Burmese Govt Ministries Under Pressure Over Debts

By Nyein Nyein 8 November 2013

Representatives of Burmese government ministries appeared before Parliament in Naypyidaw on Thursday and Friday after they were asked to explain hundreds of millions of dollars in debt they have racked up by overspending their budgets.

The Office of the Auditor General on Tuesday released findings on the government’s accounts for the first six months of the 2012 to 2013 year. It found that the government had run a deficit of 2.5 trillion kyat (US$2.57 billion) during the period, or almost 5 percent of Burma’s annual gross domestic product.

The Auditor General’s report also included details of outstanding debts owed by ministries to the central government coffers. The debts were accumulated largely during the military regime that was officially replaced by a quasi-civilian government in 2011, before which the government’s financial affairs were obscure.

The debts accrued by 16 different ministries before the end of September 2012 totaled 1.37 trillion kyat ($1.41 billion) according to the findings. As of last month, 1.09 trillion kyat ($1.1 billion) of ministerial debt was still outstanding, according to the findings. Some 900 billion kyat is owed by just seven ministries—mining, fisheries and livestock, education, agriculture and irrigation, industry, rail transport and health—it said.

Parliament’s Joint Public Accounts Committee asked ministries to explain how they would address the massive debts. On Thursday and Friday, representatives from all 19 ministries faced the committee.

Members of Parliament told The Irrawaddy that the representatives of the ministries said they were taking action on misuse of funds within their departments in order to address overspending. However, lawmakers said few concrete details were given about how the debts would be repaid.

“These debts are not only one year of overspending , these have been accumulated from the previous regimes, going back to the Burma Socialist Programme Party [BSPP],” said Phone Myint Aung, an Upper House lawmaker from Rangoon-based New National Democratic Party. The BSPP was the sole political party in Burma during the rule of Ne Win from 1962 to 1988, during which economic mismanagement led the country into deep poverty.

He said it was important that the debts were dealt with now so that they are not inherited by future administrations.

“We let the public know about these debts so that the government will have to find the solutions. We will be monitoring closely whether the government comes up with good solutions,” Phone Myint Aung said.

The ministry with the highest accumulated debt, according to the Auditor General, is the Ministry of Agriculture and Irrigation, which owes 442 billion kyat ($455 million). The Ministry of Electric Power, which owes 276 billion kyat ($284 million), is the next highest.

“The Ministry of Agriculture and Irrigation thought when they started dam and irrigation projects that taxes on farmers would cover the costs,” said Phone Myint Aung. “But actually these projects did not work out.”

He added that the Agriculture Ministry’s response to Parliament had not properly explained how the huge debt would be recouped.

Khine Maung Yee, a Lower House lawmaker for the National Democratic Force, criticized the Ministry of Electric Power for providing vague budget figures and including an unexplained “unexpected cost” segment in accounts.

Parliament this week agreed in principle to a $60 million soft loan from the Asian Development Bank (ADB) to improve power transmission. But Khine Maung Yee said the ministry’s budgeting failings should be looked at before more money is allocated to it.

“I told them [Ministry of Electric Power] if they cannot break down the specific cost, these budget should not be included. In Parliament we deal with specifics,” he said.