The IFC has proposed five new investment projects for
“The IFC has the responsibility to use its financial influence to promote transparency and reform in Burma’s corrupt business environment,”
“Regrettably, the IFC’s recent investment proposals seem to mark a deviation from the IFC’s earlier objective to bolster the growth of microfinance in
In 2012, the
That same year, the
Yet of those five, three involve the construction of upscale hotels.
For one of the projects, which would develop four hotels, the IFC’s expected development impact is to “create 437 direct and indirect jobs (46 percent female) … and create demand for locally-sourced materials, services, and labour.” In addition, the project would “contribute to the domestic economies through increased tax revenue and foreign exchange inflows.”
The goal of another project, to build a business complex and more hotels, is to install what the IFC calls “critical business infrastructure”.
“The Project will add much needed supply of international standard office, retail and hospitality infrastructure to Yangon,” a project document states. “International standard business infrastructure such as these are of critical importance in attracting foreign investments in the country.”
“And any problems are not for lack of hotel rooms – that’s not what
Another of the IFC-proposed projects, known as Yoma Equity, would provide about
Yet while Quigley’s office supports IFC funding for small- and medium-sized enterprises, she worries that the project will not be well regulated.
“It’s widely considered that the performance standards of the IFC are very good, but then the IFC doesn’t require them to be applied,” she says. “Over 50 percent of projects are classified in such a way that they don’t require the standards.”
The IFC categorises projects in one of four ways, three of which are regulated by the agency’s environmental and social performance standards. The fourth type of project, however, known as FI for ‘financial intermediary’, is excused from these assessments.
Yoma Equity, for instance, is classified as FI-2, meaning that “its business activities have potential limited adverse environmental or social risks or impacts that are few in number,” according to the IFC’s website.
Yet according to
“Every financial institution we work with must adhere to our environmental and social requirements and integrity standards,” Jweied told IPS.
“Should IFC engage with
Last year, an independent assessment by the Compliance Advisor/Ombudsman, an internal auditor, criticised the IFC’s regulations of financial intermediaries.
The report looked, for instance, at a loan for
In response, the IFC has admitted to missteps around Dinant.
In the case of Yoma Equity, the intermediary corporation is less shady than Dinant but, according to observers, still questionable.
Serge Pun chairs the
Quigley notes that Pun’s business dealings have raised social concerns in various sectors over the years. Indeed, the
These never went forward, however, and as a result Pun has developed a reputation in
“Everyone is investing in him,” she says, “so the IFC is perpetuating the same oligarchy that’s in place. The IFC is coming in and reinforcing the status quo.”
Meanwhile, the potential broader impact of the IFC’s projects is also under scrutiny. The majority of Burmese live in rural areas, after all, and agriculture is the livelihood of up to 70 percent of the population, according to
Yet most of the IFC’s projects are focusing on urban areas. Experts say this is simply continuing a broader trend being seen in
“A significant factor contributing to the urban versus rural income inequality is that the vast majority of investment in
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