Burma gets Asian Development Bank and World Bank loans 28 January 2013 Last updated at 04:38 Jonathan Head says "50 years of isolation and military misrule" have left Burma "far behind." The Asian Development Bank (ADB) and the World Bank have approved fresh loans for Burma to aid the social and economic development of the country. The ADB granted $512m (£325m), while the World Bank approved a $440m credit. The loans were made possible after Burma cleared overdue arrears to the two banks with the aid of Japan. Burma, also known as Myanmar, has been implementing economic and political reforms, resulting in various sanctions against it being lifted. "Myanmar has come a long way in its economic transformation, undertaking unprecedented reforms to improve people's lives, especially the poor and vulnerable," said Annette Dixon, country director for Myanmar at the World Bank. Much work remains to be done. We are committed to helping the government accelerate poverty reduction and build shared prosperity. "The Bank's engagement, together with the ADB, the Government of Japan and other partners, will help attract investment, spur growth and create jobs," Ms Dixon added. Tipping point Burma, one of the poorest countries in Asia, has been hurt by decades of international isolation in wake of the sanctions imposed against it. However, it has huge growth potential, not least because its rich in resources such as natural gas reserves. At the same time, it has a big agricultural potential as well as the availability of low-cost labour. The World Bank expects Burma's economy to expand by 6.3% in the financial year 2012-13, up from 5.5% in the previous 12 months. However, many analysts have said that for the country to be able to translate that potential into actual growth it needs increased investment in key sectors. Stephen Groff, vice president of ADB said the bank's loan will help Burma lay the foundation for sustainable growth "which will ultimately lead to major investments in road, energy, irrigation and education projects, as well as investments in other sectors." "This is a historic tipping point for Myanmar," he said. The bank added that its aid will also help the country "develop a strategy to make banking services more widely available." The ADB's loan to Burma is the first such credit it has approved in almost 30 years. Last year, the World Bank started lending to Burma after a gap of 25 years. Further aid In a further boost to Burma, the Paris Club of creditor nations has agreed cancel almost half of its debts to member countries. It has also agreed to reschedule the payment of the remaining loan over a period of 15 years. According to a press release on the state-run New Light of Myanmar, Norway, which is a member of the club, has cancelled all of its claims amounting to $534m. Meanwhile, another member Japan has committed to a cancellation of its arrears worth over $3bn. The release said that the overall agreement with the club "results in a very favourable debt relief of nearly $6bn or over 60% of total debt immediately in effect." "Meanwhile, other bilateral donors are expected to follow suit and more debt cancellation is coming on the way in the next six months," it added. The Paris Club is an informal group of creditors that helps countries, especially poor nations, restructure or reduce their debt. According to its website, it has 19 permanent members including the US, UK and Australia.