Italian development aid in brief

1. Background and main reasons for the presence of Italian Development Co- operation

Myanmar was selected as a priority country in Italian Development Co-operation Guidelines for the period 2011-2013 due to the high poverty ratio and the launching of the reform process, leading to a significant effort towards gradual democratization and opening of the country to international relations in the development and economic areas. Italy’s Development Co-operation in Myanmar is thus undergoing a new phase, thanks to the democratic transition started with the new civilian Government in March 2011 and strengthened by the positive process of the by-elections in April 2012. The new political situation allowed moving from an emergency activities based co-operation to a more structural approach, aimed at promoting and supporting the development of the country.

New momentum was given to Italian Development Co-operation with Myanmar, after EU sanctions were suspended, by the visit by Italian Foreign Minister Giulio Terzi in April 2012, first among EU Foreign Ministers. A development budget allocation was approved, together with the posting of a Senior Development Cooperation Expert at the Embassy in Yangon, in order to monitor and coordinate Italian funded development initiatives and ensure Italian participation in donor coordination.

In the current phase, there is a need for continuing support by the international community as well as consistent efforts in pursuance of democracy, respect for human rights and participatory development by Myanmar authorities and relevant stakeholders, centrally and on a regional/local basis (Myanmar is a Union of ethnic states). The country’s economic situation remains difficult, especially in rural areas, where the 70% of the population lives. Improvement of their conditions and livelihood is the key priority.

2. Other international donors, coordination and opportunities for division of labor, joint evaluation exercises (Harmonization) 

Italy is part of the existing coordination mechanisms (EU, bilateral and multilateral donors, sectoral working groups, etc.). The donor coordination venue (PGAE), which was chaired by DFID together with the UN since 2011, has been replaced by a formal Government-Development Partners (DPs) mechanism, launched in July 2013 under the leadership of the Ministry of National Planning and Economic Development. All bilateral and multilateral donors, active in Myanmar, are members of the plenary of the new mechanism. Moreover, a smaller structure, composed of 9 DPs, has been established to ensure the operational functioning of the coordination between Government and Donors.  

The above mentioned mechanism has been completed by the constitution of 17 Sectoral Working Groups (SWGs), which comprise the main development sectors. In this regard, Italy leads the Culture Working Group, together with UNESCO, and participates as a member in the “Enhancing of Women’s Empowerment” SWG. 

The UN System is present in Myanmar with a large number of specialized agencies and Programmes, regrouped in the UN Country Team.

It should be noted that full alignment and harmonization is not yet in place as the National Development Plan, with the related financial requirements, is still under preparation. In December 2012 the Government transmitted to international partners the draft “Framework for Economic and Social Reform”, which was officially presented at the International Cooperation Forum (January 2013), as the basis for the formulation of the National Development Plan.  

EU Joint Programming exercise has been recently completed. The newly EU delegation in Yangon has elaborated a draft of the Joint Strategy for 2013-2016 which has been discussed by Member States during the II Semester 2013. The latest version was circulated shortly and MS have been requested by EU Delegation to seek for their headquarters approval. In this context division of labour is under discussion.  

3. Other actors of the Italian Cooperation System in the country (NGOs, universities, local authorities, private sector) and strategies for their involvement. 

A number of Italian development partners are planning and implementing programmes in Myanmar, including NGOs (CESVI, THD, AVSI, OIKOS, Progetto Continenti, INTERSOS and New Humanity), in association with  international and local NGOs,  Italian Local Governments  (City of Turin) and public institutions (ISTAT), as well as Universities and research bodies (University  of Viterbo, Rome, Florence, Bologna, Turin and Milan). Italian NGOs are currently focusing their efforts on national sectors, such as agriculture and rural development, health and water supply, and environmental conservation.

At multilateral level, development initiatives are being considered or launched jointly with UN entities: FAO, UNOPS, UNESCO, UNIDO, ILO, UNDP and UNFPA. 

The Embassy of Italy and the Italian Cooperation Office in Yangon - the latter approved in May 2013 and still in its structuring process - provide the technical and institutional coordination and serve as information exchange hub for Italian development partners and actors, in order to promote partnerships and good practices networks. It should be noted, however, that the distance between Yangon e the capital city Nay Pyi Taw, where government institutions are based, is a constraint for enhancing development partnership.

The presence of Italian private companies is still limited. The Italian Institute for Foreign Commerce (ICE), based in Bangkok, is supporting the Commercial Section of the Italian Embassy in Yangon to foster possible Italian investments in Myanmar. 

4. General objectives of Italian Cooperation in the country, counterpart sharing and consistency with international guidelines on aid effectiveness. 

In this phase the strategy of Italian Development Co-operation in Myanmar aims at supporting the reform process and contributing to the implementation of a National Development Plan, focussed on the fight against poverty, the revitalization of the economy and the improvement in the short-midterm of the living conditions of the Myanmar people.      

Development Co-operation aims at facilitating the country’s opening and enhancing capacity and institution building, with the objective of assisting relevant institutions in designing and implementing inclusive social and economic development strategies. Focus is on rural development, private-sector development and the preservation of cultural heritage, a sector where traditionally Italian Development Co- operation has gained a comparative advantage. Sustainability and ownership are priority criteria, as well as the support to decentralized cooperation partners. Increasing Counterpart sharing is being pursued through regular meeting with the Planning Ministry and sectoral Ministries, in preparation of agreed development initiatives.

5. Priority development sectors and expected results

In line with the above general objectives, Italian Development Co- operation policy and resources in Myanmar are centred on: 

• rural development, with an already approved investment of 20 million euro as a soft loan, to be disbursed through 2014, 2015 and 2016, with the objective to contribute to rural local communities empowerment and development. Further soft loan resources are programmed in the area of agriculture and rural development. Besides of that, a contribution of Euro 700.000 to “ Livelihood and Food Security Trust (LIFT)” has been approved in December 2013;
• Livestock and Fisheries, with two initiatives aiming at strengthening the public capacity of these sectors, at central and local level, to improve their respective production and delivery (1 million Euro in 2013 and 2014);
• capacity building and for local development, mainly through SMEs (1 million euro in 2013,  2 million euro in 2014 and 2015), with the objective of creating capacity for endogenous local development;
• cultural heritage (1 million euro in 2013, 500.000 euro in 2014), with the objective to support  Myanmar’s capacity to preserve its unique cultural heritage and to promote the sustainable use of this resource for local development;
• Governance, census and statistics improvement, to enhance central and local government capacity (1.3 million euro in 2013 and 2014);
• gender equality and women empowerment (500.000 euro 2014), with the objective to improve the living conditions of Myanmar women, with a particular attention to the female population in rural areas. 

In 2013 the technical assistance programme has been strengthened, focusing on the statistical sector, rural development and food security, cultural heritage and sustainable tourism, local Governance improvement.

Additional resources have been made available for decentralized co-operation activities through Italian Local Governments and Universities, in support of Yangon Municipality solid waste management, public health, archaeological heritage preservation and Public Administration training. Decentralized co - operation in Myanmar led to the establishment of a new joint co-financing mechanism with the EU Commission, in support of the partnership between the Municipalities of Yangon and Turin.

One of the most important outcomes of the democratization process has been the setting up of a direct co-operation channel with the Myanmar Government. Therefore, Italy has been able to finalize in March 2013 two relevant agreements, concerning the cancellation of the 50% of the Myanmar debt and the swap of the remaining 50%. The latter, in the amount of 3,167 million USD, will be utilized for development projects, to be selected through a joint decision and management mechanism. UNOPS is expected to provide technical assistance to the Programme in terms of projects evaluation and monitoring.