COUNTRY REPORT ON WATER RESOURCES MANAGEMENT FINANCING MYANMAR AYE MYINT AYE MYINT, Director (Retired) Irrigation Department, MOAI

Contents of Presentation 1.Policy Frameworks for WRM Financing 2.Financing needs 3.Measures for reducing costs of achieving policy objectives 4.Increasing financial resources from users and beneficiaries 5.Conclusion Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

1. Policy Frameworks for WRM Financing (1) Financial and Budget policy (2) Agricultural policy (3) Guidelines for irrigation development and efficient utilization of nation’s water resources (4) Policy for watershed conservation (5) Policy for environmental conservation (6) Policy for environmental health (7) Policy for forest, wildlife, wild plants and forest ecosystem (8) Guidelines for IWRM in all sector (National Water Vision) (9) Policy for energy (10) Policy for poverty eradication (11) Policy for fishery sector Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

1-1 Financing sources and funding mechanism -Funded by Government -Soft loans received from foreign countries -Funded by JV/BOT basis by foreign and local investors -Funded by the community itself and well- wishers -Funded by local NGOs, INGOs -Funded by international organizations -Self managed by YCDC, MCDC by revenue from tariffs Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

1-2 Principles for guiding financing Budgets are prepared in accordance with national government objectives and departmental priorities as set out in national short-term and long-term strategic plans. The budget of each department related with water sector is presented to Parliament by the relevant Minister for approval. Adjustment to budgets is made by budget committee of Parliament in accordance with available funds and national priorities. The head of water related departments, the concerned Ministers, and the Auditor General have the responsibilities in relation to financial management. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

Continued Aids from foreign countries, loans and investment of national and foreign investors are managed by the basic of recipient country’s policy initiatives. To implement development works with aids and loans from foreign countries and international organizations instead of relying only upon the national own budget. Forming “Aid Effectiveness Management Institution” to control and monitor. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

2. Financing needs (1)Agricultural water supply (2) Hydroelectric Power (3) Municipal, Industry and Rural water supply (4) Urban flood/ Rural flood for damage reduction (5) Drainage(Urban/Rural) (6) Erosion and run-off control (7) Water quality management (8) Recreation, fishing, hunting and ecological system (9) Navigation (10) Others Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

3. Measures for reducing costs of achieving policy objectives 3-1 The weighting of alternatives 3-2 Consideration of soft measures 3-3 Application of Cost-effectiveness Analysis ( CEA ) Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

3-1 The weighting of alternatives Structural and non –structural measures (eg, Flood plain zoning, Flood forecasting and warning ) Rain water harvesting and flood water harvesting Conservation of agriculture instead of terrace construction Enforcing laws, regulations and standards ( to reduce the negative impacts, to manage the cultivated lands, forest areas and mining areas. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

3-2 Consideration of soft measures Raising of training and awareness programs Proper control and monitoring systems Proper investment plans for extension services Upgrading of education sector and build up capacity Use of communication media or channels such as demonstration projects, forums, workshops, seminars and publications etc. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

3-3 Application of Cost-Effectiveness Analysis (CEA) The concerned water related ministries and relevant departments take full responsibility for controlling and monitoring of approved budgets for implementation works effectively efficiently. Require proper coordination works and target group or community must be included during the process of discussion to make decision before implementation of the projects. Established “ Aid effectiveness Management Institution” to use foreign aids and loans effectively. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

4. Increasing financial resources from users and beneficiaries To formulate national water policy first (already completed at interim stage) To promulgate appropriate legal documents and regulation to introduce user-pay and polluter-pay principles To encourage private participation or mobilize user contribution in water infrastructure development and management Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

4-1. Mechanisms to be implemented for financing WRM Cost –recovery from users. Identify the source of funds for O&M and the level of contribution by beneficiaries. Investment in high priority projects must be promoted. Holding seminars and workshops to encourage direct private and foreign investment. Explore external financial assistance such as grants, aids, low interest loans. To establish monitoring mechanism for environmental conservation, effectiveness and efficiency of activities and education, communication and information. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

Continued To establish a main coordination body of water sector as former “Myanmar Water Resources Committee” to develop national water policy, master plans, guidelines and comprehensive legislations for privatization and also for fund raising. (NWRC was already established) To promote coordination and cooperation works among service providers and water users and encourage local peoples to participate in management works at basin and on farm levels. New legislation for implementation of PPP (Public Private Partnership) infrastructure projects for development of basic infrastructure in water sector. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

4-2 Financial sources Mainly funded by Government Could be expected from UN organizations, MDG funds, Carbon credit funds, IMF, World Bank and ADB. Privatization is one of the measures for increasing funding. Contribution of users and tax payers in terms of tariffs and tax for implementation of small projects. Implementing BOT/JV basis projects to increase the investment in water sector. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

4-3 Economic and financing instruments Tariffs and charges Abstraction charges Pollution charges Water markets Tradable discharge permits Subsidies Water service charges Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

Myanmar National Water Policy WATER PRICING Principle of differential pricing may have to be installed subjected to allocation and pricing on economic principles. Water Regulatory Authority (WRA) –fix and regulate the water tariff system and charges –tariff will be periodically reviewed The water charges should preferably as a rule be determined on volumetric basis Recycle and reuse of water, after treatment to specified standards, should also be incentivized through a properly planned tariff system. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

Continued Water Users Associations (WUAs) –statutory powers to collect and retain a portion of water charges –manage the volumetric quantum of water allotted –distribution system in their jurisdiction –WUAs should be given the freedom to fix rates subject to floor rates determined by WRAs Water Pricing –Unbalanced pricing of electricity incompatible with water pricing may lead to wasteful use of both electricity and water. This needs to be examined and carefully formulated. –. As an alternative, where limited ground water use for agriculture at a subsidized cost is considered desirable, separate electric feeders for such a use should be considered. ( source: Myanmar National Water Policy,2013,in interim stage ) Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

5. Conclusion -Huge investment in water sector to meet demanding objectives of nation as growing economy, increasing urbanization and also to get the objectives of MDGs as per UN declaration. - Cost -recovery from users for governance functions provides an important mechanism for financing the increasing water resources management requirements. - It is required to reform the water sector by decentralization to promote the role of service providers and local communities and adopting demand responsive approach for funding. - Needs to give incentives to attract community and private participation in investment such as low taxes, and suitable water prices for cost-recovery. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

Continued -Need to create special funds such as carbon credit funds, environment protection funds and MDGs funds etc. - Recognized that participation of water users and private sector in water infrastructure development and management becoming more important. - Need to enforce appropriate legal documents for user pay, polluter pay principle. - Need specific water policy to encourage private participation or mobilize user contribution. - Need apex body to control the nation water resources and to lead for emerging of national water policy. Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar

Regional Workshop on Water Resources Management Financing - Myanmar 3 r d October 2013, MiCasa Hotel, Yangon, Myanmar