Job opportunities, income can be increased and triple growth realized only if current volume of financial investments be doubled
All must trim down uneconomical and redundant enterprises and cut expenses, while shrinking State-own business sector and encouraging privatization
President invites successful economists, experts, businessmen doing well overseas to join hands with government for national development
19 June 2012
|With regard to processes of reforms for development of the State, President of the Republic of the Union of Myanmar U Thein Sein delivered an address in meeting with Union level organization members, Region/State Chief Ministers, Chairmen of Self-Administered Division/Zone, deputy ministers and departmental heads at the meeting hall of the President office, here, at 9 am today.|
Also present on the occasion were Deputy Commander-in-Chief of Defence Services General Soe Win, Deputy Speaker of the Pyithu Hluttaw U Nanda Kyaw Swa, Union ministers, the Attorney-General of the Union, the Auditor-General of the Union, the Chairman of Union Civil Services Board, Chief Ministers of Region and State governments, chairmen of Self- Administered Division/Zone, deputy ministers, departmental heads and guests. At the ceremony, President U Thein Sein delivered an address. The translation of the speech is as follows:-
Union level officials, chief ministers of Regions and States, chairmen of selfadministered division/zone, deputy ministers and departmental heads and all those present here, I wish you all good health and happiness.
During its first year in office, our government conducted political reforms and national reconsolidation with might and main. We started the second phase of reform strategy this year and it gives special focus on promoting the interest of the Union and the people while maintaining the development momentum we have gained in restoring national reconsolidation, State peace and stability, the rule of law, and security of public lives.
The Union government has already drawn the National Plan (draft) and will submit it to the Pyidaungsu Hluttaw soon. It is a five-year short-term plan from fiscal 2011-2012 to fiscal 2015-2016. Two annual plans the National Plan for fiscal 2011- 2012 and the National Plan for fiscal 2012- 2013 were presented to the Pyidaungsu Hluttaw. The Pyidaungsu Hluttaw has already approved and put them on record. According to the discussions at the Pyidaungsu Hluttaw, some sectors of the ministries have been reduced and the budgets for some sectors increased as necessary. Furthermore, additions and amendments were made to long-term plans that would be additional requirements for national development.
- a 7.7 percent annual average GDP growth based on 2010-2011 market prices;
- a decrease of agricultural sector ratio in GDP from 36.4 percent to 29.2 percent; and an increase of industrial sector ration in GDP from 26.0 percent to 32.1 percent and of services sector ration from 37.6 percent to 38.7 percent respectively;
- a 1.7-fold rise in per capita GDP when compared with the base year.
Although we have projected a 1.7-fold per capita GDP increase in the fiscal 2015- 2016 based on GDP growth rate calculations, our aspired goal is a triple increase in per capita GDP. Especially we will strive to fulfill the basic needs of our people to witness a real income growth.
For achieving a triple national economic growth within a five-year period, we must actively enlist the combined force of human capability, financial capital, and technology. A study of our current volume of financial investments and expenditure reveals the following main factors:
- limits in the State budget (the government budget)
- a requirement of more aids, grants and loans from abroad
- a requirement of a robust increase in the flow of domestic and foreign investments into the country We will see increase in job opportunities and income and a triple growth as projected only if we double our current volume of financial investments.
A study of State budget shows a deficit of K 2,159,534 million in fiscal 2011-2012 and a deficit of about K 1,953,712 million in fiscal 2012-2013. We need to stop budget deficit as it hurts the national economy and beget ill consequences in the long-run. In doing so, our expenditures must be effective for the programs beneficial to the nation and the people. In addition we must trim down uneconomical and redundant enterprises and cut expenses, while shrinking the State-own business sector and encouraging privatization. Here, privatization covered by the second phase of reform strategy doesn’t mean a big sell-off of government-run businesses. First we will make an assessment of the communication, electricity, energy, forestry, education, health and financial sectors where the ratio of government ownership is large. Then we will increase the ratio of private ownership in these sectors as per the international rules and practices followed by the government encouragement for efficiency promotion. Accordingly, we will form a new Privatization Commission with Vice-President at the helm for a change of methods in reassessing, reviewing and reforming Union ministry-wise scope of operations and ownership ratio.
In this context, each Union ministry must adopt and implement a Reform Strategy to determine exactly which functions of its sectors and businesses need reforms. As for drafting the reform strategy we have reached a level where we can conduct a certain degree of reforms thanks to the coordination between economic experts of National Economic and Social Advisory Council and the departments. As the Union ministries are drawing sector-wise development plans, the Region/State governments are also forming bodies at different levels in drafting regional development plans, urban development plans and rural development plans in detail.
As we are at the initial stage of reforms, the transition period sees requirements. But we believe we will become more and more efficient with the help of domestic and foreign organizations and experts. Here, the Union government is striving to adopt development plans for all the towns in the entire country. But it needs assessment to know whether it has manpower and financial power for the task and the actual ground situation. Region and State governments too can get a list of townships that need town and village extension plans, townships where clean water sufficiency and tree plantation are priorities concerns, townships which must pay attention to the establishment of seasonal and perennial plantations, industries and services for job opportunity creation, and townships whose main requirements are health, education, electricity supply and communication through an overall view of all their townships. So they must have a priorities agenda based on the given overall view to look into the requirements of their townships through year-wise plans. They should have yearwise plans at different levels to obtain and distribute budget, external aid, and domestic and foreign investments. In fact it is the town and village development plan.
The State after adopting the fifth five-year short-term plan will carry out the task of reviewing and drawing the 30- year plan. In addition, it will keep on drawing the National Development Plan till it becomes a Comprehensive Development Plan through the following plans:
- rural development and poverty alleviation plan
- human resources development plan
- investment plan
- trade sector development plan
- industrial development plan
- financial and currency sector development plan
- regional plans
- sector-wise plans
Union ministries and Region and State governments should give priority more to People-Centered Development than to the GDP growth in increasing per capita income, individual household income, and socio-economic development while bringing in real development on the ground through systematic schemes.
The second part of my speech concerns with the successful implementation of National Development Goals and UN Millennium Development Goals through effective utilization of foreign aids.
The developing countries have to acquire international grant/aid, loans and technological assistance in their pursuit of the development goals and millennium development goals since the national budget alone is not enough. In this juncture, donor countries and organizations have different priorities programmes according to spheres/areas and objectives while receiver countries have priorities sectors/ areas in effective implementation of development plans and reform strategy. Thus, careful consideration is to be made to spend the government budget and grant/aids on far-flung areas where the private sector has less interest in making investments as the profit prospects are low and to utilize local and foreign investments in regions which are economic for private investors. As to loans, consideration is to be made on its interest rate, repayment period, economically beneficial projects, benefits, repayment.
Funds should be spent on infrastructure projects such as education, health, electricity, communications, roads, bridges and ports although those sectors do not bring immediate benefits but serve the long-term interest of the State and the people. Therefore, based on international experiences, the government formed the Central Committee for Management of Foreign Grants/Aids, the Work Committee and the National Economic and Social Advisory Council for effective management of foreign grants/aids.
This being the case, the ministries and region/state chief ministers are to carefully consider priorities sectors and regions where grant/aids are required and tasks that need loans in line with their development plans and reform strategy to ensure that they serve the interest of the State and the people. With this end in view, bottom-up approach is to be widely applied rather than top-down approach.
Ministries (For example, Communications, Electric Power, Industry) should take the responsibility of evaluating the amount of loan for an investment and degree of sectorwise development the investment can bring. Therefore, if the sector under their responsibility sounds economically viable, the Union ministers must take loans from abroad and must take bold measures through calculated risk. Only then, will the nation develop. In this context, investments that could not be detrimental to environment and socioeconomic status of the people are to be chosen.
With regard to jobs creation, it is required to ensure that employees could fully enjoy basic salaries they deserve. Thus, the government like other nations has made arrangements to draw a minimum wage law and to summit it to the Hluttaw.
Here I would like to call on strenuous efforts for development of local and foreign investments which are a sine qua non for national development in the third part after stating matters related to foreign grants/aids. Laws and rules are important for investors and they should provide working space and protection to attract investments. Therefore, laws and rules and regulations have been amended to be in line with international laws, rules and regulations, and the Pyidaungsu Hluttaw will soon pass the foreign investment law. Moreover, the Myanma Special Economic Zone Bill has already been drawn and will be presented to the Hluttaw with suggestions of the relevant departments and economic organizations.
Trade and investment are the main driving force for the nation’s economic development to keep abreast of international community. Efforts are to be made for development of local and foreign investments in bringing about socio-economic development of the people and creating job opportunities while preventing what is detrimental to the interest of the State and the people, undermining the image of the State and sovereignty and harming natural environment. Meanwhile, systematic steps are to be taken for sustainable development of land, water, forest and mineral resources which could be tapped by posterity.
Unlike many other countries, land use and land speculation is one of our difficulties in the implementation of housing development and investment projects. We have found some neighboring countries are enjoying higher status of development project, living standard and socio economy than us. Thus, to keep pace with them, regional development plan, city development plan, township development plan and village development plan have been drawn by committees at different levels starting from township level. Appropriate measures are to be taken as to land use policy and land use management to fulfill the needs of the people such as farmlands, perennial crop plantations, industry, forest, environment, drinking water, transport, electricity, communications, education, health, trade, etc, in providing basic needs and job opportunities in proportion to the area and population of a township.
We have difficulties in land management as squatters on forest land, virgin and fallow land and others are acting as if they originally own the plot they illegally occupied. The result is the widespread problems and because of these problems we are not in a position to allot a large number of hectares of land for investments as other countries do.
For the development of short-term and long-term industrial raw materials and production sectors, efforts are to be made for establishment of town and village plots, arrangement of farmlands for livelihoods along with the setting up of forest, perennial crop and commercial plantations rather than allowing the people to illegally reside in forest land and virgin and fallow land. With sustainable development of environment, it is time to embark on land reform for regional development, job opportunity, economic development and higher living standard.
The government has established Land Allocation and Utilization Scrutiny Committee for Urban Development Projects and Investment Projects so as to formulate land utilization policy for utilization of land in line with laws and rules and regulations. So, the Union ministries and region/state governments will have to submit the proposals for land allotment and utilization for their urban development projects, investment projects, mines, gems, energy and mineral mining, plantation and livestock farming projects to the committee for its approval. The committee, after its scrutiny over the proposal, will coordinate with the Union government, Myanma Investment Commission, Privatization Commission and departments concerned for further actions.
Currently, procedures and land allotment specifications of respective land-related departments are different from each other and thus are not in a position for practical management on the ground. Effective management could not be streamlined without reformulation and enactment of practical laws and procedures and taxation system which meet the conditions of present time and international norms.
In addition, we have to build solid foundation for such measures as recording and registration of accurate and correct number of city plot, village plot, housing plot, farming plot and other industrial plots and accuracy of list of asset possession calculated on trading volumes and taxation procedures.
In so doing, to enable ethnic communities and migrant workers reside and earn a livelihood and grasp job opportunities in border regions and overseas migrant workers come back home and settle in own regions, the region/state governments and self-administered zones and division, in coordination with the Ministry of Border Affairs and ministries concerned, have to swing into a series of action as
- systematic allotment of land in line with town/ village development projects,
- fulfilling the requirements in education, health and socio-economic status,
- systematic establishment of commercial plantations and livestock production industries and industrial estates for expansion of agriculture, livestock farming and manufacturing industries from manageable scale to commercial scale production,
- developing the market of products from those manufacturing industries from retail outlets to wholesale brokerages and trading zones,
- extended opening of border trade stations for development of commerce and trading.
Only then, people who were forced to part families to work overseas amidst difficulties could come back and earn a proper livelihood.
Likewise, heartily I would like to invite successful economists, planning experts of different sectors, and businessmen who are doing well overseas to join hands with the government for development of the nation.
As the fourth part, I would like to elaborate on planning for urgent need and short-term and long-term requirements for development of electric power sector. The former government had established Ministry of Electric Power No (1) and Ministry of Electric Power No (2) to focus on the requirements for development of electric power sector. From 1988 to 2010-2011, it had spent K 2,802,897 million from State’s fund inclusive of general expenditure and capital expenditure and over 6.7 billion USD for four hydropower projects implemented with foreign loans. Thanks to those efforts, power generation had increased from 2,226 million KWh in 1988 to 9,711 million KWh in 2011-2012. However, the increased production still cannot meet the demand due to growing population and increase in power use. Recently, people have expressed their demand for electricity.
Thus, the government has sought outside help at home and abroad and launched emergency power supply programmes urgently. Nonetheless, we will need to manage a systematic link between energy and electricity to meet the requirements of people in the short- and long-run and for national development as well. So, we will establish National Energy Management Committee at Planning Commission for overall matters for energy sector of the State and implement National Energy Plan for short- and long-term objectives in compliance with National Energy Policy.
We will have to implement such energy projects as oil, natural gas and coal after drafting national electricity plan.
We have to carry out reforms to trading of the country’s natural resources in raw as the main priority in order that we can manufacture such public goods as fertilizer and petrochemical products apart from electricity to meet domestic demand in the long run in line with the concept of people-centred development.
The National Energy Management Committee, in putting short- and long-term plans into action, will have to manage the electricity production and supply of the government, regional governments and private investors in accordance with internationally practiced procedures. In the time of the former government, only hydroelectricity was produced based mainly on calculating low production and distribution cost but now in response to the electricity demand of the people, we will have to make efforts to generate electricity as much as we possibly can from natural gas, diesel, coal, solar and wind power and other bio and waste fuels depending on the geographical features, climate and natural resources of the regions and affordability of the people.
In moving forward to the goal of industrialization and industrial development, we need to adopt energy plan and industrial development plan systematically as energy development and industrial development have interdependent relation. Only then, we can improve commodities and services and job creation which is the requirement of the State and people.
Here, we need to adopt a pricing policy setting the reasonable price both for investors and end users depending on the value of natural resources used as fuel, production cost and distribution cost calculated on varying distances in line with international market prices. In addition, the government will have to introduce long-term practicable initiatives for annual increased production, going partnership with private companies and switching over to different forms of private investments like the other nations. I would like to ask National Energy Management Committee, Privatization Commission and Myanma Investment Commission to coordinate plans for resetting the ratio of State ownership to private ownership with Union ministries concerned and region/state governments.
The government adopted the national plan based on objective condition of the nation and by laying down four economic policies when it took over in transition period.
The first economic policy is to accomplish industrial development to keep abreast of other world countries while keeping up momentum of development of agro-industry the majority of people get involved.
For stimulating agroindustry, rural development and poverty alleviation tasks, and increased investment in the agricultural sector are crucial. The government will accelerate rural development and poverty alleviation tasks as the Rural Development Department has been established to concentrate on the tasks. Promotion of agricultural and industrial investment which could generate more employment opportunities for the people will be given priority.
I would like to urge all related departments and organizations to establish savings banks by both public and private sectors and microfinance by various organizations at home and abroad; to guarantee increased income to farmers after reviewing crops production, transportation and trading processes; to reduce transactional costs; and to advance towards technological and industrialized farming system.
As regards a fall in paddy price, private and public partnership is purchasing the paddy. Region or state governments need to seek ways to bring about reforms by organizing workshops for townshipwise field trips, and development of agroindustry and breeding of the farmers.
The second economic policy is to grant every region and state equal share of budget and taxation, foreign aids according to the poverty indexes; and to plan invitations of foreign and local investments for regional development depending on sector-wise and regional development projects. To make the effective use of the budget and the foreign aids, administration committees down to the township level need to be tasked.
The third economic policy is improving economic indexes of regions or states for each period for s o c i o - e c o n o m i c development of the people. I would like to urge the effective implementation of people-centered development including development of township-wise GDP, increase in per capital income and improvement of household-wise education, health and living standards. The fourth economic policy is to compile quality and accurate statistics through field studies, check, recheck and countercheck on reports, and feasibility study. Only with reliable statistics and information, will correct decisions and policies be made.
Today, the government is undertaking reforms to develop the country in line with the democratic practices. Inviting harmonious participation of the people in the people centered development tasks by seeking public opinion through mutual trust may facilitate rapid political, economic and social development. While we are in incremental and peaceful transition to such discipline-flourishing democratic system, the nature of mass instigations taking the people’s desire onto the street could suddenly lead to losses of lives and property of many people. The government, the parliament, the entire people and the Fourth Estate must safeguard it in unison to stand tall on the world stage as cultured and united people who strive for development of the country till our descendents.
In conclusion I have one special instruction about workshops in regions and states. Workshops are crucial for sector-wise or region-wise development. If we seek solutions to difficulties and challenges of the people with pearls of wisdom of economists and desires of entrepreneurs to engage in trade and make investment in close and frank manners, we will enjoy much more profits from:-
- designating prioritized sector and area in the regional government and Hluttaw, rather than taking considerable time to present needs for regional development and needs of roads and bridges, and economic and social requirements to the Pyidaungsu Hluttaw;
- close coordination for regional development tasks through drafting township development plans by Hluttaw representatives, townselders, and social and economic associations in townships;
- emergence of Good Governance and Clean Government as transparency prevails between the government institutions and the people;
- increased participation of businessmen in regional development tasks;
- more technical assistances in agricultural, breeding and industrial sectors;
- facilitation of regional, urban and rural development plans; and
- averting street protests by addressing issues of the people at the lower level on the spot and at the regional workshops democratically and systematically.
I would like to conclude my address with the call for successful realization of every task by reaching the lowest level with the mindset that our government is responsible to bringing about national development and improving living conditions of the people.