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Myanmar Development Resource Institute Centre for Economic and Social Development
Soe Nandar Linn Research Associate MDRI-CESD 26 September 2012 [email protected]
♣ 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
26-Sep-12 Sub-national Budgeting in Myanmar 2
Pre-reform: Budget and Governance
26-Sep-12 Sub-national Budgeting in Myanmar 3
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
26-Sep-12 Sub-national Budgeting in Myanmar 4
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
26-Sep-12 Sub-national Budgeting in Myanmar 5
Public Access to Budgetary Information
26-Sep-12 Sub-national Budgeting in Myanmar 6
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
26-Sep-12 Sub-national Budgeting in Myanmar 7
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
26-Sep-12 Sub-national Budgeting in Myanmar 8
Four Priority Reform Objectives of Myanmar Government
C
26-Sep-12 Sub-national Budgeting in Myanmar 9
National Food Poverty Shared by State/Region (2010)
Integrated Household Living Condition Survey, UNDP
26-Sep-12 Sub-national Budgeting in Myanmar 10
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%
26-Sep-12 Sub-national Budgeting in Myanmar 11
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
26-Sep-12 Sub-national Budgeting in Myanmar 12
Necessary Reforms at Sub-National Level