With Burma’s economy having for decades been operating without an appropriate system of government budgeting and accounting, the Burmese people have a complete lack of information about their country’s overall financial picture. The government therefore urgently needs to implement measures to improve governance of its institutions, ensure fiscal transparency and improve fiscal policy if it is to properly transition towards being a successful, modern nation.
The hybrid-military-dominated parliament was this week scheduled to debate the union budget. But designing systems to ensure fiscal discipline requires input from all stakeholders on macroeconomic and social issues.
There’s no universal formula for ensuring fiscal discipline, but regardless of how a country gets there, it should require organizations to ensure that expenditures can be met without relying on significant debt (or excessive printing of money) and that fiscal information is released publicly in a timely manner. To ensure balance, Burma’s budget should be aimed at allocating more to education, health and social affairs, while reducing overspending on the military and defense sector.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The nation’s economic growth and performance will ultimately need to be based on the foundations of good governance and prudent fiscal policy.
In practical terms, this means the administration should at the outset establish a special budget reform taskforce to concentrate on tackling the challenges likely to occur during the budget reform process. In order to prevent the deterioration of the prospects for fiscal reform, parliamentarians will have to play a more proactive role in budgetary discussions. The government, for its part, should send its economists overseas to study fiscal reforms and economic transitional experiences.
Second, according to Transparency International’s Corruption Perceptions Index, Burma has been ranked among the most corrupt countries in the world for decades. This corruption has a direct impact on the people and the economic health of the entire nation. Both the generals and the state’s bureaucrats have responsibility for the existence of such corruption as they have failed to ensure adequate budget and fiscal management. State agencies need to be more accountable to the people of Burma.
Third, Burma’s former generals printed money to try to ensure double-digit economic growth, but such an approach has led to hyperinflation. Burma must work to combat inflation and ensure a stable monetary policy in order to create the environment needed for economic prosperity, financial investment, and stability.
Fourth, although sub-national governments were only established recently, the union government ought to encourage them to establish their own fiscal plans and taxation. They must manage their revenue, expenditures and projects by themselves.
Finally, the people’s participation in the budgeting process and financial reporting should be transparent and accountable. The public should be informed about their foreign debt and overseas borrowing. Burma needs to undertake profound economic and fiscal reform if it is to march down the path towards a more democratic society. The budget submitted by the government will be an indicator of just how serious the government is about economic reform and tackling poverty.
Naing Ko Ko is a recipient of the 2010 Amnesty International New Zealand Human Rights Defender Award and a former Burmese political prisoner.