The Irrawaddy

Military Dissents as Rakhine Parliament Demands Fair Budget from Union Govt

A crude oil tanker docks at Maday Terminal in Rakhine's Kyaukphyu Township in July. Oil piped to China from the terminal earns Myanmar millions of dollars a year.

YANGON – A proposal calling on the Union government to increase its budgetary allocation to Rakhine State was approved by the state’s Parliament over the objection of Myanmar Military representatives during a vote on Thursday.

Arakanese regional lawmaker U Aung Kyaw Htwe of Paukttaw constituency submitted the proposal urging the Union government to increase funding for Rakhine in the coming years.

He told The Irrawaddy that while the Union government received huge annual revenue from the oil and gas sector—a reference to China National Petroleum Corp’s (CNPC) pipeline project, which travels 480 miles across Myanmar from China’s Yunan province—Rakhine State’s budget had shrunk in fiscal 2017-18 from the previous year.

Last year, the National League for Democracy (NLD)-led government allocated 142 billion kyats to Rakhine State for fiscal 2017-18, compared to 532 billion kyats allocated to Yangon, Myanmar’s commercial capital.

“As funding for the development of the whole of Rakhine State, 142 billion kyats is a ridiculous sum; that’s about the cost of building a flyover in Yangon,” said U Aung Kyaw Htwe, referring to the 130-billion-kyat Tamwe junction flyoverconstructed during ex-president Thein Sein’s administration.

He said 11 military representatives in Rakhine Parliament expressed their opposition to the proposal by standing up while 26 MPs from various political parties voted in favor and one NLD lawmaker and regional minister abstained.

“As you know, the military representatives follow orders, not their hearts. So they have to follow orders. I can sympathize with the situation of the Army representatives,” U Aung Kyaw Htwe said.

The speaker of the parliament approved the result of the vote, but the Union government—as the ultimate owner of all lands, natural resources above and below ground, and the atmosphere under the 2008 constitution’s Section 37 (a)—has the option of ignoring it.

U Aung Kyaw Htwe argued that although the Constitution does not extend resource governance rights to the State government, the NLD-dominated Union parliament and government could easily increase the State budget without violating existing laws.

In 2008, state-owned Myanmar Oil and Gas Enterprise (MOGE) and the Chinese government-owned conglomerate CNPC signed off on a$2.4532-billion joint venture pipeline project. Construction was completed in 2015. Myanmar holds a 49.1 percent stake and China holds 50.95 percent.

Oil transmission began in April 2017 and is expected to reach up to 20 million tons annually. Under a shareholders agreement signed last year, Myanmar will receive an annual right-of-way fee of US$6.905 million, a pipeline usage fee of $1 per metric ton of crude oil, a crude oil duty fee of $31.56 per metric ton and a further share of the venture’s profits.

Myanmar is also home to a twin natural gas pipeline owned jointly by Chinese, Myanmar, Indian and Korean firms. Located in Rakhine State’s Kyaukphyu Township, and known locally as the SHWE gas project, it pumps more than 1 billion cubic meters of natural gas to China annually, along with millions of tons for domestic use.

In the near future, China plans to develop the USD10 billion Kyaukphyu Special Economic Zone in the township.