U.S. Position on the Asian Development Bank’s (ADB) 

Interim Country Partnership Strategy for Burma

October 26, 2012

The United States endorses the ADB’s interim country partnership strategy for Burma (2012-

2014). The United States places value on the ADB’s important role in this country’s 

development, reform, and strengthened governance and reiterates its support for the economic

and political reforms that are currently underway. 

This country partnership strategy, and the U.S. endorsement of it, are recognition of both the

progress made in Burma and our desire to see that process continue in the months and years 

ahead. The ADB is rightly positioning itself to assist in the ongoing economic and political 

transformation of Burma. For its part, the United States will continue to review and to ease its 

bilateral restrictions in response to positive actions undertaken by the government in a number

of important areas.

Over the past six months, the United States has taken a number of significant bilateral steps to 

support the country’s economic and political reforms. In July, the U.S. Government eased 

several financial sanctions, including ones that kept U.S. companies from investing in and 

exporting financial services to the country. 

From a multilateral perspective, one of the more significant changes in the United States is that 

the U.S. Congress passed, and President Obama recently signed, legislation allowing the

Administration to waive legislative mandates that directed U.S. Executive Directors to vote “no”

on Board proposals for financial assistance to this country from the ADB and other international 

financial institutions. This new legislation is particularly important because of the key role ADB

assistance can play in coming years in Burma. The ADB, in concert with other bilateral and 

multilateral partners, will help the authorities build a strong foundation for development and 

successful reintegration into the international economic community after years of isolation.

Through its capacity and institution building, policy engagement, technical assistance, and 

eventually lending, ADB can help strengthen key public financial management systems, build
capacity in key ministries, enhance fiscal transparency and accountability, and help ensure 

sufficient engagement with civil society. Building a solid foundation in all of these areas is 

absolutely critical, especially as the country opens up and seeks to harness expected and

significant inflows of private capital and foreign direct investment for development.

The first task in this regard is for Burma to normalize relations with creditors, including the

ADB. The United States appreciate that the government has begun working with the ADB, 

World Bank and IMF on priority reforms to support sound macroeconomic development, and 

looks forward to successful completion of the arrears clearance exercise early next year. As part 

of this process, the United States hopes that the Burmese government will begin making 

payments on its ADB and World Bank debts as they fall due, which is generally a minimum

expectation of countries in the arrears clearance process. The United States also expects

continued ADB coordination and collaboration with the World Bank and bilateral creditors 

(including the Paris Club) on arrears clearance as part of a comprehensive multilateral 

normalization effort.

And yet, along with this positive and supportive outlook, the United States also remains cautious, 

knowing that the enthusiasm of the international community can easily outpace the government’s 

capacity to manage that support. Its institutions are weak, and decades of economic isolation and 

military rule have distorted the economy tremendously. In designing and implementing future

projects, the ADB will need to go beyond its normal due diligence in applying supervision and 

financial monitoring. At the same time, the Bank must ensure that its assistance is neither

associated with nor exacerbates human rights abuses and ethnic tensions in this splintered and 

impoverished society. 

Furthermore, PSOD will need to exercise particular caution in selecting loan/equity investment 

recipients to ensure high corporate governance standards. 

On the details of the strategy itself and how it must contribute to the economic and political 

transitions currently underway, at the most macro level, the United States agrees with the focus

on the three program areas of building human and institutional capacity, promoting the enabling 

environment, and creating access and connectivity for rural livelihoods through infrastructure

development. In practical terms, the United States recognizes that planning is still at a very early

stage and it is unclear what shape many of these investments will take. The United States 

appreciates staff’s efforts to date to build the necessary relationships within the various 

government ministries, to assess absorptive capacity, provide technical assistance where

requested, and begin narrowing down the particular areas in which ADB support will be most 

effective. Given the country’s institutional weaknesses, the United States wants to stress that 

capacity building must be a prerequisite to large-scale lending in order to ensure that the

government has the capability to use such assistance effectively; the United States therefore

urges ADB to exercise forbearance in moving toward infrastructure lending.

The United States also appreciates the level of coordination between the ADB and other

development partners, particularly the World Bank, which has its own areas of comparative

advantage. As the process of assessment and sector analysis continues, the Bank should remain 

focused on its core areas, notably sustainable energy and transport infrastructure, financial 

sector development, and private sector strengthening. When the time comes to begin 

identifying and designing programs, it will also be important to include large doses of technical 

assistance and policy guidance as needed to support the sectors in question.

Concerning the Bank’s strategy for its policy-based operation for arrears clearance, the United 
States agrees that the priorities should include efforts to support fiscal sustainability and 

macroeconomic stability and to strengthen management of public finances, increase investment, 

and promote regional trade and financial integration. Of these, fiscal transparency is perhaps the

most pressing need as it is indispensable to the notion of public accountability on which 

successful development rests. Wide-ranging investments in public financial management will be

vital, including technical assistance, policy advice, and knowledge management generally. Along

these same lines, while the United States commends the country for taking the initial steps 

towards building an adequate anti-money laundering and counterterrorism financing (AML/CFT)

regime, it encourages further progress on the concerns that led the Financial Action Task Force

(FATF) to add the country to the FATF blacklist, and hopes the ADB can help support these

efforts. Furthermore, given the likely commercial interest in developing the country’s vast 

natural resources in coming years, the United States suggest that the ADB might have a role in 

helping the authorities implement their previously- expressed commitment to join the Extractive

Industries Transparency Initiative (EITI).

Similarly, transparency and sound development decision-making will also be enhanced through 

active Bank engagement with civil society, and Bank efforts to promote greater government 

engagement with these same groups. The United States recognizes that these are early days in

the relationship between ADB and Burmese civil society groups and that staff are still learning

their way around this country’s non-governmental sector. Still, developing a collaborative

relationship now will yield major benefits in the future, helping to ensure that development 

activities undertaken by the government and supported by the ADB reflect the priorities of the

society at large.

With these comments in mind, the United States reiterates its support for this interim country

partnership strategy for 2012-2014. The United States looks forward to the Bank’s active

engagement to help build the foundation for development, good governance, transparency,

accountability, and inclusive growth.

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