Norway cancels NOK3.2 billion Myanmar’s debt

myanmar-currency

Photo: South China Morning Post

Norway has decided to cancel the whole of Myanmar’s debt to Norway – a total worth of NOK 3.2 billion.

“This is historic, not only for Myanmar, but also for Norway. This is the largest developing country debt that we have ever cancelled. I am proud that once again Norway is leading the way,” said Heikki Eidsvoll Holmås, Norway’s Minister of International Development.

Norway announced the debt cancellation at a meeting of Myanmar’s creditor countries at the Paris Club to negotiate how much of the total debt should be cancelled. The final hours of the meeting were dramatic as it became clear that a breakthrough in the negotiations was on the horizon.

In cancelling all Myanmar’s debt, Norway went further than the other members of the Paris Club.

“This is important for people in Myanmar. We have decided to take this step at this time in order to support the positive development in the country. Not only are we cancelling more debt than all the other creditors; we are doing so without touching a krone of the aid budget and without reporting the debt cancellation as official development assistance,” said Mr Holmås.

Norway is alone in its policy of using additional funds to cancel poor countries’ debt, so that these payments do not affect the development budget.

“We could have reported this as official development assistance, but we do not want to inflate our aid budget with funding that should be additional,” said Mr Holmås.

Norway was Myanmar’s fourth largest creditor. The whole debt to Norway dates back to the Norwegian ship export campaign. Between 1976 and 1980, Norway exported 156 vessels, as well as shipping equipment, to 21 countries through government-guaranteed export credits. The cancellation of debt to Norway through this campaign started in 2007.

The international agreement entails cancellation of 50 % of Myanmar’s total debt and restructuring of the remaining amount.

Norway’s decision is conditional on the approval of the Storting (Norwegian parliament).

Source: The Embassy of Norway in Thailand

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