The government last week received approval to a multilateral financing of $55 million to overhaul Myanmar’s woeful public finance system, donors of the project said.
The World Bank will provide a $30 million credit from the International Development Association (IDA) for the Modernization of Public Finance Management Project, while the Australian government and the UK’s Department for International Development (UKAID) will co-finance the project through a multi-donor trust fund for Myanmar by providing $8.5 million and $16.5 million respectively.
The project aims to support efficient, accountable and responsive delivery of public services through the modernisation of Myanmar’s public financial management systems, the World Bank said.
The project will also help strengthen revenue administration, which is expected to increase the effectiveness of tax and non-tax revenue mobilisation. Increased revenues in turn will create fiscal space for increasing expenditure on public services that will help reduce poverty, the Washington-based lender said.
The bank said the project will also “improve the efficiency of public service delivery through a more strategic planning and budgeting process that directs resources to the highest priority areas, and through more credible budget management system that delivers resources as intended.”
It will help improve accounting and reporting of budget execution – how public resources are spent – and strengthen accountability for service delivery, the lender said.
Improvements in tax compliance are expected to make more funds available to finance critical human and infrastructure services while maintaining fiscal discipline.
Improved availability and management of public finance data will facilitate better analysis and policymaking and more strategic and transparent use of public funds, the World Bank said.
The $30-million IDA credit is part of the World Bank Group’s rejuvenated and extensive involvement with the formerly-denounced Southeast Asian nation as almost all western sanctions got dropped last year.
During his visit to Myanmar at the end of January 2014, the bank’s President Jim Yong Kim announced plans by lender for a $2 billion multi-year development package for Myanmar. This will include projects to help improve agriculture, access to energy and health services, and to provide support for other key development priorities.
