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ADB Urges Myanmar to Fix Big Infra Gap

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EVEN THOUGH Myanmar is at a critical juncture politically, socially and economically, it has a substantial infrastructure gap that needs to be tackled as a priority, said Winfried Wicklein, Asian Development Bank’s country director in Myanmar.

“I think it is important to start the development quickly to get some early runs on the board. It is important to plan and prepare projects well to ensure sound prioritisation and sequencing,” he said.

“It is also important to pay careful attention to the quality and impact of infrastructure investments, including equity of access and sector reforms. We must also consider which is the most suitable procurement modality (public or private sector participation), as well as social and environmental safeguards, and consultation of affected people.

“Issues around limited access to infrastructure are obviously compounded in rural and ethnic areas where most poor and disadvantaged people live. And in urban areas, basic infrastructure and services are not strong enough to sustain them as growth poles to transform the economy,” he added.

Many people currently have no access to basic services and markets, and ADB estimates that 20 million people have no adequate access to roads. High transport costs and associated limited access to markets and services are among the main causes of poverty and inequality.

Likewise, Myanmar’s power sector is one of the least developed in Southeast Asia. Only 30 per cent of the population has access to reliable electricity, and existing power infrastructure can only meet about half of current demand.

ADB has secured a sizable increase in concessional funding available to Myanmar for the next 4 years. There is an annual allocation of about US$350 million (Bt12.5 billion) for sovereign lending, and additional funds to co-invest with private sector sponsors in commercial projects with development impact. Between 2013 and 2016, ADB has approved almost $500 million for infrastructure financing in support of the government, and some $900 million with the private sector.

Financing support to the government has been focused on energy, transport, irrigation and urban infrastructure services. ADB’s private sector operations mainly focus on energy, telecommunications, and logistics. Over the next three years, ADB plans to invest around 80 per cent of its financial allocation to infrastructure, amounting to around $840 million.

According to Wicklein, infrastructure development requires a long term horizon. The development of infrastructure takes time to plan, prepare and deliver civil works. At the same time, infrastructure assets will last a long time if maintained well.

“Given the critical importance of infrastructure for the development of the country, ADB will continue to prioritise infrastructure, with a strong focus on energy and transport, as well as selected investments in urban infrastructure services and key rural and agricultural infrastructure such as irrigation,” said Wicklein.

In transport, ADB will help upgrade and build rural-urban-regional transport networks to reduce transportation costs, support competitiveness and generate rural incomes.

In energy, ADB will work with the government to improve power transmission and distribution, and with the private sector to increase power generation capacity. It also helps improve Mandalay’s urban infrastructure, water supply and waste water treatment. ADB also helps improving connectivity with neighbouring countries by investing in the East-West Economic Corridor from Yangon to Bangkok via Myawaddy, and the Northern Corridor from India to China through Mandalay.

ADB returned to Myanmar in 2012 following an absence of almost 25 years. Wicklein admitted that ADB had a lot of catching up to do in terms of its country knowledge. Yet, he is pretty satisfied with ADB’s performance in Myanmar.

“We have been on a steep learning curve. Government officials have been very understanding, patient and generous with their time and advice in helping us to understand their country better … We have also been fortunate enough to be able to build strong networks and partnerships with civil society and the private sector. They help us understand the intricacies of operating in Myanmar,” he said.

“ADB has had a very good experience in Myanmar … We have found government officials very capable and eager to learn and listen. We have created a civil society advisory group to guide ADB operations in Myanmar.”

 

Source: Eleven Myanmar
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