Myanmar's new government is taking the country in new directions. Early statements by President Thein Sein have been surprisingly frank and honest in their assessment of the country's deep-seated problems, and have committed the government to a wide-ranging agenda of social, political, and economic reform. Although nagging questions remain about how far it will ultimately be willing and — not least — able to go, subsequent government actions appear to have started Myanmar down a path of meaningful political transition and socio-economic transformation.

The sudden movement within Myanmar presents a challenge for an international community whose long-standing absence from the country has left it ill-prepared to understand and effectively respond to the changes taking place. Diplomats are scrambling to catch up, but in many ways it is the aid community that has the biggest steps to take. While recent new aid commitments by Australia and other Western donors are a good start, the overall aid agenda remains decidedly under-ambitious. Aid is still viewed mainly in humanitarian terms rather than as the transformative tool that it both can and must be at a time like this. This is not to suggest that international assistance provides the solution to Myanmar's manifold problems, but simply that it offers important opportunities to actively help move the country forward. Indeed, at this point, aid may be the most important lever that the international community has in Myanmar.

This chapter reviews past achievements of international assistance to Myanmar and considers its future potential viewed from the vantage point of May 2011. It also outlines a second-generation aid agenda for Australia and like-minded donors. The analysis is based primarily on hundreds of confidential interviews conducted by the author in Myanmar between 1997 and 2011; complementary public sources are referenced where available.

Past Achievements

The dominant story of international assistance to Myanmar over the past twenty years has been one of onerous government restrictions and limited donor support. Since nearly all agencies and programmes in the country are humanitarian in focus, their developmental impact has, naturally, been limited. However, there is a more positive, if rarely told, story about the crucial role international aid agencies have played in lifting the veil of ignorance about Myanmar's humanitarian crisis, supporting basic needs, protecting vulnerable groups, improving national policy and capacities and, quite possibly, encouraging broader structural change.