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Myanmar Needs Better Governance, Not Just a Stronger Government

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This article was written by Anjali Garg and Ryan Flynn, International Budget Partnership

Source: Flickr/Tom Godber

 

Myanmar is a country in the midst of enormous change. In 2011 the country embarked on a series of reforms that have helped pull it out of decades of isolation. The transition from military rule toward more open governance has included establishing a parliament, implementing a more market-based economic system, relaxing media censorship, and negotiating ceasefire agreements aimed at ending some of Asia’s longest-running conflicts.

The government has also signaled a willingness to improve transparency and accountability, including signing on to the Extractive Industries Transparency Initiative (EITI) and the Open Government Partnership (OGP). And a new law loosening the government’s grip on civil society was enacted in July 2014.

Progress toward more open budgets remains nascent. IBP’s Open Budget Survey Tracker – an online tool that monitors the availability of budget information – shows most documents still remain under wraps. Despite producing a wealth of budget information, the government is currently publishing only the final Enacted Budget. This means that crucial documents produced by the government, such as the Draft Budget and the Audit Report, remain off limits to the public.

IBP recently sent a team to Myanmar to explore opportunities to expand budget transparency, participation, and accountability. We found that current efforts to strengthen Myanmar’s budget system are focused primarily on building government’s capacity.

A similar commitment should be made to strengthening local civil society and opening up space for public participation.

Strengthening Public Finance Management (PFM)

Recognizing the links between better budgets and improved service delivery, donors have made strengthening the government’s ability to manage public finances a priority. The World Bank, the United Kingdom, and Australia have committed a collective $55 million over the next five years (through 2019) to providing Myanmar with technical and financial assistance for public finance management reforms.

Few would question the need for government to have the skills and capacity to manage public money, and donors are doing an impressive job of matching these needs with resources. But an effective budget is more than the product of strong government systems: the ability of those outside government to understand and participate in budget decisions, and to hold government to account for how money is raised and spent, is crucial.

More Inclusive Budgets

Many of the donors we met with acknowledged the importance of reforming budgets to be more inclusive. But so far the process has been to inform rather than consult those outside government about reforms. Little has been done to facilitate a much-needed dialogue between local civil society and the finance ministry. As a result, many are left disconnected. This is a missed opportunity to ensure that issues that are often championed by civil society, such as transparency and participation, are high on the PFM reform agenda.

Importantly, donors are currently investing too little in building the capacity of local civil society to directly engage in budget issues and undertake budget analysis. Holding government to account for how it is raising and spending public money depends on the ability of civil society to analyze and use budget information. We know from experience that, much like building the capacity of government, equipping civil society organizations with the necessary knowledge and skills takes time.

A Country in Transition

If civil society appears to be largely disconnected from the reform process, the general public appears to be struggling to make sense of the enormous changes underway. A groundbreaking report by the Asia Foundation found that the public, while generally upbeat about the country’s future, has “very limited knowledge about the current structure and functions of various levels of government.” At the same time, those surveyed placed remarkable importance in citizen participation in governance: 94 percent believe it to be very or somewhat important; virtually no one believes it is unimportant (see chart below).

Myanmar Participation

Source: The Asia Foundation http://asiafoundation.org/publications/pdf/1445

A lack of understanding on the particulars of government should not be an excuse for excluding the public from the process of reform and government decision making more broadly. Rather, the Myanmar government and donors should seize on this widespread optimism and appetite for public participation to inform and involve the people in governance decisions.

In the context of government budgets, this means laying the foundation for an informed and engaged civil society that can shape budget priorities, draw the public’s attention to budget issues, and hold the government to account on its management of public resources.

Now’s the Time

To its credit, the UK’s Department for International Development (DfID) has earmarked US$6.8 million from its PFM program to support civil society. While this is a good sign, so far none of the funds have actually been disbursed according to DfID’s Development Tracker.

Delaying this effort has the effect of sequencing civil society budget work until after other reforms have taken root and, in doing so, threatens to undermine some of the fundamental objectives of donor support. Building more accountable, inclusive budgets, in which the public plays a greater role, is not a narrow technocratic exercise. International experts can help to deliver better budget systems, but building the capacity of local civil society to monitor and influence public spending is essential to better outcomes.

Investing in civil society is also likely to stoke demand for greater budget transparency and space for participation. Donors can add momentum by encouraging the government to make more budget information publicly available. If the government is serious about instituting a more open and participatory governance system, a significant step toward this can be achieved at little or no cost by simply publishing the budget documents that are already produced.

Increasing opportunities for the public to participate in budget decisions is no less important. The finance ministry should organize meetings around Myanmar to collect citizens’ views on budget priorities, and the national parliament should open their hearings on budget oversight decisions to the public. The Asia Foundation’s findings suggest that there is an optimistic populace eager to engage, but it lacks a solid understanding of how the government works. Greater participation from the public will not only help the government better understand people’s priorities and needs, but also allow the public to “learn by doing” as they engage in budget and service delivery decisions that have a direct bearing on their lives.

These three elements – supporting local civil society, increasing budget transparency, and encouraging public participation – should happen at the same time as investments in better budgetary systems and improvements in government capacity.

Without each of these, donors run the risk of merely strengthening Myanmar’s government, not strengthening Myanmar’s governance.

Links Roundup: News and Analysis on Transparency, Budgets, and More

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Transparency

Counties Not Giving Enough Information, Study Shows (Standard Digital)

  • This article talks about the dearth in the budget information that counties in Kenya are making available to the public online, citing primarily a recent IBP Kenya brief.

SEND-Ghana Gives Government a Thumbs up on Budget Transparency (SPY Ghana)

  • At a recent event in Ghana on post-2015 and the OBS Tracker, SEND-Ghana commended the government for its budget transparency and called for greater public participation and expenditure monitoring.

Accountability + Transparency = Democracy

Transparency in Brazil (Development Initiatives)

  • This brief presents the domestic environment for transparency, access to information, and open data in Brazil, including substantial discussion of budget transparency.

IMF Publishes Fiscal Transparency Evaluation for Romania (International Monetary Fund)

  • Some 15 of the 36 dimensions in the IMF’s Fiscal Transparency Code are rated as good or advanced, 15 dimensions are rated as basic, and 6 regarded as yet to be achieved. This reflects progress made in public financial management reform since 2010.

Finland: Fiscal Transparency Evaluation (International Monetary Fund)

  • Finland meets most of the principles of the IMF’s Fiscal Transparency Code at good or advanced level. Some areas, notably related to the analysis and management of fiscal risks, are still rated as basic or below, but with a few exceptions the importance of these areas for fiscal management in Finland is relatively low.

Following the Money 2015: How the 50 States Rate in Providing Online Access to Government Spending Data (USPIRG)

  • The report finds that U.S. states continue to make progress toward comprehensive, one-stop, one-click transparency and accountability for state government spending. Over the past year, many states have launched new and improved websites to better open the books on public spending, or have adopted new practices to further expand citizens’ access to critical spending information. Some states, however, still have a long way to go.

 

Budgets and Public Finance

Budgeting in the Real World: Response to Gilad Isaacs (Daily Maverick)

Kenya: State Corporations Under the Devolved Budget (All Africa)

  • This article argues that going forward in the Kenyan budget reform process, some substantial reform of state corporations is required to streamline both revenue as well as functional responsibilities between the national and county governments. Mentions IBP Kenya and recent publications.

PB Vallejo Banner

Pioneering Participatory Budgeting (American City & County)

  • This article discusses how Vallejo, California, has become the first municipality in the country to adopt participatory budgeting on a citywide scale and decided how $2.4 million of the city’s budget would be spent.

Why Context Matters in Public Finance Management Reforms (Governance for Development Blog)

  • This post emphasizes how the context of public finance management reforms has profound implications for work in development.

Presenting Public Finance Just Got Easier (OpenSpending)

  • This article announces and explains how CKAN, the data handling software suite which powers data.gov and other open data portals across the world, has been significantly upgraded and can open up new opportunities for existing and coming deployments.

 

Post-2015 and Development

SDGs

Patterns of Progress on the MDGs and Implications for Target Setting Post-2015 (Overseas Development Institute)

  • This paper argues that in order to bridge the gap between expectations and achievements in the new MDGs, it is essential to maintain the power of a unified set of goals while bringing in greater sensitivity to national realities.

Leaving No One Behind: How the SDGs Can Bring Real Change (Development Progress)

  • This report argues that more detail is needed on what “leave no one behind” means for implementation of the SDGs, specifically to define the actions needed to “leave no one behind” and to provide the right framework to monitor success in the SDGs.

Measuring Development: Why Statistics Matter (Transparency International)

  • Transparency International and Saferworld have been working recently to identify the relevant statistical indicators – the monitoring framework – to achieve goal 16 of the SDGs: “peaceful and inclusive societies, justice for all, and open and accountable government institutions.”

Proposed SDG Governance Indicators: Rule of Law or Simply Rule? (Permanent Observer Blog)

  • This blog post highlights some important points about the specifically political elements of goal 16 of the SDGs.

Improving Delivery in Development: The Role of Voice, Social Contract, and Accountability (World Bank)

  • This volume argues that the consistent integration of voice, social contract, and accountability into both the design and the implementation of development efforts is indispensable if successful outcomes are to result.

 

Governance and Civil Society

How to Stop Extremism Before It Starts (Foreign Policy)

  • In the global fight against violent extremism, a major element has been missing from the conversation that has focused on mostly top-down, official efforts: how ordinary citizens and communities are successfully challenging the acute corruption that drives young people and others into the folds of radicals, for example through social audits.

Social Media and Governance (GSDRC)

  • This brief addresses the question of the impact of social media on governance of social, political, and economic bodies, contending that social media has a lot of potential to be used for governance purposes, but that this is not capitalized on in most contexts. It includes an annotated bibliography on social media and governance as related to political participation, transparency and accountability, peacebuilding, the private sector, and internal governance.

A Workshop on Multi-Stakeholder Initiatives and Governance: What Did We Learn and Where to Go from Here? (Transparency and Accountability Initiative)

  • This article provides a thorough summary of a workshop convened by T/AI on international multistakeholder initiatives addressing public governance issues, particularly related to government transparency and accountability.

Advocating for Civil Society Space in 2015 (Huffington Post)

  • In this article, the CEO of InterAction argues that as dialogue among member states for the post-2015 agenda begins, advocating for civil society space and voice will remain one of the leading priorities.

 

Upcoming Events

“Impact, So What?”: FBL BackTalk with Accountability Lab (Feedback Labs)

  • Join Accountability Lab and Feedback Labs at the Open Gov Hub for a discussion on monitoring and measuring impact in transparency and accountability work. This event will take place on 31 March 2015 from 12:30-2:00 pm (EST) in Washington, D.C.

The Cost of Reforming Pensions in El Salvador

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Credit: Flickr/ Mario Pleitez

This article was written by Rocio Campos, International Budget Partnership 

Salvadoran workers have lost hundreds of millions of dollars in interest that the government should have paid on state pensions, according to a recent decision handed down by El Salvador’s Supreme Court of Justice. Despite interest rates on private savings averaging around 7 percent, the government has paid just 1 percent interest on public pension savings. Between 2007 and 2013 alone, this would have meant an additional USD 930 million being paid into the state pension system.

This shortfall prompted the Workers Committee for the Defense of the Pensions Funds (WCDP), a group made up of union representatives, to take legal action. The Supreme Court ruled in their favor, finding that the low interest rate for pensions is unconstitutional and jeopardizes workers’ social security. The court ordered the government to increase its pensions budget, adjust the interest rate,  and amend the Law on Pensions Savings System and the Trust Act (Ley del Fideicomiso de Obligaciones Previsionales) accordingly.

By increasing the amount of money that the government pays into the state pension system, the court order could have significant fiscal implications. The strain on the budget from the decision could be compounded by other issues threatening the health of the pension system and put pressure on spending on other social services.

Debate and Proposals
State pension reform, and the impact it could have on the amount of funds available for other public services, was a big topic of debate at a forum on social spending in El Salvador organized by IBP last year. To widen the conversation beyond government, the event brought together academics, civil society representatives, the media, and policymakers to discuss the future of public finance in El Salvador. Earlier this year David Morales, Attorney General for the Protection of Human Rights, hosted an event on human rights and social security during which participants urged the government to build a fair and sustainable pension system that prioritizes equity and justice.

Since these events, more voices have joined the debate. This includes those looking to mitigate the fiscal impact of the court decision and those looking to bolster pensions for workers.

The nonprofit organization Fundación Dr. Guillermo Manuel Ungo (FUNDAUNGO) suggested that the government should gradually raise the interest paid on pensions by 1 percent a year, to stagger the impact of the increase on the public purse.

On the other side, WCDP, in a proposal submitted to the legislature, is pushing for more aggressive action to be taken. They are calling for the interest paid on state pensions to be based on the interest rate set by the Central Bank plus an additional 3.5 percent. In today’s market this would mean an immediate increase of 8 percent.

The Costs of Reform
Mauricio Choussy, the former president of the Central Bank, has estimated that each extra percentage point paid in interest on pensions could add as much as USD 40 million to the annual budget. Data released by the Financial System Superintendence (Superintendencia del Sistema Financiero) support Mauricio’s estimate.

El Salvador’s total budget in 2014 was USD 4.6 billion, with 874 million spent on education, 555 million on health, and 431 million on pensions. Assuming the figure of 40 million is accurate, even a 5 percent increase in the interest paid on pensions would add USD 200 million to the annual budget.

Moreover, there are other mounting pressures on the pension scheme to consider.

A recent paper by the think tank Fundación Salvadoreña para el Desarrollo Económico y Social (FUSADES) highlights the growing gap between present spending levels and anticipated needs: the need to expand coverage to those employed in the informal sector; increases in life expectancy driving a growing number of retirees; and a current fiscal deficit that would be unable to sustain sudden debt increases.

The Way Forward
Legislative and municipal elections were held in El Salvador earlier this month. While the winners have so far not been confirmed, the new legislature faces some tough choices on state pension reform. How quickly the interest paid on state pensions can be brought in line with a fairer rate will inevitably involve tradeoffs with spending on other social services. As such, it is impossible to separate the pension debate from a wider debate on budget priorities.

More importantly, it is crucial that Salvadorans understand that the pension debate is not only a concern of retirees, but of all Salvadorans. Civil society across sectors must participate in a frank public discussion on the tradeoffs between implementing a fairer pension scheme and maintaining other social services.

The pension debate asks some tough questions on what the priorities should be for public spending, the answers are likely to affect the country far into the future.

Engaging the Public in the Budget: Twitter Chats in Kenya

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This article was written by Vivian Magero and John Kinuthia from IBP Kenya.

The International Budget Partnership Kenya (IBP Kenya) recently held a twitter chat on how government revenue is shared in Kenya. The Kenyan government is in the midst of reforming how revenue is shared among Kenya’s 47 counties. The Commission on Revenue Allocation (CRA), which makes recommendations to the Senate, is playing an important role in revising the formula for revenue sharing. CRA submitted its recommendations to the Senate in November 2014. Given the importance of these reforms, we felt there has been too little awareness and engagement from the wider public.

Part of the challenge is that debates over how revenue should be shared can be quite technical. IBP Kenya has been producing content to make the topic more accessible and underline what is at stake. This includes an infographic explaining the first generation revenue sharing formula; another infographic outlining our recommendations on how to revise the formula; and an animation outlining three easy to understand principles of revenue sharing: need, capacity, and effort.

Twitter is popular in Kenya. A 2012 study found Kenyans to be among Africa’s most prolific tweeters. It is also a platform on which the major players involved in the revenue sharing debate – including the CRA and civil society – are active. A twitter chat seemed like a good opportunity to come together to openly debate the reforms.

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Preparation

In the lead up to the chat, we prepared a simple strategy. This included:

  1. Who our audience was. We hoped to engage the general public, who have a right to give their inputs to the Senate and the CRA. But we also wanted to bring in some of the key players: the CRA, who were in charge of submitting recommendations to the Senate; members of the Senate committees of budget and devolved governance; the media; and civil society, who are actively engaged in advocacy around devolution and public finance in Kenya.
  2. The objective of the chat. It was important to establish why we were holding the twitter chat in the first place. What did we want to achieve? We settled on three objectives. The first was to inform the wider public and civil society of the reforms and encourage them to engage in the reform process. The second was to influence the Senate on the key principles of sharing, and to help them to make informed decisions. Lastly, we wanted to inform the media on the proposed reforms and ensure journalists had access to information relevant to the debate.
  3. Components of the chat. To ensure people could follow and engage with the chat, we came up with two hashtags, #SharingRevenueKE and #FormulaWatchKE. This allowed people to follow the debate and tweet their questions and comments. We made sure to draft a set of the tweets to cover our key messages, supply information and links to related content, and ask questions to stoke debate.
  4. Promotion. Using Piktochart, we created some visually appealing posters advertising the chat. We sent these out to our contacts via email, through our Facebook page, and on Twitter.

How it went

The hashtags attracted over 200 tweets, many of which were retweeted multiple times. However, most interaction came from those already actively engaged in the reforms, and unfortunately the CRA and the Senate didn’t get involved in the discussion. Nonetheless, we have seen a considerable increase in interactions on IBP Kenya’s Twitter handle since the sessions started, including on issues beyond the formula.

We have a few takeaways from the sessions:  

  • Hosting a Twitter chat can be a powerful tool for stoking debate but has to be planned well and thought through. There are many things to manage during the chat, so preparing material beforehand is very useful. In the first session we learned that graphics and pictures work really well and attracted a lot of retweets. So we busied ourselves preparing more of that material for subsequent sessions.
  • There were a few people during the chat who drifted off the topic and some who tried to politicize the discussion. It was important to keep bringing the conversation back to the intended focus of the discussions.
  • We attracted a good number of tweets and retweets despite only having around 350 followers. By engaging organizations and individuals with large twitter followings, we were able to draw a larger audience than we would have been able to alone. It was important to target our audience and bring them into the discussion early, and to keep reminding and inviting potential participants.
  • There were more retweets of our content than original contributions. This suggests the debate was mostly among those already engaged. However, these retweets enabled our graphics and discussion to reach many outside of our followers.

We plan to continue to experiment with Twitter and other social media platforms to reach new audiences and widen participation in budget debates. In the meantime, you can keep up with our work on Twitter, YouTube, and Facebook  – drop us a tweet or a comment!

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Disclaimer

The Open Budgets Blog features news, analysis, and opinions related to transparency, participation, and accountability in government budgeting, civil society budget analysis and advocacy, and public finance management.

Each post is the responsibility of the individual author alone, and does not necessarily represent the views of the International Budget Partnership, our donors, or partners.

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