Kanthan Shankar, the country manager for the World Bank in Burma, spoke to DVB Interview International recently about several World Bank and International Finance Corporation (IFC) projects currently underway in the country, and addresses concerns over their implementation.
The World Bank is financing a schools grant and stipends programme as part of its Decentralising Funding to Schools Project, worth a total of US$100 million. The money will go towards an existing government initiative by the Ministry of Education.
“It is mainly benefiting the poor, giving them scholarships and better school facilities,” Shankar said.
“We’ve seen similar programmes have worked in other countries so we are bringing that experience to bear. [The programme will] serve kids in primary education, in particular, with better facilities. And poorer kids will benefit. Over 100,000 kids will be benefitting and as a whole that’s over eight million schools and students.”
The World Bank’s International Development Association (IDA) is putting US$80 million into this education stipend project while the government of Australia is adding $20 million.
Meanwhile the IFC has pledged to invest $80 million in Shangri-La Asia Ltd to expand operations in Burma. The loan will provide assistance for the expansion of the Traders Hotel in downtown Rangoon as well as for construction of the 240-suite luxury Shangri-La Residences overlooking Kandawgyi Lake.
Shankar said it is important to attract private sector investment to the country.
“It is extremely important [for a country] that is under transition, where 70 percent of its population live in rural areas, [and where] poverty rates are quite high. If they need to reduce their poverty – they cannot completely depend on the public sector, they cannot completely depend on the government, they have to attract private sector,” he said.
“They’ve been shut away for such a long time. Here is an opportunity that they will be able to create an environment for responsible private sector to come in.”
Another project the World Bank is financing is a Community-driven Development (CDD) project, which gets local communities involved in choosing development projects for their villages.
“This is our first activity in Myanmar [Burma]. It is an $80 million development grant from IDA. In each of the regions in Myanmar, the poorest township is selected and each of the villages and village tracts benefit from this CDD programme. So on average there is about $27,000 for each village, and the community decides what they would want in terms of infrastructure upgrading, water supply, sanitation, building access pathways,” he said.
Shankar said he recently visited the town of Kampalet in Chin State, one of the areas taking part in the CDD project.
“I went to visit about five or six villages and some of them you have to walk for about 40 minutes each way to reach them – they are extremely remote. But you can see the impact in terms of the process. For these communities, it’s the first time for them to be responsible for the choices, rather than someone deciding for them,” he said.
However, the World Bank has faced criticism over the CDD project. The US Campaign for Burma has concerns over a lack of meaningful consultations with the local communities and a failure to ensure those with ethnic languages or limited education can understand the projects being rolled out in their communities.
“Of course it’s not going to be perfect, we are just starting this work,” Shankar said. “We are learning. There is a grievance mechanism where communities can, if something isn’t going well, bring it up to the committee.
“I certainly don’t think this is going to be perfect as it starts, we are learning, and it’s the first time these projects are being implemented,” he emphasised.
Other concerns have been raised over IFC pledging $30 million to invest in the Yoma Equity Project, an initiative of Yoma Bank. IFC investment would support the Yoma Bank’s SME [Small-Medium Enterprises] financing programme to increase access to finance for SME’s in Burma. The project was categorised as FI(2) (Financial Intermediary), which means it could forego certain social and environmental impact assessments. Given that several FI investments in other countries have been accused of a lack of transparency, there are concerns over the FI categorisation of this project.
“Look, what I can say is that IFC is trying to attract private sector into the country. There is a huge need to create jobs in Myanmar. It has to be in sectors such as in manufacturing and micro-enterprises, so creating and helping in terms of funding some of these activities and helping the government in ensuring there is an attractive environment for private sector investments, both local and international, is important, and that is what IFC does,” he said.
Shankar went on to say that the World Bank does due diligence in every project they undertake.
“We do due diligence in every activity which we do. There are these assessments that we do. If we go into any type of intervention which we finance we will do due diligence. And after that is the only way we would go into the next step. And that is being done on everything that we do,” he said.