The Rush for the Entrances in Myanmar

March 14, 2013

Over the decade, donors have publicly declared that they would improve how they operate in order to make aid work better. They would coordinate better, let recipient countries take more ownership of project design, and so on. Ten years and ten days ago, there was the Rome Declaration. Then came the Paris Declaration, the Accra Agenda for Action, and the Busan Partnership. Probably you doubt as much as I do whether these statements are worth their weight in paper. But their impact should be judged not by our biases, but by evidence---evidence of how donors actually behave. And the ultimate test for donors, suggests a finely written new report, will come in Myanmar. After the remarkable turnabout there---symbolized for foreigners by longtime dissident Aung San Suu Kyi becoming a member of the legislature last April---dozens of public and private donors are flocking to the country.Write Lex Rieffel of Brookings and James Fox, a former USAID senior economist:

Every respectable aid agency and international NGO in the world is planning to initiate or expand operations in Myanmar. The best and the brightest in these organizations are pushing to be posted in Yangon or to manage the Myanmar account. We were told that in a recent survey of World Bank employees, 80 percent listed Myanmar as their first choice for an overseas posting. Administrators of the Princeton-in-Asia program have described a fellowship in Myanmar as “the hot ticket” for its current applicants.
Rieffel and Fox are admirably forthright about their limitations as analysts of Myanmar---they've worked on development for decades but only spent a few months in the country, and don't speak the language---but Too Much, Too Soon? The Dilemma of Foreign Aid to Myanmar/Burma seems a fair portrait of donor behavior in the early days of an aid rush. Already, Myanmar's thin government is overwhelmed by requests for meeting from "ministers from donor countries, business leaders, [and] movie stars." Already, donors that vowed to cooperate are withholding information from each other. In this light, it may be a strange blessing that the government suddenly moved its capital in 2005 from Yangon to the terribly planned new city Naypyitaw. "For the government of Myanmar, encouraging embassies and donor offices to remain in Yangon could have the advantage of slowing the flow of visitors and making it easier to avoid them altogether."The news is not all bad though. Rieffel and Fox single out the UK's Department for International Development for praise: "arguably the most innovative and principled aid agency in the world today." One thing DFID did right was, along with the EU and Australia, to help establish four multidonor trust funds. For example, the "3 Diseases Fund," fills the void left by the departure of the Global Fund to Fight AIDS, TB, and Malaria in 2005. By pooling contributions from many countries, it prevents them from each setting up their own projections pell-mell.My one disappointment is that the report doesn't quite live up to its title. It doesn't answer the question, "Too Much, Too Soon?," nor even confront it with the directness I'd like. There is much (good) discussion of whether aid quality is too low---whether donors are living up to their Paris Declaration---but less of whether the sheer amount of aid in prospect could do more harm than good, no matter the quality. Even when aid is perfectly harmonized, coordinated, untied, country-owned, aligned, defragmented, managed for results, channeled through country systems, and done with mutual accountability and civil society consultation, it can still distort the political economy of the receiving country. The more that revenue comes from abroad rather than from the population, the less this fragile democracy may be compelled to respond to the needs of its citizens. Or the more, as the report worries, that dealing with donors will distract officials from existential challenges such as making peace with ethnic minorities.Although Rieffel and Fox don't say this directly, their descriptions imply that the best hope for coordinating the donors lies with the recipient. "Aid professionals generally do not get promoted in their organizations for being good cooperators. They advance by responding to the headquartersagenda, by showing that their organization is doing something that makes a difference, and by speeding up disbursement of resources under their control." Perhaps only the government of Myanmar, by leading a planning process, can get the donors to fall into a line. Here, early signs are promising. It began work on a Framework for Economic and Social Reforms last May, presented it in draft to donors in December, and brought them together to discuss it in January. The donors offered "high praise."Encouraging too is the deep debt reduction the government won from the Paris Club, the association of creditor nations, earlier this year. So far I've found no one who was involved in the 19-hour negotiation who is willing to tell me what happened. I surmise, however, that the government of Myanmar knew it had a good hand going in and played it well---owing to what blend of native savvy and foreign advisers, I know not. Norway says the talks almost collapsed. Japan, Myanmar's largest creditor, had already promised deep debt relief, and seems set to become the country's largest donor. With that set, Myanmar was apparently prepared to let its arrears to Norway, France, and other creditors languish, which could have frozen them out of the aid action. I've questioned whether Myanmar needed such deep debt relief. But if they were smart enough to squeeze it out of the donors, like a clever gambler who beats the house, I figure they deserve it.At any rate, if you need to understand the aid situation in Myanmar, this is an essential read. If your interest is more general, I still highly recommend the report as a humble, historically informed, and insightful snapshot of a country on the eve of major change.


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