STATE AND REGION GOVERNMENTS IN MYANMAR New Edition October 2018 1 © 2018 The Asia Foundation No. 11, Ko Min Ko Chin Yeik Thar Street All rights reserved. No part of this report West Ngar Htet Kyi Ward may be reproduced without written Bahan Township permission by The Asia Foundation Yangon, Myanmar ACKNOWLEDGMENTS The author and the research team would like to thank everyone who contributed to this study including respondents from government, political parties, civil society, community based groups, donors, NGOs, and national and international experts, who took time to meet and share their experiences. The researchers would also like to acknowledge all of the additional contributors and those who reviewed the report for providing invaluable feedback and advice. Finally, a special thank you to Matthew Arnold and Kelsey Atwood of The Asia Founda- tion for their continued support and guidance throughout the research and writing. Any faults in substance or analysis rest with the author. LEAD RESEARCHER AND AUTHOR Richard Batcheler CORE RESEARCH TEAM AND LEAD CONTRIBUTORS Kyi Pyar Chit Saw Matthew Arnold Ildrim Valley Kelsey Atwood Thet Linn Wai CONTRIBUTORS Heesu Chung Su Phyo Win James Owen Stephanie Guo Alison Chan Aye Moh Moh Khaing Jane Sail Billy Ford Saw Hsar Gay Doh Elzemiek Zinkstok John Rieger Nicola Williams Ye Htut Oo Hein Aung Kyaw Hillary Yu Zin Htoon REVIEWERS Tin Maung Than Anki Dellnas Myat The Thitsar Susanne Kempel Roger Shotton Kim Jolliffe Hamish Nixon Jared Bissinger Mael Raynaud Lwin Lwin Aung Design and layout: Significant Science Communication 3 PREFACE Myanmar’s state and region governments matter, and their importance has only continued to grow since their creation. They increasingly shape the role and perceptions of the Myanmar state in their jurisdictions as they broaden their range of activities and manage a significant proportion of government expenditure. As the peace process continues, decentralization to the state and region governments can help subnational actors gain the experience and capacity to govern. In September 2013, The Asia Foundation published its first report on Myanmar, State and Region Governments in Myanmar. The report provoked a great deal of interest in subnational governance from government, civil society, donors, and development partners. Since then, 38 reports from the Foundation have looked in greater detail at issues of subnational governance, peace, and conflict. This new edition of the report, published five years after the original, provides a much needed update on the structures and functions of subnational governance in Myanmar, identifying the key political, administrative, and fiscal opportunities and challenges presented by decentralization. While the report does provide recommendations, it is not intended to be overly prescriptive. Primarily, the report supports a better informed, more technically grounded debate on the critical issues of subnational governance necessary to strengthen ongoing policy and reform processes here in Myanmar, including the all- important peace process. The report builds on the considerable body of evidence in the reports published by The Asia Foundation, and supplements this evidence base with extensive analysis of the available literature and interviews with key informants working in subnational governance in three states and three regions. The report benefits from the experience of the Myanmar Strategic Support Program, implemented by The Asia Foundation in partnership with the Renaissance Institute, which provides ongoing technical support to state and region governments, particularly in relation to public financial management and municipal governance. The report was generously funded by the United Kingdom’s Department for International Development (DFID), the Australian Department of Foreign Affairs and Trade (DFAT), and the Swiss Agency for Development and Cooperation (SDC). The opinions expressed in this report are solely those of the authors and do not necessarily reflect those of DFID, DFAT, SDC, The Asia Foundation or the Renaissance Institute. We hope that State and Region Governments in Myanmar provides a knowledge base on the ways that all stakeholders in Myanmar’s subnational governance reforms can support decentralization. Dr. Matthew B. Arnold Country Representative The Asia Foundation, Myanmar Yangon, October 2018 TABLE OF CONTENTS ACRONYMS i GLOSSARY ii CHAPTER GUIDE iii CHAPTER 1 – INTRODUCTION 1 1.1 Why is decentralization in Myanmar important? 2 1.2 What is decentralization? 3 1.3 What is this report’s approach? 6 CHAPTER 2 – MYANMAR’S SUBNATIONAL GOVERNANCE FRAMEWORK 9 2.1 What is the legal framework for decentralization? 10 2.2 What is the structure of subnational governance? 17 2.3 How have Myanmar’s transitional governments interpreted and implemented the Constitution? 24 CHAPTER 3 - THE POLITICAL DIMENSION 27 3.1 How does the state/region executive branch function in practice? 28 3.2 How do the state/region legislatures function in practice? 35 3.3 How do participation and accountability at the local level function? 44 3.4 What are the emerging trends in political decentralization? 45 CHAPTER 4 - THE ADMINISTRATIVE DIMENSION 47 4.1 How do state/region governments conduct their administration? 48 4.2 How is Myanmar administered below the state/region level? 58 4.3 What are the emerging trends in administrative decentralization? 63 CHAPTER 5 - THE FISCAL DIMENSION 65 5.1 What is the subnational planning and budgeting process? 66 5.2 How do state/region governments spend their money? 74 5.3 How do state/region governments finance their spending? 79 5.4 What are the emerging trends in fiscal decentralization? 87 CHAPTER 6 – CONCLUSION 89 6.1 Assessing decentralization in Myanmar 90 6.2 Decentralization and the peace process 93 6.3 Policy recommendations and avenues for reform 94 ANNEXES 98 ENDNOTES 122 REFERENCES 130 ACRONYMS CDC City Development Committee Political Parties: CDF Constituency Development Fund ANDP Akha National Development Party CSO Civil Society Organization ANP Arakan National Party DAO Development Affairs Organization AMDP All Mon Regions Democracy Party DDA Department of Development Affairs DPM Democratic Party (Myanmar) DRD Department of Rural Development KDUP Kokang Democracy and Unity Party EAO Ethnic armed organization KPP Kayin People’s Party EO Executive Officer KSDP Kachin State Democracy Party FY Fiscal Year LNDP (La Hu) La Hu National Development Party GAD General Administrative Department LNDP (Lisu) Lisu National Development Party GAO General Administration Offices MNP Mon National Party MMK Myanmar kyat (national currency) NLD National League for Democracy MOHA Ministry of Home Affairs NUP National Unity Party MOPF Ministry of Planning and Finance PNO Pa-O National Organization MP Member of Parliament SNDP Shan Nationalities Democratic Party LDF Local Development Funds SNLD Shan Nationalities League for Democracy MOEE Ministry of Electricity and Energy TNDP Tai-Leng Nationalities Development Party MCDC Mandalay City Development Committee TNP Ta-Arng (Palaung) National Party NCA Nationwide Ceasefire Agreement UDPKS Unity and Democracy Party of Kachin State NPC National Planning Commission USDP Union Solidarity and Development Party PFM Public Financial Management WDP Wa Democratic Party PRF Poverty Reduction Fund WNUP Wa National Unity Party RDF Rural Development Fund ZCD Zomi Congress for Democracy SAD Self-administered division SAZ Self-administered zone SAD/Z Self-administered division/zone SPDC State Peace and Development Council TA Township Administrator TDAC Township Development Affairs Committee (T)DSC (Township) Development Support Committee TFMB Township Farmland Management Body TMC Township Management Committee TPFIC Township Plan Formulation and Implementation Committee UFC Union Finance Commission W/VTA Ward/Village Tract Administrator YCDC Yangon City Development Committee i GLOSSARY Accountability: The process by which public officials and institutions Hluttaw: Council or assembly. Historically a council of ministers, the are held responsible for their decisions and actions, including the term now denotes legislative bodies at the national and state/region management of public funds and meeting all aspects of performance levels. objectives. l Pyidaungsu Hluttaw: Union Legislative Assembly, a joint Administration: The management of governmental/public affairs. session of the upper and lower houses of the Union Autonomy: Self-government; the right or ability to make one’s own parliament. decisions. l Pyithu Hluttaw: People’s Assembly, the lower house of the Chief minister: Head of state/region government. Union parliament. Commander in chief: Commanding officer of Myanmar’s armed forces, l Amyotha Hluttaw: Nationalities Assembly, the upper house the Tatmadaw. of the Union parliament. Decentralization: The transfer of authority and responsibility for l State/Region Hluttaw: A state/region parliament. public functions from the central government to subordinate or quasi- Legislation: A law or set of laws, or the process of making or enacting independent government organizations. laws. l Political decentralization: The transfer of decision-making Myanmar: The abridged name for the Republic of the Union of Myanmar, power and accountability to local levels. previously called the Union of Burma. l Administrative decentralization: The distribution of NLD government: The government led by the National League for managerial responsibilities among different levels of Democracy,