Louder calls for more spending on education sector

Several businessmen and politicians have agreed that Myanmar should urgently increase spending on education and health, which, despite increases in recent years, remains the lowest in Asean.

During a recent parliamentary discussion on the 2015-16 budget bill, MP Maung Toe said: “Although the education budget has increased, it’s still low. There is still no adequate, practical budget. If the education budget is low, the country will never modernise. We can do nothing without money. There will be too few buildings and teachers. Those shortages are caused by an inadequate budget.”

Under-investment in the education sector has been a major problem in Myanmar, particularly when the country opens its doors to foreign investment. To win the Myanmar Investment Commission’s approval, a foreign investor is obliged to maintain a certain ratio of local workforce. Poor education in the country, following decades of the military rule, has sparked concerns over the scarcity of skilled labour.

In 2011, prior to the formation of the quasi-civilian government, public investment in education was less than 1 per cent of Myanmar’s gross domestic product (GDP) – the lowest among 16 Asian economies under the Asian Development Bank’s radar. In the region, the average spending on education was 3.9 per cent.

According to the World Bank, in the 2013-14 fiscal year, government education expenditure more than tripled in nominal terms from Ks310 billion to Ks 1.1 trillion, rising from roughly 0.8 per cent of GDP to about 2 per cent, alongside rapid increases in GDP.

Participants – from the private sector and civil organisations – at a recent budget consultation workshop in Yangon also supported an increase in education spending.

“I agree with most of the speakers here. Everyone is talking about education. I can see the development in the sector. But it is not enough,” said Shihab Uddin Ahamad, the country director of ActionAid Myanmar, which jointly hosted the workshop with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).

“If you think about Myanmar’s literacy rate, it is just more than 19 per cent. In any village I visit, I always ask the same questions: How many people in this village are graduated persons? How many people have completed the matriculation exam? How many people have completed primary education? In comparison with its population density, Myanmar has a very small number of educated people,” he added.

An increase in the education budget is also one of the 11 points demanded by Myanmar students. Opposing the “too-centralised” National Education Law, they have pressured the government to designate 20 per cent of the country’s overall budget for educational purposes.

In the 2014-15 fiscal year, the ratio was 5.92 per cent of the national budget, up from 5.43 per cent in the previous fiscal year. This was followed by plans to implement free middle school education in the country.

MP Maung Toe said the education budget should be increased to 8 per cent. He also proposed increasing the health budget to 5 per cent, citing that in 2000, Myanmar’s budget for health care was only US$3 per capita, while Cambodia’s was $19. In 2012, Myanmar spent $20 on health care per capita, while Cambodia spent $51.

Myanmar needs to spend more on its health budget, he said.

“Myanmar can compete with the rest of Asean only when there is more spending in these sectors,” he added.

In the country diagnostic study “Myanmar: Unlocking the Potential”, released in August 2014, the ADB summarised that Myanmar’s education sector has three major constraints: insufficient funding, despite a sharp increase in public spending since the 2011 fiscal year; inequitable access; and poor quality in relevance and teaching standards.

“To obtain adequate resources for improving education outcomes and creating a better-educated workforce, education needs to be given a much higher priority in national policy discussions and in the budget allocation process. Moreover, innovative financing mechanisms, such as public-private partnerships, are needed to augment funds for improving access and quality,” the study suggested.

The report also noted that a key labour market problem is that much of the workforce is unskilled, with low educational attainment. An education system that does not focus on developing skills competency exacerbates this lack, although efforts are being made to address these challenges.

Over half of the workforce is engaged in agriculture (52 per cent in 2010) followed by services, with 36 per cent, and industry, with 12 per cent. This distribution is not unusual for a country at Myanmar’s level of development. Projections suggest that by 2030 there will be a major shift of workers from agriculture into services and a smaller shift into industry. At 7 per cent annual GDP growth, the services sector is forecast to account for 53 per cent of workers by 2030.

Industry’s share of employment is expected to rise from 12 per cent currently to 17 per cent, with a corresponding fall in the share of agriculture to 30 per cent. At 9 per cent growth, this structural change in employment would be slightly more pronounced.

“Either way, the country’s ability to achieve a diversified economic base that will expand job opportunities is essential to ensure that growth is inclusive with improved social equity and peace,” the ADB said.

So far, budget constraints have been blamed for the low investment in education.

The government runs a budget deficit of Ks2.7 trillion in the current budget year, or 4.16 per cent of GDP, based on the revenue of Ks19.17 trillion (about $19.16 billion) and expenditure of Ks21.91 trillion. The extra budget of Ks1 trillion was allocated in November 2014: 31.97 per cent going to the Ministry of Defence, against only 7.27 per cent to health, 6.27 per cent to agriculture, 2.53 per cent to electricity and 2 per cent to education.

Though the deficit is narrower thanthe Ks2.91 trillion or 4.94 per cent of GDP in the previous fiscal year, there are some concerns that more spending on education may spark other conflicts.

While supporting Ahamad’s view on education spending, ZawPe Win, a principal at the Human Development Institute, warned of possible competition among union ministries.

“Every ministry should only seek budgets for necessary projects, not aim to beat other ministries. For example, if the Ministry of Education asks for 20 per cent of the total government expenditures, other ministries will also claim a similar amount. This may lead to unnecessary conflicts,” he said.

Meanwhile, he also noted that unnecessary spending would boost the budget deficit, when the government needs to lower the deficit or run a balanced budget to ensure economic stability.

At the workshop, the private sector and civil society said they hoped their voices would be heard by the government.

“We hope that these deliberations will be able to provide useful recommendations to the government, parliamentarians, and all stakeholders,” Zaw Min Win, vice president of UMFCCI, said at the event. “I believe that these constructive pre-budget consultations will bring useful ideas that will be conveyed at budget discussions at the parliament. In addition, today’s discussion will help enhance transparency and accountability in the budget-making process in Myanmar.”

According to the chamber’s deputy head, it is important to share budget details and analysis widely, and wider discussions among the people on budget will be able to enhance transparency and accountability inthe budgeting process. Views as well as needs of common people, academia, civil society organisations, non-government organisations, and the private sector should be reflected in the budget. Analysis of budget documents and informing budgets in terms of sectoral priorities and policy directions are important as well.

To him, budget transparency and a wider consultation process for budget making and planning are crucial for pushing forward the reform process and people-centred governance.

“What we expect is that academics, businesspeople, civil society and rural communities will learn budget processes and express their opinions – what kinds of budget they want, what they think are the priorities, etc. It is very important to let them understand the budget. If you want to ensure genuine democracy, then interaction and active participation between everyone is very important. Everybody needs to advise the government to meet the needs of the country,” said Shihab Uddin Ahamad of ActionAid Myanmar.

He also stressed the role of media in making budget planning more effective.

“Media is a mirror, so the government budget will be reflected through the mirror, and others will see it from that. Media can talk to economists, researchers and prepare before the budget. And on the day the budget is approved and published, media should be able to extract the information and publish it for the people to know,” said Ahamad, adding that it is the duty of every citizen to improve transparency.

Than Lwin, senior consultant at KBZ Bank and former deputy governor of the Central Bank, urged the wide use of risk management systems in government institutions.

“The government should try to get more income through revenue raising and external financing. And they need to utilise a checks and balances system properly. To make poverty reduction efforts successful, the government needs to take road connectivity into serious consideration,” he said.

Source: Eleven Myanmar

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