Time to Abolish Ministries’ ‘Other Accounts’: NLD Lawmaker

By Htet Naing Zaw 8 February 2019

NAYPYITAW—A National League for Democracy (NLD) lawmaker has called for the abolition of the so-called “other accounts” (OAs) held by government ministries and agencies.

In Parliament on Thursday, NLD Lower House lawmaker Daw Thet Thet Khaing asked what measures the government was taking to improve transparency in the reporting of revenue by the country’s extractive industries, and to ensure that state enterprises’ revenue ended up in the Union budget.

The Lower House in November 2017 approved a proposal by Daw Thet Thet Khaing to ensure such transparency, including greater scrutiny of revenue transfers into the Union budget by enterprises under the Ministry of Natural Resources and Environmental Conservation.

Daw Thet Thet Khaing told The Irrawaddy that she raised the question this week because there had been no significant progress more than one year after the proposal was approved.

“Internationally, there is no practice of keeping ‘other accounts’. I think they should be abolished,” she told The Irrawaddy.

“I would like to know how much the government departments involved in the extraction businesses are earning. I would like to know the exact figure,” she said.

There are 25 state-owned economic enterprises (SEEs) in Myanmar authorized to keep OAs, which currently hold around US$9 billion (nearly 14 trillion kyats). The accounts were created under U Thein Sein’s administration, she said.

The government retains exclusive rights to conduct business in certain sectors, including the extractive industry, according to the State-Owned Economic Enterprises Law enacted under the military regime in 1989. Under the law, local and foreign investors may conduct business in these sectors through contracts or joint venture agreements with the government.

During a parliamentary debate on the issue in November 2017, lawmakers pointed out that the Ministry of Natural Resources and Environmental Conservation has more than 10 trillion kyats (US$7.3 billion) in its OAs—far more than the combined budgets for health and education in fiscal 2017-18.

They said that only about half of the ministry’s revenue goes to the Union budget, while the rest is kept by the ministry in a manner that lacks transparency.

According to Parliament’s Joint Public Accounts Committee, the News and Periodicals Enterprise of the Information Ministry, Myanmar Posts and Telecommunications, Myanma Timber Enterprise, No. 1 Mining Industry, No. 2 Mining Industry, Myanma Gems Enterprise, Myanma Pearl Enterprise, and Myanma Oil and Gas Enterprise have other accounts and operate with their own funds.

Other government enterprises that have OAs while also spending Union funds include Inland Water Transport, Road Transport Services, Myanma Railways, Myanmar Post, Electricity Supply Enterprise, Myanma Petrochemicals Enterprise, No. 3 Heavy Industry, No. 2 Heavy Industry, No. 3 Heavy Industry, and Myanmar Pharmaceuticals Enterprise.

“Some enterprises operate with their own funds. The government doesn’t fund them. They have to sustain their operations using their profits. It is understandable that such departments keep OAs. But OAs should not be kept to hold revenue from extractive industries,” said secretary U Aung Kyaw Kyaw Oo of the Lower House Investment and Industrial Development Committee.

In response to Daw Thet Thet Khaing’s proposal, the deputy minister for planning and finance, U Maung Maung Win, told the Lower House that all the revenue of enterprises under the Natural Resources Ministry have been transferred to the Union budget.

“The National Economic Coordination Committee is discussing what to do with OAs kept by state-owned economic enterprises,” he said.

The committee is led by State Counselor Daw Aung San Suu Kyi. The deputy minister said that OAs are a part of the Union Budget and are spent in line with the Budget Law.

Upper House lawmaker Dr. Khun Thaung Win said there was a need for more information about OAs. “I don’t understand how OAs operate. So, I don’t want to comment on it. But the government should provide more details about them,” the lawmaker said.

Daw Thet Thet Khaing told The Irrawaddy, “[The deputy minister] said that [those revenues] are given to [the Union] budget. But what we want is transparency. We want to know the details about these accounts.”