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Myanmar military in the money

Asia Times - February 27, 2012

Brian McCartan Myanmar's military has seemingly faded to the background as former khaki-wearing military officers now wear civilian garbs in President Thein Sein's reformist elected government. Outside the halls of the new parliament, however, the military, known locally as the Tatmadaw, is still the country's chief ruling power judging by recent budget allocations.

Finance and revenue minister Hla Tun announced on January 31 that the military's share of the national 2012-13 budget would represent an estimated 14.4% of total government spending, down from the 23.6% earmarked for the armed forces in fiscal year 2011-12, but up nearly 60% in real terms.

The government's total budget is scheduled to rise 63% over last year's allocation from 7.9 trillion kyat to 13 trillion kyat. When the greater overall budget is taken into consideration, the military will see a 57% year on year rise to 1.9 trillion kyat, or about US$2.3 billion at the more widely used black market floating exchange rate.

Union Minister Major General Hla Min told the People's Parliament on February 3 that the increased allocation was necessary to compensate for the impending unification of official fixed and unofficial floating exchange rates. Around 40% of the increase is slated to pay for general expenses while 370 billion kyat is earmarked for capital expenditures, he said.

Health and education, areas the former ruling junta consistently paid short shrift, are also expected to see significant budgetary rises. Health will receive a four-fold increase to 368 billion kyat, while education will double to 617 billion kyat. This may be an acknowledgement by Thein Sein's government that it needs to spend more on social services to win more aid from the West. The rises, however, have come without cutting into the military's budget.

The Tatmadaw's previous budget for 2011-2012, announced by the former military junta in March 2011 before formally handing power over to Thein Sein's newly elected government, amounted to nearly a quarter of the annual total budget. In comparison, the entire healthcare sector received only 1.3%, a paltry allocation the political opposition and international community criticized. Analysts estimate that the military's previous allocations consistently amounted to over 40% of annual state spending.

This year's budget may be subject to some backroom debate but it is for all sakes and purposes a fait accompli. With much of the ruling Union Solidarity and Development Party (USDP) made up of former military men, a 25% block of parliament legally reserved for the military and the armed forces' continued control of many aspects of society, it is unlikely that parliament will tamper with the finance minister's proposed allocations.

It is also unlikely that there will be much parliamentary debate on the budget. The military's leading role in government is guaranteed by the 2008 constitution and its control of a quarter of the parliament virtually ensures the budget's unopposed passage. In addition to the official budget, the military has access to funds through two huge conglomerates, the Union of Myanmar Economic Holdings and the Myanmar Economic Corp.

The Tatmadaw's also maintains control over a so-called "black budget" provided by sales of natural resources, primarily oil and gas from offshore fields. These revenues have never been publicly disclosed or accounted for, and analysts believe some of the funds have been used to purchase a number of new weapons systems in recent years.

The Special Funds Law, meanwhile, gives the commander-in-chief, previously Senior General Than Shwe, now General Min Aung Hlaing, the power to allocate additional and theoretically unlimited funds to the military without prior notice or parliamentary consent. Major General Hla Min told parliament that the increase in the military's budget was necessary in order to pay for expected higher infrastructure, administrative, food and equipment costs.

Rag tag forces

Despite receiving the lion's share of the budget, Myanmar's foot soldiers face severe resource constraints. Units stationed in the countryside, especially in ethnic states where insurgent groups are active, are still expected to be largely self-sufficient in terms of food and other basic supplies.

A still standing 1997 order issued to field units ordered peripheral soldiers to sustain themselves locally rather than rely on a centralized supply system. This has resulted in systemic extortion of food and other supplies from locals. Some military units are known to farm their own food but numerous human-rights reports allege much of this is done on land confiscated from villages and worked through forced labor.

Some military units maintain large commercial plantations, or establish businesses such as brick-marking operations to make ends meet. Some of the income generated goes towards sustaining the unit while the rest allegedly goes into the pockets of corrupt military officers.

Interviews with army deserters indicate that whatever the military is providing is simply not enough and corruption is rampant within the ranks. Rank and file soldiers are forced to purchase their own uniforms, food and other basic items, deserters have said in interviews. Enlisted soldiers' families are also not provided for and many must seek work just to survive. Morale inside the Tatmadaw has suffered accordingly, seen in high desertion rates.

Myanmar is consistently ranked among the world's most corrupt countries by international watchdogs like Transparency International. That tradition runs especially deep in the armed forces, where many senior soldiers use their positions of authority for personal economic gain. Myanmar's entrenched system of rent seeking has made the officer corps one of the impoverished country's few potentially lucrative career choices.

For the sake of stability, Thein Sein's government is not expected to tamper any time soon with this patronage-driven system. Security analysts believe that any rapid move towards professionalizing Myanmar's military could result in destabilizing splits among senior leaders keen to safeguard their personal interests. At some point, though, Thein Sein will have to confront this situation if his reform program is to have meaningful results.

Boosting the military's budget to cover supposedly rising costs will not be enough unless the military is also willing to reform how those funds are allocated and spent, analysts say. With moves now afoot to end the decades-long ethnic insurgencies along the country's borders and a less restive populace hopeful about Thein Sein's various reform vows, there should be some form of peace dividend available to the military.

Without the need to maintain a pervasive military presence to ensure internal stability, in theory the military's budget could be deployed to better provide for rank and file soldiers and officers. Higher pay and a better supply system would likely raise morale and alleviate some of the burden the military now places on the civilian population, especially in ethnic areas, to keep soldiers supplied and fed. It would also go a long way towards shoring up international confidence in Thein Sein's reform effort.

Former general and current speaker of the lower house Shwe Mann recently proposed a salary increase for civil servants, including the military, in order to rein in corruption. A salary boost may help but Myanmar's military will need to address more fundamental issues if it is to transform itself into a professional rather than exploitative institution. Until Myanmar's top generals are forced to account for their spending, Myanmar's old military-led system will continue to dominate its new democratic one.

[Brian McCartan is a freelance journalist. He may be reached at bpmccartan1@gmail.com.]

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