NDAA amendment ends U.S. support to military-controlled Burma through the IFIs: Should the IFIs adopt a similar policy?

Caroline Vesey

Nearly one year after the military seized control of the Burmese government from the democratically elected National League for Democracy (NLD) party in a coup, the nation is still in turmoil, and the junta remains in power. Many members of the civilian government have been detained since February 1, 2021, including Daw Aung San Suu Kyia, Burma’s former leader, cabinet ministers, NLD party members, activists, and journalists. As a result, there have been mass protests for months. An estimated 1,300 people have been killed, including children, and more than 10,000 jailed. Under the military regime, civic space is severely restricted, and journalists and protesters are regularly attacked, arrested, and tortured by the armed forces. 

Prior to the 2021 coup, the international financial institutions (IFIs), including the World Bank Group, the International Monetary Fund (IMF), and the Asian Development Bank (ADB), had robust lending programs in Burma. However, shortly after the civilian government fell, all three institutions put a temporary hold on project disbursements. However, there is credible evidence that the World Bank has continued to send disbursements to Burma as recently as January 2022.

The IFIs must maintain a moratorium on direct lending and disbursements to Burma while the military junta remains in power. Not only is the junta undemocratically elected and committing violence against civilians, but it also blocks international humanitarian aid from reaching those in need. For instance, days before the coup in 2021, the IMF disbursed $372.39 million to the Central Bank of Myanmar to support marginalized communities during the COVID-19 pandemic. However, in September 2021, the IMF stated that it could not confirm if these funds were used as intended.

In response to the junta, the United States House of Representatives passed a bipartisan amendment, Sec. 6104, to the Fiscal Year 2022’s National Defense Authorization Act (NDAA) that ends U.S. support of multilateral assistance for Burma through its current military regime. This amendment was offered by Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, which has jurisdiction over U.S. participation in IFIs. It was cosponsored by Congresswoman Ann Wagner (R-MO) and received broad support in the House. Specifically, this amendment states that the United States will not recognize the Burmese military junta as the official government of Burma for the purpose of providing assistance from the IFIs. The amendment directs the Secretary of Treasury to instruct the United States Executive Director at the World Bank, Asian Development Bank, and International Monetary Fund to notify the respective institution that it is the policy of the U.S. government to oppose, and use the voice and vote of the United States against any assistance to Burma through the State Administrative Council, or any entity controlled by the military. Finally, the amendment contains a critical exception for humanitarian aid channeled through an independent implementing agency, such as a United Nations body, enabling the people of Burma to continue to receive needed aid without providing fiscal support to the junta. 

We encourage the IFIs to adopt a similar policy internally and commit to not directly lending to Burma while there are no democratic elections and the military remains in power. As one of the largest shareholders at the IFIs, the U.S. should use its power and influence to gain support from other donors and pressure the IFIs to refuse to compromise development aid in Burma by working with the junta, including on COVID-19 response projects. Any IFI support made to the military-controlled government would undermine U.S. and international efforts to pressure the junta to respect the Burmese people's rights and restore democracy to the country. 

We appreciate the efforts of the U.S. Congress, and in particular the longstanding leadership of Chairwoman Waters, to condemn this regime and would like to see the passage of the NDAA Sec. 6104 amendment complemented by action at the IFIs. Considering the widespread evidence of the military junta’s serious human rights violations, it is critical that the IFIs adopt an official policy, along the lines of that contained in the NDAA, to halt lending obligations and suspend disbursements, pending grants, and loans to the military junta-controlled Burma. The international community, and the IFIs, must stand in solidarity with the Burmese people by refusing to legitimize the coup and denouncing military violence at this critical moment.