Extraordinary political changes in the year since former army general Thein Sein came to power in Myanmar have prompted European powers to ease restrictions on the isolated nation, raising questions whether such rewards are too little or too much.

Citing “the remarkable programme of political reform,” the European Union announced on Feb. 17 it was lifting its travel ban on President Thein Sein and 86 other senior leaders from Myanmar (also known as Burma). The European Council, representing heads of the EU’s 27 countries, also said it would review other sanctions by the end of April.

While acknowledging the steady progress since Thein Sein became the civilian president in March 2011, some European officials remain cautious about ending some remaining restrictions – including those on commerce and certain types of aid.

“I would question how quickly these things are being done in Burma,” Sir Graham Watson, a member of the European Parliament’s foreign affairs committee, said shortly after the EU announced it would end visa restrictions on top officials.

Watson has been highly critical of past EU handling of authoritarian regimes in Myanmar as well as the ousted leaders of Libya and Tunisia. A report he prepared, adopted by the Parliament earlier this month, cites Europe’s failure to prevent dictators and their families from socking away fortunes in EU countries with impunity.

“There will no doubt be some voices that say, and I think I will be among them, let’s make sure that the Burmese government is truly committed to what it is doing, and that this isn’t kind of a short-term fix,” Watson told IPS in an interview.

In contrast to the street revolts of the Arab Spring, Myanmar’s changes stem from the military elite that ruled from 1962 to 2011. The new government has freed hundreds of political prisoners and moved to end censorship of news media. Authorities have also eased their notorious travel restrictions and are encouraging foreign investment in a country that the UN’s Human Development Index ranks among the poorest in the world.

Freed from house arrest, opposition leader Aung San Suu Kyi and her National League for Democracy are campaigning in by-elections scheduled for Apr. 1, nearly 22 years after her victory in national elections was nullified by the military junta. The Nobel Peace Prize winner was released from home detention in November 2010.

The changes have drawn swift recognition, with the United States moving to ease sanctions and restore full diplomatic relations. In December, Hillary Clinton became the first secretary of state to visit Myanmar in 50 years. Catherine Ashton, the EU’s foreign policy chief, is due to visit in April, and EU aid commissioner Adris Piebalgs was there last week to pledge development assistance.

One organisation that has long monitored Myanmar, the Brussels-based International Crisis Group, has urged Western powers to move more swiftly to reward the reforms.

“We see a very different system of government, and it’s a very different game being played right now,” said Jim Della-Giacoma, ICG’s project director for Southeast Asia.

“When the government is moving in the direction the population wants, when the government is moving in the direction that the international community has long called for, it’s no longer a situation of pushing or pressuring, but there needs to be a new approach of encourage and assisting, and in this context continued sanctions don’t play a very useful role,” he said in a telephone interview from Jakarta.

Della-Giacoma says Myanmar’s reforms partly stem from the need for economic opportunities that have been passing by during decades of isolation and Western embargoes. Western countries could help by removing sanctions apart from those on weapons, he said.

“Now is the time for the EU to craft new policies that reflect the current situation,” he said, “rather than dreaming up new benchmarks that justify the persistence of policies that should have been lifted long ago.”

Still, there are concerns about how far the civilian government will go. Thein Sein, a former prime minister under the former military junta, had a long career as an army commander. He was chosen as president by Parliament, not by popular vote.

Earlier this month, human rights advocates reported that dissident Ashin Gambira was detained by the police just weeks after being freed in the January amnesty. The Buddhist monk had been sentenced to prison for involvement in anti-government demonstrations in 2007.

The International Press Institute has expressed concern that some imprisoned journalists were freed conditionally, which the Vienna-based press freedom group says exposes them to government pressure and self-censorship.

Meanwhile, the Myanmar authorities continue to pursue their 60-year war with the Karen minority and other ethnic groups over their quest for autonomy.

Amnesty International urged Clinton before her December visit to put pressure on the government, noting in a statement that the army “continues to commit human rights violations against civilians on a widespread and systematic basis.”

Watson, the British MEP, says concerns about Myanmar’s commitment to reforms mean that the EU should not be too quick to reward the government.

“I think there is universal support in the legislature for the principle of more for more,” Watson said. “The more the Burmese government does to open up their society, to introduce democratic reforms, then the more we should be prepared to do to take away the sanctions we have applied. But I think it’s too early to end all sanctions.”

European leaders have mapped out a bold agenda ahead of the Rio summit, vowing to transform development aid, help provide renewable electricity to the world’s neediest people, and bulk up the United Nations environment body.

The European Union’s ‘Agenda for Change’ proposal calls for pumping foreign aid into sustainable growth and energy access, while European Union officials have also floated the idea of transforming the U.N. Environmental Programme into an agency with expanded influence and greater power to promote research and development.

Janez Poto?nik, the EU environment commissioner, on Tuesday reaffirmed the 27-nation block’s pledge to provide the equivalent of 0.7 percent of gross national income (GNI) for aid to the world’s poorest countries, while urging that there be a focus on sustainable growth.

“The potential for investment and gains are massive compared to official development assistance,” he said in a speech. “But at the same time the poorest countries need help, to make this promise good.

“That is why the European Union intends to fully meet our commitments to the poorest countries and will meet the Millennium Development Goal of 0.7 (percent) in 2015.”

Meanwhile, Development Commissioner Andris Piebalgs was expected on Wednesday to offer fresh support to U.N. Secretary-General Ban Ki-moon’s energy-access initiative.

“Through the promotion of our technology and expertise combined with a targeted use of our aid funding, we will aim to increase access to modern energy services for the world’s poorest,” Piebalgs said on the eve of an address at the European Parliament.

The pledges reflect officials’ hopes that the EU can be a catalyst in turning the UN Conference on Sustainable Development into a ground-breaking shift towards low-carbon, resource-efficient economic growth after disappointments at recent climate and development summits. The conference is to take place Jun. 20-22 in Rio de Janeiro, 20 years after the Brazilian city hosted the first ‘Earth Summit’.

“We are trying to work hard to ensure that we will obtain concrete results,” Poto?nik said, adding that “a day will not pass by in the coming months where the Rio outcome will not be discussed in our contacts with international partners.”

EU officials cite Europe’s commitments to cut greenhouse gas emissions, boost the use of renewable energy and improve energy efficiency as a way to tackle climate change while transforming economies and creating jobs.

Poto?nik also said it was a European priority to give the Nairobi-based UNEP more influence and resources.

But the European Commission, the EU’s executive, faces tall hurdles if it is to achieve some of these goals.

Many EU countries are economically stagnant and face rising unemployment. At a summit on Jan. 30, EU leaders pledged to create more jobs and spur growth to address a continent-wide malaise and sovereign debt problems that have forced EU leaders to ask for help from China and other countries with deep cash reserves.

EU leaders have traditionally seen overseas aid as an extension of their ‘soft power’, agreeing in 2002 to provide annual development aid equivalent to 0.51 percent of GNI by 2010, and 0.7 percent by 2015 for the 15 richest EU nations.

Yet there are doubts about whether the EU can really live up to its aid commitments.

A 2011 study by the CONCORD coalition of advocacy organisations said that despite the 54 billion euros (71.5 billion dollars) in aid provided by the EU in 2010, only nine of the bloc’s 27 countries kept or exceeded their promises on aid in 2010. The overall rate is 0.43 percent of GNI. The CONCORD group warns that at current levels of spending, aid will barely move beyond that, to 0.45 percent, by 2015.

“To succeed, Rio will need to put more money on the table to fund the move towards an economy based on sustainable development,” Felix Dodds, executive director of the London-based Stakeholder Forum said Tuesday at a development conference organised by the European Economic and Social Committee, an EU body.

Dodds, whose organisation promotes sustainable development, suggests ways in addition to development aid to create greener growth: a tax on financial transactions – backed by the European Commission but opposed by Britain and Ireland – and shifting the estimated 4.7 trillion dollars held by global sovereign wealth funds into green investments.

Dodds said the consequences of inaction are high. Referring to the EU’s aid commitment, he said: “If they do not do that, then seriously we are in danger of losing any trust with developing countries.”

Europe’s apparent failure to forge broad agreement on introducing a financial transactions tax marks the latest setback for organisations counting on a similar worldwide fee to fund development aid in austere times.

A French-led push for a European Union tax on stock and bond trades is crumbling amid opposition from Britain and lukewarm interest in several other countries. Sweden opposes an EU-wide levy, and Irish Prime Minister Enda Kenny said last week he was against any such tax that was not applied globally.

The tax idea was first proposed by American Nobel laureate James Tobin in the 1970s and revived a decade ago to tame currency and financial speculation in global markets. It has gained favour among aid advocates and developing countries as a way to raise billions of dollars a year in richer countries to help poor nations grow and to adapt to climate change.

French President Nicolas Sarkozy and other European leaders who support the tax now hope to press ahead with a fee that would apply only to some EU countries using the euro currency or those willing to adopt it.

“We really hope that the French and the Germans and other countries within the eurozone will put the interests of the poor people of the world ahead of the financial sector that caused this mess,” said Jon Slater, a spokesman for Oxfam, the hunger-fighting charity that has been a leader in lobbying for the tax to fund aid.

“We do recognise the economic situation across the globe is a tough one – it’s a difficult environment to raise money for anything,” he told IPS by telephone from London. “But we basically think it’s important to present not only the moral case but practical ways in which governments could raise revenues to meet their promises.”

Yet with Europe and the United States mired in debt and economic challenges, there are fears the tax could discourage financial flows at a time when market liquidity is needed.

British Prime Minister David Cameron has repeatedly said he would oppose efforts to introduce an EU-wide financial tax which he says would harm London’s financial centre, the City. In November, the Group of 20 leaders spiked the idea at their summit in France, delivering a blow to European supporters including the meeting’s host, Sarkozy.

The European Commission, the EU’s executive, in September proposed taxes on trades in stocks, bonds and derivatives within the 27-nation bloc and estimated the fees would generate 57 billion euros each year, though it did not specify that the revenues should be spent on aid.

Sheila Page, senior research associate at the Overseas Development Institute in London, calls the idea of new taxes in the current economic climate “ridiculous”.

“No treasury likes tying a tax to a particular sort of spending, so regardless of whether it goes ahead or not, whatever revenue came out of it would just go into general revenue and be spent or just to draw down debt.”

Global aid organisations such as Oxfam, InterAction and ActionAid have long pressed for adopting the tax idea proposed by Tobin more than a generation ago. Charity groups often call it a “Robin Hood” tax because it would shift money from rich to poor countries.

Tobin’s idea was aimed at reducing speculation blamed for overheating economies and undermining currencies. But the idea only became practical in recent years with worldwide financial networks and technology that could track transactions in the blink of an eye, and aid advocates saw it as a natural way to fund growing needs and commitments.

The 2011 United Nations Human Development Report added its weight in calling for a 0.005 percent world tax on foreign exchange trading that it estimates would raise 40 billion dollars annually for poor countries, or nearly one-third the 130 million dollars in total development aid in 2010.

“The innovation of our report is that we are proposing that (the tax revenue) should be used for sustainability and human development purposes,” Khalid Malik, who heads the HDR office, told a conference in New York last month.

The annual UN report warned that climate change and population growth threatened to reverse progress on reducing poverty, noting that 1.5 billion people lack electricity and 2.6 billion have no basic sanitation. The UN also estimates that some 1 billion people – or one in seven humans – do not have adequate food.

Page, of the Overseas Development Institute, acknowledges the aid challenges but says holding governments accountable to their charity pledges makes more sense in today’s economic climate.

“I think it would be much more useful to concentrate on trying to make sure the commitments that are there are kept and that there aren’t further cuts,” she said, “rather than coming up with impractical ideas for how to find new taxes for it.”

Representatives of the world’s poorest nations are preparing to assemble a new “programme of action” to reduce grinding poverty. Among proposals that could emerge from the U.N. Least Developed Countries Conference in Istanbul next month is a global tax on financial transactions that would generate billions of dollars a year for development assistance.

“We will recommit the international community to continue to extend support to the 48 least developed countries around the world for the next decade,” said Cheick Sidi Diarra, a United Nations high representative who will lead the conference.

Development assistance to the world’s poorest nations hit a record 122.4 billion dollars in 2008, just as the financial crisis slammed the United States, Europe and other major contributors. Diarra commended donors for the rise in aid but said fresh support is needed to sustain progress in areas such as primary education and improved water supplies.

“The donor countries have done what they could during the decade, especially in 2008 before the [financial] crisis,” Diarra said in a telephone interview from New York. But aid levels are falling well short of commitments, he said, and around half of development aid in recent years has been spent on just two countries: Iraq and Afghanistan.

Building on Brussels

A year later in Monterrey, Mexico, leading donor countries pledged to work toward providing the equivalent of 0.7 percent of GNP to development assistance – in 2009, total ODA amounted to less than half of this.

The U.N. has estimated that up to 60 billion dollars is needed annually for the poorest countries if they are to achieve poverty-reduction targets, known at the Millennium Development Goals, by 2015.

The timing of a fresh cash call is unfortunate.

The global financial crisis that followed the collapse of the U.S. housing market has forced many donor countries to scale back development assistance.

Natural disasters have also taken precedence. The Asian Development Bank and World Bank estimated that last year’s flooding in Pakistan alone caused as much as 10.8 billion dollars in damage and could take years to repair, while donors have provided nearly 4 billion dollars in aid to Haiti since its earthquake in early 2010.

Leaders in Japan – typically the most generous donor after the United States – estimate the Mar. 11 earthquake and tsunami caused 300 billion dollars in damage and warn of austere times ahead.

New sources of finance

The four-day conference that begins on May 9 is expected to address calls for more cash, better governance, and improved investment and trade opportunities for the next decade.

Given such challenges, finding alternative sources of development funding could take a prominent place on the LDC  Conference agenda.

One option is financial transactions taxes, or FTTs, which have been considered in the past as an alternative ways to finance U.N. operations and humanitarian assistance. Taxes on cash transfers were promoted at an LDC ministerial meeting in Lisbon last October. Prominent figures in finance, including the economist Joseph Stiglitz and the financier Warren Buffett, have argued that such taxes would generate revenue while dampening speculative trading in currencies or financial products.

Civil society organisations meeting in New York to prepare for the Istanbul conference agreed earlier this month to press for sweeping debt relief.

“[LDCs] spend over $6 billion every year on debt servicing,” said Arjan Karaki, head of the LDC Watch, a Kathmandu-based organisation. “In many LDCs, more money is spent on debt servicing than on essential services like health care, drinking water and energy,” Karaki said in a statement.

The U.N.’s Diarra acknowledged that there are major financing challenges ahead, and said the Istanbul meeting should seek to improve investment and trade opportunities, drawing on efforts such as the EU’s Cotonou Agreement and “Everything But Arms” initiative that promote economic partnerships with developing countries.

Diarra added that leaders in LDC countries also have a responsibility to commit to “more transparent rule, rules that are respectful of human rights, and more respectful of private property, and also protect the foreign investment and local investment as well.”

Civil society groups are also preparing appeals in the area of human rights and social protections, although more controversial proposals calling on nations to cut military spending and funnel the money into aid are unlikely to be on the official agenda.

“We want solutions that are consensual and agreeable for everybody,” Diarra said.

Some 6,000 government, civil society and business participants are expected to attend the LDC meeting in Istanbul.

Pakistan is still reeling from flooding that caused one of the world’s costliest natural disasters in 2010, with millions of people lacking shelter, infrastructure in ruins and donations falling short of appeals. But worse may come.

The United Nations’ disaster coordination agency announced on Jan. 24 that the Pakistan floods caused damages of at least 9.5 billion dollars – the world’s third costliest natural disaster in 2010 – and killed 1,985 people – the fourth deadliest in a year of cataclysmic events.

But Pakistanis will face a water challenge of a different sort in the years ahead – the possibility of dire scarcity.

“There are so many other priorities that the government is facing, particularly at a national security level, and to be frank, Pakistan’s government has never really made genuine, sustainable commitments to human development and human security issues, such as guaranteeing better access to water for the masses,” says Michael Kugelman, an Asia analyst at the Woodrow Wilson International Center in Washington.

A Woodrow Wilson Center report titled ‘Running on Empty’ that Kugelman oversaw in 2009 warned that Pakistan’s water situation is “extremely precarious” and that the South Asian nation could face widespread shortages within 25 years. He said last year’s floods exposed the government’s neglect of infrastructure, including dams, “one of the big manifestations of the water management policy failures.”

“I think you could argue quite conclusively that if repairs had been done in a more timely fashion or more efficaciously in the last few years, that the damage from the flood would not have been as extensive as it was,” Kugelman told IPS.

Aid officials say restoring water and sanitation services – already inadequate before the inundations – remain a priority six months after torrential rains turned the Indus River and its tributaries into destructive torrents. Floodwaters raged from July through September, causing nearly 1 billion dollars in damage to dams and irrigation systems and 93 million dollars damage to water and sewerage facilities, according to relief agencies. The U.N.’s humanitarian affairs agency says only 59 percent of the 1.9 billion dollars in immediate recovery aid has so far been provided.

Lack of safe drinking water, stagnant pools and wrecked or non-existent wastewater disposal are creating a health threat that is magnifying flood recovery problems.

The Red Cross and the South African anti-poverty group ActionAid have both warned that waterlogged and silted croplands are threatening subsistence farming and creating food shortages, and that malnourishment – particularly among children and mothers – is growing.

The Red Cross reported on Jan. 21 that four million people lack adequate shelter, and contaminated water supplies in southern Pakistan are “creating breeding grounds for waterborne diseases.”

The U.S. State Department said that more than a million children are at risk of contracting infectious diseases, including waterborne ailments that were a main cause of death among children before the 2010 inundations.

Aside from urgent recovery needs, donors and analysts say Pakistan must address its future water management practices if it is to serve its rapidly growing population of 170 million.

A flood damage report prepared by the Asian Development Bank (ADB) and World Bank says the country’s water supply and sanitation services “fail on three accounts – quality, access, and sustainability of services.”

“Piped water supply is frequently intermittent and not potable; only 35 percent of the population has access, at best for 3-6 hours a day in all but the largest cities. Sewerage services are inadequate with most households not connected to a system; 33 percent of rural inhabitants have no toilet,” says the 188-page report issued in December.

Inadequate and neglected infrastructure is the legacy of Pakistan’s chaotic and endemically corrupt politics, analysts say. Efforts to take power away from Islamabad and give regional governments more responsibility over water and sanitation services have failed, the ADB/World Bank assessment says, because local officials “were not provided the skilled staff, management capacity and systems, and operating budgets to do the job.”

Pakistan’s civilian authorities have not been aloof to the need for improved water supplies and other infrastructure. Two years ago, Prime Minister Syed Yousaf Raza Gilani and U.N. Secretary-General Ban Ki-moon inaugurated Pakistan’s participation in a scheme aimed at streamlining foreign assistance in areas of health, agriculture, rural development and disaster management.

Local authorities also back ambitious dam-building projects – including two on the Indus, the Kalabagh in Punjab and the Diamer Basha in Kashmir – designed to prevent floods, generate electricity and provide stable water supplies. Gilani has told reporters that had the dams been in place before July 2010, the country might have been spared the worst flooding.

But there are growing fears that the country is outstripping its ability to feed itself, and overtaxed water supplies are likely to fuel conflicts between competing agricultural and urban demands.

Irrigation practices are primitive and account for 90 percent of the nation’s water use. According to the U.N., Pakistan consumes 75 percent of its water resources, compared to 34 percent for India.

Meanwhile, the U.N. estimates that the country’s population will double by 2050. Urban areas accounted for 36 percent of the population in 2008, up from 33 percent in 2000, with poverty forcing rural Pakistanis to seek greener pastures in cities.

Kugelman says more attention should be paid to urban water management to avert health and resource problems. “It’s not going to be that long from now when the majority of the country lives in urban areas, and even now, the government really cannot provide sufficient water supplies, clean water, and water at all to the current populations in the cities.”

The report by Kugelman and his Woodrow Wilson Center associates warns that Pakistan faces an imminent water crisis, with careless practices having a ripple effect on food production.

“Intensive irrigation regimes and poor drainage practices have caused water logging and soil salinity throughout Pakistan’s countryside. As a result, vast expanses of the nation’s rich agricultural lands are too wet or salty to yield any meaningful harvests,” says the report.

Kugelman sees the flood recovery as an opportunity for change. Instead of constructing expensive dams, “doing more modest things like (investing) in more high-efficiency irrigation technology that doesn’t waste as much water, or just (trying) to fix up existing structures instead of building new ones.”

But much depends on the country’s leadership.

Violence, displacement, a restless youth population, endemic corruption, the conflict in neighbouring Afghanistan and creeping extremism – these challenges would confound the most audacious statesman. The Jan. 4 assassination of Salmaan Taseer, the Punjab state governor and prominent secularist who was gunned down by his own bodyguard, symbolises the country’s volatile condition.

“I think we’re seeing much more of a disturbing gain being made by those that really do not support democracy,” Kugelman said. “I still don’t think the country is about to collapse, the military is too strong to allow that to happen. But it’s pretty scary.”