Burma

The Myanmar National Community Driven Development (CDD) Project was approved by the Board of Directors on November 1, 2012. The total project cost is $86.3 million, of which the World Bank is contributing $80.0 million through an emergency recovery loan. This emergency lending allowed the Bank to quickly disburse the loan to the Government of Burma prior to the clearance of the country’s arrears, which did not occur until January 2013. The project aims to provide grants to poor rural communities for small-scale development projects which are selected by communities themselves, though the Bank has stipulated that the projects identified at village tract level should be infrastructure-based such as road extensions, bridges, classroom building, etc.

The CDD project is a six year project, and is intended to reach 3 townships in the first year, 5 more in the second year, and 7 more in the third year. By the end of the sixth year, CDD projects will have been implemented in a township in all 14 of Burma’s states and regions as well as the union territory, covering a total of 640 village tracts. The first three townships chosen for this project in May 2013 were Kyunsu in Tanintharyi Division, Kanpetlet in Chin State, and Namhsan in Shan State. Each village tract will receive an average of $27,000 per year for three years, which is sent to the village tract directly once the project is approved. The project has been assigned the environmental assessment category B, which means that it is anticipated to have limited social and environmental impacts.

Concerns

For the World Bank, the rationale for this project is to shift the paradigm from a top-down development approach to a bottom-up one. The idea is that if the communities themselves choose the projects while the Department for Rural Development (DRD) implements them, the projects will serve as a confidence-building measure between the communities and the government. However, the fact that the DRD is part of the Ministry of Border Affairs (a military-run ministry) still raises many concerns for CSOs, and the lack of experienced facilitators has compounded the problem. In addition, the focus on infrastructure-only projects is particularly limiting for many of the targeted communities. In Namhsan, Shan State, for example, the need was not for infrastructure, as they already had a hospital and a new school, but for community livelihood support and capacity building for the hospital and school staff, which is not what the CDD provides. Namhsan was also the site of ongoing conflict between the local armed groups and the Burma military during the first year of the project, which led many CSOs to question the township selection process given that the Bank required that all of the selected sites be located in non-conflict zones.

The issue of consultation and transparency has also been a problem so far with the CDD project. Many groups felt that despite the rhetoric, the CDD was being rushed through, implemented in a top-down fashion as opposed to bottom-up, and did not have space for communities to provide input. For instance, many remote village tracts were visited only once by the facilitators, where Steps 1-6 of a ten step process were conducted. These steps include information dissemination, volunteer election (some villagers who were absent from the meetings were “volunteered” by others), forming committee members, and choosing a project from a pre-defined priority list. According to the project information, this cycle requires at least three visits by the facilitator, but in this case the whole process was squeezed into 3 hours. To make matters worse, in many cases the facilitators’ visits were only announced two days in advance, which prohibited many villagers who needed to work from attending the meeting. This rush to cut corners undermines the entire purpose of the project and deepens the mistrust between communities, the government, the international NGOs hired as facilitators, and international institutions such as the World Bank.

Resources

• DRD response to IFI Watch Myanmar’s Namh Sam report, 10 February 2015
• Verifying World Bank Claims About CDD: A Report on the Namh Sam Township Project, IFI Watch Myanmar, October 2014
• Burma Country Manager response to IFI Watch Myanmar, 29 May 2014
• Notes and Recommendations on the CDD Project, IFI Watch Myanmar, April 2014
• CSOs Lambast World Bank for ‘Hasty’ Grant to Burma, The Irrawaddy, 7 November 2012
• Community Driven Development, World Bank website

The Telecommunications Sector Reform Project is a $31.5 million public sector project funded by IDA that was approved by the Board of Directors on February 6, 2014. The project is intended to provide an enabling environment to support a liberalized telecom sector and to help provide access to extremely rural areas. Component 1 includes the improvement of the regulatory environment. The Myanmar Post and Telecommunications (MPT) will take over the regulatory role for the time being, and they will receive on-the-job training from Bank staff and regional regulators. Component 2 includes the development of a universal access fund and strategy, especially to provide coverage to extremely rural areas. The second phase pilot projects will be funded by a one-time subsidy to the four main operators to build infrastructure in areas which are not commercially viable. Component 3 includes the improvement of e-Government in Burma, including the launch of the Myanmar National Portal. The Portal will be mobile-friendly and should help improve access to information regarding licensing and other relevant data (subscriptions, quality of service, etc). The project has been assigned the environmental assessment category B, which means that it is anticipated to have limited social and environmental impacts.

Concerns

Civil society organizations have noted a number of gaps in the project documents and have sought to bring them to the attention of the project team, country staff, and Executive Directors. In particular, civil society would like the Bank to commit to risk assessments and support for safeguards prior to implementation in all three components of the project, especially given the history of abuse perpetuated by the Ministry of Communications and Information Technology (MCIT), the project implementer. Currently, Burmese law and practice does not protect users from unwarranted security agency surveillance or collection of personal data, and the government may seek to enlist state-owned MPT or new private operators in such abuses without appropriate safeguards for rights.

The World Bank must have a primary interest in ensuring that security agencies are not able to conduct surveillance, procure user data, or disrupt communications without an accountability process that involves independent oversight to protect rights (i.e. obtaining a warrant from an independent and competent judicial authority). Such a process does not now exist. Rather, the MPT has been responsible for regulating internet filtering and monitoring surveillance in conjunction with government security agencies.

While the commitments made by the Burma Country Manager to review the suite of telecommunications policies focused on issues of privacy, data collection, cyber-crime, access to and freedom of information (which was not described in the project documents) was welcome, it is insufficient unless those laws are revised and removes the government’s ability to wield bias and abusive powers as it aids the Burmese government in modernizing Burma’s IT infrastructure and launching eGovernment services.

It is also critical that the project team develops a consultation framework for use by the government during Component 2, which involves the construction of the telecommunications infrastructure in rural ethnic areas and which may have a number of indirect but serious land and environmental impacts caused by the influx of labor, movement of construction equipment, biased land laws, and lack of a domestic safeguard policy framework. According to the available project documents, it is unclear whether the Bank will provide oversight of the Environmental and Social Management Framework, undertake safeguards assessments, lead mitigation efforts, or build the institutional capacity of MCIT. Past consultations with CSOs were disappointing, so the lack of clarity on implementation of the project, especially the physical components, is particularly worrisome.

For instance, the documents for the first consultation with NGOs regarding the project were disclosed only a few days beforehand and indicated that the Bank had already consulted ethnic groups widely. When CSOs demanded that the list of ethnic groups consulted be published, the project team admitted that they had not done any other consultations besides the one in Yangon but had included the statement in the draft project documents in anticipation of future consultations. The document was immediately taken down from the Bank’s website, but CSOs still feel as if they cannot trust what is recorded in the Bank’s documents because of this instance.

Resources

Letters

• Response to World Bank Country Manager, 10 February 2014
• Burma Country Manager Response to CSO letter, 25 January 2014
• CSO letter to the World Bank Board of Directors on the Burma Telecom Project, 21 January 2014
• CSO letter to the World Bank Southeast Asia Country Director on the Burma Telecom Project, 21 January 2014

Media

• Telecom investments threaten privacy rights in Burma, DVB, 4 February 2014
• World Bank Pledges $2 Billion in Aid to Myanmar, Radio Free Asia, 27 January 2014
• Reforming Telecommunications in Burma: Human Rights and Responsible Investment in Mobile and the Internet, Human Rights Watch, May 2013

The Agricultural Development Support Project (ADSP) is a $100 million public sector project funded by IDA that is expected to go to the Board of Directors for approval on February 5, 2015. The project is focused on the productivity improvement of small-holder farmers through Water User Groups in Burma’s dry zone, namely in the Naypyitaw, Sagaing, Bago East, and Mandalay regions. The three major components are: (i) irrigation management, which will focus on reforming the way irrigation schemes are managed as well as fund some strategic studies; (ii) farm advisory services, including classic training on basic problems such as inadequate seed production, technology, fertilizer, and agrochemicals; inexistence of public extension services; and increasing labor costs (which will be addressed through the farm mechanization subcomponent); and (iii) project management. There is also space for an emergency fund to allow the project team to quickly re-allocate resources in the case of an emergency. The project has been assigned the environmental assessment category B, which means that it is anticipated to have limited social and environmental impacts.

Concerns

Agriculture is core to the development of Burma, as 70% of the country’s population relies on this sector for their livelihoods, most of whom are small-holder farmers. The most burning issue regarding agriculture in Burma today is that of land – land grabbing by cronies and the miltary is a major problem and one that will not go away unless the lands of small-holder farmers are protected. There is a fear that World Bank investments in agriculture will promote agribusiness in Burma, which has already prompted mass land grabbing by cronies, leaving local farmers landless without compensation.

Of particular concern is the intersection between agriculture, energy and extractives, and land as conflict drivers in Myanmar. The ethnic groups of Burma, which represent about 40% of the total population, occupy 70% of the country’s land that is rich in natural resources. However, the government has already granted several land concessions to national and international business interests for agribusiness, energy, and minerals,though no one in the local communities has seen these contracts. For instance, large amounts of land has been granted to Chinese businesses for energy production, especially in Kachin State where conflict is ongoing. In fact, the conflict in Kachin State was reignited in 2011 over an argument between the KIO and the military over access to electricity generated by a hydropower dam owned by a Chinese company.

This project could seek to exacerbate some of these issues if it does not take into account the complexities of land conflict and governance risks. The team is hiring consultants to conduct some of these surveys, but it is important that they learn from the negative examples of the Thilawa Special Economic Zone and the Cambodian Land Management and Administration Project how to adequately address legacy land conflict issues. There are a lot of questions and concerns about the Ministry of Agriculture and Irrigation’s capacity to ensure that the rights of farmers are promoted in the program, how much of the benefits will flow down to the smallholder farmers, and also how the program can protect against land loss by smallholders. In addition, CSOs in Burma are concerned that all of the consultations for the project thus far have only been conducted in Yangon with senior staff from international NGOs, while stakeholders such as ethnic groups and small land holders in rural areas that will be directly impacted by the project have never been consulted.

Resources

• Myanmar ADSP Meeting Notes, 3 September 2014
• VIDEO: Progress and Perspectives on the Interim Strategies of the World Bank and ADB in Myanmar, World Bank Spring Meetings, 9 April 2014
• Myanmar Agricultural Development Bank: Initial Assessment and Restructuring Options, World Bank: Livelihoods and Food Security Trust Fund, April 2014
• Myanmar: Capitalizing on Rice Export Opportunities, World Bank: Livelihoods and Food Security Trust Fund, February 2014

The Yoma Equity Project is a $10 million International Finance Corporation investment approved by the World Bank Group Board of Directors on July 1, 2014. The investment will consist of (i) quasi-equity; (ii) senior loan; and (iii) trade finance through IFC Global Trade Finance Program (“GTFP”). The investment is intended to help expand the small and medium-size enterprise (SME) portfolio of the client, Yoma Bank, thereby increasing SME access to lending in Burma generally. The project has been assigned the environmental assessment category FI-2, which means that while the project may have some negative social and environmental impacts, the client is responsible for managing the environmental and social risks of its sub-projects.

Concerns

The IFC’s Performance Standards do not apply directly to FI projects, meaning that the responsibility for assessing the social and environmental impacts of the particular FI portfolio is delegated to the client. The client is not required to disclose sub-clients or sub-projects, perform consultations, or conduct environmental or social impact assessments. This tool is supposed to allow the IFC to finance smaller projects than is typically feasible, but in practice it often leads to less supervision and poor verification on the documents submitted by the client. This of course creates serious accountability issues, especially if the FI lending happens to go to a client that has a checkered history and without even the minimum standards of Corporate Social Responsibility. As a result, FI projects have come under scrutiny in recent years, especially in India and Honduras, as illustrated by the CAO’s audit of IFC FI projects in February 2013.

While the IFC claims that part of this project will include advisory services for Yoma Bank staff to develop and implement an Environment and Social Management Framework, Yoma will be operating in an environment where there are no country system safeguards in place and therefore little accountability if they fail to implement the ESMF. The role of the IFC in overseeing the implementation and monitoring of the project is going to be very important in this case, especially because of Yoma Bank’s checkered past. These concerns include Yoma’s membership in the business ecosystem that has been developed for many years by its main sponsor, Serge Pun and associates, through the creation of different companies, business holdings, and other investment deals or joint ventures with some major multinational companies and overseas banks, some of which go to agribusiness, golf courses, real estate development, and industrial infrastructure including the Thilawa SEZ. These investments have been linked with human rights violations including forced evictions, clearance of forests, industrial wastes and labor issues.

Resources

• Foreign Aid Funding Luxury Hotels in Myanmar, Inter Press Service, 1 June 2014
• Press Release: International Finance Corporation (IFC) Should Postpone Burma Investment, US Campaign for Burma, 27 May 2014
• DVB talks to Vikram Kumar, IFC, DVB, 3 August 2014