Myanmar + 1 more

Supporting the transition: Understanding Aid to Myanmar Since 2011

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Myanmar today is one of the world’s largest recipients of international development assistance, often referred to simply as “aid.” A history of underinvestment has left the country with the highest poverty rate in the region and critical deficits in infrastructure and social services, making it a priority for many development agencies. Myanmar was the seventh-largest recipient of international aid in 2015, and it is now the third-largest recipient per capita in the region—behind only Cambodia and Laos, which have far smaller populations. Expectations are for sustained, high engagement with the international community.

This reflects a significant change since the political and economic transition initiated by the Thein Sein government in 2011. Far from its current seventh, Myanmar was just the 79th-largest recipient of aid globally in 2010. Under the former military government, levels of assistance were both far lower and restricted primarily to health and humanitarian programs. Yet, since the start of the transition,
Myanmar has actively courted international support for its reforms, and international aid agencies have responded with significant debt forgiveness and new programs. This has brought about a significant proliferation and diversification of funding agencies in Myanmar, which now also fund a broader range of activities, with many of the largest donors prioritizing energy, transportation, and rural development. The mode of delivery has also changed: most new funding has been distributed through the government and financed with loans.

Following the inauguration of the NLD government in March 2016, it is time to take stock of aid to Myanmar and reflect on how policy has evolved.
Though the policies and programs governing this aid have developed significantly since 2011, much remains undetermined, with potential for significant positive reforms. Many large commitments from donors remain unprogrammed or unspent, and there are still important policy questions to be resolved in the country’s new aid-management architecture. This leaves significant opportunities to improve practice and to better leverage aid to support the country’s development aspirations.

The need for such reflection is particularly pressing because Myanmar presents a distinctly challenging environment for effective aid programming. Political and economic changes are occurring rapidly, creating competing priorities for international assistance. The country faces multiple distinct humanitarian crises—some from protracted conflict, others the result of periodic natural disasters—and an ongoing peace process. The country’s complex security situation poses significant challenges, with many nonstate armed groups active across the country, and ongoing violence in Kachin State and northern Shan State.

There are also challenges in coordinating the large and diverse array of funding agencies in the country.

Providing meaningful assistance in this setting, while minimizing the risk of doing harm, is a stark challenge for aid actors.

In this context, it is also important to acknowledge the limited influence of aid, which is only a small component of overall development finance. The Myanmar government already raises considerable domestic revenue, and aid is small relative to the national budget—approximately 4 percent in 2015. In addition, remittances have approached levels similar to aid over the past several years, and since 2011 there has been almost twice as much foreign direct investment as aid. Trade has also expanded significantly since the country’s political and economic transition began. In this environment, the task for aid policymakers is to identify the unique contribution that this funding can make—which often derives from its flexibility and ability to leverage global expertise—and to ensure it best complements the other factors driving development in the country.

To support reflection on aid programming, this report provides an introduction to aid in Myanmar, including historical grounding, some novel quantitative data on donors’ current priorities, and analysis of several particularly vexing policy areas.

Recognizing the unique challenges of delivering aid where there is limited experience of international development cooperation, the report places a special emphasis on clearly defining key terms and explaining the policy frameworks that have guided the international community’s engagement with Myanmar. The first chapter focuses on the history of aid to Myanmar. The second, on the analysis of key trends in current assistance. The third chapter discusses several of the priority policy questions for development cooperation in Myanmar moving forward. An annex containing key definitions provides more detail on useful terminology.

Data collection for this report took place between June 2016 to July 2017. The report draws on interviews, secondary sources, and quantitative analysis, including an independent quantitative dataset on donors’ programs in Myanmar in November 2016. Over 40 interviews were conducted in Yangon between June 2016 and June 2017 to better understand donor priorities in Myanmar. For the quantitative data, a survey was conducted to establish a rigorous accounting of donor programs in Myanmar. Based on prior estimates of international assistance, a list of 25 target donors was created, of which 21 ultimately provided data. This was collected in alignment with the standards used for the Aid Information Management System in Myanmar.

Further data on aid was drawn from the Organization for Economic Cooperation and Development’s Creditor Reporting System Aid Activity Database, and the Myanmar Information Management Unit’s Who, What, Where dataset.