Corruption is part everyday life in Myanmar. While the wealthy can use bribery to get around the law, for the vast majority of Burmese citizens, bribery is necessary to get things done even when the law is on your side. The term “tea money” exists in common parlance to describe the small bribes necessary to obtain even the most basic of services—bribes that are so ubiquitous that many people don’t think they count as corruption. The imposition of unofficial, discretionary and discriminatory “fees” means that formally public services are in practice “privatized.”
One explanation for the persistence of this petty corruption is that both the national government and the regional governments lack the revenue necessary to provide the public services that, under Myanmar’s Constitution, the government is supposed to provide. According to the Asia Foundation, “Decades of deliberate neglect of Myanmar’s tax-administration system have left the country with one of the lowest tax takes in the world [….] Myanmar’s tax revenues in 2016–17 were only 6–7% of GDP. This compares to 10–20% of GDP for countries at similar levels of income.” The country does earn significant revenue from natural resources, but these rents have gone into the pockets of military elites; other revenue sources are severely limited. When the demand for government services and benefits outstrips the supply, people become willing to pay extra for the promised public goods. The idea that these extra fees are acceptable is exacerbated by the fact that Myanmar’s lower-ranking public servants earn very low official salaries. But allocating public services on the basis of bribe payments is not fair, equitable, transparent, or efficient.
In an ideal world, Myanmar would reform its tax system, collect adequate revenue, pay its public servants decent salaries, and be able to provide all of the goods and services to which its citizens are legally entitled. But while we can all hope Myanmar works toward that goal, nothing like that is going to happen anytime soon.
A more practical short-term solution is to raise the official administrative fees—or “user fees”—for public services.
In fact, there are already user fees in place for some municipal services in Myanmar, including building and land fees, as well as street lighting fees, garbage collection fees, and water collection fees in places where these services are provided. These fees provide for much of the revenue for the state-controlled municipal offices. Similar user fees could be applied for nationally-provided public services like health and education, but with proper mechanisms to ensure access to everyone through fee exemptions for certain marginalized groups and the very poor. In short, the proposal is to formalize some of the currently unregulated payments for government services, through the imposition of pre-identified and pre-determined “user fees,” coupled with special provisions to ensure access for the very poorest. This approach would have two principal benefits:
- First, replacing bribes with official user fees will also allow for better regulation of money currently collected as bribes and with increase transparency of revenue collected.
- Second, user fees would help the state address its revenue shortfalls, and the additional revenue could be used for providing better public services.
Of course, user fees can be exploited and pocketed for personal gain. In the case of Malawi, which introduced user fees for various services provided by the local government, there have been numerous instances of misappropriation, diversion, overcharging, and unauthorized collection. However, this doesn’t mean that user fees inevitably lead to corruption. Rather, it means that appropriate controls are essential. One solution is to use technology to systematize receipts of user fees through electronic cash registers. In fact, a government in Kenya successfully raised its annual collections by 400% through their utilization of electronic cash registers, which Professor Taryn Vian claims “helped improve internal accountability” and “helped to detect corruption by facilitating the comparison of reported revenue with expected revenue.” While this is no guarantee of universal success, it shows great potential to mitigate the risks associated with user fees. With the right safeguards in place, systematized user fees for select services could be a key measure to reduce the petty corruption so prevalent in public service delivery in Myanmar.