However, local analysts say Myanmar should avoid accepting loans from China, which typically come with high interest rates. “Instead of agreeing to every project that China wants to carry out, we should consider which projects most benefit the Chinese and negotiate for better terms of implementation,” said U Ye Tun, a former Pyithu Hluttaw MP.

For infrastructure development, local projects with long term benefits such as better international connectivity should be prioritised, while the terms and conditions of use should be well-negotiated, said Dr Zaw Oo, economic adviser to the former president of Myanmar.

Analysts agreed that the government should push for more build, operate and transfer (BOT) arrangements when implementing infrastructure projects.

“The government should not agree to implement projects by taking loans as it may not be able to recover its investment on the infrastructure project. Such developments involve heavy capital expenditure and cost a lot to upkeep. As such, raising funds through debt may not be in the country’s best interests. It would be better to go for BOT arrangements,” said U Zaw Pe Win, a local analyst.

For development that is sustainable and beneficial for both countries under the BRI project, long-term financial plans and a good system to ward of regional financial dangers are important, the State Counsellor said.

“BRI projects need to be in accordance with the priorities and development projects of the participating countries. The project feasibility should consider not only economical but also social and environmental responsibility. The most important thing is to get local support. If the people of the participating countries are convinced that BRI would have positive effect on them, the project’s goals can be accomplished,” Daw Aung San Suu Kyi said.

Myanmar will prioritise nine infrastructure projects under the China-Myanmar Economic Corridor, which is part of the BRI. These include basic infrastructure such as power grids, roads and bridges. Notably, there are the Muse-Mandalay railway, Kyaukphyu deep-sea port and Special Economic Zone proposals.

Source: https://www.mmtimes.com/news/avoid-debt-trap-when-engaging-belt-and-road-analysts.html