China-backed AIIB opens door to lend Myanmar junta loans

The Beijing-based Asian Infrastructure Investment Bank has missed out on financing projects in Myanmar, even if the Southeast Asian nation does not return to democracy.

AIIB Vice President Joachim von Amsberg told the Financial Times that although the bank has no new plans for Myanmar, it has reason to deal with “de facto governments”.

“We would not have imagined a management horse, we would have passed our checklist,” he said.

The announcement comes as governments and corporations with interests in Myanmar rise under pressure to sever ties with the country’s military junta following the overthrow of the Aung San Suu Kyi regime. broke on the protesters.

Western Total Chevron energy groups last week responded to activists’ concerns cash dividends were suspended Myanmar State Oil and Gas Company.

Announced by Japanese beer group Kirin and South Korean steelmaker Posco plans to leave joint ventures With the military-controlled conglomerates of Myanmar.

The AIIB checklist includes assessments of whether the de facto government has effective control over the territory, recognition of other financial obligations by the state, and the position of neighboring countries, as well as possible financial risk.

“I do not think it can be answered presumably. It must be based on a specific point in time, based on the specific offer of the program, “said von Amsberg.

When was the AIIB? launched in 2016 It was widely regarded by Xi Jinping as part of China’s ambitious road infrastructure program. Since then, the AIIB has approved more than $ 24 billion in funding for 119 projects.

Ang ors are boarding a school bus outside Yangon School. International companies announce plans to withdraw from joint ventures with army-backed businesses © STRINGER / EPA-EFE / Shutterstock

Although some critics see the bank as part of Beijing’s growing influence through diplomacy and international economic governance, its membership has almost doubled to 103 countries, including Australia, Canada, the United Kingdom, France and Germany.

The Myanmar crisis, however, has raised questions about Beijing’s long-running economic ties with the junta.

Yun Sun, an expert on Myanmar-China relations at the Stimson Center, said that when Western groups withdrew from Myanmar and imposed sanctions on coup leaders, he expected Chinese investors and companies to eventually get involved and fill the void. .

“If Western companies decide to leave, China will inevitably increase its footprint, its share of the Burmese market, which begs the question: ‘Are isolation and sanctions the best strategy?’

The AIIB’s only project with Myanmar, of which it is also a member, was in 2016, when it provided $ 20 million in financing for a private sector gas power plant.

The World Bank, the Asian Development Bank, Myanmar’s creditors, and its operations there have temporarily suspended payments and new contracts since the coup.

The National Unity Government, formed by supporters of ousted leader Aung San Suu Kyi, warned foreign creditors that it will not respect the debts incurred by the military regime.

Although the AIIB was a relatively young institution, multilateral lenders generally had decades of experience working in difficult situations and could play a role in easing tensions, says Von Amsberg, a World Bank veteran.

“The beauty of multi-speed multilateral banks is that they are a forum where you have a governance mechanism that includes countries that have complex, sometimes conflicting, or even troubling relationships,” he said.

More than 800 people have been killed and 4,000 jailed since the February 1 coup in Myanmar, and the country’s healthcare, education and banking system struggles to act, prompting fears that Myanmar could become a failed state,

how The political crisis is deepeningAnother important consideration for the international community is the well-being of the country’s 54 million people. The UN warns that a double blow to the coronavirus և coup could leave almost half the population Below the official poverty line in Myanmar next year from $ 1 per day.

Von Amsberg said that the AIIB will always “try to prioritize” funding inquiries for members “especially those with severe funding and development needs.”

“It is clear that when we receive funding offers from countries that have large infrastructure gaps or large population needs for energy, transport, water and similar services, we would pay more attention to those requests,” he said.

“It does not eliminate our policies or our concerns about sound banking, but we prioritize projects when development is particularly strong.”

Additional report by Sherry Fei Ju in Beijing

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