Myanmar: The 1999/2000 Budget


[Name and address withheld. Ed.]

In Myanmar, the fiscal year is from 1 April to 31 March. Usually, the budget announcement for the forthcoming fiscal year comes together with a summary of the country's economic performance, in terms of gross domestic product (GDP) and sectoral growth rates for the outgoing fiscal year. However, in this year's budget announcement for 1999/2000 there was no mention of Myanmar's economic performance for 1998/99. This indicates a less-than-satisfactory performance and reluctance to reveal economic data that erode the claim of the ruling military junta, the State Peace and Development Council (SPDC), to performance legitimacy through demonstrated economic growth.

The most significant feature of the 1999/2000 budget is the huge overall deficit expected for the state economic organizations (SEO), amounting to 58.3 billion kyats. This is almost 17 per cent of their total expenditure (343.6 billion kyats). Their projected total current receipts of 284.6 billion kyats is much less than their total current expenditure of 318.4 billion kyats.

As for ministries and departments, in terms of recurrent expenditure in the current account the defence ministry's share is the largest at 40.2 per cent amounting to 17.5 billion kyats. Education is second with a 14.1 per cent share that came to 6.2 billion kyats. Meanwhile, the health ministry, with an allotment of 1.7 billion kyats and a share of 3.9 per cent, is seventh in ranking.

If the supplementary budget for 1998/99 is taken into consideration, the defence ministry's 1999/2000 current expenditure is about 1.3 per cent lower in nominal terms. The nominal current expenditure for education is also 1.3 per cent lower than the previous year's outlay, while that for health is nearly 15 per cent higher than that of the preceding year's expenditure. The overall current account budget for ministries and departments is 2.2 per cent lower in nominal terms than that expended in 1998/99.

In the capital account, the defence appropriation is also the largest with a share of 41.5 per cent and an outlay of 14.2 billion kyats. The second-ranked construction ministry gets 5.9 billion kyats for a 17.2 per cent share. Education is fourth with a 7.7 per cent share and the health ministry has a 3 per cent share in sixth position. The science and technology ministry, that is in charge of engineering/technology education, is seventh at 2.2 per cent.

In the capital account, the nominal defence spending is 22 per cent less than that for 1998/99 (supplementary budget included). Overall, the capital budget for the ministries and departments is reduced by about 32 per cent from the previous year's expenditure.

In the 1999/2000 budget the combined appropriation for current and capital expenditures of all ministries and departments is reduced by about 19 per cent from the previous year's level in nominal terms. This means a much more austere budget when double-digit inflation is accounted for. However, it should be noted that the 1997/98 spending exceeded the budget appropriations by some 26 per cent in the current account and 112 per cent in the capital account, while the combined spending for 1998/99 also exceeded the budget by about 58 per cent. Therefore, it is a distinct possibility that this latest budget appropriation may have hugely underestimated the actual amount to be expended.

WATCHPOINT: The trends suggest the continuation of soft budget constraint despite the official adoption of a market-oriented economic system.


About our company:

AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.

Go to top