Myanmar settles debt owed to World Bank, obtains new loan

YANGON, Jan. 29 (Xinhua) -- Myanmar has settled debt of 430 million U.S. dollars owed to the World Bank since 1973 in coordination with the Japan Bank for International Cooperation ( JBIC) and has re-obtained a new loan of same amount from the world financial institution, a press release of the Ministry of Finance and Revenue said Tuesday.

Myanmar settled the World Bank debt by taking out the amount from JBIC on Jan. 25 and paid back the World Bank.

Obtaining a new loan of 430 million dollars from the World Bank on the same day, Myanmar finally settled the debt by paying off the bridge loan to JBIC.

According to the release, the World Bank will support Myanmar with 80 million dollars in carrying out national community-driven development project for infrastructural development in agricultural sector, roads, health centers and schools of 640 villages across the country.

The release added that the World Bank will resume social and economic assistance to help Myanmar build strong foundation for poverty alleviation scheme and positive reform process.

Similarly, Myanmar had earlier also settled debt of 512 million dollars owed to the Asian Development Bank (ADB) by a bridge loan obtained from the JBIC to which Myanmar paid off while re-getting a new loan of 512 million dollars from the ADB, the largest amount it received in 30 years from ADB.

Through clearing the debt, Myanmar would have access to more low-interest development loan programs.

Under an agreement between Myanmar government and Paris Club creditor countries reached on Jan. 25, Myanmar obtained 5.925 billion U.S. dollars' debt relief from Paris Club creditor countries.

The creditors delivers an exceptional treatment providing a cancellation of 50 percent of the total of arrears due to the Paris Club creditors in nominal terms in two phases with the remaining amount to be rescheduled over 15 years including a seven- year grace period.

Following the agreement, Norway relieved 534 million dollars' debt, while Japan 3 million dollars' which Myanmar owed to them.

Myanmar government's economic reform program is supported by the International Monetary Fund (IMF) with a Staff Monitored Program (SMP) currently providing a framework for cooperation between the Myanmar government.