COVID-19 Relief Loans Fuel Conflict, Hundreds of Civil Society Orgs Say


Monday, August 24, 2020

Hundreds of civil society organizations (CSOs) across Burma have spoken out in opposition to international financial institutions’ COVID-19 Economic Relief Plan (CERP) loan scheme to the Burmese government, condemning the funds as “dangerous and irresponsible.”

COVID-19 economic relief loans have been approved by Burma’s Parliament and are being offered by the International Monetary Fund, World Bank, Asian Development Bank, and the Japan International Cooperation Agency, to a total of more than US$1 billion.

Some 224 CSOs released a joint statement on August 20 describing these loans as “ignor[ing] the interests of ethnic people” and “fuel[ing] Burma’s decades-long civil war.”

“The Burma Army and related organizations have control over the economy in our country. If Burma gets loans from international financial institutions, businesspeople who are close to the Burma Army will get these loans. This could cause more conflict in ethnic regions,” Saw Lay Kapaw, of the Karen Peace Support Network, an organization signatory to the statement, told NMG. “If the Burma Army has more money, people may suffer more. We therefore strongly oppose these international loans.”

The majority of government loans go to private banks, which then provide further funds to business projects primarily located in urban areas of central Burma, like Yangon and Mandalay, in a process that is “riddled with corruption,” the statement highlighted.

“They have said that the loan money would be used to build infrastructure projects. They won’t use it in ethnic regions. Frankly, we are not satisfied with this,” Saw Lay Kapaw added.  

The joint statement said that among the infrastructure projects that stand to be “fast-tracked” by the loans are controversial hydropower dams, long opposed by ethnic communities who have demanded that such projects not be considered until Burma is governed by a federal, democratic Constitution.

These projects are frequently guarded by the Burmese military. Meanwhile, the Burmese state is on trial at the International Court of Justice for violating the Genocide Convention, the statement emphasized.

“Burma does not need foreign loans. It is rich in natural resources, which, if properly

managed, could enable the entire population to prosper,” the statement said. “We do not support any international loans to Burma until a federal democratic union is established where we can first ensure our existing resources are used equitably and any loans, if necessary, are for the benefit of all citizens, not just those in power.”