China-backed Asian Investment Act opens doors to Myanmar’s military government for loans

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Even if the Southeast Asian country does not restore democracy, the Beijing-based Asian Infrastructure Investment Bank has opened its doors for funding projects in Myanmar.

The AIIB vice president Joachim von Amsberg told the Financial Times that although the AIIB does not have any new Myanmar projects under consideration, it does have a deal with the “de facto government”. frame.

“We will not comment on the form of government, we will check our list,” he said.

The announcement comes as the government and companies with interests in Myanmar are facing increasing pressure to cut off ties with the country after the country’s military government overthrows the government of Aung San Suu Kyi. Blow On the protesters.

Last week, Western energy group Total and Chevron responded to the concerns of activists Suspension of distribution of cash dividends Myanmar’s state-owned oil and gas company.

Japanese beer group Kirin and South Korean steel manufacturer Pohang Steel also announced Plan to exit the joint venture An enterprise group controlled by the Myanmar military.

The AIIB’s list includes an assessment of whether the actual government effectively controls the territory, the country’s recognition of other financial obligations and the position taken by neighboring countries, and an assessment of potential financial risks.

“I don’t think this can be answered by hypothesis. It must be based on a specific point in time, based on a specific project proposal,” von Amsberg said.

When the AIIB was established Launched in 2016 In Xi Jinping’s view, it is widely regarded as an integral part of the Chinese President’s ambitious “One Belt, One Road” infrastructure plan. Since then, the AIIB has approved more than US$24 billion in financing for 119 projects.

Outside a school in Yangon, soldiers boarded the school bus. International companies have announced plans to withdraw from joint ventures with military-supported companies © STRINGER/EPA-EFE/Shutterstock

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

However, the crisis in Myanmar has raised questions about what kind of relationship Beijing will form with the military government, which has been the country’s long-term economic lifeline.

Sun Yun, an expert on Myanmar-China relations at the Stimson think tank, said that as Western groups leave Myanmar and impose sanctions on coup leaders, she expects Chinese investors and companies will eventually step in and fill the gap. .

“If Western companies decide to withdraw, China will inevitably expand its footprint and share in the Myanmar market, which also raises the question:’Is isolation and sanctions the best strategy?'”

The only project between the AIIB and Myanmar, which is also a member country, was in 2016 when it provided a private sector natural gas power plant with US$20 million in funding.

The World Bank and the Asian Development Bank, which are lenders in Myanmar and conduct business there, temporarily suspended payments and new contracts after the coup.

The national unity government formed by the supporters of the deposed leader Aung San Suu Kyi, Foreign lenders have been warned It will not fulfill the debts assumed by the military government.

World Bank veteran von Amsberg said that although the AIIB is a relatively young institution, multilateral lending institutions generally have decades of work experience in complex situations and can play a role in easing tensions.

“The beauty of multilateral development banks is that they are a forum where you have a governance mechanism that includes countries with difficult relationships and sometimes conflicts or even worries,” he said.

Since the coup in Myanmar on February 1, more than 800 people have been killed and 4,000 have been imprisoned, while the country’s health, education, and banking systems have Work hard, Sparking concerns that Myanmar may become Failure status.

As Deepening political crisisAnother important consideration for the international community is the well-being of the country’s 54 million people.The United Nations warned that the double blow of the coronavirus pandemic and the coup could make nearly half of the population live Below Myanmar’s official poverty line By next year it will be about $1 a day.

Von Amsberg stated that the AIIB will always “see to prioritize” financing requests from members with “particularly serious financing and development needs.”

“Obviously, when we get financing advice from countries where there is a huge infrastructure gap or a large population of unmet needs (such as energy, transportation, water, and services like that), we will pay more attention to these requests,” he said.

“This does not overturn our policies or our concerns about sound banking, but when the development case is particularly strong, we will prioritize projects.”

Additional reporting by Sherry Fei Ju in Beijing

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