Myanmar’s Constitutional & Economic Reform Process

Khaing Sape Saw

PART 1Myanmar Constitutional Reform Process PART 2Economic Reform Process

PART 1Myanmar Constitutional Reform Process

Myanmar’s Constitution Milestones

1947

1974

2008

Myanmar: 1948–present

Union of Burma 1948–62Socialist Republic of the Union of Burma1962–1988Union of Myanmar 1988–2011Republic of the Union of Myanmar 2011~

Titles of the head of state: chairmanship of executive councils

• 1948–1962: President of the Union of Burma• 1962–1974: Chairman of the Union Revolutionary Council• 1974–1988: President of the Socialist Republic of the

Union of Burma• 1988–1997: Chairman of the State Law and Order

Restoration Council• 1997–2011: Chairman of the State Peace and

Development Council• 2011–: President of the Republic of the Union of

Myanmar

Myanmar’s revolutionary, nationalist, founder of Myanmar army, and considered to be the Father of Myanmar.

General Aung San

Union of Burma 1948~ 1962Sao Shwe Thaik

• 1948~1952

1947 Constitution

U Ba U

1957• 1962

U Win Maung

U Nu

Democratic Rule

1947 Constitution

• The 1947 constitution was used from the country's independence in 1948, to 1962.

• aspiring to a 'loose' federation, was seen as a separatist movement insisting on the government honoring the right to secession in 10 years provided for by the 1947 Constitution.

Socialist Republic of the Union of Burma

1962–1988

1974 Constitution One Party rule system

Burmese Way to

Socialism

General Ne Win U San Yu !981~1988

1974 Constitution

• Approved in a 1973 referendum, the 1974 constitution was the second constitution to be written. It created a unicameral legislature called the Pyithu Hluttaw (the People's Assembly), represented by members of the Burma Socialist Programme Party. Each term was 4 years.

1974 Constitution

• The national government consisted of three branches: judicial, legislative and executive. The legislative branch was a bicameral legislature called the Union Parliament, consisting of two chambers, the 125-seat Chamber of Nationalities (Lumyozu Hluttaw) and the Chamber of Deputies (Pyithu Hluttaw), whose seat numbers were determined by the population size of respective constituencies.

Economic policies: 1962–1988

• nationalized economy • a policy of autarky ; the economic isolation

from the world.

Union of Myanmar 1988–2011

U Sein

Lwin

U Aye

Ko

U Maung

Maung

1988

Union of Myanmar 1988–201118 September 1988 ~ 30 March 2011

The State Law and Order Restoration Council (SLORC)State Peace and Development Council (SPDC )Chairman: Senior General Saw Maung(1988 to 1992) Chairman: Senior General Than Shwe (1992 to 2011)

SLORC changed its name in 1997 to the State Peaceand Development Council (SPDC).

(Daw) Aung San Suu Kyi

• A Myanmar opposition politician• A chairperson of the National League for Democracy

(NLD)• A Representative of Pyithu Hluttaw for Kawhmu, the

lower house of the Myanmar parliament, ( since April 2012)1990 – the government held free election for the first time. In the 1990 general election, the NLD won 59% of the national votes and 81% (392 of 485) of the seats in Parliament. The 1990 election results were invalidated by the Electoral Laws enacted in March 2010.

The President

the head of executive/ The head

of Pyidaungsu (union) government

Our President U Thein Sein was elected in March 2011.Approval by the Pyidaungsu Hluttaw .

elect the Union government ministries

Republic of the Union of Myanmar 2011~

Republic of the Union of Myanmar 2011~Types of government Presidential republic with a bicameral

legislature.BRANCHES OF GOVERNMENT

Executive The President is the head of state and head ofgovernment.

Legislative Pyidaungsu Hluttaw: bicameral : two houses upper house Amyotha Hluttaw (House of Nationalities) :224-seat 168 are directly elected and 56 are appointed by the Burmese Armed Forces lower house Pyithu Hluttaw (House of Representatives): 440-seat 330 are directly elected and 110 are appointed by the armed forces.

Judiciary The highest court in the land is the Supreme Court, consisting of two (2) Chief Justices.

Legislative StructurePyidaugsu Hluttaw /ParliamentAmyotha Hluttaw

House of Nationalities224 Seatdirectly elected

168

Defense Services personal56

PyiThu HluttawHouse of Representative

440 Seat directly elected330

Defense Services personal110

elected on the basic of township population

elected from Regions and States

Nominated by the Commander-in-Chief of

the Defense Services

Formation of Courts at Different Levels under Judiciary Law,2010

Judiciary Executive

Legislative

Sovereign state powers: Separation of Power Division of Power

Union/Pyidaugsu Hluttaw

Region Hluttaw

State Hluttaw

Self-administered Division /Zone

7 7 6

Separation of POWER: Check and Balance/Check and counter check

JudiciaryPOWER

ExecutivePOWER

The administrative organs Pyidaungsu regions State Self-

admin zone

The highest court: the Supreme CourtBritish-era laws

Parliament : bicameral two houses : upper house

Lower house 

Legislative

Enact ; New Laws

Pyithu Hluttaw: The highest organ of the State

Legislative powerPyithu Hluttaw

State Council

Pyidaugsu Hluttaw

RegionHluttaw

StateHluttaw

self-administered Division /Zone

Myanmar parliament

parliament name Pyidaungsu Hluttaw / Assembly of the Union

Structure of parliament Bicameral

Chamber name Pyithu Hluttaw / House of Representatives

Related chamber (for bicameral parliaments)

Amyotha Hluttaw / House of Nationalities

Dates of election / renewal 7 November 2010

Purpose of elections Elections were held for all the seats in the House of Representatives.

Number of registered electorsVoters

29'021'60822'421'123 (77.26%)

Political ReformDemocratic Rule 1948–62One Party Rule 1962–1988

•Burma Socialist Programme Party Military Rule 1988–2011Union Solidarity and Development Party

(USDP) 2011-

Period political system economic system1) 1948-62

(1958-60)

parliamentary democracy system (AFPFL)

Military caretaker government

A mix of nationalism, socialism market

Same as above

2) March 1962 to (1964-74)

(1974-88)

Socialist military

revolutionary council of the Military

Myanmar way to socialism under military rule one party system(BSPP)

nationalization and Myanma way 1988command economy, self-reliance isolation

same as above except for re -acceptance of ODA loans and partialreforms

3) Sept 1988 to 2011

military rule (SLORC/SPDC) transition toward a market –oriented economy in the first half of the 1990s.

4) 2011~ present parliamentary democracy system Presidential republic with a bicameral legislature

a market –oriented economy

Overview on the political & economic System

Constitutional Remark

1947

1974

2008

Constitution referendum; but one party systemConstitution referendum; Multi-

party system

Urgently Drawn , Lacking political party registration systematically

PART 2Economic Reform Process

2012-15

“We will open doors, make reforms and invite investments as necessary for development of the nation and the people.”

President U Thein Sein

A reform bridge linking

The National Comprehensive

Development Plan

Economic Reforms

Ongoing programs : a 20-year long-term plan: drawing up in consultation with parliament for the country’s economy to grow on a par with the dynamic Asian economies.

2012 ~ 2015: identifying key parameters of the reform process Myanmar to become a modern, developed and democratic nationby 2030.

long-term

Short-term

Economic Reforms Objective• A reform bridge linking the ongoing programs of

government to the National Comprehensive 20-year long-term Development plan.

• to develop more detailed sectoral and regional plans.

• A guide for building cooperation with development partners and international bodies to obtain mutual benefits.

• focuses on potential focusing on immediate actions or “quick wins” : implementing to bring tangible and sustainable benefits to the population.

Economic Reforms

• targeting in the medium term• macroeconomic policies to promote inclusive

growth, stability • poverty reduction • Sectoral policies, • line ministries and departments • contributing to people-centered development

Economic Reforms • *inclusive growth; social, cultural and environmental aspects of

development, • national harmony and regional development, and improving

governance. • strategies for Myanmar to reposition in the international

community through strategic engagements with neighboring economies,

• the ASEAN Economic Community (AEC),• the Greater Mekong Sub-region and the rest of the world. • the required changes in the magnitude and composition of public

expenditure and sources of financing.

Economic Reforms

• details policies on synchronizing the division of labor for devising necessary reforms between parliament and other key stakeholders,

• developing an effective aid management framework,

• consultative mechanisms with civil society actors.

• implementation, monitoring and evaluation.

Economic Reforms 1. Fiscal and Tax Reforms1.1. Budgetary reforms• To ensure sound public financial management and reduce fiscal

deficits • budgetary allocation to a policy-based and tax inclusive fiscal

regime. • enhance streamlining of various revenue flows, • unifying annual budget within a medium term framework and • moving towards effective management of hard budget constraints, • while phasing out soft budget constraints currently given to the

state economic enterprises.

Economic Reforms • 1.2. Tax Reform• simplifying the current tax system, starting with

replacing the commercial tax• with a general sales tax at a single rate, with at most one

reduced (or zero) tax rate for basic food items. • Raising the exemption threshold for income tax would

make it easier to administer.

• a gradual shift in relative emphasis from direct to domestic indirect taxation; value-added tax, reforming excise tax.

Economic Reforms 2. Monetary and Financial Sector Reforms• macroeconomic stability and strong economic

growth depend in large part on a shift from direct to indirect instruments of monetary policy and the creation of an efficient, competitive and stable financial sector.

Economic Reforms

2.1. Central Bank Autonomy• reducing inflation and facilitating growth. • the finalization of the new central bank law

that will grant operational autonomy and accountability to the Central Bank of Myanmar.

Economic Reforms

• 2.2. Bank Lending Regulations• allowing commercial banks to lend for terms

of longer than one year while enabling mortgage finance to get started.

• the use of moveable assets as collateral for lending will be permitted and encouraged.

Economic Reforms

• 3. Liberalization of Trade and Investment• exchange rate unification, • the AEC targets and objectives for 2015 will be

an important driver of further reforms and some further feasible quick wins.

Economic Reforms • 3.1. Import Liberalization• the adoption of a managed float system, it is important

to move as quickly as possible to eliminate the linkage between export receipts and import licensing.

• currency appreciation pressures and provide broader benefits to Myanmar producers and consumers.

• ease exchange restrictions by allowing foreign currency purchases for car imports and for health and travel expenses abroad.

• a plan to gradually remove all exchange and other non-tariff restrictions on imports

Economic Reforms

• 3.2. Investment Liberalization• Environmental and social guidelines for foreign

investment • the foreign investment law and citizens’ investment

law will eventually be merged to provide a single investment framework in line with AEC goals.

• ensuring improving of actual investment climate • considerably reduced on transaction costs

associated with heavy regulations

Economic Reforms • 4. Private Sector Development• 4.1. Regulatory Reform• ensure that transaction costs will be minimized for

domestic small- and medium-sized enterprises (SMEs) throughout the business chain;

• starting from regulations for business start-ups, dealing with construction permits, employing workers,

• registering property, accessing credit, protecting investors, paying taxes, trading across borders,

• enforcing contracts .

Economic Reforms • 4.2. Tourism• Tourism is a relatively quick window of opportunity available

from the recent development of Myanmar as a prime tourist destination.

• Change regulation on the current visa requirements and the procedures for both tourists and businesses.

• Consideration should be given to moving quickly to significantly simplified arrangements, such as those currently in place within the ASEAN countries.

• upgrade airports and its facilities to provide better access of international flights and other means of transport for these tourists.

Economic Reforms

5. Food Security and agricultural growth• agricultural growth is critical for inclusive

development; Given a high percentage of agricultural contribution to GDP and employment in the country

• growth strategies towards helping improve the welfare and income of farmers.

Economic Reforms agricultural growth Strategies ; continue…•Increasing extension services and government loans, removing barriers throughout the supply chain.

•improving productivity of rice sector (through improved seed quality, better agronomic practices, optimized fertilizer and input dosages, and integrated pest management);• promoting dry season diversification into high-value horticulture, fresh fruits, poultry and small livestock by both small farmers and landless; improving water management at the farm level through low-cost micro-irrigation and expanding micro-finance activity in rural areas.

47

Natural Gas Resources

Forest

Land Resources

Fishery Resources

Rich Natural Resources

Other Mining Products

Gold

Copper

Precious Gem Stones

Economic Reforms • 6. Extractive Industries Transparency

Initiative• Myanmar has huge natural resources but

international experience clearly shows that such resources can as often be a curse as a blessing.

• In order to ensure that the extraction of natural resources produces real benefits for people.

Economic Reforms

7. privatization• improve valuations in future privatizations of

SEEs. further privatization of SEEs will enhance the government’s target on deficit-reduction.

Economic Reforms • Economic Stability and Growth• According to the IMF, inflation has decreased from

a double-digit rate in 2009-2010 to 6.4% in 2011, • and it is likely to even decrease further to around

4.2% in 2012. • mainly due to the combined effects of falling global

food prices and a surplus of agriculture produce;• 2012 ; achieved a reduction of the budget deficit,

declining from 6.0% to 5.5% of GDP;

Economic Reforms • Economic Stability and Growth• Myanmar's economy grew at 7.3 percent in 2012/13. • The main drivers of growth were increased gas

production, services, construction, foreign direct investment, and strong commodity exports.

• The economy is projected to grow at 7.5 percent in 2013/14 and rising to 7.8 percent in the medium term owing to continued increase in gas production, increased trade and stronger performance in agriculture.

Source: the world bank

Economic Reforms

• Economic Stability and Growth; continue…

• Once an ongoing assessment of the business climate in Myanmar has been completed, it will be possible for the government to develop a comprehensive action plan for improving the overall business environment, which will become a cornerstone for the emergence of a vibrant private sector.

Myanmar lose a bit of Oomph?

Why its long-term growth rate has slowed?• International sanctions not fully removed yet.

Thank You