Reuters-World Bank cuts off Myanmar

[hlaing@xxxxxxxxxxxxxx]

World Bank cuts off Myanmar 
01:58 p.m Sep 04, 1998 Eastern 

WASHINGTON, Sept 4 (Reuters) - The World Bank on Friday cut financial ties
to Myanmar, saying it would not consider giving the government any more
money because it had failed to make repayments on past loans. 

In a rare and severe step, the Washington-based lending agency said it
placed loans and credits to the Myanmar government in ``nonaccrual''
status, meaning the country will not be able to borrow money from the World
Bank until it clears its arrears, estimated at $14 million. 

The decision will make it more difficult and expensive for Myanmar --
formerly known as Burma -- to borrow money from other lenders, because it
sends a signal to private banks and financial markets that the government
was in default to one of the world's lenders of last resort. 

Myanmar is ruled by a military junta that has refused to let a democratic
legislature elected in 1990 take power. 

In May 1997 the United States imposed unilateral sanctions on Myanmar,
barring any new investment in the country but allowing existing projects to
go ahead. 

Myanmar has borrowed more than $700 million from the World Bank since 1956.
But no loans have been made since July 1987. 

``The bank does not have an active lending programme and does not have
plans for one,'' a World Bank official said. 

International pressure is growing against Myanmar's military government
over the issue of human rights, particularly its treatment of Aung San Suu
Kyi, the daughter of Myanmar independence hero Aung San. 

Other countries with protracted arrears to the World Bank include Iraq,
Liberia and Syria.