Gilded Gatekeepers: Myanmar's State-Owned Oil, Gas and Mining Enterprises

As Myanmar seeks to build more modern and open oil, gas and mining industries, the state-owned economic enterprises (SEEs) active in these sectors will play a critical role. Enhancing the effectiveness of these SEEs will be an important goal of Myanmar’s continued economic reform as the country embarks upon its post-election transition. Such reforms will evolve in a context of a broader debate about the role of extractive industries within Myanmar’s economy, growing efforts to promote transparency, and ongoing concerns about the links between extraction and conflict.

Within this complex context, the Natural Resource Governance Institute (NRGI) has conducted research into the activities, revenue flows and governance of Myanmar’s extractive-industry SEEs. The aim of this research is to help governmental and non-governmental stakeholders within Myanmar assess key challenges surrounding the country’s oil, gas and mining SEEs. It builds on preliminary information-gathering within Myanmar and NRGI’s global research on the governance of state-owned enterprises.


Projected percentage of public revenue collection and public expenditure of Myanmar’s petroleum and mineral sector state-owned enterprises, 2015/16

From April 2013 to March 2014, the Myanma Oil and Gas Enterprise (MOGE) deposited more into its “Other Accounts” ($1.4 billion) than Myanmar spent on health ($750 million) or education ($1.1 billion).

Findings

Our research highlights several findings that warrant consideration by Myanmar’s leaders as they examine how SEEs can contribute to the country’s reform agenda:

  1. Oil, gas and mining SEEs exert significant influence over public revenues.
  2. The government has moved in a concerted way to grant SEEs greater financial autonomy, and many SEEs appear to be amassing large reserves in independent accounts that carry over from one year to the next. There is not a clear link between the activities that SEEs like MOGE are charged with performing and the large sums they are entrusted with retaining and spending.
  3. The contours and boundaries of SEEs’ roles are not extensively defined in the legal framework, and are a source of confusion for many actors inside and outside of government.
  4. Several interviewees suggested that SEEs are used to spread benefits to a network of private political patrons that support the government.
  5. There has been a distinct lack of public transparency in the management of these SEEs.
  6. Many interviewees indicated that military-affiliated companies occupy a central position in the mining industry in particular, though their precise roles and activities remain unclear.

Opportunities for reform

We suggest that stakeholders consider the following broad goals to enhance the positive roles played by Myanmar’s oil, gas and mining SEEs:

  1. Revenue retention policies matched to commercial strategies
  2. Enhanced public disclosure of key data
  3. Clarified roles and responsibilities, and reduction in any unnecessary overlaps between SEEs and other public entities
  4. Strong mechanisms for internal accountability

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