Myanmar Development Resource Institute Centre for Economic and Social Development

Soe Nandar Linn Research Associate MDRI-CESD 26 September 2012 ladynandar@gmail.com

♣ Budget

♠ Strictly top-down

♠ Discretionary power of Head-of-State

♠ Special Project Committee – large slush fund

♣ Governance

♠ Centralised administration – British legacy

♠ Line ministries maintain authority to the lowest unit

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Pre-reform: Budget and Governance

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New Administrative Structure of Myanmar

Union

7 States and 7 Regions

6 Self Administrative Zones and Region

64 Districts

324 Townships

2,471 Wards 13,747 Village Tracts

Sub-national parliaments Sub-national governments Chief Ministers

♣ Fiscal reform: ♠ Budget deficit was reduced in FY2012/13(10% of previous year) ♠ Abolishing and streamlining ministries (Industrial development for

special and defense projects; Electricity Production) ♠ President encourages ministries to trim down uneconomical and

redundant State Economic Enterprises Privatization ♠ Emphasize on-going review of public utilities performance and

reforms: communication, electricity, energy, forestry, education, health and financial sectors where the ratio of government ownership is large

♣ Monetary reform: ♠ Exchange rate unification ♠ Central Bank autonomy

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Significant Initial Steps of Reform in Myanmar

♣ The government took a key step towards fiscal transparency through the publication of the FY 2012/13 budget

♣ However, Ministry of Information still controls the legal and regulatory framework to require the publication of budgetary information

♣ Media plays an important role in introducing transparency and budgetary execution

♣ Parliamentary oversight – thorough scrutiny of public expenditures and spending priorities

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Public Access to Budgetary Information

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Budget System of Myanmar

Current Budget

Union-level organisations

States and Regions

Ministry of Finance and Revenue

Ministry of National Planning and Economic Development

Capital Budget

Union-level organisations

States and Regions

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The Process of Budget Bill

National Plans, Annual Budget,

Taxation

Union Ministers

- President - 2 Vice Presidents - Union-Attorney

General - Union-Auditor General - Chief Ministers - Chair of Naypyitaw

Council - Minister of Finance &

Revenue

Financial Commission Pyidaungsu

Hluttaw (Union)

Budget estimates are submitted to the parliament. It takes at least two months to review and debate the budget proposals.

♣ Sustaining agriculture towards industralisation

♣ Balanced and proportionate development across States and Regions

♣ Inclusive growth

♣ Quality of statistics

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Four Priority Reform Objectives of Myanmar Government

C

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National Food Poverty Shared by State/Region (2010)

Integrated Household Living Condition Survey, UNDP

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Budget Allocation by State/Region FY2012/13

6%

1% 1% 3%

8%

4% 5%

15%

6%

3%

13%

5%

15%

13%

1%

0%2%4%6%8%

10%12%14%16%18%

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Per-capita Budget Allocation by State/Region FY2012/13

12,047 12,636

2,473

15,105

3,941

8,149

2,721

8,831

2,460 2,685

12,554

2,108

8,642

5,132

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Mya

nmar

Kya

t

♣ Budget reform

♠ Horizontal resource allocation rules and regulations of the transfer from Central to State/Region governments

♠ More systematic formulation of sub-national fiscal plan

♠ Increasing sharing of State/Region budget

♠ More equitable resource sharing – step towards fiscal federalism?

♣ Participatory planning

♠ Regional Plans and Urban Development Plan – participatory?

♣ Priorities

♠ Capacity building of sub-national governments and institutions

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Necessary Reforms at Sub-National Level