MYANMAR TACKLES GRAFT
Minister’s exit just the start
Myanmar’s government is declaring war against corruption and preparing for significant cabinet changes amid the biggest political crisis since it took power two years ago.
One minister has left under a cloud and as many as 18 other senior officials are reported to be under investigation. A further reshuffle and restructuring of ministries is in the pipeline, which the government hopes will cure the administrative malaise that has overwhelmed ministers and bureaucrats alike.
Corruption charges and investigations have engulfed the cabinet and government in recent weeks, threatening stability. But State Counsellor Aung San Suu Kyi has taken quick steps to restore confidence, particularly among the business community.
A new finance minister has been appointed following the resignation of Kyaw Win, who was the subject of an anti-corruption inquiry. The new minister, Soe Win, is a well-respected accountant, banker, economist and lawyer, with substantial international experience. He is also 80 years old.
The business community has welcomed the appointment enthusiastically. “He’s extremely well-qualified for this post,” said Kyaw Kyaw Hlaing, head of the local company Smart Technologies. “He is completely clean, trustworthy and professional: a real breath of fresh air in this current cabinet.”
Reaction from foreign businesses was also positive. They believe Soe Win’s international training and experience will soon bring changes to what is seen as a moribund economic policy.
“He is regarded as very capable technically, and appears to have excellent leadership skills,” Ola Nicolai Borge, a Norwegian lawyer and business consultant who has been based in Myanmar for many years, told Asia Focus. “So he should be just the right man for this tough job.”
However, the new minister’s age has left some with reservations. “One concern, though, is his age, as 80 in the West and 80 in Myanmar are different,” said Thet Aung Min Latt of the local consulting company Diamond Intelligence.
“The finance minister also has to run the Myanmar Investment Commission, hold meeting after meeting with investors, international and local conferences, cabinet meetings, parliament sessions: he need lots of energy.”
The new finance minister is seen as a big step up from his predecessor, given his extensive track record in banking and consulting, both locally and internationally, pointed out Thet Aung Min Latt.
Soe Win has had 46 years of experience advising international and local clients regarding taxation, investment laws and banking in Myanmar. He is also a senior member of the National League for Democracy’s influential Central Economic Committee and a member of the Bar Council in Yangon.
He joined the Foreign Exchange Department of the state-owned commercial bank as deputy manager in 1961. He was sent to the UK for training with National Westminster Bank and the Bank of England in 1976. He was appointed deputy controller of foreign exchange at the Myanmar Foreign Trade Bank in 1990 and became its general manager in 1993. He left the bank for Price Waterhouse (later PricewaterhouseCoopers) in 1996. In 2003 he founded Myanmar Vigour, which became a member firm of the multinational accounting and consulting group Deloitte in June 2015.
He has been intimately involved in drafting banking laws and regulations, and fiscal policies during his tenure with the state banks. He frequently writes on banking and finance in the local media, and recently published a textbook, Fundamentals of Trade and Finance, for university students.
But Soe Win is not the only new minister in the pipeline, according to government insiders. At least four others are expected to be announced in the coming weeks. The cabinet is braced for a major shake-up, with some foreign trips planned for early next month put on hold. But these changes are not likely to be announced in one big hit, a government source told Asia Focus.
Part of the problem, is finding suitable candidates who are willing to accept ministerial assignments. But the search is under way, with possible candidates being sounded out. The State Counsellor wants to make sure she has experienced and qualified candidates lined up, before replacing any of the perceived “has-beens”.
Just finding qualified people is a tall order in Myanmar, given how decades of iron-fisted junta rule — and the closing of universities for nearly two decades — left the political and administrative talent pool nearly dry. The high “turn down” rate complicates the task further.
Kyaw Win was actually the fourth choice for finance minister in 2016, according to a source close to the selection process. It seems Soe Win was one of those proposed at the time, but declined when approached.
The relatively speedy replacement of Kyaw Win was forced on the government when news of an investigation into allegations of corruption, and police raids on his home, became public. But there are others who are facing separate investigations by the parliamentary anti-corruption committee, led by Aung Kyi, a former senior military officer and minister in the Than Shwe and Thein Sein governments; in the mid-1990s he was also Gen Than Shwe’s liaison with Aung San Suu Kyi.
Aung Kyi is renowned for being taciturn, clean and independent, a stickler for the law and something of a maverick in previous military governments. He has a top police officer as his number two. And clearly he is relentlessly going after corrupt officials. His powers have recently been strengthened by parliamentary legislation, though they do not include the authority to prosecute; his main task is to compile the evidence.
Eighteen top-ranking officials, including ministers and chief ministers, are under investigation, according to the government’s anti-corruption committee. There are six teams conducting separate investigations, say anti-corruption officials. Details have not been made public, and few of those under suspicion have been named so far.
Aung Kyi did acknowledge recently that both the finance minister and the immigration and labour minister were being investigated. All of the evidence in the case against Kyaw Win is expected to be ready in the near future, and if there is a case to answer it will be turned over to parliament to decide the next course of action.
Rumours abound as to who else is on the anti-corruption hit list. But it seems certain that at least two chief ministers are among them.
The new war on corruption is the brainchild of the new president, Win Myint. He flagged his intentions in his inauguration speech when he vowed to “make a difference”.
Win Myint wants a wholesale clean-out of cabinet, according to sources close to the president. He reportedly has told Aung San Suu Kyi that as a result of his two years as speaker of the lower house — seeing all the ministers parading before him in parliament — he knows who is corrupt, incompetent or unprofessional. He wants to clear out all the “deadwood”.
Tensions seem to have surfaced, though, between the two civilian leaders — president and state counsellor. Aung San Suu Kyi seems reluctant to go all-out, preferring to proceed more slowly, while stressing the need for stability and continuity, and to let the legal process run its course.
In the meantime, a major cabinet restructuring is in the pipeline, according to sources close to the top government leaders. Senior NLD leaders have realised they made a mistake merging too many ministries — an idea that was sold to them by Korean consultants — at the time they took office.
Now they are seriously considering creating three “new” ministries with three new ministers and three new deputies. According to the plan under consideration: Finance and Planning are to be split into two ministries; Fisheries and Livestock separated from Agriculture — a realisation of how important the industry is to the country, and the government’s failure to regulate it efficiently and reap the financial rewards that are illegally going to Thailand; with Cooperatives to be separated and a ministry for SMEs created, as three different ministries now deal with small business.
The planned changes make strategic sense, says Tin Maung Than, an economist involved in public sector reform and an adviser to the Mandalay chief minister, Zaw Myint Maung. The Planning Department is primarily involved the government’s future policy orientation and initiatives, while finance is concerned with expenditure, revenue and budgets, he said.
“Planning involves assessing and taking risks, compared to the conservative outlook at Finance, which is concerned with stability,” he concluded.
But some business analysts fear that creating new ministries and searching for new ministers is beyond the resources of the NLD and the civilian government. “There is already a major skills deficit,” said Thet Aung Min Latt of Diamond Intelligence. “And the NLD just don’t have the people to run ministries at this time.”
So while the business community has enthusiastically welcomed the appointment of the new finance minister, and it supports the renewed crackdown on corruption, it is anxiously waiting to see what impact this will have on the government’s economic policy.
Obviously while more major changes are afoot, and until the likely shake-out in the ministries actually materialises, the Myanmar business community remains guarded about the prospects of a significant economic upturn, but it is cautiously optimistic.
Finding suitable cabinet candidates is difficult enough in Myanmar, and persuading them to accept positions is even harder. The nowousted Kyaw Win reportedly was the fourth choice for finance minister in 2016