World Bank to return to Myanmar

The bank said it would staff the office in Yangon with a new country manager and begin collecting the economic data needed to support a new aid program for the impoverished country.

"Our primary goal is to help the people of Myanmar," said Pamela Cox, vice president for East Asia and the Pacific.

But restarting any aid program will first require talks on how to handle Myanmar's hundreds of millions of dollars' worth of unpaid debts to the World Bank and other development lenders, said Cox.

"This is a country which has been closed to the outside world for decades -- so we're now preparing a strategy to guide our work with the government to improve services for the people -- and assist in tackling the country's development challenges."

However, she added, "before we can launch a full-fledged program, we would need to clear our arrears."

The development lender will begin talks with other aid donors to Myanmar to determine how to best deal with debts left unpaid from previous programs: $393 million to the World Bank, some $500 million to the Asian Development Bank, and others.

The World Bank froze its Yangon program in 1987 after the country, then known as Burma, stopped making payments on its debt to the bank.

Last week Japanese Prime Minister Yoshihiko Noda said Tokyo will waive about 300 billion yen ($3.7 billion) of Myanmar's debt and resume suspended assistance to the country, partly contingent on progress in democratization in the country.

The World Bank move followed the European Union on Monday suspending a wide range of trade, economic and individual sanctions against Myanmar in response to moves to open up the government and institute democratic reforms.

Other countries have also moved to drop or reel back sanctions, but the United States has yet to do so.

Cox said the bank does not want to get out ahead of the international view of whether Myanmar's reforms will stick.

"We've all been heartened by the government's steps in Myanmar."

"We also realize that there are risks. We will move with the consensus of other key stakeholders."

"I think the mood of the whole development community is that we have measured progress," she said.

"We are not linked to sanctions per se. We are linked more to the fact that we need to get basic data and knowledge."

Cox will travel to Myanmar in June with a team including representatives of the World Bank's private-sector investment arms, including the International Financial Corp., for talks with the authorities "to get an assessment of what needs to be done."

"We need to understand what are the development needs, what are the priorities."

"What we want to focus on are issues around poverty, around creating jobs, around livelihoods... the sorts of things that we can do as development partners to help kick-start higher incomes for local people, so that they receive some of the benefits of the reform measures that their government is undertaking."