Since seizing power on 1 February, Myanmar’s illegal military junta’s destructive efforts to gain territorial and political control have dragged the economy, already impacted by the COVID-19 pandemic, into a crippling, downward spiral.
According to the briefing, if the coup is not reversed, the junta’s domination of the economy with result in:
Multilateral Development Bank (MDB) financing decisions are inherently political, even if banks assert that they cannot interfere in political affairs and are apolitical by virtue of their Articles of Association. Any development intervention has a potential political impact, by empowering or disempowering the incumbent political authority or its challengers and human rights concerns can undermine development objectives.
While the World Bank and Asian Development Bank have both declared a freeze on disbursement for their operations in Myanmar, it is unclear whether their private project loans, loans through financial intermediaries, and other financial instruments and guarantees will continue. Without a thorough examination of their portfolios, they risk assisting the junta. To date, the Asian Infrastructure Investment Bank has not published any formal statement regarding Myanmar and the IMF has said that its engagement with Myanmar is determined on an ongoing basis by its membership.
MDB shareholders may in turn be bound by the sanctions imposed by their countries. Multiple foreign governments—which are shareholders in MDBs—have sanctioned entities and individuals in Burma. For example, the US—the largest shareholder in the World Bank Group and sharing the top position with Japan in the ADB—has sanctioned the junta. European shareholders, as a bloc, represent 23% of shareholder power in AIIB—second only to China—and many have adopted sanctions against the junta.
Read more in Myanmar’s military junta cripples economy.