Manila, Apr. 27

The Asian Development Bank (ADB) said Friday it was prepared to resume giving financial aid to Myanmar after a 24-year suspension, but only once the government repaid nearly $500 million in debt.

ADB president Haruhiko Kuroda said the Manila-based multilateral institution was ready to help the formerly junta-ruled country emerge from decades of economic quagmire, following recent significant political reforms.

But Kuroda said Myanmar owed the ADB $490 million, and the newly appointed quasi-civilian government must repay the money before any new financial assistance could be extended.

"At this stage, that is one big hurdle... to restart financial assistance to Myanmar because the government has accumulated arrears vis-a-vis ADB, the World Bank and other bilateral donors," Kuroda told reporters.

"And that must be cleared before we can start financial assistance."

Kuroda said that unlike bilateral donors, multilateral lending agencies had little wiggle room to waive off debts.

"I would like to emphasise that as far as multilaterals are concerned, we have not much flexibility," Kuroda said.

But he stressed the Manila-based bank was prepared for "constructive engagement" with the government in Myanmar, and help it revive its economy as it slowly transitions into democracy.

Kuroda noted that Myanmar was the fourth most populous country in Southeast Asia, and this had a huge potential labour pool that presented opportunities for investment.

The country also has big reserves of untapped natural resources, Kuroda said, without giving specific figures.

"The potential for the Myanmar economy is really huge," Kuroda said.

"We are hopeful that with the engagement by the international community, including ADB, the Myanmar economy can be developed rapidly and the living standards of its people can be substantially improved," he said.

Myanmar was an original member of the ADB, which has been providing soft loans and grants to the region’s developing countries since its founding in 1966 in a bid to help improve the lives of the poor.

The ADB cut off Myanmar from aid in 1988, when the military regime violently crushed a public uprising led by students and activists.

The World Bank announced on Thursday that it would open an office in Myanmar in June. Kuroda said the ADB had no plans yet to do the same, although it could happen.