Soe Nandar Linn Research Associate MDRI-CESD 26 September 2012 - PowerPoint PPT Presentation

Myanmar Development Resource Institute Centre for Economic and Social Development Soe Nandar Linn Research Associate MDRI-CESD 26 September 2012 ladynandar@gmail.com

Pre-reform: Budget and Governance 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

New Administrative Structure of Myanmar Union Sub-national parliaments 7 States and 7 6 Self Administrative Sub-national governments Zones and Region Regions Chief Ministers 64 Districts 324 Townships 13,747 Village 2,471 Wards Tracts 26-Sep-12 Sub-national Budgeting in Myanmar 3

Significant Initial Steps of Reform in Myanmar 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

Public Access to Budgetary Information ♣ 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

Budget System of Myanmar Union-level organisations Ministry of Finance Current and Revenue Budget States and Regions Union-level Ministry of National organisations Capital Planning and Budget Economic States and Development Regions 26-Sep-12 Sub-national Budgeting in Myanmar 6

The Process of Budget Bill Pyidaungsu Financial Commission Hluttaw (Union) President - 2 Vice Presidents - Union-Attorney - General Union-Auditor General - Union Ministers Chief Ministers - National Plans, Chair of Naypyitaw - Council Annual Budget, Minister of Finance & - Taxation Revenue Budget estimates are submitted to the parliament. It takes at least two months to review and debate the budget proposals. 26-Sep-12 Sub-national Budgeting in Myanmar 7

Four Priority Reform Objectives of Myanmar Government Sustaining agriculture towards industralisation ♣ Balanced and proportionate development ♣ C across States and Regions ♣ Inclusive growth ♣ Quality of statistics 26-Sep-12 Sub-national Budgeting in Myanmar 8

National Food Poverty Shared by State/Region (2010) Integrated Household Living Condition Survey, UNDP 26-Sep-12 Sub-national Budgeting in Myanmar 9

Budget Allocation by State/Region FY2012/13 18% 15% 15% 16% 14% 13% 13% 12% 10% 8% 8% 6% 6% 4% 5% 6% 5% 4% 3% 3% 1% 1% 1% 2% 0% 26-Sep-12 Sub-national Budgeting in Myanmar 10

Per-capita Budget Allocation by State/Region FY2012/13 16,000 15,105 14,000 12,636 12,554 12,047 12,000 Myanmar Kyat 10,000 8,831 8,642 8,149 8,000 6,000 5,132 3,941 4,000 2,721 2,685 2,473 2,460 2,108 2,000 - 26-Sep-12 Sub-national Budgeting in Myanmar 11

Necessary Reforms at Sub-National Level 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