By Paul Eckert
WASHINGTON (Reuters) - The pace and scope of the World Bank's re-engagement with Myanmar's reform-minded government will depend on settling the country's unpaid debts and getting accurate economic data, a senior bank official said on Thursday.
Pamela Cox, the World Bank's East Asia and Pacific regional vice president, said the global development lender was "heartened by the government's steps in Myanmar" and would respond step-by-step in line with member countries and other agencies.
"We've been working very closely with our board and our shareholders, the other bilateral partners, the IMF, and, of course, the government of Myanmar on plans for moving our relationship forward," she told reporters in Washington.
Cox, who will visit Myanmar, also known as Burma, in June when the bank opens an office there, said the resource-rich Southeast Asian country is emerging from decades of international isolation with a dearth of capable technocrats, scarce accurate economic data and a huge pile of unpaid debt.
"Before we can launch a full-fledged World Bank program we would need to clear arrears," she said.
Cox said Myanmar owes the World Bank $393 million from lending from the late 1980s. Myanmar's arrears to the Asian Development Bank were approximately $500 million, and officials were still trying to figure out debts levels to other countries.
The World Bank will work with the International Monetary Fund on debt-sustainability analysis to see "how much debt stress this country is going to be under once it normalizes relations and how much debt should be forgiven," she said.
MYANMAR'S 'ECONOMIC PLUMBING'
Cox said the World Bank also needs to "do the basic analysis and capacity building for what we call the 'economic plumbing.'
"Does the government have a functioning financial system? Does it have a functioning budget system? Does it have a government that actually works?" she said, describing a formula the bank applies to all new partners.
President Thein Sein's reforms implemented over the past year include freeing hundreds of political prisoners, allowing greater media freedom, reforming the currency, and holding peace talks with ethnic minority rebels.
The United States, Canada, the European Union, Japan and Australia have moved in quick succession to ease sanctions on Myanmar following the new army-backed civilian government's efforts at pushing ahead with democratic reforms.
"We're not linked to sanctions per se," said Cox. "We're linked to the basic fact that we need to get basic data knowledge."
The World Bank will listen closely to the views of Washington and other capitals that fund bank projects as they expand ties to Myanmar, and will tap civil society groups for advice on monitoring aid and other concerns.
"We will move with the consensus of other key stakeholders. We won't be far head nor do we want to lag behind either," said Cox.
(Editing by Leslie Adler)