Businesses “wait and see” as govt plans for GAD transfer

The business community will “wait and see” if the transfer of the General Administration Department (GAD) to civilian control improves the bureaucracy and regulatory environment for those doing business outside major cities.

The President Office last week announced that the GAD under the military-controlled Ministry of Home Affairs is set to be shifted to the Ministry of the Union Government Office, which is headed by U Min Thu, who was until recently a deputy minister in the President’s Office.

U Zaw Htay, the President’s Office spokesperson, told the press on December 22 that “the policy has been set” and the government “will work according to the procedures to implement it.” The military still has control over defence, border affairs and home affairs ministries without the oversight of civilian authorities.

Traditionally, the home affairs ministry appoints the GAD at each level of government, which covers more than 16,000 local districts and townships. An Asia Foundation (TAF) report in 2014 described the GAD as the “backbone of Myanmar’s public administration”.

“With 36,080 staff spread across the country, the GAD maintains a ubiquitous presence built around its administrators, particularly at the all-important township level,” the report stated. The department has a very extensive remit, ranging from maintaining law and order to collecting taxes and managing land. Many of its officers are associated with the military and they work closely with the security forces, the police and judiciary across the country.

Since the transition in 2011, its role has expanded to include providing staff for sub-national executives and legislatures. Businesses, however, often find it difficult to work with GAD in remote regions.

Dr Matthew Arnold, the TAF country representative in Myanmar, described the importance of the GAD to Myanmar’s governance as “exceptional”.

“It’s involved in an exceedingly diverse range of sectors and also all levels of government. The placement of the GAD under the full control of elected, civilian government is really important to Myanmar’s transition and should allow for other reforms to progress, especially at the state and region level and locally,” Dr Arnold told The Myanmar Times.

Most foreign businesses working in the remote regions, however, would withhold judgement on the reform and “wait and see what happens”, according to American investor Robert Walsh, who has projects in Kachin and other regions. For the overhaul to succeed, there needs to be a massive turnover of GAD leaders down to the township level, from military to NLD-appointed civilians, most of whom are qualified in some form of public administration.

“We would next need to see a willingness on the part of new leadership to take a ‘whole of government approach’ to mobilising the other ministry components in each district and township to promote economic development,” Mr Walsh explained. This includes working with foreign businesses and putting a halt to the bureaucracy “speciously inventing reasons why something couldn’t or shouldn’t be done”.

All of these are going to take a while. “Foreign investors are well into ‘patience fatigue’, and I don’t know how much time the government has before it’s completely exhausted. Government will have to work fast and pull off a few showy achievements,” the investor remarked.

For Filip Lauwerysen, executive director of the European Chamber of Commerce in Myanmar, the transfer of the GAD needs to strengthen the willingness and capacity of the government to crack down on the illicit trade in border areas.

“Under the current circumstances, it is hard for European investors who set-up manufacturing in Myanmar, for instance in the beer industry, to compete on a level-playing field with illegal merchandise pouring in over the borders and being sold widely and publicly without paying any taxes,” the director said, adding that the change would present a window to address illegal trade and any meaningful improvements would “be much welcomed by the European business community.”

The transfer will be implemented “very soon”, according to U Zaw Htay.

Source: Myanmar Times

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