Myanmar - Corruption
According toTransparency International's index of perceived corruption, Burma is tied with as the Afghanistan world's second most corrupt nation [Somalia is first]. Poor policymaking, minimal rule of law, outdated equipment and technology, inadequateinfrastructure, and a weak education system combine to hinder economic growth inBurma. Political intervention, corruption, and central state control obstruct mosteconomic sectors. The government controls all official trade in goods, extractiveindustries, sources of capital, educational institutions, movement of labor, and access toinformation.
The 2010 CPI ranks the most corrupt country as perceived to be Somalia, followed by Burma, called Myanmar by its current rulers, and, successively, Afghanistan, Iraq, Sudan, and Uzbekistan. Corruption is endemic in Burma. Many economists and businesspeople consider corruption the most serious barrier to investment and commerce in Burma. Due to a complex and capricious regulatory environment and extremely low government salaries, rent-seeking activities are ubiquitous. Very little can be accomplished, from the smallest transactions to the largest, without paying bribes. Transparency International rated Burma third worst in the world in 2009 in its annual Corruption Perceptions Index.
Since 1948, corruption is officially a crime that can carry a jail term. However, the ruling generals apply the anti-corruption statute only when they want to take action against a rival or an official who has become an embarrassment most notably in October 2004, when the SPDC arrested then-Prime Minister General Khin Nyunt and many of his colleagues and family members for corruption. In 2006, authorities arrested over 300 Customs officials, charging them with corruption. Most citizens view corruption as a normal practice and requirement for survival. The major areas where investors run into corruption are when seeking investment permission, in the taxation process, when applying for import and export licenses, and when negotiating land and real estate leases.
Burma's multiple exchange rates and currencies make conversion and repatriation of foreign exchange very complex, and ripe for corruption. The official rate of approximately 6 kyat to the dollar is grossly overvalued. The unofficial market exchange rate as of December 2009 wasapproximately 1000 kyat to U.S. $1. The unofficial exchange rate fluctuates according to the season as well as domestic and foreign effects. The government also issues Foreign Exchange Certificates (FEC) which are nominally valued at $1=1FEC but ostensibly trade at a fixed rate of 1FEC=450 kyat via a small number of licensed exchange counters, but that rate is still significantly overvalued and in practice the counters will buy FEC at that rate but will never sell them at the 1FEC=450 kyat rate.
Burma lacks regulatory and legal transparency. All existing regulations, including those covering foreign investment, import-export procedures, licensing, and foreign exchange, are subject tochange with no advance or written notice at the whim of the ruling generals. The country's decision-makers appear strongly influenced by their desire to support state-owned enterprises and meet the needs of the military-controlled Myanmar Economic Corporation and Myanmar Economic Holdings, Ltd., as well as wealthy cronies.
The GOB established a Tourist Police Unit in 2006, but a lack of proper funding and training,as well as pervasive corruption, prevents the unit from being effective. Despite the creation ofa Tourist Police Unit, law enforcement services are generally unresponsive, under equipped,and poorly trained. Corruption is pervasive, and some GOB officials collaborate with criminalsor carry out crimes themselves under protection of their official status. Most criminal acts gounreported and/or are not investigated. Response time can be extremely long, if any responseoccurs at all. Police often blame lack of transportation for their slow response.
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