The China-backed AIIB leaves the door open for loans to the Myanmar junta

The Asian Infrastructure Investment Bank in Beijing has left its doors open to finance Myanmar’s projects, even if the Southeast Asian nation does not return to democracy.

Joachim von Amsberg, vice president of the AIIB, told the Financial Times that the bank was not considering a new project in Myanmar if it had the framework to deal with “de facto governments”.

“We would not take a view on the form of government, we would look at our checklist,” he said.

The statement said governments and companies with interests in Myanmar are under increasing pressure to sever ties with the country’s military junta following the ouster of Aung San Suu Kyi’s administration. crack about the demonstrators.

Responding to activist concerns, Total and Chevron western energy groups last week discontinue cash dividends To the Myanmar state oil and gas company.

Japanese beer group Kirin and South Korean steelmaker Posco have also announced it plans to withdraw from joint ventures With conglomerates controlled by the Myanmar military.

In the AIIB’s checklist, whether a government has de facto effective control of the territory, the state recognizes other financial obligations and assesses the attitudes and potential financial risk taken by the surrounding countries.

“I don’t think it can be answered hypothetically. It has to be based on a specific time, based on a specific project proposal, ”von Amsberg said.

When there was an AIIB It was launched in 2016 Xi Jinping generally saw the Chinese president’s belt and road infrastructure plan as part of his ambition. Since then, AIIB has approved more than $ 24 million to fund 119 projects.

Although some critics have seen the bank as part of its influence in Beijing through diplomacy and international economic governance, its membership has nearly doubled to 103 countries, including Australia, Canada, the United Kingdom, France and Germany.

The crisis in Myanmar, however, has raised doubts as to what relationship Beijing will have with the junta because of the country’s long economic life.

Yun Sun, who specializes in Myanmar-China relations at the Stimson Center, thought that when Western groups disconnected from Myanmar and imposed sanctions on heads of coups, Chinese investors and companies hoped to finally step in and fill the gap.

“If Western companies decide to withdraw, it will become inevitable that China will increase its footprint and its share of the Burmese market, which also raises the question: ‘Are isolation and sanctions the best strategy?'”

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

The World Bank and the Asian Development Bank, which are lenders in Myanmar and have operations there, were suspended and their new contracts temporarily suspended after the coup.

The National Union government, made up of supporters of ousted leader Aung San Suu Kyi, has warned foreign lenders that it will not pay homage to the debts incurred by the military regime.

Although AIIB was a relatively young organization, multilateral lenders generally had decades of experience working in complex situations and could play a role in reducing tensions, said von Amsberg, a World Bank veteran.

“The beauty of multilateral development banks is that they are a forum with a governance mechanism that brings together difficult and sometimes conflicting or even worrying countries,” he said.

Since the February 1 coup in Myanmar, more than 800 people have been killed and 4,000 detained in the country’s health, education and banking systems. struggling to function, Creating fears that it could become Myanmar a failed situation.

As the political crisis is deepening, another key issue for the international community is the well-being of the country’s 54 million population. The UN warns that the double success of the coronavirus pandemic and the coup could affect almost half of the population Below the official poverty line in Myanmar about $ 1 a day for next year.

Von Amsberg said the AIIB will “try to prioritize” funding requests from members with “particularly severe funding and development needs”.

“Clearly, when we receive funding proposals from countries with large gaps in infrastructure or high unsatisfied needs of the population (energy, transport, water and similar services), we would pay close attention to these requests,” he said.

“This does not rule out our policies or our concerns with a strong bank, but we prioritize projects when the development case is particularly strong.”

Additional report by Sherry Fei Ju in Beijing