Myanmar: extractives transparency is critical to development


In 2011, Myanmar emerged from five decades of authoritarian rule and has subsequently undergone unprecedented political and economic reform. Myanmar has committed to improve political and economic governance and to re-integrate with the global economy. It is host to substantial natural resources, including significant quantities of non-ferrous metallic minerals, gemstones, and oil and gas reserves.

In 2014, these resources contributed 34% of total exports – or USD $4.2 billion – and an annual gem and jade sale generated US$3.4 billion. 2013 and 2014 also witnessed onshore and offshore oil and gas tenders, generating substantial interest from international oil companies. As such, it is not surprising that natural resource wealth is a key driver of the Government of the Union of Myanmar’s economic development agenda. However, Myanmar’s extractive industries sector has a long history of conflict, economic mismanagement, and military rule.

Although progress has been made with the approval of candidacy to the Extractive Industries Transparency Initiative (EITI), a global standard to promote open and accountable management of natural resources, the sector still operates with limited information sharing and constrained relations between the government, private sector, civil society, and ethnic groups.

Past grievances have often been resolved through force, rather than policy-making, mediation or dialogue. Little has been known about the structures which govern the extractives sector and how revenue flows between relevant institutions and stakeholders. Those areas with the highest natural resource wealth are often those most affected by the country’s long-standing civil war.

Consequently, Myanmar faces a formidable challenge in generating trust between stakeholders, and ensuring transparent, inclusive and sustainable development of its natural resource assets. But opportunities are present; Myanmar’s recent candidacy of EITI is viewed as central to the process of reform. The initiative has the ability to feed into the peace process, increase understanding of the ownership of contracts in the sector, improve access to and the quality of extractive industries sector data, and enhance the role and function of government. The process is intended to facilitate a platform for dialogue, high-quality information and analysis but not to pose solutions. Expectations must be managed to reflect this.

Informing this opportunity, the first in-depth institutional and regulatory assessmentof the extractive industries sector in Myanmar has now been published.

The report provides a baseline institutional and regulatory assessment of the oil and gas, mining, and hydropower sectors in Myanmar, shedding new light where before there was opacity. The report inputs into the EITI membership process in Myanmar and is the first study into the context within which EITI will be implemented in Myanmar, in addition to informing broader improvements in natural resource governance.