The representatives of Paris Club creditors and the
representatives of the Government of the Republic of the Union of Myanmar met
on 25 January 2013 and agreed on a comprehensive treatment of the Republic of
the Union of Myanmar’s public external debt.
The delegation of the Republic of the Union of Myanmar
described the economic and social challenges faced by the country during the
current transition process and presented the main measures, included in the
program of the Government and supported by the Staff Monitored Program (SMP)
with the International Monetary Fund, aimed at maintaining macroeconomic
stability while creating the institutions necessary to manage a rapidly
changing economy and at achieving inclusive and sustainable economic growth.
Paris Club members took note of the strong commitment of the
Government of the Republic of the Union of Myanmar to implement the economic
reforms under this program. They welcomed the commitment of the Government of
the Republic of the Union of Myanmar to continue cooperation with the IMF,
following the present SMP, as the Government of the Republic of the Union of
Myanmar expressed in its Letter of Intent attached to the SMP. They also
welcomed the comprehensive arrears resolution plan that the Government of the Republic
of the Union of Myanmar is committed to implement with all its external
creditors.
The representatives of the Creditor Countries, aware of the
exceptional situation of the Republic of the Union of Myanmar and of the
presence of arrears that puts the Republic of the Union of Myanmar in debt
distress, agreed on a debt treatment to ensure its long term debt
sustainability. To this end, once multilateral arrears have been cleared,
representatives other than that of Japan will recommend that their Governments
deliver an exceptional treatment providing a cancellation of 50% of the total
of arrears due to Paris Club creditors in nominal terms in two phases. The
remaining amounts will be rescheduled over 15 years, including a 7-year grace
period.
Moreover, Norway has committed to an exceptional full
outright cancellation of its claims. In total this combined effort results in a
reduction of net present value of more than 60%. As regards Japan, exceptional
cancellation and rescheduling of claims will be provided.
Paris Club creditors noted the Republic of the Union of
Myanmar’s commitment to meet its external financial obligations with all its
creditors, multilateral, bilateral and commercial.
Background notes
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| Rich nations of the Paris Club. |
2. The members of the Paris Club which participated in the
reorganization of the Republic of the Union of Myanmar’s debt were
representatives of the governments of Austria, Canada, Denmark, Finland, France,
Germany, Italy, Japan, the Netherlands, Norway and the United Kingdom.
Observers at the meeting were representatives of the
governments of Australia, Belgium, Korea, the Russian Federation, Spain,
Sweden, Switzerland and the United States of America, as well as the International
Monetary Fund (IMF), the International Development Association (IDA), the Asian
Development Bank and the Secretariat of the UNCTAD.
3. The delegation of the Republic of the Union of Myanmar was
headed by Mr. Win Shein, Union Minister, Minister of Finance and Revenue. The
meeting was chaired by Mr. Ramon Fernandez, Chairman of the Paris Club.
 |
| Burma's Finance Minister Win Shein signing the final agreement. |
1. The Republic of the Union of Myanmar’s economic program is
supported by a Staff Monitored Program with the International Monetary Fund
(IMF).
2. The Republic of the Union of Myanmar’s public external
debt was estimated to be USD 15.3 billion as of end 2012 (source: IMF
documents). The debt owed to Paris Club creditors was estimated to be USD 10.33
billion as of 1st January 2013 (source: Paris Club).
(Burmese delegation led by Finance and Revenue minister U Win Shein arrived Paris on 22 January to attend the meeting for the forgiveness of Burmese debt. Burmese side first explained in details the political and economic reforms currently going on in their country and submitted their proposal for debt forgiveness.
Burmese propsal was 67% of all their Parric Club debts to be forgiven, and the rest of the debts to be allowed to pay back in 23 years time including 7 years grace-period. Paris Club's response was 40% of all debts to be cancelled, and the rest to pay back in 15 years including 5 years grace-period. Final agreement was reached between two sides after after 16 hours continuous meeting from 11:00 January 24 to 3:00 January 25.
As the final result Burma has achieved the forgiveness of 60% (6.192 billion US Dollars) of her external debts from the debt relieve program of the Paris Club and the debt relief programs from both Norway and Japan.)
(Burmese delegation led by Finance and Revenue minister U Win Shein arrived Paris on 22 January to attend the meeting for the forgiveness of Burmese debt. Burmese side first explained in details the political and economic reforms currently going on in their country and submitted their proposal for debt forgiveness.
Burmese propsal was 67% of all their Parric Club debts to be forgiven, and the rest of the debts to be allowed to pay back in 23 years time including 7 years grace-period. Paris Club's response was 40% of all debts to be cancelled, and the rest to pay back in 15 years including 5 years grace-period. Final agreement was reached between two sides after after 16 hours continuous meeting from 11:00 January 24 to 3:00 January 25.
As the final result Burma has achieved the forgiveness of 60% (6.192 billion US Dollars) of her external debts from the debt relieve program of the Paris Club and the debt relief programs from both Norway and Japan.)
