Global Development: Views from the Center

In the last few days, a delicate dance of reconciliation between Myanmar and its estranged foreign creditors reached its final measures. At the Club de Paris---the collective negotiating forum for creditor governments such as Japan and the United States---a press release just announced a debt deal with the poor and long-isolated Asian nation. The creditors committed to what is by Paris Club standards an exceptionally generous deal: cancelling half the debt in arrears---Myanmar defaulted in 1998---and instituting a 15-year repayment schedule for the remainder, including a 7-year grace period. Because the interest rates on most of these the loans are low, typically about 1%, this stretching out of repayment further reduces the debt's economic cost ("net present value" or NPV). Overall, the NPV will fall 60%. Meanwhile the World Bank and Asian Development Bank made their first loans to Myanmar in more than 20 years, in the process erasing their own arrears issues with the country.

The European Development Fund audit body just came out with a report that suggested its aid funding on roads had been less successful than expected because a lot of them were falling apart due to heavy traffic and insufficient maintenance.   So this seems like a good moment to revisit the sectoral aid effectiveness debate.

The unexpectedly sudden French military action in Mali is a first step toward reunifying the country, but it also highlights the risks for outsiders, including the United States. In the days ahead, the US will need to balance its cautious instincts on Mali with the imperative to help shape events as they unfold. In the months ahead, the US must reflect on the future of American counterterrorism and democracy strategies in places without a massive US military presence.

My dishwasher died over the holidays.