MM-Reengagement and Reform Support Program

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The development objectives of the Reengagement and Reform Support Credit Program for Myanmar are (i) to support Myanmar's critical reforms for strengthening macroeconomic stability, improving public financial management, and improving the investment climate, which will in turn help grow the economy, create jobs, and reduce poverty; and (ii) to facilitate the clearance of Myanmar's arrears to International Development Association (IDA), which is required in order to restore normal relations between Myanmar and the World Bank. This program document states a Reengagement and Reform Support Credit (RRSC) to the Republic of the Union of Myanmar for SDR287.75 (US$440 million equivalent). It will be a standalone development policy operation (DPO) program aimed at supporting the full normalization of relations between Myanmar and the World Bank as well as the Government's efforts to undertake critical institutional and policy reforms in the implementation of its medium-term development strategy. In terms of IDA resources, Myanmar is eligible for exceptional support as a reengaging country. Since Myanmar is projected to be at a low risk of debt distress after arrears clearance, IDA resources will be provided on credit terms, per the stipulations of the credit allocation system agreed with IDA donors for the IDA 16 period (FY12-FY14). Going forward, the Government realizes that a key challenge will be to ensure that these reforms translate into improved living standards for the majority of the population, and that gains registered are sustained. The program document is divided into six sections, including this introduction. Second section discusses the country context which gives an overview of Myanmar focusing on the political and economic context, recent economic developments, macroeconomic outlook, and debt sustainability. Third section presents the Myanmar Government's development program; fourth section discusses how the Bank is supporting the government's program, while section fifth describes the DPO. Sixth section outlines implementation issues, including risks and mitigating measures.