Analysis

Myanmar: Facing Up To Bureaucratic Bribery

  • Asia Pacific
  • Myanmar
  • Creating a Compliant Organisation
Myanmar: Facing Up To Bureaucratic Bribery


Aung San Suu Kyi’s civilian-led government has emphasized the need to combat corruption, both for the sake of ordinary citizens, and with a view to attracting the right kind of foreign investment. Within days of coming into office in 2016, she issued a set of guidelines barring officials from accepting expensive gifts. Since then, the government has amended the country’s anti-corruption law with a view to making its administration more efficient. However, progress remains slow, and a survey published in March 2017 by the anti-corruption NGO Transparency International (TI) highlights the scale of the challenges that the country faces.

 

The survey was conducted through face-to-face interviews in 1,224 households selected to be representative of the country as a whole. The findings were published in the People and Corruption: Asia Pacific report which is part of TI’s ‘Global Corruption Barometer’ series. The survey represents the views of ordinary citizens rather than business, but their experiences offer an insight into the difficulties that companies may encounter in their own dealings with government officials.

Who are the main bribe takers?

Respondents were asked whether they had come into contact with one of six public services in the previous year: police, officials dealing with ID documents, courts, hospitals, utility services, and public schools. The people who had dealt with these agencies were then asked whether they had had to pay a bribe.

It emerged that nearly half (49%) of the people who had had contact with the police had paid a bribe, as had 40% of those applying for ID documents. Ominously, 39% of those dealing with the courts had likewise paid bribes. Hospitals (21%), utility services (20%) and schools (16%) fall further behind, but these are still significant figures given that these organisations are providers of essential public services.

Averaged out, these figures mean that nearly a third (32%) of the total survey population had paid a bribe in the previous year. However, to put the problem in a regional perspective, Myanmar was by no means the worst-affected of the six South-East Asian countries covered in TI’s survey. In Vietnam, nearly twice as many respondents (61%) had been obliged to pay bribes.

What can ordinary people do?

When offered a list of specific measures that people might take to fight corruption, 62% said that ‘ordinary people cannot do anything’. ‘Refuse to pay bribes’ was the second most popular option, but chosen by only 10% in Myanmar, compared with 33% in Indonesia, and 37% in Vietnam. The implication is that ordinary citizens believe they have no choice.

On a similar note only 9% of respondents thought that it would be effective to report corruption. When asked to list the top reasons for not reporting corruption, 29% said that ‘nothing will be done’. This seems all too plausible given the high levels of corruption in the police and the courts. A further 24% said that ‘people are afraid of the consequences’. The survey did not go into details, but it is easy to imagine that these outcomes could include some form of retaliation by powerful officials and interest groups who are involved in bribery.

Business perspectives

The tribulations of ordinary Myanmar people dealing with officials will resonate with the experiences of international companies operating in Myanmar and the wider South-East Asian region. For example, in the ASEAN Business Outlook Survey 2016-2017 conducted by American Chamber of Commerce Singapore and the US Chamber of Commerce, slightly more than half of the respondents (50.3%) stated that pressure to bribe officials for routine government services posed ‘some hindrance’ or a ‘serious hindrance’ to their business. Such hazards do not normally constitute a reason to hold back investment, but they represent a constant impediment to day-to-day operations.

On a similar note, according to the World Bank’s 2014 Enterprise Survey, 37% of Myanmar companies reported that they were expected to give gifts when meeting tax officials, and 38.9% said they were expected to do so when applying for operating licences. This survey took place before the present administration took office, and in the long term reforms to streamline official procedures may reduce the opportunities for corruption. However, no one expects this to be a swift process. Meanwhile, there may be a temptation – particularly among local employees – to see bribery demands from officials as ‘normal’. However, this is no longer the view of the Myanmar government, at least not at the highest level, and it is scarcely compatible with international anti-bribery legislation. At a minimum, companies need to train their employees in strategies to resist bribery demands, even if this results in costly delays to official processes – as it almost certainly will.

What to watch?

In anti-bribery enforcement, as in other governance issues, Myanmar cannot afford to stand still. The question is whether the country will gradually move forward or whether – for lack of effective government initiative – it will actually lose ground. Here, there are three key indicators:

  • The first is the most practical. Bureaucratic procedures that are slow and complicated create the conditions for bribery because they give officials an opportunity to seek favors in return for faster service. So how far is it realistic to expect improvements in efficiency and technical capacity? Here the immediate signs are not so favorable. The 2017 edition of the World Bank’s annual Doing Business report, which measures the ease of standard business procedures such as applying for a construction licence, shows no more than a slight improvement. Myanmar ranks at 170 out of 190 economies measured, compared with 171 the previous year.

  • The third indicator concerns Myanmar companies. How far will they be willing to adopt international anti-corruption standards? On this front, the third Transparency in Myanmar Enterprises (TiME) report, published by the Myanmar Center for Responsible Business (MCRB) in September 2016, shows that an elite group of some ten to 15 leading Myanmar companies are adopting international best practice, for example by introducing anti-bribery codes. In their case, a major incentive is the hope of working with international partners who expect higher standards. However, there is so far little evidence that the great mass of Myanmar companies is following their example. 

For international companies, there is a fourth indicator: will foreign companies in Myanmar be a target for extraterritorial enforcement? So far, there is only one minor example. Myanmar was among several countries mentioned in a 2011 US enforcement case against an insurance broker which had employed third-party facilitators without introducing proper controls. It may be no more than a matter of time before we see the first major enforcement case focusing specifically on Myanmar.

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