Southeast Asia’s Transparency Problem

Most countries in Southeast Asia do not have a transparent budget process, according to a global survey conducted by International Budget Partnership.

Most countries in the region do not have a transparent budget process, a global survey confirms.

By Mong Palatino
September 30, 2015

Most countries in Southeast Asia do not have a transparent budget process, according to a global survey conducted by International Budget Partnership.

The 2015 Open Budget Index used 140 observable facts and indicators to measure if a country’s budget system allows opportunities for adequate oversight and public participation. If a country scores a minimum of 60 out of 100, it is deemed to provide sufficient budget information and audit mechanisms.

In Southeast Asia, only the Philippines scored above 60 (the global average is 45). Indonesia and Malaysia performed above average with a score of 59 and 46 respectively. Thailand and Timor-Leste received ratings of 42 and 41. Three countries in the region were found to have a budget system with limited public participation and weak transparency: Vietnam (18), Cambodia (8), and Myanmar (2). There is no data available for Singapore, Brunei, and Laos.

The survey confirms long-held assumptions that many countries in the region continue to implement budget processes with little accountability and public engagement.

Of course, the problem is not exclusive to Southeast Asia: 98 out of 102 countries which participated in the survey lack adequate institutions and mechanisms “for ensuring that public funds are used efficiently and effectively.” In fact, only 24 countries scored over 60 on the budget transparency index.

But within the region, several common threads can be seen. The first is the failure of the government to include substantial public input and feedback in the budget making and implementation. The global average score for public participation is 25. Yet several Southeast Asian countries scored lower than this: Malaysia (12), Timor-Leste (10), Cambodia (8), and Myanmar (6). Even the Philippines, which scored high on this category and was singled out in the report for institutionalizing citizen participation in the budget system, was asked to “provide detailed feedback on how public perspectives have been captured and taken into account” in the whole budget process.

Another one is the absence of a strong legislative oversight of budget spending. Malaysia scored 15, while the Philippines got its lowest rating (36) for this indicator in the budget index. Last year, the Philippine Supreme Court ruled that a disbursement program enacted by the office of the president was unconstitutional since it was not authorized by Congress.

There were specific recommendations for countries in order to make the budget process more transparent and democratic. Cambodia is urged to “hold legislative hearings on the budgets of specific ministries, departments, and agencies at which testimony from the public is heard.” Vietnam needs to consult the legislature first before releasing contingency funds, which were not identified in the budget law.

Juvinal Dias, a researcher of Timor-Leste NGO La’o Hamutuk, recommends the following to the government: “Make budget information available to the public, make opportunities available for public participation in the budget process, and strengthen fiscal oversight by the legislator and auditor.”

There are also simple but relevant reforms that governments can immediately implement. These include publishing budget year-end and audit reports (Myanmar), producing a pre-budget statement and making it available to the public (Indonesia), establishing specialized budget research office (Malaysia), and holding a pre-budget debate by the legislature (Philippines).

The budget survey is useful as a benchmark for governments, scholars, and civil society organizations in assessing the utilization of public funds in their respective countries. In Southeast Asia, it is a reminder that opportunities for corruption can be reduced if we make the budget process more open while strengthening mechanisms for inter-agency accountability.