Addressing Myanmar's Debt Issues
April 21, 2011
The two leaders shared the view that addressing Myanmar's debt issues in a comprehensive way is important for Myanmar's reengagement with the international community. Japan will accompany Myanmar as it strives to this objective, in close communication with the MDBs and the Paris Club.
In this respect, Myanmar expressed its willingness to discuss with the World Bank and the Asian Development Bank, with the view to clearing its arrears vis-?-vis those institutions. Japan advised Myanmar to closely collaborate with the Paris Club. Myanmar, on its part, expressed its willingness to work out with the Paris Club.
On Myanmar's debts with Japan, the two leaders underlined that the two sides will pursue the following conceptual approach as an adjustment of terms of past ODA.
- Payments whose due had fallen before March 2003
An ultra short-term commercial loan for clearing this category of debts (JPY 198.9 billion in total for both principal and interest) will be bridged to a quick-disbursing long-term concessional loan (Yen Loan), under which a set of policy actions and reforms implemented by Myanmar will be jointly monitored by the two countries.
- Payments whose due falls after April 2003
Japan will resume the procedures to cancel this category of debts (JPY 127.4 billion in total for both principal and interest), as was conveyed to the Myanmar side in December 2002.
- Overdue charges
Overdue charges (JPY 176.1 billion, fixed as of end-March 2012) that have accumulated in the past two decades or so will be canceled after jointly monitoring the continuation of Myanmar's reform efforts in one year period.
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