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““Update & 5 Top PFM Disclosure Issues””
16 / 3 / 1616 / 3 / 16David Allan David Allan ([email protected])([email protected])
MCRB/ASEAN-CSR Network Anti-corruption workshop
for companies
Overview Overview ……
Recent UpdatesRecent Updates 5 Top Disclosure Issues5 Top Disclosure Issues Comments on Heat MappingComments on Heat Mapping NIS NIS –– some context gapssome context gaps CSO issuesCSO issues Social Accountability workSocial Accountability work…… SummarySummary
MyanmarMyanmar’’s 1s 1stst
EITI Report:EITI Report: April 2013 April 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.
MyanmarMyanmar’’s s CitizenCitizen’’s Budget:s Budget: April 2015 April 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.
“Guides for Growing Citizens”
Programs underway in some schools and elsewhere to improve financial literacy.
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
5 Top Disclosure Issues5 Top Disclosure Issues1.1. Increasing financial support for and Increasing 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 on Increased 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 score Major 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.
1. 1. Increasing financial support for Increasing 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 on Increased information is desired on defense and security expenditure.defense and security expenditure.
Disaggregated budget information is desired Disaggregated budget information is desired particularly in these sectors. particularly in these sectors.
Information needs to be able to be assessed Information needs to be able to be assessed on activity, activity type and also on activity, activity type and also disaggregated by gender and vulnerability disaggregated by gender and vulnerability category. category.
Gender responsive budgeting is considered a Gender responsive budgeting is considered a particular need and obligation under CEDAW. particular need and obligation under CEDAW.
2. 2. Jade trade a key gapJade trade a key gap
Myanmar's Jade production has been Myanmar's Jade production has been credibly valued by Global Witness at credibly valued by Global Witness at approximately $31 Billion per annum.approximately $31 Billion per annum.
Approximately $1 Billion of this passes Approximately $1 Billion of this passes through formal trade sales and taxation through formal trade sales and taxation collection routes.collection routes.
The remainder is informal and illegal The remainder is informal and illegal trade which does benefit or pass to trade which does benefit or pass to National or MOF accounts.National or MOF accounts.
This is a critical gap when looking at This is a critical gap when looking at how to fund national development.how to fund national development.
3. 3. Extractive Industry Transparency Extractive Industry Transparency Initiative (EITI) to go further in year 2Initiative (EITI) to go further in year 2
Myanmar's first EITI report has been Myanmar's first EITI report has been published.published. While advancing information While advancing information availability a lot, many clear gaps and availability a lot, many clear gaps and recommendations have been identified recommendations have been identified for the year 2 report.for the year 2 report.
Agreed supplemental reports such as a Agreed supplemental reports such as a report on the hydropower industry report on the hydropower industry inclusion in EITI have not been inclusion in EITI have not been produced as per the produced as per the workplanworkplan and need and need to be.to be.
Contract transparency and beneficial Contract transparency and beneficial ownership are important areas in all the ownership are important areas in all the resource sectors.resource sectors.
4. 4. Major budget transparency score Major budget transparency score improvement is needed, quicklyimprovement is needed, quickly
In the 2015 Open Budget Survey Myanmar In the 2015 Open Budget Survey Myanmar scored 2 out of 100, largely for not releasing scored 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 reports Myanmar already produces 7 of 8 reports considered necessary for good budget considered necessary for good budget transparency performance.transparency performance.
Publishing an executive budget statement Publishing an executive budget statement (not existing) and timely public disclosure of (not existing) and timely public disclosure of existing reports is an urgent priority for existing reports is an urgent priority for improved performance.improved performance.
Despite timely preparation, last years "citizen's Despite timely preparation, last years "citizen's budget" is commended but was released too budget" is commended but was released too late, reducing its useful role.late, reducing its useful role.
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 information Right to information and access to information are critical matters as a part of disclosures for are critical matters as a part of disclosures for fiscal fiscal decentralisationdecentralisation..
Access to Information legislation is needed, to Access to Information legislation is needed, to support citizen requests, for successful support citizen requests, for successful accountability programs to run at a local and accountability programs to run at a local and national level.national level.
Myanmar is in the process of Myanmar is in the process of decentralisingdecentralising financial control. Similar transparency financial control. Similar transparency initiatvesinitiatves as are needed at national level are needed at as are needed at national level are needed at state and local level.state and local level.
Disclosure of budget information and financial Disclosure of budget information and financial information at the state, region and local information at the state, region and local government level are considered critical for government level are considered critical for social accountability.social accountability.
President President TheinThein SeinSein, 10 July 2012, 10 July 2012
””make sure make sure the benefits the benefits go to the go to the vast majority vast majority of the people of the people and not to and not to a small groupa small group””
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
MM “Heat Mapping” - % of SampleOverall Perception of Corruption
National Integrity Systems Temple
“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.
Military Military –– given their institutional role given their institutional role and role in independence of the legislatureand role in independence of the legislature
Consideration of the basic rights associated Consideration of the basic rights associated with ownership and property lawwith ownership and property law
Inadequate constitutional recognition of ethnic Inadequate constitutional recognition of ethnic groups or validity of ethnic formed governmentsgroups or validity of ethnic formed governments
Rights of citizenship Rights of citizenship and representation by all public groups and 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 status Poverty 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
Missing Pillars?Missing Pillars? From MM context factorsFrom MM context factors
Social Welfare system status Social Welfare system status
““Access to informationAccess to information”” legislation or institutionslegislation or institutions
Availability of finance by institutional routes Availability of finance by institutional routes
Criminal activity and drugs Criminal activity and drugs as a major income activityas a major income activity
Transitional factors related to the Transitional factors related to the absence of peace and stabilityabsence of peace and stability
Transitional factors related to post war Transitional factors related to post war reconstruction where large inflows may reconstruction where large inflows may commence without corruption controlcommence without corruption control
Specific resource extraction transparency Specific resource extraction transparency regimes to prevent grand corruption regimes to prevent grand corruption ((EgEg. EITI, mandatory reporting, contract . EITI, mandatory reporting, contract transparency etc.)transparency etc.)
Missing Pillars?Missing Pillars? Related to Peace transitionRelated to Peace transition
Presence of Presence of ‘‘conflict entrepreneursconflict entrepreneurs’’ who seek to who seek to monopolisemonopolise the reconstruction economy or the reconstruction economy or resource capture opportunitiesresource capture opportunities
Foreign Direct Investment inflows (FDI) being Foreign Direct Investment inflows (FDI) being for a type of project that favor large for a type of project that favor large multinationals rather than affected communities multinationals rather than affected communities
Issues associated with the consistency of Issues associated with the consistency of application of antiapplication of anti--corruption proceedings corruption proceedings
Rapid influx of aid and extractive incomeRapid influx of aid and extractive income
Funds inflows for disarmament and reintegration Funds inflows for disarmament and reintegration of combatants as a necessary part of peace of combatants as a necessary part of peace processes and additional issues this createsprocesses and additional issues this creates
Absence of conflict sensitive, Do No Harm Absence of conflict sensitive, Do No Harm approaches, and delivery needs for quick impacts approaches, and delivery needs for quick impacts /spend targets without note of corruption risks. /spend targets without note of corruption risks.
Some corruption press snippets of interest for Myanmar audience
NLM 5/8/2014
Anti-Corruption Commission ActivitySome 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.
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.
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.”
Briefing paper series Briefing paper series on citizen social on citizen social accountability tools: accountability tools:
““WhatWhat””, , ““WhyWhy””, , ““HowHow”” and and ““In ActionIn Action””
Citizen Social Citizen Social Accountability Tools Accountability Tools can be a key route to can be a key route to citizen engagement citizen engagement on national integrity on national integrity building and antibuilding and anti-- corruption reforms.corruption reforms.
ISSUES for ISSUES for CSOsCSOs?? Systems that Systems that penalisepenalise……
A big push on overly strict documentation needs, A big push on overly strict documentation needs, not not recognisingrecognising that that MMsMMs situation actually situation actually encourages falsification of documents. encourages falsification of documents. RecogniseRecognise the context! the context!
‘‘Drop DeadDrop Dead’’ dates on funds causes major dates on funds causes major problems when money is so hard to get and no problems 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, not Encourage 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 dilemmas Donors can create big dilemmas –– and at times and at times even encourage staff to falsify documents.even encourage staff to falsify documents.
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 progress report progress
Jade Jade 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 needs Heat 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?
