is to repay the loan in 30 years. The loan carries the interest rate of 0.7 per cent per annum.

Starting a programme two years ago in Myanmar, the bank plans to scale it up six-fold in the coming two years as “a central element of the government’s poverty reduction strategy”, the World Bank said.

The World Bank has launched the people-centred projects in several countries. 

In April, it revealed that Indonesia has passed the 2014 Village Law to benefit 73,000 villages. In Vietnam, a new CDD programme was designed to reach ethnic minorities in the Central Highlands region, and extended its program in the Northern Mountains region.

Afghanistan is approaching national coverage under its programme, with the new president, Ashraf Ghani, pledging to reach all rural communities to ensure the delivery of vital basic services.

World Bank Vice President for East Asia and Pacific Axel van Trotsenburg visited Myanmar from May 12-16 to observe some of the initial results of the National Community Driven Development Project, the World Bank’s first project in the country in 25 years. 

During his visit, he also launched the World Bank Group’s new Country Partnership Framework with Myanmar in support of Myanmar’s policies, programs, and investments to help reduce poverty and improve people’s lives.

The 2015-17 Myanmar Country Partnership Framework (CPF), recently endorsed by the World Bank Group’s Executive Directors, provides for up to $1.6 billion in credits, loans and grants, as well as technical assistance and knowledge from the International Development Association (IDA), the Bank’s fund for the poorest countries. Myanmar will also receive up to $1 billion in investments and $20 million in technical assistance from the International Finance Corporation (IFC), the private sector arm of the World Bank Group.

“Millions of people in Myanmar will benefit. We are focusing on the three vital areas: poverty, people and jobs. Reducing rural poverty, providing basic services, and stimulating the private sector,” van Trotsenburg said in his blog.