Myanmar ended the 2017-2018 fiscal year with US$10.2 billion in foreign debt, the Joint Public Accounts Committee reported to the Union Parliament. That is an 11.5% rise from the previous fiscal year.

According to the committee, China is Myanmar’s largest creditor with loans totaling roughly US$4 billion. Most of it was taken out by the Ministries of Electricity and Energy, Defense, Industry and Agriculture, Livestock and Irrigation, the Myanmar Times reported. Japan accounted for the second highest amount of debt, holding loans totaling US$2.5 billion. Other creditors include Thailand, India, the UK and institutions, such as the Asian Development Bank.

By way of explanation, the committee identified a number of failed government projects and investments as well as embezzlement and mismanagement of funds within government ministries. One Mandalay Region official embezzled K2.6 billion from a US$400 million loan from a Chinese company for rural development and microfinance loans.  The committee recommended stronger oversight and corporate governance.

Myanmar has taken advantage of hundreds of millions of dollars interest-free loans from organizations such as the IMF. The fund is aimed to combat poverty and develop its infrastructure. However, government ministries have also readily taken on high-interest loans, the committee pointed out. The Ministries of Electricity and Energy and Industry, in particular, have taken out loans bearing high interest rates of 2.5% and 4%.