This document summarizes David Allan's presentation on public finance management issues in Myanmar. It identifies the top 5 disclosure issues as: 1) Increasing budget transparency for health, education and social welfare, as well as defense spending. 2) Addressing the lack of transparency around jade trade. 3) Expanding Extractive Industry Transparency Initiative reporting. 4) Improving major budget transparency scores. 5) Passing a right to information law. It also discusses updates on Myanmar's EITI report and citizen's budget, and notes that a right to information law is critical for accountability.

1. ““Update & 5 Top PFM
Disclosure Issues””
16 / 3 / 1616 / 3 / 16
David AllanDavid Allan
(djallan7@gmail.com)(djallan7@gmail.com)
MCRB/ASEAN-CSR Network
Anti-corruption workshop
for companies

2. OverviewOverview ……
 Recent UpdatesRecent Updates
 5 Top Disclosure Issues5 Top Disclosure Issues
 Comments on Heat MappingComments on Heat Mapping
 NISNIS –– some context gapssome context gaps
 CSO issuesCSO issues
 Social Accountability workSocial Accountability work……
 SummarySummary

3. MyanmarMyanmar’’s 1s 1stst
EITI Report:EITI Report:
April 2013April 2013 –– March 2014March 2014
Summary:Summary:
 Major step forward,
 Good cooperation
in the MSG process,
 Some big gaps
to be addressed,
 Clear paths forward
for year 2 report.

4. MyanmarMyanmar’’ss
CitizenCitizen’’s Budget:s Budget:
April 2015April 2015 –– March 2016March 2016
Summary:Summary:
 Major step forward,
 Good cooperation
in the MSG process,
 Some big gaps
to be addressed,
 Clear paths forward
for year 2 report.

5. “Guides for Growing Citizens”
Programs underway in some
schools and elsewhere to
improve financial literacy.

8. Some slides taken from a presentation made to the
Public Finance Management Sector Working Group
Meeting, the topic one as requested by the group
chairman, PS MOF Maung Maung Win & cochairs.
Nay Pyi Taw 8/3/2016.
“5 Top Disclosure Issues”
David Allan, as
Civil Society Representative to PFM SWG

9. 5 Top Disclosure Issues5 Top Disclosure Issues
1.1. Increasing financial support for andIncreasing financial support for and
information is desired on health,information is desired on health,
education and social welfare budgets.education and social welfare budgets.
Increased information is desired onIncreased information is desired on
defense and security expenditure.defense and security expenditure.
2.2. Jade trade a key gapJade trade a key gap
3.3. Extractive Industry Transparency InitiativeExtractive Industry Transparency Initiative
(EITI) report to go further in year 2(EITI) report to go further in year 2
4.4. Major budget transparency scoreMajor budget transparency score
improvement is needed, quicklyimprovement is needed, quickly
5.5. Law for Right to Information /Law for Right to Information /
Access to Information is needed ASAP.Access to Information is needed ASAP.

10. 1.1. Increasing financial support forIncreasing financial support for
and information is desired on health,and information is desired on health,
education and social welfare budgets.education and social welfare budgets.
Increased information is desired onIncreased information is desired on
defense and security expenditure.defense and security expenditure.
 Disaggregated budget information is desiredDisaggregated budget information is desired
particularly in these sectors.particularly in these sectors.
 Information needs to be able to be assessedInformation needs to be able to be assessed
on activity, activity type and alsoon activity, activity type and also
disaggregated by gender and vulnerabilitydisaggregated by gender and vulnerability
category.category.
 Gender responsive budgeting is considered aGender responsive budgeting is considered a
particular need and obligation under CEDAW.particular need and obligation under CEDAW.

11. 2.2. Jade trade a key gapJade trade a key gap
 Myanmar's Jade production has beenMyanmar's Jade production has been
credibly valued by Global Witness atcredibly valued by Global Witness at
approximately $31 Billion per annum.approximately $31 Billion per annum.
 Approximately $1 Billion of this passesApproximately $1 Billion of this passes
through formal trade sales and taxationthrough formal trade sales and taxation
collection routes.collection routes.
 The remainder is informal and illegalThe remainder is informal and illegal
trade which does benefit or pass totrade which does benefit or pass to
National or MOF accounts.National or MOF accounts.
 This is a critical gap when looking atThis is a critical gap when looking at
how to fund national development.how to fund national development.

12. 3.3. Extractive Industry TransparencyExtractive Industry Transparency
Initiative (EITI) to go further in year 2Initiative (EITI) to go further in year 2
 Myanmar's first EITI report has beenMyanmar's first EITI report has been
published.published. While advancing informationWhile advancing information
availability a lot, many clear gaps andavailability a lot, many clear gaps and
recommendations have been identifiedrecommendations have been identified
for the year 2 report.for the year 2 report.
 Agreed supplemental reports such as aAgreed supplemental reports such as a
report on the hydropower industryreport on the hydropower industry
inclusion in EITI have not beeninclusion in EITI have not been
produced as per theproduced as per the workplanworkplan and needand need
to be.to be.
 Contract transparency and beneficialContract transparency and beneficial
ownership are important areas in all theownership are important areas in all the
resource sectors.resource sectors.

13. 4.4. Major budget transparency scoreMajor budget transparency score
improvement is needed, quicklyimprovement is needed, quickly
 In the 2015 Open Budget Survey MyanmarIn the 2015 Open Budget Survey Myanmar
scored 2 out of 100, largely for not releasingscored 2 out of 100, largely for not releasing
reports to the public in a timely manner.reports to the public in a timely manner.
 Myanmar already produces 7 of 8 reportsMyanmar already produces 7 of 8 reports
considered necessary for good budgetconsidered necessary for good budget
transparency performance.transparency performance.
 Publishing an executive budget statementPublishing an executive budget statement
(not existing) and timely public disclosure of(not existing) and timely public disclosure of
existing reports is an urgent priority forexisting reports is an urgent priority for
improved performance.improved performance.
 Despite timely preparation, last years "citizen'sDespite timely preparation, last years "citizen's
budget" is commended but was released toobudget" is commended but was released too
late, reducing its useful role.late, reducing its useful role.

15. 5.5. Law for Right to Information /Law for Right to Information /
Access to Information is needed ASAP.Access to Information is needed ASAP.
 Right to information and access to informationRight to information and access to information
are critical matters as a part of disclosures forare critical matters as a part of disclosures for
fiscalfiscal decentralisationdecentralisation..
 Access to Information legislation is needed, toAccess to Information legislation is needed, to
support citizen requests, for successfulsupport citizen requests, for successful
accountability programs to run at a local andaccountability programs to run at a local and
national level.national level.
 Myanmar is in the process ofMyanmar is in the process of decentralisingdecentralising
financial control. Similar transparencyfinancial control. Similar transparency initiatvesinitiatves
as are needed at national level are needed atas are needed at national level are needed at
state and local level.state and local level.
 Disclosure of budget information and financialDisclosure of budget information and financial
information at the state, region and localinformation at the state, region and local
government level are considered critical forgovernment level are considered critical for
social accountability.social accountability.

16. PresidentPresident TheinThein SeinSein, 10 July 2012, 10 July 2012
””make suremake sure
the benefitsthe benefits
go to thego to the
vast majorityvast majority
of the peopleof the people
and not toand not to
a small groupa small group””

18. Some slides taken from a paper /
presentation for the Corruption, Integrity
Systems and the G20 Conference,
Brisbane, 17-18/6/2014.
Corruption “Heat Mapping”
as a precursor/element of a National
Integrity System Assessment (NIS):
The Case of Myanmar
David Allan

19. MM “Heat Mapping” - % of Sample
Overall Perception of Corruption

20. National Integrity Systems Temple

21. “The NIS exercise does not allow us
to understand what causes a sound
corruption control framework.
The NIS approach starts from the
assumption that it is the harmony of
the inter-pillar dynamics … …
What level of performance, what
combination of elements, in what
context, result in a sound corruption
control framework?” TI Portugal.

22.  MilitaryMilitary –– given their institutional rolegiven their institutional role
and role in independence of the legislatureand role in independence of the legislature
 Consideration of the basic rights associatedConsideration of the basic rights associated
with ownership and property lawwith ownership and property law
 Inadequate constitutional recognition of ethnicInadequate constitutional recognition of ethnic
groups or validity of ethnic formed governmentsgroups or validity of ethnic formed governments
 Rights of citizenshipRights of citizenship
and representation by all public groupsand representation by all public groups
 Role of State Owned Enterprises (Role of State Owned Enterprises (SOEsSOEs))
 High centralization rather than deHigh centralization rather than de--centralisationcentralisation
 Inadequate public financial management systemInadequate public financial management system
 Poverty statusPoverty status
(poverty will drive corruption and also prevent(poverty will drive corruption and also prevent
those with little power to be able to resist)those with little power to be able to resist)
Missing Pillars?Missing Pillars?
From MM context factorsFrom MM context factors

23. Missing Pillars?Missing Pillars?
From MM context factorsFrom MM context factors
 Social Welfare system statusSocial Welfare system status
 ““Access to informationAccess to information”” legislation or institutionslegislation or institutions
 Availability of finance by institutional routesAvailability of finance by institutional routes
 Criminal activity and drugsCriminal activity and drugs
as a major income activityas a major income activity
 Transitional factors related to theTransitional factors related to the
absence of peace and stabilityabsence of peace and stability
 Transitional factors related to post warTransitional factors related to post war
reconstruction where large inflows mayreconstruction where large inflows may
commence without corruption controlcommence without corruption control
 Specific resource extraction transparencySpecific resource extraction transparency
regimes to prevent grand corruptionregimes to prevent grand corruption
((EgEg. EITI, mandatory reporting, contract. EITI, mandatory reporting, contract
transparency etc.)transparency etc.)

24. Missing Pillars?Missing Pillars?
Related to Peace transitionRelated to Peace transition
 Presence ofPresence of ‘‘conflict entrepreneursconflict entrepreneurs’’ who seek towho seek to
monopolisemonopolise the reconstruction economy orthe reconstruction economy or
resource capture opportunitiesresource capture opportunities
 Foreign Direct Investment inflows (FDI) beingForeign Direct Investment inflows (FDI) being
for a type of project that favor largefor a type of project that favor large
multinationals rather than affected communitiesmultinationals rather than affected communities
 Issues associated with the consistency ofIssues associated with the consistency of
application of antiapplication of anti--corruption proceedingscorruption proceedings
 Rapid influx of aid and extractive incomeRapid influx of aid and extractive income
 Funds inflows for disarmament and reintegrationFunds inflows for disarmament and reintegration
of combatants as a necessary part of peaceof combatants as a necessary part of peace
processes and additional issues this createsprocesses and additional issues this creates
 Absence of conflict sensitive, Do No HarmAbsence of conflict sensitive, Do No Harm
approaches, and delivery needs for quick impactsapproaches, and delivery needs for quick impacts
/spend targets without note of corruption risks./spend targets without note of corruption risks.

26. Some corruption press snippets of
interest for Myanmar audience

27. NLM 5/8/2014

28. Anti-Corruption Commission Activity
Some web based articles:
18/9/2014 Corruption watchdog needs to use its teeth, MP says
The Anti-Corruption Commission must be completely independent and
start doing what it was set up to do – uncover corruption and take action
against anyone involved in corruption, no matter who they are, Upper
House MP Hla Swe said.
22/9/2014 Question to be raised about lack of work done
by Anti- Corruption Commission
A question will be raised in parliament regarding the lack of work done by the Anti-
Corruption Commission, Lower House MP Thein Nyunt said on Saturday. “The
commission said in its report that it has received 533 complaints within 6 months
and only three of them have been investigated and necessary action taken.

29. Corruption and Projects
Article 6/3/2016 Eleven
“People from every sector protest against
Chinese ambassador's remark about Myitsone”
Eleven Media Group’s CEO Dr. Than Htut Aung:
“If the next government wants to disclose
about the Myitsone project for the people,
transparency must be shown to the people
in terms of how much corruption and
bribery cases were involved between the
Chinese government and the ones that
permitted the project.

30. Corruption and Misuse of Government Spending
21/9/2014 Speaking on Behalf of Speaker U Khin Aung Myint…
….“When these budgets, money from tax-payers, are reused for the public's
education and health sectors, unsatisfying situations have arisen such as a
building not being able to meet its standard, a school being built with
boards instead of bricks as it was originally stated, or a school built with
half the budget although a gigantic amount was shown on the paper as the
total cost of the building.”….
“on September 16, Khin Aung Myint was able to point out how the budgets
for the health and education sectors have been wasted by people pocketing
the money for themselves even though the government has increased the
budgets for many-fold.
…"It's like a tray of plums being dropped at a fair. After it was dropped, one
person takes a handful of plums and another person takes another handful
of plums so only half of them are left. The budget issue is like this.“….
...“in the article “Auctions as Usual” published in 7 Day journal, it is
described that a construction business person said “Although tender haven’t
not called for, the business person was already let know.”

31. Briefing paper seriesBriefing paper series
on citizen socialon citizen social
accountability tools:accountability tools:
““WhatWhat””,, ““WhyWhy””,,
““HowHow”” andand ““In ActionIn Action””
Citizen SocialCitizen Social
Accountability ToolsAccountability Tools
can be a key route tocan be a key route to
citizen engagementcitizen engagement
on national integrityon national integrity
building and antibuilding and anti--
corruption reforms.corruption reforms.

33. ISSUES forISSUES for CSOsCSOs??
Systems thatSystems that penalisepenalise……
 A big push on overly strict documentation needs,A big push on overly strict documentation needs,
notnot recognisingrecognising thatthat MMsMMs situation actuallysituation actually
encourages falsification of documents.encourages falsification of documents.
RecogniseRecognise the context!the context!
 ‘‘Drop DeadDrop Dead’’ dates on funds causes majordates on funds causes major
problems when money is so hard to get and noproblems when money is so hard to get and no
other sources of funding is available.other sources of funding is available.
Make easier No Cost Extensions (Make easier No Cost Extensions (NCEsNCEs) available.) available.
 Encourage integrity and reasonableness, notEncourage integrity and reasonableness, not
prescriptive incentives like per diems.prescriptive incentives like per diems.
 Accept aspects of development still needed.Accept aspects of development still needed.
Donors can create big dilemmasDonors can create big dilemmas –– and at timesand at times
even encourage staff to falsify documents.even encourage staff to falsify documents.

34. SummarySummary……
 Much new information available (EITI,CB)Much new information available (EITI,CB)
 5 Top Disclosure Issues seem clear5 Top Disclosure Issues seem clear
 EITI 1EITI 1stst report progressreport progress
 JadeJade recognisedrecognised as CRITICAL issueas CRITICAL issue
 Budget transparency needs focus nowBudget transparency needs focus now
 Social accountability tools hereSocial accountability tools here
 Right to information comingRight to information coming
 Heat Mapping shows some key needsHeat Mapping shows some key needs
in important areas for rule of lawin important areas for rule of law
 Be careful of perverse incentivesBe careful of perverse incentives
 PFM interest rising very rapidlyPFM interest rising very rapidly……
 Is corruption interest really rising?Is corruption interest really rising?