[Exclusive] Korea stops financing infra projects in Myanmar amid deepening crisis

Responding to the prolonged crisis in Myanmar, the South Korean government has decided to halt financing for government infrastructure projects there until next year, a source told The Korea Herald on Friday.

“The Ministry of Economy and Finance has temporarily suspended financial support through the Korea Economic Development Cooperation Fund for any new infrastructure projects by the military government,” said an official at the Export-Import Bank of Korea, who requested anonymity.

“Discussions are also underway to decide whether to cease the ongoing EDCF operations for Myanmar that took place long before the military coup, but nothing has been confirmed yet,” he said.

The EDCF is a state-run fund launched in 1987 to help poor and less developed countries by extending low-interest loans. It is managed by the Finance Ministry.

“The government has put a temporary halt on consultations with Myanmar in terms of promoting new infrastructure projects financed by the EDCF,” said a Finance Ministry official, declining to comment further.

In September 2019, the government signed its current EDCF agreement with Myanmar and pledged to provide $1 billion worth of loans to the Southeast Asian country until 2022 to support its industrialization and economic growth through various infrastructure projects.

Under the deal the state-run policy lender -- the Export-Import Bank of Korea, under the Finance Ministry, which operates the EDCF projects -- decided to offer a 70 billion won ($62.79 million) loan to help Myanmar build a Korea-Myanmar Industrial Complex.

The industrial park, scheduled to be built in 2024, was to be jointly established by the government-owned Korea Land and Housing Corporation and Myanmar’s Construction Ministry in a town just north of Yangon, Myanmar’s largest city.

Myanmar’s military regime has not decided whether to continue with the infrastructure projects that started before the coup, casting clouds over the current projects supported by the Korean government, including the industrial park, the Finance Ministry official said.

Meanwhile, the military in Myanmar has escalated its lethal crackdown on protesters since it seized power Feb. 1, detaining elected leader Aung San Suu Kyi. The civilian death toll has reached 550 as of April, according to a Myanmar-based human rights group called the Assistance Association for Political Prisoners.

By Choi Jae-hee (cjh@heraldcorp.com)