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Public Finance Overview in Myanmar

Countries do not succeed economically without taking care of their population.

Even for resource-rich countries like Myanmar a prosperous economy must rely on the skill and expertise of its human capital for sustained growth and stability.

Currently, however, Myanmar's social sector spending is extremely low by international standards: as a percentage of GDP in 2012-2013 0.76% was spent on health, 1.46% on education, and less than 0.01% on social welfare. Need for government support, meanwhile, is great: about 85% of Myanmar's population fall below the World Bank's poverty line of USD2.25 per day.

But Myanmar has the potential to improve this situation. Even a small percentage of the country's abundant natural resource revenues could be turned into significant social investments. According to UNICEF, for example, just over a quarter of Myanmar's 2010 sales from precious and semi-precious stones could provide a universal child benefit of 15,000 Kyat per month for all children under five.

What these social investments require, most of all, is political will, including the will to change old systems. Preparation of the  budget needs to be better aligned with the needs, plans, and goals of the social sector. Budget information and its rationale is not currently well understood by the public. Public participation in budget decisions – including information access, understanding of priorities and the ability to influence the allocations – can be shown to give results that bring prosperity for all. Budget criteria should be transparent to the public, to help spending be as effectively allocated as possible.

The other necessary change is increased taxation, which has historically been extremely low in Myanmar. Increased and progressive taxation would provide enormous opportunities for more reliable social investment in the future, while at the same time helping improve governance and political accountability.

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