The TA is designed to strengthen the capacity of the government to develop and implement policies through a combination of policy advice, learning programs, workshops and seminars, and exposure to experiences from neighbor countries that faced similar challenges. Given that the capacity constraints are overwhelming and resources limited, the proposed TA will be selective in its interventions. It will improve the capacity of civil servants in government ministries and related public companies, although support to divisions and states could also be considered. The sectors to be included in the TA have been selected according to government priorities and the potential for ADB support based on preliminary needs assessments, strategies, and road maps.
The new government is implementing a broad set of reforms as it embarks on a remarkable transition to build an economy that will benefit all citizens. Some major ongoing initiatives concern exchange rate unification, reform of land and investment laws, amendment to the Central Bank Act, finance sector reforms, and reform of the trade union law. These reforms offer a unique opportunity for the country to lay the foundations for a brighter and more prosperous future for its people. The political and economic developments since early 2011 open unprecedented opportunities for Myanmar to catch up with its neighbors and increase its per capita gross domestic product, one of the lowest in Southeast Asia at about $860; reduce the poverty rate from the current 26% to 16% of the country's 60 million people; and improve human development indicators (Myanmar is near the bottom of the list at 149 out of 187 countries). The changes and speed of reform have been impressive, but the challenges are complex and numerous.
The country is facing several binding development constraints, including (i) a weak economic policy framework and environment that needs urgent reforms to maintain macroeconomic stability, strengthen public finance, promote private-sector-led trade and investment, and provide timely and reliable statistics to inform policy decisions; (ii) limited capacity of government civil servants for formulating and managing the policy and institutional reform process, coordinating among themselves, and managing external assistance; (iii) weak public institutions that have difficulties to effectively support the economic reform process, efficiently provide essential public services, and develop and enforce strategies, plans, laws, rules, regulations and standards; and (iv) lack of efficient physical infrastructure to support trade and investment in agriculture, manufacturing, and industry, as well as to provide a sufficient level of services to both the urban and rural populations.
The country needs to embark on a comprehensive and well-sequenced program of reforms if it is to realize its potential. The regulatory, legal, and policy environment needs upgrading to facilitate the participation of the private sector, promote investment, and diversify the economy. The government needs to develop strategies, investment plans and incentives, and generate adequate fiscal resources to expand access to electricity, water supply and sanitation, and transport, as well as to improve health, education, and social protection systems. Agriculture, which employs about 70% of the population, has great potential for improvement, but is in great need of land reform, expansion of credit to farmers, more public investment in rural infrastructure, and better seeds, fertilizers, extension services, and post-harvest facilities.
The capacity of existing socioeconomic policymaking institutions in Myanmar is limited and needs to be bolstered if appropriate economic policy reforms are to be designed and implemented successfully. Strengthening these institutions and giving them more independence in decision making in their areas of responsibility would increase accountability and contribute to better governance and greater transparency and efficiency. The Myanmar civil service has a critical role to play in this reform process. However, the majority of the civil servants have limited exposure to modern public sector management and good governance practices. They have had very few opportunities to develop new techniques and skills, to learn lessons from other countries, or to access high-quality policy advice.
To avoid duplication and overstretching of the government's absorptive capacity, the TA will be implemented in consultation with other development agencies that are providing related assistance to the government. The TA takes into account lessons learned from other capacity-building TA projects, especially the need for strong government ownership for TA to be successful and sustainable. The TA also builds on and complements other capacity-building TA projects. In particular, it will harness the experience developed under the ADB-financed GMS Phnom Penh Plan for Development Management, The Phnom Penh Plan builds capacity of civil servants for leadership, public policy, and development management; and promotes regional cooperation in the countries of the GMS. which since 2005 has provided limited support to improve the capacity of civil servants through learning programs outside Myanmar.
Policy advisors will support selected government agencies in preparing the new policy agenda, in line with the government strategy to reduce poverty and promote sustainable economic growth. Advisors placed in key ministries will work closely with government officials to assist them in the preparation of policy papers, plans, strategies, laws, or regulations. They will also suggest improvements to management systems, policies, and procedures in the ministries through the preparation of institutional development plans. These will be complemented by the preparation of capacity-building plans based on training needs assessments, in-country training programs based on demand, and out-of-country programs to learn lessons and best practices from neighbor countries. The TA will also support workshops, seminars, and conferences to share knowledge and discuss economic development and policy issues.