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Japan has provided Myanmar with a bridge loan that enables the government to pay off $900M in overdue debts.
The Japan Bank for International Cooperation has provided Myanmar with a bridge loan that enables the government to pay off about $900 million in overdue debts to the Manila-based Asian Development Bank (ADB) and the World Bank, the Associated Press reported.
Western countries have eased sanctions imposed on Myanmar’s military-run government since President Thein Sein started taking steps to reform the economy and free political prisoners, Reuters reported.
But until now, international financial institutions had been prevented from making new loans to Myanmar because the country stopped payments on its old loans around 1987, the AP reported.
With Myanmar’s debt arrears cleared, the ADB has announced that it will loan the country $512 million to “make banking services more widely available,” particularly in rural areas, and “sustain government efforts to revamp the national budget process and modernize tax administration,” Reuters reported.
It’s the ADB’s first loan to Myanmar in more than 30 years, Reuters reported.
Also following on the debt clearance, the World Bank said its board had approved a $440 million credit for Myanmar that would support "critical reforms being implemented by the government to strengthen macroeconomic stability, improve public financial management and improve the investment climate,” the AP reported.
Some of the World Bank credit will be used to repay the bridge loan from Japan, the AP reported.
More from GlobalPost: World Bank ends 25-year hold on Myanmar, grants millions