Country Operations Business Plan: Myanmar, 20152017

INTERIM COUNTRY PARTNERSHIP STRATEGY Myanmar: 20152016

1. The interim country partnership strategy (CPS), 20152016 of the Asian Development Bank (ADB) for Myanmar extends the validity of the interim CPS, 201220141 for 2 years to 2016.2 It is consistent with the earlier interim CPS and the 5-year policy agenda of the Government of Myanmar. A. Background

2. The interim CPS, 20122014 offers a framework for ADBs progressive reengagement with Myanmar, while providing space for continued analytical work, capacity building, consultations, and the forging of partnerships toward the development of a full CPS over the medium term. In line with the governments development priorities, ADBs medium-term goal under the interim CPS, 20122014 is to support the government in achieving sustainable and inclusive growth, with the guiding theme of connectivity (domestic and regional, rural and urban, hard and soft infrastructure). 3. The interim CPS, 20122014 focuses on (i) building human resources and capacities (capacity building in ministries in core areas of ADB involvement, and education); (ii) promoting an enabling economic environment (macroeconomic and fiscal management; and trade, investment, and finance sector reform); and (iii) creating access and connectivity (rural livelihoods and infrastructure development, especially energy and transport). It mainstreams the thematic areas of good governance, environmental sustainability, social safeguards, private sector development, and regional cooperation and integration into ADBs operations. ADB is also focusing on the crosscutting areas of knowledge and partnerships. 4. Staff assessments indicate that the strategic direction of the interim CPS, 20122014 remains relevant, and the proposed project investments in the country operations business plan (COBP), 20152017 are consistent with this strategic direction. B. Closing the Programming Gap

5. ADB and the government have consulted on the options for covering the programming gap between the current interim CPS, 20122014 and the proposed full CPS, 20172021. There is agreement that the strategic thrust of the current interim CPS remains valid, and that an interim CPS, 20152016 should be developed to extend the validity of the earlier interim CPS by 2 years to 2016. 6. Building on experience to date and the approach in the interim CPS, 20122014, and in close consultation with the government, the focus, selectivity, and results orientation of ADBs strategy and program in Myanmar will be enhanced during 20152016. ADB will increasingly focus its support on helping overcome Myanmars key development constraints through strategic transport, energy, and skills and related investments, as well as direct support to key reforms, building on the capacity-strengthening efforts to date. ADB will also support the governments efforts to improve the enabling business environment and stimulate an increasing private sector role in infrastructure and public service provision. While a range of innovative pilot projects have been supported in several sectors and thematic areas, greater focus and 1 ADB. 2012. Interim Country Partnership Strategy: Myanmar, 20122014. Manila (October). 2 The waiver by the Strategy and Policy Department (SPD) of the usual 1-year limit for extension of the interim CPS

was granted on 24 June 2014.

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selectivity will enable ADB to support the governments efforts to accelerate the achievement of sustainable and inclusive growth. 7. The 2-year extension of the interim CPS, 20122014 permits a smooth transition into the full 5-year CPS, 20172021. The proposed timing takes into consideration (i) the unique circumstances in Myanmar in the lead up to what are widely regarded as landmark general elections in November 2015; (ii) the need for close alignment between the CPS and the governments 5-year national development plan (April 2016March 2021); (iii) alignment with the next Asian Development Fund allocation cycle (20172020); and (iv) the extensive time and resource requirements for the preparation of a full CPS. It also provides the time for required strategic and analytical work in critical areas such as governance, conflict-sensitive approaches, social and environmental safeguards, gender equity, and private sector engagement, which are to underpin the preparation of the full CPS, 20172021. C. Preparation of the Country Partnership Strategy, 20172021

8. The proposed Myanmar National Comprehensive Development Plan, 20112031 will map the development paths to 2031; it is broken down into a series of 5-year plans, the second of which runs from April 2016 to March 2021. This planning framework provides the basis for long-term CPS alignment with government strategies. It also serves to identify the long-term programmatic pillars around which to allocate ADBs financial and staff resources in a focused and results-oriented manner. 9. ADB has already initiated the process of preparing the first full CPS, 20172021 for Myanmar, building on the lessons learned during the reengagement process and aiming to increase focus and selectivity. Substantial economic and sector work is under way, including a country diagnostic study carried out by ADBs Economics and Research Department.3 The initiating meeting is scheduled for 2015 and Board approval for 2016. D. Conclusion

10. Given the status of ADBs reengagement strategy with Myanmar and the governments planning cycle, and with the next 5-year development plan scheduled for launch in April 2016, the validity of the interim CPS, 20122014 needs to be extended by 2 years. This will enable the CPS, 20172021 to be fully aligned with the new 5-year development plan, provide sufficient time for analytical underpinning of the country strategy and program, and ensure that relevant government agencies and other key stakeholders are thoroughly consulted.4

3 ADB. 2014. Myanmar Unlocking the Potential. Country Diagnostic Study. Manila. 4 The process of preparing an additional linked document to the COBP is covered in the SPD Memo on Streamlined

Business ProcessesClarification on Interim Country Partnership Strategy Business Process, 28 April 2014.