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Funded by the
European Union
Sustainable Financing
of Protected Areas
in Myanmar
Sustainable Financing
of Protected Areas
in Myanmar
Funded by the
European Union
ii
Copyright © 2015
by the Wildlife Conservation Society
Myanmar Program
AUTHORS
Lucy Emerton, U Aung Kyin, and Robert Tizard
Printed copies are available upon request to:
WCS Myanmar
Aye Yeik Mon 1st St., Ward 3, Building C1
Hlaing Township 11051
Yangon
Myanmar
Email: wcsmyanmar@wcs.org
Phone: +95 1 524893
Web: http://myanmar.wcs.org
Twitter: @WCSMyanmar
FRONT COVER PHOTO
Copyright © Robert J. Tizard/WCS
CITATION: L. Emerton, A. Kyin, R. Tizard. 2015. Protected Areas in Myanmar – Assessment and
Recommendations. Yangon, WCS, p. 95.
iii
Index
Part I: Assessment of financing status, trends, constraints & opportunities
Introductory remark viii
Executive summary xii
1 Introduction: background to the assessment 1
Objectives, scope and content 2
How PA financial sustainability is defined 3
2 Procedures and provisions for PA financing: institutional, legal & administrative aspects 6
How budgets are requested and approved 6
How funds are allocated and transferred 9
How PA budgets are devised 10
How PA revenues are generated and administered 12
New and emerging PA financing mechanisms 14
3 PA financing status and trends: funding sources, flows & gaps 16
Public budget 16
Expenditure patterns and targets 20
Externally-funded grants and projects 23
Self-generated revenues 25
Possible PA funding gaps under different management scenarios 27
4 Conclusions and next steps: PA financing needs, constraints & opportunities 31
Key financial needs, constraints and barriers 31
Opportunities and strategic entry points for enhancing financial sustainability 34
Potential areas for further follow-up, scoping and elaboration 35
Part II: Options for sustainable financing
1 Introduction 40
Objectives, scope and content of the report 40
Recap of key PA financing status, trends, constraints & opportunities 41
2 Relevance and potential of different PA revenue and income sources 43
Overview of possible PA fund-generation mechanisms 43
Direct user fees and service charges for PA land, resources & facilities 45
Levies and surcharges on nature-related products & services 47
Payments for ecosystem services 49
Forest carbon finance 50
Cross-sectoral fiscal earmarking & transfers 51
Sub-national ecological-fiscal transfers & retention 52
Debt-for-nature swaps 54
iv
Corporate sponsorship & advertising 55
Biodiversity offsets 56
Leases, concessions & joint ventures 58
Venture capital, credit & investment funds 59
Conservation bonds 60
Conclusions on revenue & income sources with the greatest potential for further development in
Myanmar 62
3 Possible scope, role and architecture of a long-term PA fund 64
The need & rationale for developing a long-term PA fund 64
Basic design elements 65
Fund types & lifetime 67
Legal setup & governance structure 68
Fund management & location of investments 71
Sources of funding & capital 72
Fund disbursement & targets 74
Conclusions on PA financing needs & fund design options for Myanmar 75
4 Enabling conditions and next steps for taking PA sustainable financing forward 79
Opportunities, risks & follow-up needs for priority financing measures 79
Cross-cutting measures & additional requirements for PA financial sustainability 84
Roadmap & key actions for moving forward 87
5 References 90
v
List of Figures
Figure 1: Key conditions for PA financial sustainability .................................................................... 4
Figure 2: Chain of public budget submission and approval ............................................................. 7
Figure 3: Annual calendar for public budget preparation ................................................................ 8
Figure 4: Request and approval process for budget allocation and transfer ................................... 9
Figure 5: Index of real change in environment and conservation sector funding 2010-15 .......... 17
Figure 6: Proportion of Union budget allocated to MOECAF, FD, NWCD and PAs 2010-15 .......... 17
Figure 7: Index of real change in PA budgets 2010-15 (constant 2015 USD) ................................. 18
Figure 8: Variation in per hectare spending between PAs (avg 2010-15, base 2015 USD) ............ 19
Figure 9: Breakdown of 2014/15 NWCD budget by category of expenditure .............................. 20
Figure 10: Share of NWCD spending on staff remuneration and labour charges, 2009-15 ........... 20
Figure 11: Index of real change in spending on staff remuneration 2010-15 (base 2015 USD) .... 21
Figure 12: Variation in staffing levels and filled positions between PAs (average 2010-15) ......... 22
Figure 13: Change in MOECAF, FD and NWCD revenues and expenditures, 2010-15 (constant
2015 USD) ....................................................................................................................................... 26
Figure 14: Key financial constraints to effective PA management ................................................. 31
Figure 15: Opportunities and strategic entry points for enhancing PA financial sustainability .... 34
Figure 16: PA sustainable financing measures and instruments with potential for further follow-
up and development ...................................................................................................................... 36
Figure 17: Categories of PA revenue and income sources ............................................................... 1
Figure 18: Possible PA revenue and income sources, assessed potential and additional co-
benefits ........................................................................................................................................... 63
Figure 19: Core elements and choices in fund setup and operation ............................................. 65
Figure 20: Key characteristics of selected PA, biodiversity and environmental funds in ASEAN
countries ......................................................................................................................................... 66
Figure 21: Basic PA fund design options ........................................................................................ 77
Figure 22: Summary of priority PA financing measures ................................................................. 79
Figure 23: Sources, purpose, target, opportunities, risks and follow-up for priority financing
measures ........................................................................................................................................ 80
Figure 24: Roadmap of key actions for moving forward on sustainable PA financing ................... 88
vi
List of Tables
Table 1: Share of environment & nature conservation sectors in Union budget 2010-15 ............................. 17
Table 2: Budget allocations per protected area 2010-15 (constant 2015 USD) .............................................. 19
Table 3: Budget allocations to PAs and NWCD by category of expenditure 2010-15 (constant
2015 USD) ........................................................................................................................................................ 20
Table 4: Externally-funded grants and projects by protected area ................................................................. 23
Table 5: NWCD revenues 2009-14 (constant 2015 USD) ................................................................................. 25
Table 6: Estimates of PA funding levels and needs from other ASEAN countries ........................................... 28
Table 7: PA recurrent cost needs and funding gaps under alternative staffing and management
scenarios .......................................................................................................................................................... 30
List of Acronyms
CBM
Central Bank of Myanmar
CDM
Clean Development Mechanism
CESR
Corporate environmental and social responsibility
ECD
Environmental Conservation Department
FD
Forest Department
GEF
Global Environment Facility
MEB
Myanmar Economic Bank
MFAR
Ministry of Finance and Revenue
MMK
Myanmar Kyat (at the time of the report, USD 1 = MMK 1,025)
MNPED
Ministry of National Planning and Economic Development
MOECAF
Ministry of Environmental Conservation and Forestry
MTE
Myanma Timber Enterprise
NWCD
Nature and Wildlife Conservation Division
OA
Other account
PA
Protected area
PES
Payments for ecosystem services
REDD
Reducing Emissions from Deforestation and Forest Degradation
SAO
State administrative organisation
SEE
State-owned economic enterprise
WCS
Wildlife Conservation Society
vii
Acknowledgements
Grateful acknowledgement is made of the extremely useful information, comments and ideas
provided by Dr. Nyi Nyi Kyaw, Director General of the Forest Department and Director Win Naing
Thaw of the Nature and Wildlife Conservation Division, MOECAF, as well as colleagues from
MFAR and MNPED, and especially for their generosity in sharing data.
This report was produced with the invaluable help of Professor Aung Kyin (former Rector of the
University of Forestry, Yezin), without whom it would not have been possible to carry out the
assignment.
Many thanks are also due to Robert Tizard (Technical Advisor to the WCS Myanmar Program) for
his continuous guidance and support throughout the study, as well as to U Than Myint (Director
of WCS Myanmar Program) and U Saw Htun (Deputy Director of WCS Myanmar Program) for
their technical oversight and backup, to Dr Christopher Holmes (Director of WCS Southeast Asia
Conservation Initiatives) and Jim Tolisano (Project Manager of WCS Business & Conservation
Initiative) for their overall coordination, and to Ma Annie Chit (Program Manager, WCS
Myanmar) for her logistical and administrative assistance.
viii
Introductory remark
The first part of the report makes a critical review of the problem based on objective
realism. The second part proposes the theoretical knowledge and international
experiences related to protected areas financing mechanisms.
All parties concerned, MOECAF and users/beneficiaries of Forestry Ecosystem Services
(Provisioning food; Provisioning raw materials; Provisioning Fresh Water; Provisioning
medicinal resources; Regulating Local Climate; Regulating Carbon Sequestration;
Regulating Extreme Events; Regulating Waste Water Treatment; Regulating Soil Erosion
and Fertility; Regulating Pollination; Regulating Biological Control; Habitats for Species;
Habitats for genetic diversity; Cultural Services- recreation, tourism, aesthetic
appreciation and Spiritual experience) are earnestly suggested to make a concerted
effort to preserve the biological diversity which is at present in a state of perpetual
decline worldwide and the pace is increasing, the diversity of species is shrinking, the
diversity of habitats is under threat and finally genetic diversity is decreasing.
In conclusion, allow me to cite the remarks of Edmund Burke (1729-1797), a British
politician, an economist and a writer. He said “No men can act with effect who do not
act in concert, no men can act in concert who do not act with confidence, no men can
act in confidence who are not bound together with common options, common
affections and common interests.”
Professor Aung Kyin
Retired Rector
University of Forestry, Yezin
National Consultant
ix
Foreword
Myanmar’s Protected Area network holds some of our country’s most beautiful and
outstanding natural and cultural landscapes. This network is interwoven with Permanent
Forest Estate and ensures that ecosystem services our people need to develop continue
to function and benefit local livelihoods. Despite the importance of our protected area
network, there are still many challenges to managing these areas effectively. In
particular our protected area network has limited funding for supporting its effective
management. Fortunately this is gradually changing over the past few years since the
budgets for our protected areas have been increasing. There were increases in
externally funded projects to support the management of these areas, though available
fundings are still insufficient.
This important report highlights the need to increase the size and diversity of the
financial support to our protected areas. Examples from neighboring countries have
already shown there are a variety of new opportunities available to secure more funding
for these vital areas. These can range from entry fees to payments for ecosystem
services and contributors included are a broader range of partners including other
government departments as well as the private sector. Myanmar needs to have a glance
at those opportunities in order to make our protected areas and the people dependent
on them prosper.
The report also highlights the need to enhance revenue retention and promote
reinvestment in conservation. The management of our Permanent Forest Estate is being
transformed; there are now new possibilities for revenue that do not come from the
direct harvest of trees and forest products. REDD+ mechanisms and Payment for
Ecosystem Services schemes could become important new sources of income. It will be
important to reinvest a portion of this income back into conservation so as to make
protected assets continue their essential services.
Once revenues have increased and are retained for conservation there is a clear need to
enhance management effectiveness on the ground and deliver conservation outcomes
for our country and the world.
There might be concerns that protected areas hamper opportunities for development
and associated financial gain, this report clearly depicts such opportunities would not be
lost. A well funded and effectively managed protected area network will provide new
economic opportunities for the benefit of national and local economies and at the same
x
time ensure the conservation of Myanmar’s considerable wealth of biodiversity and
natural resources.
To this end, improvement in planning for the management of protected area, thus,
become a necessity. New funding opportunities have to be aligned with the
conservation priorities of the country in order to effectively protect the natural
resources bounded with the protective area network.
Dr. Nyi Nyi Kyaw
Director General
Forest Department
xi
xii
Executive summary to Part I
This first section of the document reports on a strategic review carried out to support the
development of a sustainable finance strategy for Myanmar’s PA network. It assesses financing
status, trends, constraints and opportunities. The aim is to identify needs, niches and entry points
for strengthening PA financial sustainability, to be discussed with MOECAF and other key
stakeholders and prioritised according to their usefulness, relevance and strategic importance for
follow-up.
PA funding status and trends
The Nature and Wildlife Conservation Division (NWCD) of the Forest Department (FD) of the
Ministry of Environmental Conservation and Forestry (MOECAF) is the government agency that
is mandated to oversee PA management, and is allocated an earmarked budget to do so. This
budget comes from Union funds.
In the financial year 2014/15, public funding worth MMK 1.06 billion (USD 1.03 million) was
allocated to PAs. The share of NWCD budget spent on PAs has changed little over the last five
years at between 80-90%, and MOECAF allocations have for the most part remained steady at
around 0.2% of total Union funding to line ministries and departments. Overall, the Union
budget has been progressively rising, meaning that the absolute value of funding provided to
NWCD and PAs has grown since 2010. The NWCD budget has increased by around a third in real
terms, and PA allocations rose by more than a half.
Public funding to environment and nature conservation 2010-15 (expressed in constant 2015 USD)
Absolute funding levels differ greatly between sites, with four PAs accounting for more than a
half of total spending since 2010/11. There is also a wide variation in average annual spending
per unit area, with figures ranging between USD 2 and USD 84,000 per km2 and generally
(although not exclusively) exhibiting an inverse relationship to PA size. Overall, direct staff costs
(mainly salaries and associated remuneration and benefits) accounted for just under two thirds
of PA budgets in 2014/15 and 80% of NWCD spending. Only twenty PAs (out of the 24 managed
by NWCD and 36 in total in Myanmar) are actually staffed, or receive a government budget.
xiii
Sixteen sites, accounting for more than 20% of the national PA estate, receive no dedicated
public funding at all.
More than 20 PAs currently benefit from external support via internationally-funded projects.
These are spread across more than half of PAs and almost 90% of the national PA estate – an
area which is one third greater than that under the active management of NWCD. Since 2010,
something over thirty externally-funded projects are recorded as having been implemented
which are directly concerned with species and habitat conservation in and around Myanmar’s
PAs. In total this funding was worth just under USD 4.5 million up to 2013/14. During the current
financial year a massive rise in funding commitments was registered: PA projects worth an
estimated USD 18.7 million were initiated. The private sector is also beginning to play a
progressively greater (although as yet still relatively minor) role in PA funding.
Even though the law permits a variety of self-generated revenues to be earned from the use of
PA lands and resources, in practice most PAs generate little or no income (less than USD 17,000
in 2013/14). There are currently no systems in place to would allow PA revenues and income to
be retained and reinvested in biodiversity conservation. All earnings must be remitted to the
Union Fund (i.e. the central treasury). Even though ‘other accounts’ which serve to absorb and
manage all or a portion of own-source revenues are held by other line ministries and
departments, no such arrangements exist for MOECAF. While the Environmental Conservation
Law 2012 calls for an Environmental Management Fund to be established, and emerging PES,
REDD+ and corporate contributions similarly require some form of extra-budgetary mechanism
for administering and allocating PA funding, none of these arrangements have yet been
operationalised in practice.
Key financial constraints to effective PA management
xiv
In total, over the last five years, an average of USD 1.9 million a year or USD 43/km2 has been
spent on PAs. Union funds contribute 41% of this figure (an average of USD 0.79 million a year)
and externally-funded projects account for 59% (USD 1.1 million). When calculated on an area
basis, levels of external funding and NWCD spending are similar (USD 25-26/km2/year each).
The review makes it clear that Myanmar’s PAs face severe budget constraints. Many are unable
to cover the costs of essential infrastructure, equipment, maintenance, running and operational
activities – and many have no staff or funding at all. Although both public budget allocations and
externally-funded projects and grants to PAs have shown a steady increase over the last five
years, and look set to rise still further in the future, critical funding shortages still remain.
Key PA financing needs & constraints
It is obvious that insufficient funding at both site and central levels poses a major barrier constraint
to effective PA management. Financial sustainability is however only partly to do with the amount of
funding available. Other particularly important constraints include that:
Funding is distributed unevenly across the PA network. Three National Parks and one Wildlife
Sanctuary consume more than half of the total annual public budget allocation to PAs.
Meanwhile, around a third of PAs and 10% of the area under protection has no dedicated budget
at all, from either government or external sources.
Staff costs dominate public budgets. In 2014/15 staff-related costs accounted for almost two
thirds of government spending on PAs, and some 80% of NWCD’s budget. There is little surplus
funding available to meet other essential equipment, maintenance, running and operational
management needs. These costs are mainly left to be covered by externally-funded projects.
PAs rely on a very narrow funding base and range of financial sources. PAs are financed from just
two sources: the Union budget and external projects and grants. Up to the last financial year
these contributed an average of 40% and 60% respectively of annual resource flows. Self-
generated revenues are negligible. Only a limited range of PA funding sources are at present
enabled by the law, which is largely restricted to ‘traditional’ fees and charges for tourism, land
rental and fines.
PAs revenues cannot be earmarked or retained. All PAs earnings must be remitted to the Union
fund. They do not accrue as income to the PA, NWCD, FD or MOECAF, and are not reinvested
directly in conservation. Even if PA financing sources were to be expanded, this would not
automatically translate into an improvement in the availability of funds, because earnings would
continue to be channelled to the central treasury. This also means that there are weak incentives
for PA managers to implement charge and fee systems, or to collect and remit their proceeds.
Shortfalls in staffing limit the ability of PAs to request and spend funds. Despite the fact that
salary costs dominate public spending, only around a half of PAs are actually staffed. Even those
PAs that have staff face severe gaps in capacity: just 51% of approved positions have been filled,
and the majority of PAs are operating below 50% capacity. Without sufficient human resources, it
xv
is not possible to carry out essential PA management activities or to deliver on key conservation
goals. Many PAs therefore face difficulties in spending their existing budget allocations – and for
the most part would have only a very limited capacity to absorb and utilise additional funding, if it
were to become available.
Budget calculations lack flexibility, and key expenditure items are often under-costed.
Standardised cost norms and inflators are the main tools used to calculate annual PA expenditure
needs. Yet these rates tend to be unrealistically low, and cannot easily be adapted or modified in
response to changes or differences in circumstances and conditions. The budget that a PA
receives does not reflect its size, ease of management, level of threat or biodiversity significance.
Thus, even where a budget is requested and allocated for certain activities or items, it may not be
sufficient to cover the required expenditures.
PAs operate according to a short-term financial planning horizon. PAs budgets are planned,
disbursed and spent over a one-year time period. No forward estimates of budget needs,
expenditure plans or funding availability are made, and no information on longer-term
expenditure frameworks, spending ceilings or resource constraints are provided by MOECAF,
MFAR or MNPED. There is also no carry over in funding or expenditures permitted across financial
years. PA managers therefore cannot know with certainty what their future funding security is
likely to be. This short-term tine horizon discourages a more strategic approach to budgeting and
financial planning, which would take future needs into account.
There is a disconnect between financial planning and on-the-ground conservation needs. The links
between financial and conservation planning remain tenuous. There is limited communication
between finance/ budget units and conservation managers. Most PAs do not integrate their
financial and management planning processes, and therefore have little idea of what funding is
required to deliver on core conservation activities and objectives. PAs do not follow output-based
or activity-based approaches to budgeting, but rather prepare financial plans according to
administrative expenditure categories. Spending tends to be focused on basic running costs and
staffing, and activities that have the greatest importance in conservation terms are not
necessarily accorded the highest priority when funds are allocated.
There are weak links to development planning and conservation incentives in broader PA
landscapes. Land and resource management regimes within and outside PAs are subject to
separate institutional, planning and financial arrangements, and are often driven by different (and
sometimes even conflicting) policy goals. NWCD’s management and budgetary jurisdiction
extends only within PA boundaries. Meanwhile, the Regional and State authorities and other line
ministries that are mandated to manage and develop the broader PA landscape are not
responsible for funding or implementing biodiversity conservation activities. As a consequence,
few measures are in place which attempt to integrate conservation and development goals, offset
the local opportunity costs of PAs, address the economic threats to biodiversity, promote
sustainable livelihoods, or provide positive incentives and rewards for conservation.
xvi
Opportunities & strategic entry points for enhancing PA financing
A number of recent shifts in Myanmar’s institutional, policy, economic and investment context
potentially lend support to efforts to enhance PA financial sustainability. Key strategic opportunities
and entry points include:
Existing and emerging legislation in Myanmar both demands and enables a variety of new
environmental financing measures. These include market-based, user-pays and incentive
mechanisms as well as the proposed Environmental Management Fund. Meanwhile, a precedent
has been set of establishing ‘other accounts’ to absorb, retain and administer own-source
revenues in other sectors.
MOECAF is currently in the process of developing several new financial instruments and
procedures which have relevance to, or could potentially generate funding for, PAs. These include
a REDD+ financial management system and benefit-sharing mechanism, payments for ecosystem
services, and an Environmental Management Fund.
Fiscal decentralisation forms a cornerstone of the government’s current public financial
management reform process, and systems for a medium-term fiscal framework, improved cash
and debt management systems are emerging. As well as opening the door to more streamlined
and integrated procedures for PA financial planning, these developments may offer opportunities
for NWCD to engage much more closely with Regional and State governments, and – potentially –
Opportunities and strategic entry points for enhancing PA financial sustainability
xvii
to develop a variety of cost-sharing, revenue-sharing and joint management arrangements with
them.
Myanmar’s economy has opened up considerably to the private sector and outside investors over
the last five years, and is in the process of negotiating the terms and safeguards under which
these activities will take place. In addition to mandatory payments and fees, several developers
have indicated their interest in contributing voluntary funding to environmental activities.
A sizeable (and rapidly growing) body of externally-funded conservation projects has been
initiated over recent years, and a significant number of international organisations and domestic
NGOs are involved in PA management in Myanmar. These inflows of funding, in-kind
contributions and technical assistance provide the opportunity to pilot, test and support the
development of new funding mechanisms and innovative approaches to financial planning and
administration .
Potential areas for further scoping, elaboration & follow-up
Various policy instruments are available with which to address the financial constraints described
above, which also respond to and build on the identified opportunities and strategic entry points.
Three categories of closely linked and mutually interdependent PA sustainable financing measures
and instruments are identified and presented for consideration by MOECAF and possible follow-up.
PA sustainable financing measures and instruments with potential for further follow-up and
development
measures to enhance revenue
retention & promote direct
reinvestment in conservation
conservation trust fund / extra-budgetary fund
revenue retention formulae & benefit-sharing agreements
fiscal decentralisation & deconcentration to sub-national levels
measures to increase the size
and diversity of PA financing
sources & funding portfolios
debt-for-naturefiscal earmarking & transfer sectoral & subnational mainstreaming
payments for ecosystem servicesresource fees & user charges green products & markets
green investments & bondsjoint ventures & business partnerships capital & credit funds
corporate funding, including cost-sharing & biodiversity offsets concessions & leases
measures to streamline PA
financial planning, costing
& allocation procedures
integrated PA management / business planning
joint planning of budgets for conservation and development activities in broader PA landscapes
output / activity-based costing & budget calculation guidelines
Measures to increase the size and diversity of PA financing sources and funding portfolios are based
on the introduction of additional income streams and revenue sources at national and/or site levels.
A wide variety of mechanisms could in principle be used to generate funding for PAs, including
market-based instruments (such as user fees, PES and green markets), enhanced allocations from the
public budget (such as fiscal transfers, mainstreaming into sectoral and subnational and subnational
budgets and debt-for-nature swaps), private sector engagement (such as donations, cost-sharing,
biodiversity offsets, concessions and leases), and investment support (such as joint ventures,
business partnerships, bonds, capital and credit funds). This list includes already-existing and
emerging revenue sources which have the potential for further development and scaling-up (such as
xviii
user fees, PES, corporate funding and joint ventures), as well as mechanisms which have proved
successful in other countries but have not yet been tried in Myanmar.
Measures to enhance revenue retention and promote direct reinvestment in conservation are
primarily targeted towards ensuring that a greater share of income is returned to PAs as direct
funding. The primary mechanism by which to accomplish this would be to establish some form of
permanent fund that could attract, absorb, retain, administer and allocate conservation financing
beyond (and in addition to) the routine annual public budget process. Many different design options
exist, ranging from full government management through to an independent external structure,
incorporating various combinations of sinking, revolving and endowment fund aspects, and serving
to channel funds to a variety of potential targets and beneficiaries. The proposed Environmental
Management Fund and associated PES/REDD+ payment systems may offer concrete opportunities. It
will also be necessary to identify appropriate revenue retention and benefit-sharing formulae, and
investigate how improved revenue retention can be best accomplished in the light of the bigger-
picture fiscal decentralisation and deconcentration processes that are currently ongoing in Myanmar.
Measures to streamline PA financial planning, costing and allocation procedures deal with the need
to ensure that improvements in the financial status of PAs enhance on-the-ground management
effectiveness and delivery of conservation outcomes. The development of business plans as an
integral component of PA management plans aims to match funding to conservation priorities, while
the harmonisation of budgets for conservation and development activities in the broader PA
landscape is seen as an opportunity to address the need to cover the opportunity costs of PAs and
set in place effective conservation incentives and reward systems for local land and resource users.
Meanwhile, output-based or activity-based costing is a way of ensuring that PA budgets reflect
conservation needs, and are sufficient to cover the expenditures that are required to deliver on
them.
xix
Executive summary to Part II
This second section of the document reports on a strategic review carried out to support the
development of a sustainable finance strategy for Myanmar’s PA network. It builds on the findings of
the first section of the document, where we identified needs, niches and entry points for
strengthening PA financial sustainability. The report elaborates concrete options for the development
of the selected measures, specifies enabling conditions and requirements for their implementation,
and compiles a roadmap of suggested actions for strengthening the financial sustainability of the PA
system.
Relevance and potential of different PA revenue and income sources
A wide range of innovative mechanisms for financing PAs have emerged over recent decades, and
are now commonly used in other parts of the world. These aim to supplement conventional funding
sources (such as government budgets and international grants) and diversify non-budget income
streams, so as to make PAs more financially independent, stable and secure over the long-term.
Eight PA revenue and income sources are considered to have high or medium potential for further
development in Myanmar: direct user fees and service charges; voluntary levies and surcharges;
payments for ecosystem services; cross-sectoral fiscal transfers; and sub-national fiscal transfers;
corporate sponsorship and advertising; biodiversity offsets; leases, concessions and joint ventures.
levies & surcharges
on other products
percentage or flat fee levied on nature-related goods &
services or to capture consumers’ interest in conservation
direct user fees
& service charges
charges paid for extractive and non-extractive
uses of PA land, resources and facilities
corporate sponsorship
& advertising
cash or in-kind (technical advice, training, professional services,
equipment, infrastructure, etc.) contributions to PAs from companies
biodiversity offsets support to species & habitat conservation or restoration to balance or
compensate for unavoidable biodiversity damages caused elsewhere
payments for
ecosystem services
cash or in-kind fees collected from beneficiaries of ecosystem services,
channeled as rewards or compensation to land & resource managers
cross-sectoral fiscal
earmarking & transfers
allocation of all or portion of public revenues from
taxes and other charges generated by other sectors
sub-national ecological-
fiscal transfers & retention
redistribution of public revenues from central to subnational
level based on provision of public benefits through PA system
leases, concessions
& joint ventures
devolution of management of particular PA functions, services or
facilities to external agencies with payment and/or profit share.
xx
Possible scope, role and architecture of a long-term PA fund
Over the last two decades or so, PA funds have been established in many countries and sites across
the world. Developing a long-term fund (or funds) in Myanmar could assist greatly addressing the
barriers to PA financial sustainability. The main purpose would be to attract and retain a more
diversified funding portfolio, thereby ensuring a secure, stable and targeted flow of financial
resources that would supplement existing Union budget allocations and externally-supported
projects. It could provide a mechanism to facilitate flexible, coordinated and long-term approaches to
planning, promote greater stakeholder participation, and ensure that the full range of PA
conservation costs and cost-bearers are compensated.
Three PA fund options are identified as having potential for further development in Myanmar, which
could supplement, complement and support the government budget (the primary long-term PA
funding mechanism):
Extra-budgetary government fund to earmark, retain and administer fiscal revenues and other
government and external contributions to cover NWCD’s core costs of maintaining PAs as
functioning and viable institutions;
Multi-donor sector support fund to coordinate externally-funded grant-based projects and donor
support to the PA sector in Myanmar, and ensure that projects are planned, funded and
implemented according to the highest international and national conservation priorities; and
Independent trust fund to make available funding to support biodiversity conservation in and
around PAs to activities and groups which are additional and complementary to MOECAF’s
spending and mandate.
endowment, sinking, revolving/replenishable
constituted as non-government or private
entity with multi-stakeholder management
development assistance, foundations,
corporate sector, bonds & investments, etc.
generating, retaining and allocating
sufficient funding to cover core
central and site-level costs for NWCD
and PA authorities
revolving/replenishable
managed within MOECAF as
special account or off-budget fund
PA revenues, non-PA levies, fiscal transfers,
PES, public budget, grants & donations, etc.
sinking, with capacity to be replenished
bilateral, multilateral and governmental
MOECAF projects and sector support, etc.
joint management between MOECAF,
MFAR, MNPED and donor representatives
supporting spending by the local
authorities and line agencies that are
mandated to manage and develop
the broader PA landscape
Improving availability of funding for
activities carried out by civil society,
the private sector and researchers in
support of PA conservation
ensuring sufficient incentives and
rewards to enable & promote
sustainable livelihood options for
communities living in and around PAs
Independent trust fund
Extra-budgetary government fund Multi-donor sector support fund
the weight of line represents the likely priority accorded to different funding targets and beneficiaries
xxi
Enabling conditions and next steps for taking PA sustainable financing forward
In total, twelve priority PA financing measures are identified which can serve to increase the size and
diversity of PA financing sources and funding portfolios, enhance revenue retention and promote
direct reinvestment in conservation, and streamline PA financial planning, costing and allocation
procedures in Myanmar.
A phased approach is proposed to taking PA sustainable financing forward. Over the short-term, it is
recommended that actions should focus on building the information, awareness and support base,
and commencing the strategic planning, design and demonstration activities, that are required to
initiate the identified priority financing mechanisms. This will lay the foundation for a medium-term
set of actions intended to operationalise, institutionalise and scale-up new PA financing measures.
It is suggested that the sustainable financing measures are initiated at both site and national levels
simultaneously. The aim is to set in place two strands of mutually reinforcing actions which will
together serve to demonstrate, test and embed new approaches to PA financial planning, fund
generation and administration.
xxii
short-term (1-2 years)
identify
demonstration
PAs
establish
national
PA finance
working group
cross-sectoral and sub-
national fiscal transfer
mechanisms negotiated
for key sectors and
States/Regions
medium-term (3-5 years)
draft guidelines &
procedures on PA
financial planning
developed and being
tested at key sites
multi-sector dialogue
initiated on cross-
sectoral and sub-
national fiscal
transfers
feasibility of fund
architecture and
capitalisation options
assessed & discussed
legal & institutional
support, gaps and
needs for additional
provisions identified
cross-sectoral, multi-
stakeholder dialogues
on PA financing needs
& options initiated
targeted business
case for PA financing
measures compiled
regional experiences
in PA sustainable
financing shared
capacity & training
needs and delivery
mechanisms assessed
formal & informal training
& capacity development
in PA financing underway
continuing sharing of
experiences, best
practices and lessons
learnt at national &
regional levels
continuing cross-sectoral,
multi-stakeholder
platforms on PA financing
new and revised
regulations & legal
provisions under debate,
consultation and drafting
PA fund(s) approved, are
commencing operation,
with initial capitalization
& revenue flows on track
agreements in place and
implementation of
financing measures
commenced at
demonstration sites
financial planning
guidelines adopted and
being rolled out
across PA network
integrated PA financial
budgeting, reporting &
monitoring systems in use
system-wide PA
sustainable financing
plan developed
needs, niches &
concrete options
identified for piloting
of financing measures
at site level
develop
dedicated,
long-term PA
fund
mechanism(s)
build
communications,
awareness &
capacity
on PA financing
pilot priority
financing
measures &
planning
approaches
strengthen legal
& institutional
basis for
PA sustainable
financing
1
PART I
Assessment of financing status, trends,
constraints & opportunities
2
1 Introduction:
background to the assessment
Objectives, scope and content
This document has been produced for the Wildlife Conservation Society (WCS) as part of a
strategic review of protected area (PA) financing status, needs and options in Myanmar. The
overall objective is to support the development of a sustainable finance strategy for the national
PA network. It is also envisaged that the findings of the review will serve to guide the work of a
National Sustainable Finance Working Group, to be established by the Forest Department (FD) of
the Ministry of Environmental Conservation and Forests (MOECAF) and other government
agencies during the course of the GEF-funded Strengthening Sustainability of Protected Area
Management in Myanmar project.
This is the first of three deliverable outputs. It reports on PA financing status, trends, constraints
and opportunities. The second output is a presentation on the study findings. Following on from
this, a third document will elaborate concrete options and instruments for the future sustainable
financing of the PA network. The current report contains four chapters:
Chapter 1 lays out the objectives and scope of the report, and provides a working definition
of PA financial sustainability;
Chapter 2 looks at institutional, policy, legal and administrative aspects of PA financing. It
describes the procedures and processes for requesting, allocating and administering public
funds, and summarises the main stakeholders and decision-making processes that determine
budget decisions;
Chapter 3 assesses past and current PA expenditures, revenues and funding sources in
quantitative terms, makes a qualitative assessment of likely future financial flows, and
provides a rough assessment of possible PA funding gaps under different management
scenarios; and
Chapter 4 draws conclusions about the key funding needs and financial constraints which
serve as barriers to effective PA management, and identifies opportunities, strategic entry
points and potential mechanisms for strengthening PA financial sustainability, to be discussed
with MOECAF and other key stakeholders, and then further elaborated in the second
deliverable output of the assignment.
The report is based on meetings and consultations held January and February 2015 in Nay Pyi
Taw and Yangon. These involved government staff from MOECAF and other ministries, as well as
representatives from a variety of national and international NGOs working in biodiversity
conservation and protected areas, bilateral and multilateral development agencies, research and
academic organisations. An extensive literature review was also carried out, and relevant data
3
and statistics on public budgets and expenditures, international projects and other funding flows
to PAs in Myanmar were collated and analysed.
How PA financial sustainability is defined
The assignment responds to the clear and urgent need to address the funding shortages that
have long been observed in relation to Myanmar’s PAs, and which serve as a major barrier to
biodiversity conservation. The terms of reference for the study note that current budgets are
“still far short of what is required, and without sufficient funding Myanmar’s protected area
network will not be able to effectively protect the globally important resources it was
established to conserve”. The study intends to provide “one step towards ensuring that the
protected area network in Myanmar will have a robust sustainable financing strategy to ensure
that these resources survive for future generations”.
Funding challenges are mentioned repeatedly in the various policies, strategies and plans that
govern biodiversity and PAs in Myanmar. Inadequate budgetary resources are cited as a key
constraint to conservation in both the 1995 Forest Policy and the 2009 National Sustainable
Development Strategy (NCEA 2009). In a similar vein, the Biodiversity Strategy and Action Plan
for 2012-20 suggests that low investment is one of the major underlying causes of ineffective
biodiversity conservation in the country (MOECAF 2011), a point that is also given emphasis in
the 2013 REDD+ Readiness Roadmap (UN-REDD 2013). The 2013 Biodiversity Conservation
Investment Vision enumerates a list of PA funding constraints, and recommends that new
mechanisms need to be developed to increase environmental financing (WCS 2013). Most
recently, the summary on nature and biodiversity conservation in Myanmar prepared last year
by the Nature and Wildlife Conservation Division (NWCD) states that “limited funding for
protected area management and biodiversity is the major constraint” (NWCD 2014).
However, while a great deal of attention has been paid to the amount of funds that is being
spent on PAs, much less consideration has been given to the host of other financial conditions
and forces that influence conservation effectiveness. It is important to note at the start of this
report that the current assignment takes a far broader view of PA financial sustainability than
funding alone. Focusing only on the quantity of money being spent on PAs runs the risk of failing
to identify (and, ultimately, neglecting to address) some of the most binding financial constraints
and pervasive barriers to biodiversity conservation and PA management effectiveness. Thus, for
the purposes of this assignment, PA financial sustainability is understood as:
“the ability to secure sufficient, stable and long-term financial resources, and to allocate
them in a timely manner and in an appropriate form, to cover the full costs of protected
areas and to ensure that protected areas are managed effectively and efficiently with
respect to conservation and other objectives”. (Emerton et al. 2005)
4
In short, financial sustainability is only seen to be
possible if there are strong and effective institutions
for PA management, and a solid framework for
planning and implementing biodiversity conservation
within which financial measures are embedded. The
key point is that there are many ways in which
financial conditions and issues act as a constraint to
PA management, which extend beyond a simple lack
of funds. The amount of budget available is
undoubtedly an important and necessary condition
for PAs in Myanmar to be managed effectively, but
by itself it is unlikely to be sufficient.
Briefly, there are seven particularly important
financial conditions that are required for effective PA management, and which form a part of the
financial sustainability issues investigated in this report (Figure 1):
Funding: Securing an adequate amount of money to cover PA costs. This is of course
absolutely vital. Unless a PA has access to sufficient financial resources, it will be impossible
to manage it effectively or to undertake the range and level of actions that are required to
conserve biodiversity;
Diversity: Building a broad funding portfolio which spreads risk. Relying on just one or two
source of funds (such as the public budget, foreign funding or tourism income, for example) is
unlikely to generate sufficient funds to meet requirements. It is also very risky. Building a
portfolio that draws on several different sources means that if one diminishes or fails, there is
other funding available to plug this gap;
Security: Ensuring stable and secure budgets for the future. It is necessary to ensure that
funding is guaranteed over a longer time frame than the annual government budget cycle or
the typical project period of three to five years. It is difficult to plan for long-term biodiversity
conservation without knowing how much funding will be available in the future;
Links to conservation: Ensuring that PA management needs and biodiversity conservation
goals drive fund-raising, financial allocation and spending. Sustainable financing is not an end
in itself, it is a means to an end: more effective biodiversity conservation. Funding is unlikely
to be fit to purpose if is not directed towards the goals and activities which are of the highest
priority for biodiversity conservation, and which have – ideally – been articulated in the PA
management plan. There is often little connection between the budget requests or funding
proposals that are prepared, and the actual needs to fund on-the-ground biodiversity
conservation activities in the PA;
Administration: Improving cost-effectiveness, allocation and spending. Even when funds are
generated, they are not always spent effectively. Reducing costs, improving cost-
Figure 1: Key conditions for PA financial
sustainability
5
effectiveness and targeting expenditures wisely are also key components of sustainable
financing;
Planning: Taking a strategic approach to identifying funding needs and options. Just as
managers in business are expected to understand financial issues, so PA managers are
increasingly required to develop the same types of competencies. They need to go beyond
traditional budgeting and cost accounting. This involves a strategic process which identifies
the financial constraints to effective PA management and how to overcome them, plans how
funding will be sourced, administered and used, and specifies a series of financial targets and
milestones in relation to biodiversity conservation; and
Enabling conditions: Strengthening the broader economic and legal context. A wide range of
external financial, economic and legal factors have the potential to influence PA management
effectiveness. These range from subsidies, price distortions and market failures in other parts
of the economy which prejudice against biodiversity, through weak laws which do not
support more sustainable financing, to a low awareness of the economic value of protected
areas among economic and development decision-makers. All of these broader conditions
influence PA funding, and the financial and economic incentives that people have to conserve
biodiversity.
Another important issue is that achieving financial sustainability is a far more complex challenge
than just covering the direct costs of PA management (such as equipment, staffing,
infrastructure, patrolling, maintenance, scientific research and surveys). This is of course a very
important goal – and is most definitely required for effective biodiversity conservation. But
assessments of PA costs and financing needs also consider what economists term “opportunity
costs”: the economic activities that are diminished or foregone due to the existence of PAs.
Unlike direct costs (which are borne by the agency responsible for managing the PA),
opportunity costs are typically incurred by the people who use the lands and resources in and
around PAs. In most cases adjacent residents and local authorities both expect and demand that
sufficient development benefits are seen to accrue to them from the PA that lies on their
doorstep. If this is not the case, they are likely to be unwilling to support biodiversity
conservation, and may continue to degrade and encroach on PAs. While opportunity costs may
not always require funding in terms of money, they remain a cost that must be budgeted for and
covered.
It should be noted that this assignment is concerned primarily with the first six bullet points
listed above. Its main focus is on improving the financial sustainability of the government
institutions that are mandated to manage National Parks, Wildlife and Bird Sanctuaries PAs in
Myanmar, in other words site-level PA authorities and the NWCD, FD and MOECAF.
6
2 Procedures and provisions for PA financing:
institutional, legal & administrative aspects
Before assessing how much money is actually being spent on managing PAs, it is first of all
necessary to understand the ways in which government budgets are formulated, requested and
allocated in Myanmar, how funds are administered, and which financial sources are available to
PAs. This chapter looks at institutional, policy, legal and administrative aspects of PA financing.
The main findings are:
Only a small range of PA funding sources are at present enabled by law.
As a result, PAs depend wholly on the Union budget for their core funding, supplemented
by externally-funded projects.
Even though the law permits PAs to earn a limited variety of revenues, there are currently
no systems in place that would allow this income to be retained and reinvested in
biodiversity conservation; all earnings must be remitted to the Union Fund.
Although ‘other accounts’ which serve to absorb and manage all or a portion of own-
source revenues (and are excluded from routine fiscal reports) are held by other line
ministries and departments, no such arrangements exist for MOECAF.
While the Environmental Conservation Law 2012 calls for an Environmental Management
Fund to be established, and emerging PES, REDD+ and private investments similarly
require some form of extra-budgetary mechanism for administering and allocating PA
funding, none of these arrangements have yet been operationalised in practice.
How budgets are requested and approved
The Nature and Wildlife Conservation Division (NWCD) of the Forest Department (FD) of the
Ministry of Environmental Conservation and Forestry (MOECAF) is the government agency that
is mandated to oversee PA management, and is directly allocated an earmarked budget to do so.
This comes from Union funds (no PAs are currently funded via State or Regional budgets or
managed by State or Regional governments). As of the financial year 2014/15, 20 out of the 24
PAs managed by NWCD received a budget
1
; the remaining four
2
received no public funding
(although one of these, Taninthayi Nature Reserve, is funded from private sector sources − as
described further below). In addition, 11 PAs
3
fall under the jurisdiction of Township Forest
Departments, but receive no dedicated budget allocation for conservation activities. One of
1
Chatthin, Htamanthi, Hukaung Valley, Indawgyi, Inlay Wetland, Kyaikhtiyoe, Lawkananda, Mainmahla Kyun, Minzontaung,
Moyungyi Wetland, Panlaung Pyadalin Cave, Pidaung, Shwe U Daung and Shwesettaw Wildlife Sanctuaries; Alaungdaw Kathapa,
Hkakaborazi, Lampi Island Marine, Natmataung, and Popa Mountain National Parks; and Rakhine Yoma Elephant Range.
2
Hponkanrazi, Bumhpabum and Kyaukpantaung Wildlife Sanctuaries and Taninthayi Nature Reserve.
3
Kahilu, Kelatha, Minwuntaung, Moscos Kyun, Mulayit and Thamihla Kyun Wildlife Sanctuaries; Pyin Oo Lwin, Taunggyi and
Wetthikan Bird Sanctuaries; Loimwe and Parsar Protected Areas.
7
these, Thamihla Kyun Wildlife Sanctuary, also receives some support from the Department of
Fisheries.
The 2008 Constitution establishes the basic terms and conditions under which public funds are
managed and administered in Myanmar. There is currently little additional guidance and no
other standalone regulations on public financial management, meaning that the actual
implementation of the budget process is largely guided by prior practice (MFAR 2013; World
Bank 2013). MOECAF observes the same systems and procedures as any other line ministry
when requesting and receiving Union funds
4
. The budget process follows a fixed annual calendar
and decision-making hierarchy, according to clear and generally well-understood procedures,
roles and responsibilities (Figure 2, Figure 3).
Figure 2: Chain of public budget submission and approval
MOECAF
Vice-President,
Union Budget
Financial
Commission
Office of
the President
Pyidaungsu Hluttaw
(Union Assembly)
revenue &
expenditure
estimates
consolidated
into unified draft
MOECAF budget
scrutinises
approves
PA
NWCD
FD
adopts
submits
confirms
checks & advises
proposes & negotiates
MFAR (recurrent budget)
MNPED (capital budget)
4
Beginning 2012/13, States and Regions have had separate budgets from the Union (although significant transfers continue to be
made from the latter to the former). The procedures for preparing, requesting and approving the allocation of funds from
State/Region budgets follows a parallel process to that described for the Union budget, with requests being transmitted through the
Vice President for the State-Region Budget to the Financial Commission, and then onwards via the Prime Minister of the relevant
State/Region to the State or Region Hluttaw for final confirmation and announcement.
8
The process commences in August, when MOECAF receives budget instructions, estimate forms
and calendars from MFAR. Projections of the following year’s revenues and expenditures are
compiled for each protected area, and checked (and revised as necessary) by the budget/finance
units of NWCD and FD. PA financial estimates are combined and progressively merged upwards
into the NWCD and then FD budgets, and, ultimately, become a component of the consolidated
draft budget for MOECAF as a whole. Over the course of October and November MOECAF’s
budget proposal is checked, negotiated and adjusted as appropriate at the ministerial level,
under the advice of the Ministry of Finance and Revenue (MFAR) and the Ministry of National
Planning and Economic Development (MNPED)
5
.
In November, MOECAF’s draft budget is submitted for scrutiny to the Vice President who is
mandated to deal with the Union Budget, along with the budgets of all the other units which are
funded from Union sources. It then passes to the Financial Commission for review and approval.
The Financial Commission is chaired by the President with membership of the Minister of
Finance and Revenue and States/Regions. In December, the recommended Union budget is
presented to the Cabinet via the Office of the President. Parliamentary debate (and usually some
modification) takes place between January and March, before the consolidated budget is
eventually adopted by the Union Assembly by March 31 (the last day of the financial year). The
Union Budget Bill is then signed by the President and becomes law. The Union Budget Law
(issued annually) lays out the receipt and expenditures, reserve funds and loan procedures for
Union Ministries and Departments, State Administrative Organisations, State-owned Economic
Organizations and the various other agencies and committees that will receive Union funds
during that year.
Figure 3: Annual calendar for public budget preparation
5
Recurrent and capital budgets are determined separately: the Budget Department of MFAR is responsible for reviewing, collating
and consolidating the recurrent budget, while MNPED is responsible for the capital budget and for reviewing all investment
proposals prior to their entry into the budget.
9
How funds are allocated and transferred
Once the Union budget has been adopted, the approved budget allocation is assigned to
MOECAF. The Ministry is the budget holder or recipient of funds from the Union budget (the
Group Accounting Head, in budgetary terminology
6
) and is ultimately accountable for reporting
on spending. Within MOECAF, funds cascade downwards via an internal allocation process,
through the FD and NWCD, to PAs (
Figure 4). The flow of funds from MFAR to MOECAF is managed through two intermediaries: the
Central Bank of Myanmar (CBM) that operates only at the central level, and the Myanmar
Economic Bank (MEB) which provides a retail banking service to government bodies (UNICEF
2014b). Union funds are accessed through the State Fund Account at the CBM, from where they
are allocated to each budget holder (including MOECAF) and credited to an account held at the
MEB after the submission of a letter of sanction from MFAR. Drawing limits are specified which
give rights to spend up to a certain predetermined level. Applications are made quarterly for an
allotment of the total annual sanction.
Figure 4: Request and approval process for budget allocation and transfer
downward flow of
funds and approval to
spend according to
agreed annual
workplan & budget
State Fund Account, Central Bank of Myanmar
MOECAF Account, Myanmar Economic Bank
MFAR
letter of sanction
authorising
budget release
to approved limit
approved
budget
credited to
quarterly application
for allotment of approved
drawing limit
funds released
quarterly up to
approved
drawing limit
request for sanction
MOECAF (Group Accounting Head)
PA (Attendant Minor Head)
NWCD (Minor Head)
FD (Major Head)
For centralised deparments and deconcentrated allocations, sanctions and drawing limits are
authorised and made internally, and are provided directly from the ministry budget. This is, for
example, how PA budgets are currently managed. A slightly different system operates for
decentralised units of government. Here, funds for sub-national activities are provided to State
and Regional governments, which then allocate sanctions to the Regional and Township offices
of the ministries according to the regional budget (UNICEF 2014b). For example, State/Region
Forest Departments operate with direct accountability to MOECAF but in consultation with the
State/Region Minister of Forestry and Mines. A similar system is in the process of being put in
place for Environmental Conservation Departments (ECDs): MOECAF opened five subnational
6
In budgetary organizational terminology, MOECAF is the Group Accounting Head. Departments (such as FD) are Major Heads,
Divisions (such as NWCD) are Minor Heads, and further sub-divisions (such as PAs) are Attendant Minor Heads.
10
ECDs in 2013/14, with another five to be opened this year and the remaining four regional
offices planned for 2016/17, followed by 67 district-level ECD offices and 336 township offices
due to be established from 2016 onwards (Thet Aung Lynn and Oye 2014).
Once budget allocations are decided and sanctions are issued they are fairly immutable,
although it is reported that budget holders have considerable flexibility in moving money around
at the minor head (i.e. division) and subhead (i.e. primary expenditure classification) level, and
appear to exercise this discretion (World Bank 2013). In relation to PAs, this might for instance
enable the reallocation of resources between different on-the-ground conservation activities but
not, for example, between staffing, equipment and utilities. It would also make it difficult to
reassign resources that have been earmarked for other FD divisions or MOECAF departments.
Any changes over and above the approved budget limit (or between major heads and primary
categories of expenditure) can only be requested once during the year. A budget readjustment is
carried out towards the end of September, when ‘supplemental’ funds may be requested to
cover expenditure overruns and revenue shortfalls. As is the case for the main annual budgeting
process, PA supplemental budget requests must follow an upward chain of consolidation
through NWCD, FD and MOECAF. The supplemental Union budget estimate (for the current
year) is presented to parliament for approval shortly before the main budget (for the following
year). Once approved, the revised budget allocations are signed off by the President and
published as the Supplementary Appropriation Law of the Union for that year.
How PA budgets are devised
As is the case with other line ministries and departments, MOECAF devises its own expenditure
proposal and budget ceiling (UNICEF 2014a). The budgetary requirements of each component
unit (including PAs) are nested within the overall ministerial figures. Two budgets are prepared:
the capital budget (overseen by MNPED) and the recurrent budget (overseen by MFAR). The
capital budget covers three main categories (project investment (construction), works
investment (machinery and equipment), and office equipment), while there are seven classes of
recurrent expenditures (remuneration, travel allowances, goods and services, maintenance,
transfer payments, entertainment expenses and reserve fund).
In theory, budgeting and development planning processes are closely intertwined. The
government works on a cycle of annual plans, short-term five-year plans (the current planning
period runs from 2011/12 to 2015/16) and a long-term National Comprehensive Development
Plan (2011-2031). The National Planning Law, which is presented to Parliament a few weeks
before the budget, sets out the year’s targets for the economy as a whole and by sector, outlines
each government agency’s policies and activities, and presents annual project proposals and
investment estimates for the state-owned sector.
11
Thus each PA’s annual budget submission reflects its stated workplan for that year, which should
in turn be guided by the targets set out in the PA management plan (if it exists) and other,
higher-level, plans for the forest and environment sector as well as the national development
plan for Myanmar. However, although a variety of short, medium and long-term strategies and
plans have been developed which touch on PAs and biodiversity conservation (for example the
National Forest Masterplan 2001/02-2030/31, National Sustainable Development Strategy 2009,
National Biodiversity Strategy and Action Plan 2011-30, 2014 Biodiversity Conservation
Investment Vision), these have only a limited bearing on the annual workplans and budget
proposals which are prepared for each PA. In practice, the links between strategic planning and
budget preparation however remain fairly weak (World Bank 2013; UNICEF 2014b). For the most
part, budgets are organised along administrative lines, rather than according to programmes,
activities, or outputs. (World Bank 2013).
In reality, it is staff numbers that tend to exert the greatest influence over PA workplans and
budgets (and, as discussed further in Chapter 3, account for by far the largest share of
expenditures). The level and scope of site-level activities that can actually be carried out in any
given year depends largely on the workforce that is available. However, current policy means
that, overall, the public sector is operating with only around two thirds of its full complement of
staff. For PAs, just 51% of approved positions are filled. This severely constrains PAs’ ability to
mobilise and move funds. Even if additional funds were available, it is uncertain whether PA
workplans could be expanded without increasing the number of staff positions. For this reason,
it is common for NWCD to reduce the annual workplans and budget requests that are submitted
by PAs before onward consolidation into the MOECAF annual budget request, due to the fear
that it will not be possible for the specified funds to be fully absorbed or spent over the course
of the year. Quarterly recurrent spending targets place an additional (downwards) pressure on
PA budgets: there is a risk that if MOECAF does not meet the expenditure targets it has set itself,
then the unused balance will be removed and returned to the Union budget. In the worst case,
future budget requests may be cut. A fairly conservative stance thus tends to be taken when PA
workplans and budgets are formulated.
Standardised formulae are used to estimate staff-related expenditure needs, and are also
applied to some other core conservation activities. Some of these cost norms are common to all
government agencies (for example daily subsistence allowances for public servants), while
others (such unit costs for tree planting, boundary demarcation, etc.) are formulated by the
finance sections of NWCD, FD or MOECAF, under the supervision of MFAR. Most are only revised
at very infrequent intervals (if at all), meaning that they are commonly outdated and often
unrealistically low. This tendency towards under-costing is compounded by the currrent lack of
medium-term expenditure planning for the public budget. Neither MFAR nor MNPED make
forward estimates of key aggregates and indicators beyond the next fiscal year, meaning that
little guidance is available to MOECAF as to what can be expected in terms of future expenditure
ceilings, resource constraints, or expected inflation (Asia Foundation 2014). The costs assigned
to administrative units are therefore usually constructed by inflating the previous year’s
12
allocation by the expected nominal growth in GDP that is laid out in the national plan (World
Bank 2013; UNICEF 2014a,b).
How PA revenues are generated and administered
Unusually (as compared to other countries), neither the Protection of Wildlife and Conservation
of Natural Areas Law 1994 nor the 2002 Rules Relating to the Protection of Wildlife and
Conservation of Natural Areas make any reference to the financial arrangements under which
PAs are to be managed, or provide any list of permissible funding sources. They do, however,
give details about the revenues that can be generated from PA lands and resources. Thus, the
Protection of Wildlife and Conservation of Natural Areas Law 1994 allows for land rental and
service fees to be charged, for hunting licenses to be issued (outside PAs, and for non-protected
species), for zoological and botanical gardens to be licensed and operated as joint ventures
between the government and private individuals/companies, and for a variety of penalties and
fines to be imposed for carrying out actions which are prohibited under the law or which cause
loss and damage to the Forest Department.
The 2002 Rules relating to the Protection of Wildlife and Conservation of Natural Areas further
elaborate the activities for which fees will be charged. It also contains some guidance on how
the resulting revenues should be used. Article 20 for example calls for the “sharing of profits
from commercial activities based on international research based on the use of wild animals and
plants obtained in Myanmar”, while Article 23 specifies “making plans and carrying out eco-
tourism and reinvesting part of the income for the development of Nature Reserves”.
Various other references are made in the 2002 Rules to the payment of fees for activities carried
out in PAs, including “scientific research on totally protected wild animals” (Article 30), “capture
of protected wild animals to be raised on a commercial basis” (Article 35), for the “operation of a
zoological garden or botanical garden” (Article 56). Article 68 requires that the Courts should
impose penalties for environmental offences as well as the payment of compensation for losses
to Forest Department property, and Articles 70 and 72 allow for the handover and sale of
confiscated animals, plants and related equipment and vehicles by State, Divisional or Township
Forest Officer. Article 20 of the Forest Law 1992 allows for the Direct General to determine the
rate of royalty and other fees for the extraction of forest produce. Article 51 of the Forest Law,
Article 45 of the Protection of Wildlife and Conservation of Natural Areas Law and Article 75 of
the Protection of Wildlife and Conservation of Natural Areas Rules stipulate that all fees and
penalties due “are to be treated as if they were arrears of land revenue”.
The management jurisdictions and revenue-raising powers of different levels of government,
including PAs, are assigned by the 2008 Constitution, and are strictly delineated between the
Union and States/Regions. Schedule One of the Constitution (the Union Legislative List)
designates environmental protection and conservation (including forests, wildlife, natural plants
and natural areas) as a Union responsibility. Schedule Two (the Region or State Legislative List)
13
names recreation centres, zoological gardens and botanical gardens. Schedule Five lists the taxes
and revenues that are to be collected by the Region or State government (and deposited in the
Region or State fund) to include taxes collected on woods other than teak, other restricted
hardwoods and most non-timber forest products, entertainment fees, royalties collected on
freshwater and marine fisheries, as well as land revenues and water taxes, and rent and other
revenues from properties owned by and services/enterprises run by the region or state. Section
231 states that all public taxes and revenues not listed in Schedule Five will be collected by the
Union.
The Constitution is also clear about fiscal administration. All taxes and revenues are
administered via the public budget: those collected by MOECAF must be paid to the Union Fund
(as laid out in Section 231), and those collected by Region and State governments are to be
deposited in the Region or State fund (Section 254). Earnings are required to be placed into the
collecting organisation’s MEB account, from whence they are settled (along with payments)
through the CMB State Fund Account (UNICEF 2014b). Here, the key point to emphasise is that
revenues collected by government agencies (including PAs) are not routinely retained,
earmarked or used to meet own operating expenditures – public funding (including to PAs) is
normally allocated and channelled solely through the Union Fund, via the budget of the parent
line ministry (in this case MOECAF).
There is one exception to this rule. Special funds, known as ‘Other Accounts’ (OAs) may be held
to absorb and manage all or a portion of own-source revenues (for instance from user fees,
revolving funds, trust funds or donations). Examples include the retention of pre-school PTA fees
by the Department of Social Welfare (UNICEF 2014b), Ministry of Health accounts to hold
receipts from community cost-sharing, hospital equity funds and interest on trust funds,
Ministry of Public Works accounts for maintenance income, cement sales and housing rentals,
and Ministry of Education accounts for dormitory fees (World Bank 2013). Because OA revenues
and expenditures are not included in routine fiscal reports (and are therefore not shown in the
Government’s budget data) they are also relatively flexible as to the uses to which they can be
put. Other accounts are either held by the MEB (for domestic revenues) or the Foreign Exchange
Trade Bank (for foreign exchange earnings). Although they are treated as being exceptional or as
special cases, both the number and value of OAs seem to be substantial. Around 13,400 OAs
were reported to be in existence in 2011/12, accounting for receipts of MMK 2.54 trillion and
expenditures of MMK 2.26 trillion – some 44% and 28% of total budgeted revenues and
expenditures respectively (World Bank 2013). Despite the possibility, in theory, of utilising OAs
to retain and administer PA revenues, MOECAF does not currently operate any extra-budgetary
funds.
In terms of public financing, PAs thus depend wholly on subventions from the Union budget,
administered through MOECAF. PAs are however also eligible to benefit from externally-
financed projects. The Foreign Economic Relations Department of MNPED is charged with
management of all external assistance, with grants being managed by the Grant Aid Foreign
Assistance Steering Committee, chaired by the President with the Minister of MNPED as
14
secretary (Rieffel and Fox 2013). Each externally-funded project has its own special account,
governed by Ministry of Finance and Central Bank of Myanmar regulations. While discrete grants
and projects remain the main source of channelling external funding in Myanmar, four multi-
donor trust funds have to date been set up: the 3 Diseases Fund (now the Three Millennium
Development Goals Fund), Multi-Donor Education Fund and Livelihoods and Food Security Trust
Fund. No multi-source trust funds for the environment or nature conservation are yet in
operation.
New and emerging PA financing mechanisms
Several new PA funding models have recently begun to emerge, although most are still at the
design stage or in a very early phase of development. A number of agreements have been
negotiated with private sector companies to support environmental activities – mostly via
corporate environmental and social responsibility (CESR) programmes. One of these (the
Taninthayi Nature Reserve Project) directly funds PA conservation. Another example is provided
by Tokio Marine & Nichido, a Japanese insurance company, which has been funding mangrove
conservation and restoration in Ayeyarwady Division since 1998. The management of these
corporate funding sources is further described below, in Chapter 3. It is also reported (although
not documented) that preliminary discussions about the possibility of providing voluntary
funding to site-level social and environmental activities have been initiated with potential
hydropower, oil and gas, mineral and other extractive industry developers as well as with the
tourism sector.
In particular, there appears to be a growing interest in investigating ways in which corporate
contributions and commercial revenues can be retained at the Regional and State level and
reinvested in social and environmental activities. The Shan State Government is reported to
have established a ‘Fund for Poverty Reduction and Environmental Conservation’ by decree from
the Chief Minister, utilising contributions from mining developers (Thet Aung Lynn and Oye
2014). A trust fund for Inlay Lake has been in process for some time now, funded via the public
budget as well as the retention of 50% of tourist entry fees, and intended as a mechanism to
finance the 2015-25 conservation plan. An ecotourism management strategy is currently under
development that offers the potential to direct tourism-related revenue streams toward PA
management and conservation efforts, including through the development of private sector
concessions and funding arrangements (ICIMOD 2015).
There are also indications that the modalities for the management of public PA revenues and
expenditures may be in the process of being rethought. In particular, there are a number of
ongoing discussions about financial mechanisms that lay more emphasis on the ‘user-pays’
principle, incorporate some level of market-based instruments, and work through extra-
budgetary channels. As early as 1995, the Forest Policy mentioned the establishment of an
autonomous forest development fund as a planned policy measure, and raised the possibility of
generating funds through cost-sharing with other sectors which benefit from forestry such as
15
irrigation, fisheries, agriculture, tourism and energy. Most recently, the 2014 Summary on
Nature and Biodiversity Conservation highlights payments for ecosystem services (PES) as one of
the best solutions for achieving the sustainable financing of nature and biodiversity conservation
(NWCD 2014). The Environmental Conservation Department (ECD) of MOECAF has now been
mandated to investigate PES further, including legal requirements. Along similar lines, the
REDD+ Readiness Roadmap demands the establishment of a dedicated financial mechanism and
benefit-sharing arrangements for REDD+ payments, and mentions a variety of other sustainable
financing mechanisms for the forest sector such as a carbon tax, carbon offsets, PES and sharing
of timber revenues (UN-REDD 2013).
The Environmental Conservation Law 2012 provides an important entry point for the
introduction of new environmental revenue streams and the development of systems to absorb,
retain and administer funding from market-based and extra-budgetary sources. Article 7 incudes
among the duties and powers of the ECD “submitting proposals to the Committee for economic
incentive mechanisms” as well as instituting polluter pays mechanisms, soliciting funding
contributions from the beneficiaries of environmental services, and instituting cost-sharing from
resource-based businesses. Article 8 then specifies that “the Ministry shall establish an
Environmental Management Fund in the Union Budget in accord with the financial regulations
and by-laws of the Union for effective implementation of environmental conservation works in
addition to the receipt from the Union Consolidated Fund”.
The draft Environmental Conservation Rules elaborate these provisions further. Chapter V
specifies that the Environmental Management Fund will be funded via the State budget,
MOECAF income, pollution charges, payments for environmental services, cost-sharing and
benefit-sharing by resource-based businesses, as well as other sources of loans, donations, aid
and official income received by MOECAF and the Environmental Conservation Committee from
domestic and international sources. MOECAF is authorised to set appropriate levels of
environmental compensation, payments for environmental services and other contributions,
while the ECD is assigned to manage, use, transfer, account for and report on the Fund under
the guidance of the Committee. The fund is to be administered via a drawing account in any
State-owned bank, with separate sub-accounts and records as necessitated by its different
sources. The resulting funds are to be used for “special matters relating to the environmental
management, conservation and enhancement of environment for the protection of ozone layer,
biodiversity conservation, conservation of coastal environment, mitigation of and adaptation to
the global warming and climate change, pollution control, management of persistent organic
pollutants, doing research and development works relating to environmental conservation and
other environmental matters”.
16
3 PA financing status and trends:
funding sources, flows & gaps
This chapter analyses the size, composition and use of PA funding. The main findings are:
PAs are currently financed entirely from the Union budget and externally-funded projects.
Self-generated revenues remain negligible, both as a percentage of total FD earnings and
in relation to PA management costs.
An average of USD 1.9 million a year, or USD 43/km2, has been spent on PAs since 2010
7
.
Union funds contribute 41% of this figure (USD 0.79 million a year) and externally-funded
projects account for 59% (USD 1.1 million).
When calculated on an area basis, levels of external funding and NWCD spending are
similar (USD 25-26/km2/year). Direct staff costs (mainly salaries and associated
remuneration and benefits) accounted for Just under two thirds of public budget
allocations in 2014/15.
Absolute funding levels differ greatly between sites, with four PAs accounting for more
than a half of total spending since 2010/11. Only just over half of PAs receive a dedicated
public budget or have permanent staff.
More than 20 PAs currently benefit from externally-funded projects, accounting for 85% of
sites and 98% of the area under the active management of NWCD, as well as two PAs in
which NWCD currently has no staff.
While the amount of public budget allocated to PAs has risen by around 50% in real terms
over the last 5 years and externally-funded grants and projects have increased even more
steeply, there remains a critical shortage of funds.
Even though salaries dominate spending, PAs continue to face serious shortfalls in staffing:
only half of approved positions are filled. Most PAs also lack a budget for core
infrastructure, equipment, maintenance and running costs, as well as to fund key on-the-
ground conservation activities.
Public budget
In the financial year 2014/15, Union funds worth MMK 1.06 billion (USD 1.03 million) were
allocated to PAs (Table 1). PAs were thus the main component of NWCD’s budget, consuming
just over 90% of funds. While FD accounted for two thirds of MOECAF spending (MMK 13.62
billion or USD 13.29 million), the share of FD funding going to NWCD was relatively low at 8.5%
(MMK 1.15 billion or USD 1.12 million). Overall, the MOECAF budget (MMK 21.46 billion or USD
7
The analysis focuses on trends over the last 5 years – in other words since the 2010 elections, which marked the start of a transition
towards a more open economy and decentralised model for public financial management. To account for the effects of inflation and
exchange rate fluctuations and to enable the comparison and aggregation of values between years, all figures are expressed at
constant 2015 USD.
17
20.93 million) accounted for just 0.18% of total Union expenditures on line ministries and
departments (MMK 12,127 billion or USD 11.8 billion). This compares to around 5.7% for the
health sector, 11% for education and 0.29% for social welfare (UNICEF 2014b).
The share of the NWCD budget spent on PAs has changed little over the last five years at
between 80-90%, and MOECAF allocations have for the most part remained steady at around
0.2% of total Union funding to line ministries and departments (Figure 6). The exception was in
2010, the election year, when MOECAF received unusually high current and – especially – capital
budget allocations. This was almost entirely consumed by an increased allocation to FD, which
received a current budget that was almost twice as much as that given in succeeding years and a
capital budget which was more than four times higher. The share of the MOECAF budget
allocated to FD has progressively fallen over the last five years, while the portion of FD funding
spent on NWCD has generally increased. Overall, the Union budget has been rising steadily
(Figure 5), meaning that the absolute value of funding provided to NWCD and PAs has grown
since 2010. The NWCD budget increased by around a third in real terms, and PA allocations rose
Table 1: Share of environment & nature
conservation sectors in Union budget 2010-15
Figure 5: Index of real change in
environment
and conservation sector funding 2010-15
2010/11
2011/12
2012/1
3
2013/14
2014/15
Current MMK billion
Union
[1]
4,379
4,894
7,414
9,297
12,127
MOECAF
[2]
27.04
12.02
12.99
15.44
21.46
FD
[3]
24.27
9.79
10.53
9.49
13.62
NWCD
[4]
0.68
0.60
0.83
0.99
1.15
PAs
[5]
0.56
0.50
0.72
0.82
1.06
Constant 2015 USD million
[6]
Union
5,297
5,757
8,241
9,692
11,831
MOECAF
32.71
14.14
14.44
16.10
20.93
FD
29.36
11.52
11.71
9.90
13.29
NWCD
0.83
0.71
0.92
1.04
1.12
PAs
0.68
0.58
0.80
0.86
1.03
[1] Calculated from consolidated accounts presented in IMF 2014, includes current and capital expenses and net acquisition of non-
financial assets, but excluding State-owned economic enterprises. [2] from MOECAF figures, Excluding funding to Myanma Timber
Enterprise.[3,4,5] from MOECAF figures. [6] adjusted to 2015 price levels using CPI deflator from IMF World Economic Outlook
Database, April 2014, converted to USD at prevailing market exchange rate. Index of real change in environment and nature
conservation sector funding based on change in budget calculated at constant 2015 USD.
Figure 6: Proportion of Union budget allocated to MOECAF, FD, NWCD and PAs 2010-15
MOECAF in Union spending
FD in MOECAF spending
NWCD in FD spending
PAs in NWCD spending
From MOECAF data
18
by more than a half (Figure 5, Figure 7). Meanwhile, MOECAF and FD budgets also have shown a
steady – albeit slightly more modest – increase since 2011/12.
The NWCD budget is divided between the twenty PAs that are staffed and actively managed. All
have registered a general increase in Budget allocations over the last five years
8
(Figure 7,
Table 2). Absolute funding levels however differ greatly between sites, (
Table 2), with four PAs accounting for more than a half of total spending since 2010/11: Popa
Mountain Park (22%), Alaungdaw Kathapa National Park (13%), Shwesettaw Wildlife Sanctuary
(9%) and Namataung National Park (7%). A variety of factors account for these relatively high
funding levels, including conservation priority, size, tourist visitation levels and levels of staffing
and on-the-ground management. There is also a wide variation in average annual spending per
unit area, with figures ranging between USD 2 and USD 84,000 per km2 and generally (although
not exclusively) exhibiting an inverse relationship to PA size (Figure 8). Across the entire
network, an average of USD 25/km2/year of public funding has been invested in PAs over the last
5 years.
Figure 7: Index of real change in PA budgets 2010-15 (constant 2015 USD)
From MOECAF data; Index of real change in budget funding based on change in budget calculated at constant 2015 USD using CPI
deflator from IMF World Economic Outlook Database, April 2014, converted to USD at prevailing market exchange rate. Excludes
Lampi Island Marine NP as this received budget only from 2013/14.
8
Popa Mountain Park shows a slightly different growth pattern as compared to other PAs. It received an unusually high travel
budget in 2010/11 of more than MMK 175 million (USD 212,300 at today’s prices), meaning that the budget decreased in real terms
between 2010/11-2011/12. The PA budget has however risen in real terms since 2011/12.
19
Table 2: Budget allocations per protected area 2010-15 (constant 2015 USD)
Protected area
2010/11
2011/12
2012/13
2013/14
2014/15
Pidaung WS
11,036
11,403
17,791
16,763
19,202
Shwe U Daung WS
15,529
24,765
20,772
25,315
35,740
Shwesettaw WS
51,754
48,191
86,470
78,960
84,738
Chatthin WS
35,062
31,094
45,022
50,157
55,105
Htamanthi WS
17,455
22,156
45,416
52,924
49,608
Inlay Wetland WS
10,918
12,772
20,422
20,767
21,756
Moyungyi Wetland WS
13,790
16,352
22,497
20,450
26,043
Alaungdaw Kathapa NP
79,970
75,221
107,738
118,578
133,716
Popa Mountain Park
285,354
129,545
120,499
116,575
201,402
Mainmahla Kyun WS
16,575
25,406
29,245
28,917
39,225
Lawkananda WS
32,256
26,606
46,272
39,095
40,534
Lampi Island Marine NP
n/a
n/a
n/a
29,276
37,649
Hkakaborazi NP
10,938
12,295
31,549
34,982
29,552
Kyaikhtiyoe WS
7,734
17,786
16,344
18,979
27,079
Minzontaung WS
12,106
13,688
19,097
21,513
21,979
Rakhine Yoma Elephant Range
14,399
24,698
32,090
35,354
40,610
Panlaung Pyadalin Cave WS
10,668
16,960
21,254
23,476
27,076
Indawgyi WS
10,748
15,748
18,806
19,304
23,817
Hukaung Valley WS
15,334
14,701
34,403
39,199
35,531
Natmataung NP
25,611
45,409
61,651
67,897
82,853
Total
677,236
584,794
797,340
858,482
1,033,214
Average per km2
33.06
28.55
25.05
26.74
32.18
As has been mentioned in the previous chapter, MFAR and MNPED follow a short-term financial
planning horizon. No forward estimates of budget, future expenditure ceilings or resource
constraints are made beyond the next fiscal year, and there is no comprehensive or binding
medium-term expenditure framework or strategic plan for PAs which indicates their financing
needs over the medium or long-term. For this reason, it is not possible to make any firm
estimate of future public budget allocations to PAs. It can however be assumed that, at a
minimum, existing levels of staffing and funding will be maintained and will at least increase in
line with the projected growth in area of the national PA network.
Figure 8: Variation in per hectare spending between PAs (avg 2010-15, base 2015 USD)
From MOECAF data; excludes Lampi Island Marine NP as this received budget only from 2013/14.
20
Expenditure patterns and targets
Direct staff costs (mainly salaries and associated remuneration and benefits) accounted for Just
under two thirds of PA budgets in 2014/15 (Table 3). Although it has not been possible to obtain
a breakdown of PA budgets, detailed figures are available on NWCD expenditures. As discussed
above, PAs account for the vast majority of NWCD’s budget allocation, and so NWCD data can be
taken as being indicative of PA expenditure patterns. These show that staff remuneration
consumed almost 80% of last year’s NWCD budget, and other labour charges 10%, meaning that
in total some 90% of annual spending was on human resources (Figure 9). Travel and transport
(including allowances associated with routine PA management activities such as patrolling,
boundary demarcation, etc.) consumed around 3% of the budget and a similar amount – USD
37,800 – was spent on machinery, equipment and infrastructure, while utilities, rent and taxes
accounted for just under 2%. This left just 2.4% or USD 26,600 for other activities, consumables
and running costs – an average of just over USD 1,300 per PA for the year.
From MOECAF data
Table 3: Budget allocations to PAs and NWCD by category of expenditure 2010-15 (constant
2015 USD)
2010/11
2011/12
2012/13
2013/14
2014/15
Protected Areas
Direct staff costs
355,083
359,856
593,814
697,381
650,538
Other expenditures
322,153
224,938
203,526
161,101
382,676
Total
677,236
584,794
797,340
858,482
1,033,214
NWCD
Salary
484,458
461,797
409,898
521,742
607,817
Other staff remuneration
-
-
277,783
287,299
279,935
Sub-total
484,458
461,797
687,681
809,041
887,752
Travelling Allowance
8,181
11,776
30,377
30,739
30,513
Sub-total
8,181
11,776
30,377
30,739
30,513
Labour charges
53,866
57,696
101,487
110,093
112,904
Tax
3,515
1,515
1,094
1,162
2,235
Rent
722
1,100
1,673
1,663
994
Transport charges
2,598
7,174
3,724
2,801
2,022
Labour charges
5,663
2,635
2,868
2,630
2,162
Fuel, Lubricant
174,037
49,858
1,601
1,061
568
Telephone charges
3,804
4,200
6,693
5,567
3,387
Figure 9: Breakdown of 2014/15
NWCD budget by category of expenditure
Figure 10: Share of NWCD spending on staff
remuneration and labour charges, 2009-15
21
2010/11
2011/12
2012/13
2013/14
2014/15
Electricity
5,155
5,269
5,085
5,831
13,295
Newspaper, journals
952
1,319
1,174
1,620
1,324
Uniforms
-
-
-
-
-
Consumable goods
8,060
25,931
22,816
15,929
9,917
Medicare
-
-
-
-
-
Animal feed
11,402
10,606
10,972
11,608
12,947
Animal medicine
1,218
1,373
2,111
1,374
1,333
Printing
959
715
556
417
390
Show Room
1,599
-
172
1,097
195
Conferences
1,002
533
156
1,393
522
Sub-total
274,553
169,925
162,182
164,245
164,197
Machinery, machine tools
5,454
4,510
3,056
1,551
767
Building
7,116
40,305
12,569
10,038
10,810
Roads
363
407
-
-
-
Vehicle
12,979
11,736
8,920
10,447
17,947
Boat, steamer
762
717
2,255
1,168
993
Reserve Forests
-
1,709
1,952
78
410
Miscellaneous
32,412
2,912
8,293
7,710
6,894
Sub-total
59,086
62,296
37,045
30,993
37,821
Total
826,278
705,793
917,285
1,035,018
1,120,283
From MOECAF data
Not only do staff remuneration and labour charges account for the lion’s share of the NWCD
budget, but their contribution has been growing over time: from just over 40% of the total in
2009/10 to almost 90% during the current financial year (Figure 10). This increase is at least
partially due to the long-overdue salary increases which were noted in the 2012/13 budget and
thereafter. Overall, PA salary bills have almost doubled in real terms since 2010, and at many
sites the increase has been far higher
9
(Figure 11).
Figure 11: Index of real change in spending on staff remuneration 2010-15 (base 2015 USD)
9
The only exception to this general growth in PA salary bills appears to be for Hukaung Valley Wildlife Sanctuary. Although
expenditures on direct staff costs doubled during 2012/13 and 2013/14 as compared to previous years (due to the more increase in
salary levels, as well as the implementation of extension to the PA), they then halved again in the current financial year. It is not clear
why this is the case.
22
From MOECAF data; Index based on budget calculated at constant 2015 USD using CPI deflator from IMF World Economic Outlook
Database, April 2014, converted to USD at prevailing market exchange rate ; excludes Lampi Island Marine NP.
Yet, despite this general increase in spending on human resources (overall and in terms of the
real level of remuneration offered), most PAs face major shortfalls in staffing. This has already
been mentioned in the previous chapter as being a key factor constraining the amount of budget
they can request, receive and absorb. It also severely constrains the level and type of on-the-
ground conservation activities that can actually be implemented. Overall, only 51% of approved
staff positions have been filled, and half of PAs are operating below 50% capacity (Figure 12).
Figure 12: Variation in staffing levels and filled positions between PAs (average 2010-15)
From MOECAF data
These figures make it clear that there remains a critical shortage of funds for key conservation
activities, and that little or no money is available to invest in essential equipment, infrastructure
and capital. Perhaps the greatest PA financing constraint is, however, that only twenty PAs (out
of the 24 managed by NWCD and 36 in total in Myanmar) are actually staffed, or receive a
government budget. Sixteen sites
10
, accounting for more than 20% of the national PA estate,
receive no dedicated staff or public funding at all.
10
Comprising four PAs that are under the jurisdiction of NWCD, 12 managed by Township Forest Departments and one under private
management.
23
Externally-funded grants and projects
Numerous development donors, international organisations, domestic and international
conservation NGOs, foundations and research centres provide some form of assistance to
Myanmar’s PAs. As well as direct funding, this includes a variety of in-kind and indirect support –
for example via technical assistance, planning support, research and information-generation,
training and capacity-building, regional and global networking, and national-level policy
processes. More than 20 PAs currently benefit from externally-funded projects (Table 4),
accounting for 85% of sites and 98% of the area under the active management of NWCD, as well
as two PAs in which NWCD currently has no staff (Hponkanrazi Wildlife Sanctuary and Taninthayi
Nature Reserve). Only three of the PAs managed by NWCD currently appear to be functioning
without external assistance (Kyaikhtiyoe, Panlaung Pyadalin Cave and Pidaung Wildlife
Sanctuaries).
Table 4: Externally-funded grants and projects by protected area
Protected area
External organisations implementing projects and grants
Alaungdaw Kathapa NP
ASEAN Centre for Biodiversity, Wildlife Conservation Society
Chatthin WS
Friends of Wildlife, Norwegian Ministry of Environment
Gulf of Morrama Ramsar Site
Biodiversity and Nature Conservation Association
Hkakaborazi NP
Wildlife Conservation Society
Hponkanrazi WS
Wildlife Conservation Society
Htamanthi WS
Wildlife Conservation Society
Hukaung Valley WS
Wildlife Conservation Society
Indawgyi WS
ASEAN Centre for Biodiversity, Fauna & Flora International, Michael Succow Foundation,
Norwegian Ministry of Environment.
Inlay Wetland WS
Friends of Wildlife, Norwegian Ministry of Environment, UN-HABITAT, UNDP, UNESCO
Lampi Island Marine NP
Biodiversity and Nature Conservation Association, Fauna & Flora International, Myanmar
Environment Rehabilitation-Conservation Network, Oikos International
Lawkananda WS
Wildlife Conservation Society
Lenya NP (proposed)
Fauna & Flora International, Biodiversity and Nature Conservation Association,
Mainmahla Kyun WS
ASEAN Centre for Biodiversity, Fauna & Flora International
Minzontaung WS
Wildlife Conservation Society
Moyungyi Wetland WS
Fauna & Flora International, Norwegian Ministry of Environment
Natmataung NP
ASEAN Centre for Biodiversity, Fauna & Flora International, Norwegian Ministry of
Environment, Smithsonian Institution
Popa Mountain Park
Norwegian Ministry of Environment
Rakhine Yoma Elephant Range
Wildlife Conservation Society
Shwe U Daung WS
Rufford Foundation
Shwesettaw WS
Norwegian Ministry of Environment, Wildlife Conservation Society
Taninthayi Nature Reserve
Fauna & Flora International, Motamma Gas Transportation Company/ Taninthayi Pipeline
Company/ PTT Exploration and Production, Wildlife Conservation Society
Taninthayi National Park (proposed)
Fauna & Flora International.
It is noticeable that the private sector is beginning to play a progressively greater (although as
yet still relatively minor) role in PA funding. On a commercial basis, the Htoo Group company
(via its subsidiary Htoo Zoos & Garden Business Unit) has a management contract with the
Forest Department to run Hlagwa Park, Pyin Oo Lwin Botanical Garden, Nay Pyi Taw, Yadanabon
and Yangon Zoological Gardens. As mentioned in Chapter 2, this type of joint venture between
the government and private companies to operate zoological and botanical gardens is enabled
24
under the Protection of Wildlife and Conservation of Natural Areas Law 1994. Also as described
above, there appears to be a growing interest in investigating how public-private partnerships
can be further developed, particularly in relation to tourism and under the coordination of
Regional and State governments. Such plans however remain in their early stages.
As Myanmar’s economy continues to open up to international investors (particularly in the oil,
gas, minerals, hydropower, infrastructure and tourism sectors), there appears to be a growing
interest in investigating new modalities for attracting corporate funding to PAs. To date, only
one such model exists. The Taninthayi Nature Reserve is funded from three gas pipeline
companies: the Total-operated Motamma Gas Transportation Company, Taninthayi Pipeline
Company and PTT Exploration and Production. The project commenced in 2005 and is proposed
to continue for the lifetime of the pipelines – at least until 2028 (Pollard et al. 2014). Payments
are made as compensation (but not as direct offsets) for impacts on biodiversity along the
pipeline route. A budget of USD 1.2 million was made available during each of the first two
phases (2005-2012), and $1.8 million is being spent during the third phase (2013-2016): a
current average of around USD 450,000 per year. Funds are channelled to FD to be spent on an
agreed workplan and set of activities, including the provision of top-up ‘allowances’ to PA staff
salaries. WCS assists in financial administration and disbursement.
It is extremely hard to make an accurate estimate of the level of funding that is being provided
to PAs via externally-funded grants and projects. There are no up-to-date disaggregated data on
aid inflows, and organisations are understandably reluctant to disclose numerical information
about project finances and expenditures. Attribution of spending to in-country, on-the-ground
PA conservation activities also remains a challenge: a large proportion of the funding for
biodiversity conservation projects is spent outside Myanmar (for example on travel and salaries,
consultants, organisational overheads, equipment and technologies purchased elsewhere and
other international costs), or are for mixed-purpose projects which target a number of different
sites, activities and goals (often at a regional, or even global, level). It has only been possible to
make a rough, and inevitably partial, estimate by combining the information that was shared
during interviews with key donors and conservation organisations in Myanmar with that
presented in the reports and databases of selected international conservation organisations and
funding agencies
11
. This list includes major bilateral and multilateral projects as well as larger-
scale grants from international organisations and foundations, but excludes agencies’ internal
budgets and spending from core institutional funds, and leaves out a large number of small
grants and informal contributions.
Since 2010, something over thirty externally-funded projects are recorded as having been
implemented which are directly concerned with species and habitat conservation in and around
11
Including the AidData database (http://aiddata.org/), Organisation for Economic Co-operation and Development’s Creditor
Reporting System (CRS) Aid Activities database (http://stats.oecd.org/Index.aspx?DataSetCode=crs1) OECD / World Bank / Asian
Development Bank / Inter-American Development Bank AidFlows tracking tool (http://www.aidflows.org), GEF projects database
(http://www.thegef.org/gef/gef_projects_funding) and project lists of the Helmsley Charitable Trust
(http://helmsleytrust.org/programs/place-based-conservation/grants) and Critical Ecosystem Partnership Fund
(http://www.cepf.net/grants/project_database/Pages/project-db-region-pages/indo-burma_II_projects.aspx).
25
Myanmar’s PAs. Major donors include the ASEAN Center for Biodiversity, Critical Ecosystem
Partnership Fund, European Union, Helmsley Charitable Trust, Global Environment Facility,
Kreditanstalt für Wiederaufbau (KfW, the German Development Bank), United Nations
Development Programme, and the Governments of Japan, Korea, Norway, United Arab
Emirates, United Kingdom and United States. In total this funding was worth just under USD 4.5
million up to 2013/14. Assuming a typical 3-year time frame for each project, this translates to
an average of USD 1.1 million a year being spent between 2010/11 and 2013/14 (a figure which
is similar to that estimated in the UNDP-GEF PA financial sustainability scorecard for 2012).
Calculated on an area basis, this equates to an average of USD 26/km2/year for the period
2010/11 to 2013/14. This compares to spending on PAs from Union funds of just under USD 3
million or USD 25/km2/year (at 2015 prices) over the same period.
Unfortunately, data are not available to permit any projection of future trends in external
funding. It should however be noted that during the current financial year a massive rise in
funding commitments was registered: PA projects worth an estimated USD 18.7 million were
initiated. It is not known how long these projects will run. These figures are not included in the
five-year averages used in the calculations above. This is because almost all of these new
projects are large-scale ones which are being channelled through international NGOs, meaning
that only a small proportion of funds are likely to be used for on-the-ground conservation
management activities and direct budget support. A large proportion of funding is likely to be
retained by the implementing organisation to cover its own expenditures, or used to fund costs
incurred outside Myanmar. It seems highly probable that these patterns of funding to will
continue to increase substantially, at least over the short-term.
Self-generated revenues
As described in Chapter 2, PA revenues are not earmarked, retained or reinvested, but are
remitted to the Union Fund. They therefore cannot strictly be considered to be a source of
conservation funding – although may have the potential to be so in the future, should the
proposed Environment Management Fund become operational. Over the last three years, the
real value of NWCD revenues has fluctuated between USD 14,500 and almost USD 20,000 a year
(Table 5). It is not clear why unusually high income was recorded in 2009/10 and a very low
figure was logged in 2010/11.
Table 5: NWCD revenues 2009-14 (constant 2015 USD)
2009/10
2010/11
2011/12
2012/13
2013/14
Sale of commodity and Income from services
Commodity sales
142
80
113
78
86
Income from services
59,047
1,177
12,933
16,349
13,097
Rent
10,775
3,268
1,176
2,779
2,606
Tax
14
-
-
-
-
Sub-total
69,977
4,525
14,223
19,207
15,790
Other income, fines and confiscations
26
2009/10
2010/11
2011/12
2012/13
2013/14
Other income
188
1,455
296
169
1,073
Fines
-
1,159
-
-
-
Sub-total
188
2,615
296
169
1,073
Total
70,165
7,140
14,519
19,375
16,862
From MOECAF data
The bulk of PA revenues was earned from the provision of tourism services, including land rental
and concession fees. In 2012/13, just under 35,000 foreign tourists were recorded as visiting
nine PAs under the management of NWCD
12
. It should however be noted that the charges and
fees earned from recreation and tourism are collected by a number of government agencies in
addition to NWCD, including the Ministry of Hotels and Tourism and Regional/State
governments. For example, the Ministry of Tourism and Hotels collects entry fees in Hkakaborazi
and Natmataung National Parks and Lampi Island Marine National Park. As already mentioned
above, zonal fees are collected at Inlay Lake Wildlife Sanctuary and partially retained by Shan
State Government. Hotel concession fees in Popa Mountain Park, Moyungyi Wetland Wildlife
Sanctuary and Hlawga Park are estimated to total more than USD 60,000.
The PA revenues earned by NWCD therefore remain very small, in both absolute and relative
terms. Between 2010 and 2014, the total earnings of just under USD 60,000 accounted for just
0.34% of Forest Department revenues and was worth only around 2% of the expenditures made
on PAs over the same period (Figure 13).
Figure 13: Change in MOECAF, FD and NWCD revenues and expenditures, 2010-15 (constant
2015 USD)
-
12
Alaungdaw Kathapa National Park, Hkakaborazi National Park, Hponkanrazi Wildlife Sanctuary, Lawkananda Sanctuary, Mainmahla
Kyun Wildlife Sanctuary, Moyungyi Wetland Santuary, Natmataung National Park, Panlaung Pyadalin Cave Wildlife Sanctuary and
Popa Mountain Park.
27
From MOECAF data
As has been mentioned in the previous chapter, MOECAF follows a short-term financial planning
horizon. Revenues are projected only for the next fiscal year. For this reason, it is not possible to
make any detailed estimate of likely future PA revenues, although it can be assumed that
income will be maintained at least at current levels. Should new mechanisms for revenue
generation and financial retention be introduced, this figure has the potential to increase
substantially.
Possible PA funding gaps under different management scenarios
The data presented above suggest that since 2010 PAs have received an annual average of USD
1.11 million or USD 26/km2 of external funding and USD 0.79 million or USD 25/km2 of public
budget, equating to an overall investment of USD 1.9 million a year or USD 43/km2.
While it is clear that current PA budgets are not adequate to ensure effective conservation
management, no estimate exists of what the minimum funding needs are – let alone the optimal
level. To come up with an accurate figure would require that both system-wide and site-level
management plans are developed, and costed properly. As these figures do not yet exist, it is at
present only possible to make a very rough approximation of PA funding needs, using
comparative data from other countries and from global studies. The figures provided below
must therefore be treated with caution, and should not be taken as anything other than ballpark
estimates that have been generated for illustrative purposes.
The global literature suggests that, across tropical developing countries, the ‘typical’ costs of
effective PA management in similar ecological zones, socio-economic and institutional contexts,
and management needs (adjusted to reflect 2015 Myanmar prices
13
) may average anything
13
Much of the published literature on PA financing levels and needs across the world compares, aggregates and applies PA budgets
and funding data in a somewhat indiscriminate, and not always appropriate, manner. It is important to remember that real costs and
price levels vary − over time, and between countries. The costs of the staff, consumables and equipment required for effective PA
management in Brazil in 2001, for example, cannot be exported wholesale to Myanmar in 2015. For this reason, figures must always
be adjusted to take account of inflation and to compensate for differences in purchasing power parity, before they are applied in
different places or years. Even adjusted estimates are a gross over-simplification, as they ignore the massive variation that exists in
PA threats and management needs between sites.
28
between USD 185/km2/year (James et al. 2001) and USD 644/km2/year (Balmford et al. 2003).
Studies in other ASEAN countries with put this figure at between USD 82-119 for basic
operations and USD 74-355 for optimal management (Table 6). Even allowing for the high levels
of uncertainty and variation that such single-figure estimates inevitably mask, current PA
funding in Myanmar is clearly far below these levels. It should also be noted that the 2010-15
average spending of USD 25/km2/year from Union funds does not compare well with public
expenditure levels of between USD 38-896 in other Southeast Asian countries.
Table 6: Estimates of PA funding levels and needs from other ASEAN countries
Country
Cost
Current
USD/km2
2015
Myanmar
USD/km2
Source
Cambodia
Cardamom
landscape
Basic funding level
100
82
Cutter and Hean 2010
Adequate funding level
144
119
Grieg Gran et al. 2010
Optimal funding level
159
131
Indonesia
Actual public spending (National Parks)
97
38
McQuistan et al. 2009
Actual public spending (Nature Reserves)
133
53
Optimal funding level (National Parks)
279
111
Optimal funding level (Nature Reserves)
895
355
Lao PDR
Actual public spending
42
52
Emerton 2006
Malaysia
Actual public spending
992
97
Emerton 2013a
Philippines
Actual public spending
49
39
Mansourian and Dudley 2008
Thailand
Actual public spending
228
43
Emerton 2013b
Optimal funding level
337
74
Leangcharoen 2011
Viet Nam
Actual public spending (Central PAs)
1,678
896
Emerton 2011
Actual public spending (Provincial PAs)
617
329
Local currency figures adjusted to 2015 Myanmar price levels using CPI deflator and PPP GDP per capita conversion factors taken
from IMF World Economic Outlook Database, April 2014. “Actual” figures reflect public spending only, “basic”/”optimal” figures
incorporate funding from all sources.
Guided by these figures, a set of indicative – and fairly conservative – scenarios can be posed
which consider different levels of staffing, operational management and network coverage for
Myanmar’s PAs. An additional annual budget for non-staff recurrent costs of USD 100/km2 is
assumed for ‘basic’ management, rising to USD 175 for ‘improved’ management. The terms
‘optimal’ and ‘effective’ are deliberately not used, as these imply a value-judgement about the
adequacy and impact of funding. ‘Basic’ and ‘improved’ merely imply progress beyond the
current situation. Staff costs are added to these figures, calculated at existing average per capita
salary and remuneration levels. Under the basic management scenario it is assumed that three
quarters of approved positions will be filled, while the full complement of staff will be recruited
under the improved scenario.
This brings total PA recurrent costs to an average of USD 130/km2/year for basic management
and USD 215/km2/year for improved management – three and five times as much, respectively,
as the current level. It should be noted that these figures exclude capital costs, which are
impossible to estimate on the basis of available information. Needs for investment spending are
however likely to be substantial, and the funding gap will increase still further once they are
taken into account.
29
These three staffing, management and funding
scenarios (actual staffing and current operational
expenditure levels; 75% staffing and basic
management budget; and full staffing and
improved management budget) are modelled for
three possible sizes of PA network: the twenty PAs
that are currently actively managed by NWCD, the
entire existing PA network (also including NWCD
PAs that are not currently staffed or funded, as
well as those managed by Township FDs and the
private sector) and an expanded PA network (also
including proposed PAs in Bago, Sagaing and
Tanintharyi Regions). Funding gaps are calculated
by looking at the difference between the projected
cost requirements and the amount of PA funding
that is currently available (including both Union
funds and externally-funded projects, using
average annual figures for the 2010/11-2014/15
and 2010/11-2013/14 periods respectively).
The results indicate a funding gap ranging from USD 460,000 a year to extend current staffing
and expenditure levels across the entire existing PA network, up to a maximum of USD 8.88
million a year to achieve a fully-staffed, improved management and expanded PA network
scenario (Table 7).
30
Table 7: PA recurrent cost needs and funding gaps under alternative staffing and management
scenarios
PAs under
active NWCD
management
Existing
PA
network
Expanded
PA
network
20 PAs
32,109 km2
36 PAs
40,549 km2
>36 PAs
50,209 km2
Cost requirement (USD 2015 million)
Current staffing & expenditure levels
1.86
2.32
2.87
75% staffing + basic management budget
4.20
5.26
6.49
Full staffing + improved management budget
6.93
8.71
10.74
Funding gap - staff costs (USD 2015 million)
Current staffing & expenditure levels
-
-0.16
-0.35
75% staffing + basic management budget
-0.33
-0.56
-0.84
Full staffing + improved management budget
-0.66
-0.96
-1.34
Funding gap – other operational expenditures (USD 2015 million)
Current staffing & expenditure levels
-
-0.31
-0.67
75% staffing + basic management budget
-2.00
-2.84
-3.79
Full staffing + improved management budget
-4.41
-5.89
-7.55
Funding gap – all costs (USD 2015 million)
Current staffing & expenditure levels
-
-0.46
-1.01
75% staffing + basic management budget
-2.34
-3.40
-4.63
Full staffing + improved management budget
-5.07
-6.85
-8.88
31
4 Conclusions and next steps:
PA financing needs, constraints & opportunities
Drawing on the preceding review of funding status and trends, this chapter identifies key
financial constraints which act as barriers to effective PA management, and suggests needs,
opportunities and strategic entry points for strengthening financial sustainability. Three
categories of PA sustainable financing measures and instruments are identified and presented for
consideration by MOECAF for possible follow-up as part of the second phase of the current
assignment. These include mechanisms to:
Increase the size and diversity of PA financing sources and funding portfolios;
Enhance revenue retention and promote direct reinvestment in conservation; and
Streamline PA financial planning, costing and allocation procedures.
Key financial needs, constraints and barriers
The foregoing analysis presents ample evidence that Myanmar’s PAs face severe budget
constraints. Most PAs are unable to cover the costs of essential infrastructure, equipment,
maintenance, running and operational activities – and many have no staff or funding at all.
Although both public budget allocations and externally-funded projects and grants to PAs have
shown a steady increase over the last five years, and look set to rise still further in the future,
critical funding shortages still remain.
Figure 14: Key financial constraints to effective PA management
funding
levels
limited budget with
which to coordinate
PA activities at
the national level
insufficient funding
to cover core
site-level costs
budget
allocation
uneven distribution
of funding across the
PA network
domination of public
budgets by staff costs
fund generation
& administration
PAs rely on a very
narrow funding
base and range of
financial sources
inability to retain or
earmark PA revenues
links to strategic
planning processes
disconnect between
financial planning
and on-the-ground
conservation needs
weak links to
development planning
and conservation
incentives in broader
PA landscapes
budget calculations
& financial planning
shortfalls in staffing
limit the ability of PAs to
request and spend funds
under-costing and
lack of flexibility in
budget calculations
short-term financial
planning horizon
While budget shortfalls clearly undermine PA management effectiveness, it is important to
remember (and has already been emphasised at the start of this report) that financial
sustainability is only partly to do with the amount of funding available to PAs. In addition to
insufficient funding to cover core site-level costs, the review of PA funding status has identified
32
ten particularly important financial constraints. These concern funding levels, budget allocation,
fund generation and administration, budget calculations and financial planning, and links to
strategic planning processes (Figure 14).
There is limited budget with which to coordinate PA activities at the national level. NWCD is
mandated to maintain the national PA network as a whole, ensure coordination within the PA
system and with other sectors, and implement government policies and laws on PAs. More than
90% of NWCD’s budget is however consumed by site-level PA spending − in 2014/15, a balance
of only just over USD 85,000 remained after PA budgets had been allocated. This is insufficient
to adequately resource the staff and activities that are required to maintain the PA network at
the national level.
Funding is distributed unevenly across the PA network. Three National Parks and one Wildlife
Sanctuary consume more than half of the total annual public budget allocation to PAs.
Meanwhile, around a third of PAs and 10% of the area under protection has no dedicated
budget at all, from either government or external sources. This means that on-the-ground
conservation is effectively zero in a large proportion of the national PA estate.
Staff costs dominate public budgets. In 2014/15 staff-related costs accounted for almost two
thirds of government spending on PAs, and some 90% of NWCD’s budget. There is little surplus
funding available to meet other essential equipment, maintenance, running and operational
management needs. These costs are mainly left to be covered by externally-funded projects.
PAs rely on a very narrow funding base and range of financial sources. PAs are financed from just
two sources: the Union budget and external projects and grants. Up to the last financial year
these contributed an average of 40% and 60% respectively of annual resource flows. Self-
generated revenues are negligible. Only a limited range of PA funding sources are at present
enabled by the law, which is largely restricted to ‘traditional’ fees and charges for tourism, land
rental and fines.
PAs revenues cannot be earmarked or retained. All PAs earnings must be remitted to the Union
fund. They do not accrue as income to the PA, NWCD, FD or MOECAF, and are not reinvested
directly in conservation. Even if PA financing sources were to be expanded, this would not
automatically translate into an improvement in the availability of funds, because earnings would
continue to be channelled to the central treasury. This also means that there are weak
incentives for PA managers to implement charge and fee systems, or to collect and remit their
proceeds.
Shortfalls in staffing limit the ability of PAs to request and spend funds. Despite the fact that
salary costs dominate public spending, only around a half of PAs are actually staffed. Even those
PAs that have staff face severe gaps in capacity: just 51% of approved positions have been filled,
and the majority of PAs are operating below 50% capacity. Without sufficient human resources,
it is not possible to carry out essential PA management activities or to deliver on key
33
conservation goals. Many PAs therefore face difficulties in spending their existing budget
allocations – and for the most part would have only a very limited capacity to absorb and utilise
additional funding, if it were to become available.
Budget calculations lack flexibility, and key expenditure items are often under-costed.
Standardised cost norms and inflators are the main tools used to calculate annual PA
expenditure needs. Yet these rates tend to be unrealistically low, and cannot easily be adapted
or modified in response to changes or differences in circumstances and conditions. The budget
that a PA receives does not reflect its size, ease of management, level of threat or biodiversity
significance. Thus, even where a budget is requested and allocated for certain activities or items,
it may not be sufficient to cover the required expenditures.
PAs operate according to a short-term financial planning horizon. PAs budgets are planned,
disbursed and spent over a one-year time period. No forward estimates of budget needs,
expenditure plans or funding availability are made, and no information on longer-term
expenditure frameworks, spending ceilings or resource constraints are provided by MOECAF,
MFAR or MNPED. There is also no carry over in funding or expenditures permitted across
financial years. PA managers therefore cannot know with certainty what their future funding
security is likely to be. This short-term tine horizon discourages a more strategic approach to
budgeting and financial planning, which would take future needs into account.
There is a disconnect between financial planning and on-the-ground conservation needs. The
links between financial and conservation planning remain tenuous. There is limited
communication between finance/ budget units and conservation managers. Most PAs do not
integrate their financial and management planning processes, and therefore have little idea of
what funding is required to deliver on core conservation activities and objectives. PAs do not
follow output-based or activity-based approaches to budgeting, but rather prepare financial
plans according to administrative expenditure categories. Spending tends to be focused on basic
running costs and staffing, and activities that have the greatest importance in conservation
terms are not necessarily accorded the highest priority when funds are allocated.
There are weak links to development planning and conservation incentives in broader PA
landscapes. Land and resource management regimes within and outside PAs are subject to
separate institutional, planning and financial arrangements, and are often driven by different
(and sometimes even conflicting) policy goals. NWCD’s management and budgetary jurisdiction
extends only within PA boundaries. Meanwhile, the Regional and State authorities and other line
ministries that are mandated to manage and develop the broader PA landscape are not
responsible for funding or implementing biodiversity conservation activities. As a consequence,
few measures are in place which attempt to integrate conservation and development goals,
offset the local opportunity costs of PAs, address the economic threats to biodiversity, promote
sustainable livelihoods, or provide positive incentives and rewards for conservation.
34
Opportunities and strategic entry points for enhancing financial sustainability
A number of recent shifts in Myanmar’s
institutional, policy, economic and investment
context potentially lend support to efforts to
enhance PA financial sustainability. Five
strategic opportunities and entry points In
particular can be highlighted: existing and
emerging legislation on environmental
finance, the development by MOECAF of new
financial instruments and procedures, fiscal
reform and decentralisation, opening of the
economy to private sector and outside
investors, and the presence of a large (and
growing) number of externally-funded grants
and projects in PAs (Figure 15).
Existing and emerging legislation in Myanmar
both demands and enables a variety of new
environmental financing measures. These
include market-based, user-pays and incentive mechanisms as well as the proposed
Environmental Management Fund. Meanwhile, a precedent has been set of establishing ‘other
accounts’ to absorb, retain and administer own-source revenues. Although extra-budgetary fund
provisions are yet to be implemented or operationalised in the environment sector, they offer a
potentially important entry point for strengthening PA funding, retention and financial
sustainability.
MOECAF is currently in the process of developing several new financial instruments and
procedures which have relevance to, or could potentially generate funding for, PAs. The design
of a financial management system and benefit-sharing mechanism for REDD+ payments is to
commence shortly, plans are currently underway to initiate a system of payments for ecosystem
services (PES), and options are being investigated for the development of an Environmental
Management Fund. The Environmental Conservation Department has been charged with taking
these financial mechanisms forward.
Fiscal decentralisation forms a cornerstone of the government’s current public financial
management reform process (MFAR 2013), and is a key component of more general shifts
towards strengthening local governance and administrative structures and promoting “people-
centred development”. To date, this has included the gradual roll-out of a medium term fiscal
framework, as well as improved cash and debt management systems (UNICEF 2014a). A major
thrust has also been to increase the share of expenditure and revenue collection in state and
region budgets, and to enhance sectoral deconcentration and subnational budget allocation
Figure 15: Opportunities and strategic entry
points for enhancing PA financial sustainability
35
within line ministries (Nixon and Joelene 2014). These ongoing national-level developments will
exert a strong influence on how PAs are managed, funded and administered in the future. As
well as opening the door to more streamlined and integrated procedures for PA financial
planning, they may offer opportunities for NWCD to engage much more closely with Regional
and State governments, and – potentially – to develop a variety of cost-sharing, revenue-sharing
and joint management arrangements with them.
Myanmar’s economy has opened up considerably to the private sector and outside investors
over the last five years. Negotiations are ongoing with mining, oil and gas, hydropower,
infrastructure and tourism developers about the terms of engagement, conditions of contract
and concession arrangements under which these activities will take place. The government is in
the process of developing environmental safeguards, and setting up systems by which to
manage, mitigate and compensate environmental impacts. Myanmar has already submitted a
candidacy request to the Extractive Industries Transparency Initiative (Thet Aung Lynn and Oye
2014), and discussions were recently initiated with IFC and the Wold Bank on sustainable
hydropower. Several developers, investors and donors have also indicated their interest in
contributing funding to environmental activities, either through market-based mechanisms and
payments for ecosystem services, or via voluntary donations made as part of corporate
environmental and social responsibility programmes.
A sizeable (and rapidly growing) body of externally-funded conservation projects has been
initiated over recent years, and a significant number of international organisations and domestic
NGOs are involved in PA management in Myanmar. At least half of PAs and almost 90% of the
national PA estate by area is currently being supported from external funding sources, with a
portfolio that is currently worth around USD 20 million − a figure which looks set to increase still
further in the future. These inflows of funding, in-kind contributions and technical assistance
provide the opportunity to pilot, test and support the development of new funding mechanisms
and innovative approaches to financial planning and administration .
Potential areas for further follow-up, scoping and elaboration
Various policy instruments are available with which to address the financial constraints
described above, which also respond to and build on the identified opportunities and strategic
entry points. These are summarised below, with a view to providing a basis for further
discussions with MOECAF and other key stakeholders, during which those measures of the
greatest interest, relevance and strategic importance can be selected for follow-up. The second
deliverable output of the current assignment will then pick up on the prioritised themes and
actions, elaborate concrete options for their further development, identify enabling conditions
and requirements for implementation, and compile a framework and suggested actions for
strengthening the financial sustainability of the PA system.
36
To these ends, three main categories of PA sustainable financing measures and instruments have
been identified as having potential for further follow-up and development: those aiming to
increase the size and diversity of PA financing sources and funding portfolios; enhance revenue
retention and promote direct reinvestment in conservation; and streamline PA financial
planning, costing and allocation procedures (Figure 16). It is important to note that all are closely
linked, and mutually interdependent. The introduction of new revenue streams will, for
example, need to be accompanied by the development of some kind of financial retention
mechanism, if it is to result in a measurable improvement in PA funding. Similarly, the long-term
viability of an extra-budgetary conservation fund depends on additional sources of income being
made available by which it can be capitalised and maintained. Any effort to strengthen PA
financial sustainability, including new arrangements for fund generation and administration,
requires that current weaknesses and bottlenecks in PA financial planning and budgeting
procedures are also addressed, so that the resulting funds can be allocated and managed
effectively, strategically, and in direct support of biodiversity conservation.
Figure 16: PA sustainable financing measures and instruments with potential for further follow-
up and development
measures to enhance revenue
retention & promote direct
reinvestment in conservation
conservation trust fund / extra-budgetary fund
revenue retention formulae & benefit-sharing agreements
fiscal decentralisation & deconcentration to sub-national levels
measures to increase the size
and diversity of PA financing
sources & funding portfolios
debt-for-naturefiscal earmarking & transfer sectoral & subnational mainstreaming
payments for ecosystem servicesresource fees & user charges green products & markets
green investments & bondsjoint ventures & business partnerships capital & credit funds
corporate funding, including cost-sharing & biodiversity offsets concessions & leases
measures to streamline PA
financial planning, costing
& allocation procedures
integrated PA management / business planning
joint planning of budgets for conservation and development activities in broader PA landscapes
output / activity-based costing & budget calculation guidelines
Measures to increase the size and diversity of PA financing sources and funding portfolios are
based on the introduction of additional income streams and revenue sources at national and/or
site levels. As illustrated in Figure 16, a wide variety of mechanisms could in principle be used to
generate funding for PAs, including market-based instruments (such as user fees, PES and green
markets), enhanced allocations from the public budget (such as fiscal transfers, mainstreaming
into sectoral and subnational and subnational budgets and debt-for-nature swaps), private
sector engagement (such as donations, cost-sharing, biodiversity offsets, concessions and
leases), and investment support (such as joint ventures, business partnerships, bonds, capital
and credit funds). This list includes already-existing and emerging revenue sources which have
the potential for further development and scaling-up (such as user fees, PES, corporate funding
and joint ventures), as well as mechanisms which have proved successful in other countries but
have not yet been tried in Myanmar. Potential follow-up actions revolve around identifying and
testing the feasibility/acceptability of different financing mechanisms in a Myanmar context,
37
negotiating the modalities for their roll-out, piloting them at site and/or national levels, and
developing supporting regulations, procedures and institutional structures.
Measures to enhance revenue retention and promote direct reinvestment in conservation are
primarily targeted towards ensuring that a greater share of income is returned to PAs as direct
funding. The primary mechanism by which to accomplish this would be to establish some form
of permanent fund that could attract, absorb, retain, administer and allocate conservation
financing beyond (and in addition to) the routine annual public budget process. Many different
design options exist, ranging from full government management through to an independent
external structure, incorporating various combinations of sinking, revolving and endowment
fund aspects, and serving to channel funds to a variety of potential targets and beneficiaries. It
will also be crucial to determine how such a fund should be positioned relative to (or even
combined with) the proposed Environmental Management Fund and associated PES/REDD+
payment systems. It will also be necessary to identify appropriate revenue retention and
benefit-sharing formulae, and investigate how improved revenue retention can be best
accomplished in the light of the bigger-picture fiscal decentralisation and deconcentration
processes that are currently ongoing in Myanmar. Potential follow-up actions revolve around
assessing the feasibility of alternative design models and implementation modalities for the
fund, including its scope and scale of operation, legal, financial and institutional basis,
capitalisation and financial sources, and disbursement mechanism.
Measures to streamline PA financial planning, costing and allocation procedures deal with the
need to ensure that improvements in the financial status of PAs enhance on-the-ground
management effectiveness and delivery of conservation outcomes. The development of business
plans as an integral component of PA management plans aims to match funding to conservation
priorities, while the harmonisation of budgets for conservation and development activities in the
broader PA landscape is seen as an opportunity to address the need to cover the opportunity
costs of PAs and set in place effective conservation incentives and reward systems for local land
and resource users. Meanwhile, output-based or activity-based costing is a way of ensuring that
PA budgets reflect conservation needs, and are sufficient to cover the expenditures that are
required to deliver on them. Potential follow-up actions revolve around the development of
procedures and guidelines for integrated PA financial and business planning, and their piloting
and roll-out at the site-level in collaboration with the local government administration.
38
39
PART II
Options for sustainable financing
40
5 Introduction
Objectives, scope and content of the report
This document has been produced for the Wildlife Conservation Society (WCS) as part of a
strategic review of protected area (PA) financing status, needs and options in Myanmar. The
overall objective is to support the development of a sustainable finance strategy for the national
PA network. It is also envisaged that the findings of the review will serve to guide the work of a
National Sustainable Finance Working Group, to be established by the Forest Department (FD) of
the Ministry of Environmental Conservation and Forests (MOECAF) and other government
agencies during the course of the GEF-funded Strengthening Sustainability of Protected Area
Management in Myanmar project.
This is the third of three deliverable outputs. The first report reviewed PA financing status,
trends, constraints and opportunities (see accompanying report Myanmar Protected Areas:
assessment of financing status, trends, constraints & opportunities). The second output was a
presentation on the study findings. The current document elaborates concrete options and
instruments for PA sustainable financing:
Chapter 1 lays out the objectives and scope of the report, and provides a recap of the
findings of the earlier review of PA financing status, trends, constraints and opportunities;
Chapter 2 identifies different PA revenue and income sources and assesses their relevance
and likely potential of for further development in Myanmar;
Chapter 3 explores options to create a long-term PA funding mechanism, and examines its
possible scope, role and architecture; and
Chapter 4 identifies the enabling conditions and next steps for taking PA sustainable
financing forward, and suggests a rough roadmap of actions to be undertaken over the
short and medium term.
The report is based on meetings and consultations held between January and April 2015 in Nay
Pyi Taw, Yangon and Bangkok. These involved government staff from MOECAF and other
ministries, as well as representatives from a wide variety of bilateral and multilateral
development agencies, NGOs, research and academic organisations working in biodiversity
conservation and protected areas. A roundtable dialogue was held with high-level decision
makers from MOECAF and MFAR to identify options and priorities for taking PA sustainable
financing forward at national and site levels. An extensive literature review was also carried out,
a critical analysis of experiences, best practices and lessons learned on the development and
implementation of PA sustain able financing mechanisms in other ASEAN countries and beyond.
41
Recap of key PA financing status, trends, constraints & opportunities
The first part of this assignment reviewed PA financing status, trends, constraints and
opportunities. Its main findings and conclusions were that:
PAs depend wholly on Union funds for core budget, supplemented by externally-funded
projects. Even though the law permits a variety of PA revenues to be generated, few of
these sources are actually utilised, and there are no systems in place that would allow PA
income to be retained and reinvested in biodiversity conservation;
Over the last five years, an average of USD 1.9 million a year or USD 43/km2 has been
spent on PAs. Union funds contribute 41% of this figure (an average of USD 0.8 million a
year) and externally-funded projects account for 59% (USD 1.1 million);
While the amount of public budgets and external funding allocated to PAs have risen
significantly over the last 5 years, there remains a critical shortage of funds. Only just over
half of PAs have a dedicated budget or staff, and most are unable to cover capital and
recurrent costs, meaning that they cannot afford to deliver on essential on-the-ground
conservation activities; and
A very rough approximation of the likely magnitude of PA funding gaps, indicates a
shortfall ranging from just under USD 0.5 million a year to extend current staffing and
operational expenditure levels across the entire existing PA network, up to a maximum of
almost USD 9 million a year to achieve a fully-staffed, improved management and
expanded PA network scenario.
Ten particularly pervasive financial constraints to effective PA management are identified:
1. There is insufficient funding to cover core site-level costs and coordinate national-level PA
activities;
2. Funding is distributed unevenly across the PA network;
3. Staff costs dominate public budgets;
4. PAs rely on a very narrow funding base and range of financial sources;
5. PAs revenues cannot be earmarked or retained;
6. Shortfalls in staffing limit the ability of PAs to request and spend funds;
7. Budget calculations lack flexibility, and key expenditure items are often under-costed;
8. PAs operate according to a short-term financial planning horizon;
9. There is a disconnect between financial planning and on-the-ground conservation needs;
and
10. There are weak links to development planning and conservation incentives in broader PA
landscapes
42
In turn, a number of recent shifts and emerging directions in Myanmar’s institutional, policy,
economic and investment context offer key opportunities and entry points for overcoming these
barriers, including
Existing and emerging legislation on environmental finance;
The development by MOECAF of new financial instruments and procedures;
Ongoing fiscal reform and decentralisation processes;
The opening of the economy to private sector and outside investors; and
The presence of a large (and growing) number of externally-funded grants and projects in
PAs.
Three categories of PA sustainable financing measures and instruments are identified and
presented for consideration and possible follow-up by MOECAF. These include mechanisms to:
A. Increase the size and diversity of PA financing sources and funding portfolios;
B. Enhance revenue retention and promote direct reinvestment in conservation; and
C. Streamline PA financial planning, costing and allocation procedures.
The following chapters of the current report follow up on these findings, and further elaborate
potential financing mechanisms and funding arrangements that could help to overcome the
constraints and respond to the opportunities identified in the first report.
43
6 Relevance and potential of different
PA revenue and income sources
A wide range of innovative mechanisms for financing PAs have emerged over recent decades,
and are now commonly used in other parts of the world. These aim to supplement conventional
funding sources (such as government budgets and international grants) and diversify non-budget
income streams, so as to make PAs more financially independent, stable and secure over the
long-term. Twelve of the most commonly-used PA revenue and income sources are described
below, and illustrated with real-world case studies drawn from ASEAN countries and elsewhere.
A preliminary assessment is made of their likely feasibility and potential for further development
in Myanmar.
Overview of possible PA fund-generation mechanisms
It is possible to distinguish twelve types of PA fund-generation mechanisms that have come into
common usage in other parts of the world, and which may have potential for further
development in Myanmar (Error! Reference source not found.). These can be grouped into four
verlapping categories:
Charge and fee systems which create or improve markets in PA goods or services, based
on the principle of user or beneficiary pays;
Fiscal instruments which raise and transfer funds through the public budget;
Voluntary contributions which attract funding via philanthropic or charitable donations;
and
Business and investment facilities which back the development of enterprises and
commercial financing agreements in support of PAs and biodiversity conservation.
This chapter is concerned primarily with identifying revenue and income sources that can be
used to improve the funding status of NWCD and site-level PA authorities. It should however be
noted that most of the fund-generation mechanisms described below serve a number of
purposes, and have a number of possible targets in terms of both spending and recipients. In
addition to providing funding for NWCD, they could, for example, function to mobilise funding
for biodiversity and ecosystems in the broader landscape, share PA benefits and costs more
equitably between different stakeholders, or provide conservation incentives for local
communities and the private sector.
Figure 17: Categories of PA revenue and income sources
charge & fee systems
create or improve markets based
on user/ beneficiary pays principle
voluntary contributions
attract philanthropic
or charitable donations
business & investment facilities
back enterprise development
and commercial financing
fiscal instruments
raise/transfer funds
via public budget
levies &
surcharges
on other
products
percentage or flat fee levied on
nature-related goods & services or
to tap into consumers’ interest
direct
user fees
& service
charges
charges paid for extractive and
non-extractive uses of PA lands,
resources and facilities
corporate
sponsorship
&
advertising
cash or in-kind support (technical
advice, training, services,
equipment, infrastructure, etc.)
debt-for-
nature
swaps
purchase or retirement of external
debt and allocation of local
currency funds to PA conservation
biodiversity
offsets
support to conservation or
restoration to balance unavoidable
biodiversity damages elsewhere
payments
for
ecosystem
services
cash or in-kind fees collected from
beneficiaries of ecosystem services,
used to reward land managers
forest
carbon
finance
income raised from generation and
sale of carbon credits & certified
emissions reductions
cross-
sectoral
fiscal
earmarking
& transfers
allocation of all or portion of public
revenues from taxes and other
charges generated by other sectors
sub-national
ecological-
fiscal
transfers &
retention
redistribution of public revenues
based on provision of public
benefits through PA system
conservation
bonds
tradable capital market instruments
to raise upfront funds for
environment-related investments
leases,
concessions
& joint
ventures
devolution of management of
particular PA functions, services or
facilities for payment.
venture
capital,
credit &
investment
funds
mobilisation of commercial funding
sources for conservation and PA-
related ventures
45
Direct user fees and service charges for PA land, resources & facilities
In most parts of the world, user fees – especially for tourism and resource harvesting − have
traditionally provided the majority of PA revenues. In Myanmar, a variety of charges can in
principle be collected for the use of PA land, resources and facilities, including for entry, other
recreational services, land rental and concessions, as well as for various extractive resource
uses
14
. As well as generating income, user fees have the additional advantage that they can be
employed to manage demand and optimise income from both economic and conservation
viewpoints. In Kenya, for example, differential PA entry fees have for some time now been used
as a tool to regulate visitor numbers, with more popular or fragile areas being priced relatively
higher.
Many PA authorities have recognised that there is the potential to widen considerably the range
of goods and service for which charges are levied. The Philippines Administrative Order 2000 on
determining PA fees for instance served to expand the basis of PA revenue generation, allowing
for the possibility for income to be generated from a wide variety of sources including entrance
fees, charges for the use of facilities such as car parks and visitor centres, payments for services
such as snorkelling, diving, swimming, boating, mountain climbing, trekking, picnicking, bird
watching, filming and photography, as well as fees for resource harvesting, construction and
aquaculture development, land rental and concessions. Diversifying the range of goods and
services for which fees are charged can make a significant difference in terms of income
generation and cost recovery. For example, even though New Zealand’s Department of
Conservation is not permitted to charge for entry into PAs, it is able to cover 15% or more of its
annual budget from commercial concessions on tourism, agriculture and filming, as well as from
income generated by the users of recreational facilities such as huts, trails and campsites. All of
these rates are set at levels which will ensure full cost-recovery, and are regularly revised and
updated in line with inflation (Phillips 2000).
As well as involving the creation of new fee systems, fund generation often involves improving
existing markets and pricing structures. This is because, very often, charges are set so low that
they neither accurately reflect prevailing prices, nor fully recover the costs of providing those
services. Kenya’s differential PA pricing was, for example, preceded by studies to assess tourist
demand and willingness to pay, and looked at PA entry fees and service charges in neighbouring
countries.
Bioprospecting fees are a special category of user charges that have emerged as a PA funding
mechanism in several parts of the world, including – to a limited extent – in the ASEAN region.
They usually include research fees and up-front payments for prospecting and collecting genetic
materials, as well as royalties or profit-sharing on product discoveries. Perhaps the best-known
example of bioprospecting fees being used to fund PAs is the agreement made between Costa
14
It should however be noted (as detailed in the review of PA financing status and trends, and addressed further below) that these
revenues are not necessarily collected or administered by PA authorities.
46
Rica’s National Biodiversity Institute (INBio) and the international pharmaceutical company
Merck. Merck supports the strengthening of INBio’s technical capacity, as well as sharing profits
from any successful drug produced; INBio in turn provides a share of these revenues to
protected area management (Zebich-Knos 1997).
Similar arrangements pertain within several ASEAN countries although in almost all cases the
revenues are collected by science and technology institutes rather than by PAs or conservation
agencies. For example, since the mid-1990s, Diversa Corporation has been granted
bioprospecting rights across a wide range of natural habitats in Indonesia. As well as paying
royalties for all of the discoveries which are developed commercially, the agreement specified
setting up a centre for microbial diversity in Bogor Agricultural University. Along similar lines,
Nimura Genetic Solutions Co. Ltd. has for more than a decade been working with the Forest
Research Institute Malaysia and Sarawak Biodiversity Centre, focusing on the collection of
microbes in rainforest habitats. It is estimated that, since 2000, the collaborating agencies have
received payments totalling around USD 0.5 million from royalties and the donation of
equipment and laboratories, while the total investment in Malaysia has exceeded USD 4 million
(Nimura 2014). In Lao PDR and Viet Nam, partnerships between the University of Illinois at
Chicago, the international pharmaceutical company Glaxo Smith Kline, the National Centre for
Science and Technology and Cuc Phuong National Park in Viet Nam, and the Traditional Medicine
Research Centre in Lao PDR have been attempting to operationalise ethical models for
bioprospecting, involving benefit-sharing arrangements, technology transfer, capacity building,
and community development (Soejarto et al. 2004).
User fees for the direct use of PA land, resources and facilities are considered to have high
potential for further development in Myanmar. Charges for recreational activities and facilities
currently seem to offer the greatest possibilities. Tourism represents a sector which is growing
rapidly, where there is a demonstrated willingness to pay for nature-based goods and services,
and for which a variety of fees are already enabled by law (and to some extent collected) in PAs.
There is scope both to apply more widely these existing legal provisions, and to extend the range
of services and facilities for which fees are levied.
Under current arrangements, bioprospecting fees are unlikely to offer a major source of income
for PAs, and are thus considered to be of low potential as a PA funding mechanism. Evidence
from other countries suggests that it has, in reality, yielded very little income for PAs or
biodiversity conservation in all but a few cases. It is also not explicitly enabled by law as a source
of PA funding, although in principle it is consistent with the collection of fees for “scientific
research” functions. Perhaps most importantly, much of the bioprospecting that is currently
taking place in Myanmar appears to be largely unregulated, and protocols in areas such as
intellectual property rights, access and benefit sharing are still under development. It is
considered that efforts would be better focused on financing mechanisms which have a more
positive and dependable track record.
47
Levies and surcharges on nature-related products & services
As well as collecting fees directly for the use of PA land, resources and facilities, several
countries generate income from products, services and sectors that depend indirectly on the
existence of PAs or the conservation of biodiversity. Revenues are generated by charging a
surcharge or levy on the purchase of nature-related products and services, and earmarking the
resulting income for PAs
15
. Travel and tourism products and services, in particular, often allow
for various opportunities to generate income for PAs via surcharges and levies. In several sites in
Asia, hotels located in and around protected landscapes or high biodiversity areas offer tourists
the option of choosing to add a lump sum or percentage-based payment to their hotel bills, to
be channelled into a biodiversity fund or to support local conservation and development
activities. This system has already become institutionalised in other parts of the world. For
example, most private and community conservancies in Eastern and Southern Africa levy a hotel
surcharge or bednight fee. Across the twenty local conservancies and trusts included in Kenya’s
Northern Rangeland Trust, annual payments totalling more than USD 0.5 million are used to pay
for rangers’ salaries, educational bursaries and other ventures identified as a priority by local
communities.
Another case of a voluntary levy collected through the travel and tourism industry is the
“Change for Conservation” programme run by Hong Kong-based DragonAir (a subsidiary of
Cathay Pacific). This collects donations of spare change from air passengers, which is used to
fund conservation projects in mainland China. The imposition of voluntary or mandatory tolls on
vehicles using roads that pass through PAs has also been identified as a funding mechanism in
several parts of the region. For example, discussions are underway in Dong Phayayen - Khao Yai
World Heritage Site in Thailand and the Central Forest Spine landscape in Malysia about the
possibility of collecting fees or donations from travellers on the roads which traverse the PAs.
Examples also exist of premium pricing and branding systems being used to capture consumers’
willingness for nature conservation via the sale of products that are otherwise unrelated to
biodiversity or PAs. Several States in the USA for example offer vehicle owners the opportunity
to generate payments for protected areas through their purchase of vehicle licence plates. For
example, Minnesota’s “Critical Habitat Plate” displays a picture of iconic local wildlife; the
additional USD 30 fees are channelled to the Reinvest in Minnesota Critical Habitat Program for
preserving important wildlife habitat and plant communities such as wetlands, prairies, old
growth forests, and endangered orchid sites. Similar schemes operate via Nevada’s "Conserve
Wildlife" license plate, Maine’s “Conservation and Support Wildlife” plate, and Ohio’s
“Conservation and Sportsman's” plates. During every month since 1983, a different country has
released a set of legal tender WWF stamps that feature endangered wildlife and which, together
with limited-edition first day cover envelopes, raise funding for conservation.
15
It should be noted that this category of funding overlaps with the fiscal earmarking and transfers discussed below; the main
difference is that levies and surcharges obtain payments directly (and usually voluntarily) from the consumer or seller of the product,
while fiscal instruments work through the taxes and fees collected via the government budget and are usually mandatory.
48
Similar schemes have been proposed (but not yet implemented) in Thailand to develop “marine
life” postage stamps and vehicle licence plates as a means of funding for Marine National Parks.
In both Europe and the USA, Airwick air fresheners offer a “National Parks collection” product
range which involve a small donation to conservation in the PA which the purchased scent
purports to smell like. WWF credit cards are also available in several European and North
American countries, whereby the commercial issuing bank makes a small contribution to
conservation on account opening, annual renewal, and as a percentage of all card purchases.
Levies and surcharges on nature-related products and services are considered to have medium
potential as a PA funding mechanism. Although there is currently only a limited scope and
market for levies and surcharges on conservation-related products and services in Myanmar,
clear opportunities exist in the travel and tourism sector. Possible options for further
investigation include voluntary bednight levies or surcharges at high-end hotels operating in and
around protected landscapes, and efforts to collect spare change or other donations from
passengers on Myanmar Airways International or private air companies.
49
Payments for ecosystem services
Over the last two decades, payments for ecosystem services (PES) have become an increasingly
popular mechanism for generating PA financing. They have already been identified as a priority
in Myanmar, and the ECD is in the process of identifying possible models and requirements for
developing a national system of PES. Like other user fees, PES are based on charging the users or
beneficiaries of ecosystem services for the benefits (or costs avoided) they receive, but usually
involve regulating services for which no prior market exists. PES are usually characterised as
being voluntary transactions which relate to a well-defined environmental service or a land use
likely to secure its provision, include at least one buyer and at least one seller effectively
controlling service provision, and involve payments which are conditional on securing an agreed
quality and/or quantity of the specified service(s) (Wunder 2007).
To date, the vast majority of PES schemes across the world have focused on the provision of
watershed, biodiversity and landscape services in terrestrial (mainly forested) landscapes
16
.
Although there is a growing interest in marine and coastal PES (Mohammed 2012) and payments
for ecosystem-based disaster risk reduction (UNEP 2011), few if any examples exist of such
schemes operating in practice. A variety of PES and PES-like schemes exist in ASEAN countries,
although it is worth noting that, while a large number of current funding efforts are termed
“PES” (probably reflecting the current popularity of the term and approach among conservation
planners and donors) it is less certain that all can, strictly, be considered to be PES. Many are, in
reality, just new ways of communicating and packaging traditional donor and international NGO
project interventions, or providing subsidies to communities who live in or around high
conservation value landscapes.
Viet Nam’s Payments for Forest Environmental Services programme is perhaps the most well-
known example in the Asia region. This was first legislated as a pilot scheme in 2008 in Son La
and Lam Dong Provinces before being extended to an additional fifteen Provinces with major
watersheds and hydropower plants, and in 2010 was scaled up to the national level. Payments
are made by large-scale commercial water users (such as hydropower, factories and urban
supply facilities) and tourist companies, and channelled to forest owners either directly or via
government-administered Forest Protection and Development Funds. In Malaysia, the Perak
State Forestry Department has recently negotiated an agreement with a small hydro developer
to institute PES in Typing Forest Reserve. The Reserve is a production forest, and the scheme is
intended to compensate for the retirement of logging activities in the catchment area and
reward for the provision of water quality and flow regulation services. The payment is set at
0.25% of profits, and is additional to the other fees paid by the developer to the Forestry
Department such as land compensation charges for the area in which power lines will be
constructed. The resulting revenues are to be shared between the Forestry Department and
Perak State Treasury, according to an agreed benefit-sharing formula.
16
Carbon finance, covered in the section below, is usually considered as a separate category of conservation finance.
50
It is worth noting that, as well as providing a source of revenues for the government agencies
that are mandated to conserve biodiversity, PES are widely (and in most cases primarily) used to
provide conservation incentives for the communities that live in critical ecosystems. For
example, a variety of PES schemes are under development in the buffer zone of La Peñablanca
Protected Landscape in the Philippines which aim to encourage, enable and reward poor local
villagers to reduce illegal timber felling and charcoal production, and to engage in more
sustainable farming practices. Agreement has been reached with a local tour operator to share a
proportion of revenues with the local community, and negotiations are underway with the water
department in nearby Tugegurao town to contribute funding (REECS 2008).
Payments for ecosystem services are considered to have medium-high potential as a PA
financing mechanism in Myanmar. They have already been recognised to be a priority within
MOECAF: a decision has been made to develop a national PES system, and ECD is beginning to
look at possible implementation models, legal and institutional needs. There are also various
opportunities for PES in PAs in major tourist areas, as well as those located in the watersheds
which serve hydropower facilities, urban water supply schemes and other industrial water users.
There may also be potential for developing marine and coastal PES, especially in relation to the
fisheries habitat and productivity and coastline protection services provided by mangroves and
coral reefs. It should however be noted that neither ecosystem services nor PES are yet explicitly
mentioned in the laws governing PA management, and that considerable work needs to be
carried out to establish whether other key requirements are in place (for example relating to
contract law, property rights, and a willingness to pay on the part of ecosystem service
beneficiaries).
Forest carbon finance
Carbon finance can be considered to be a specific form of PES which (in the case of Myanmar
and other developing countries) is based primarily on payments from the international
community. Myanmar is in principle eligible to be the recipient of Clean Development
Mechanism (CDM) projects, which allow for the generation of saleable emissions reductions
from afforestation, reforestation and revegetation activities (including improved forest
management). There is however currently only one registered CDM project in Myanmar – the
Dapein Hydropower Project, and this does not relate to either afforestation or reforestation. The
emergence of a REDD+ (Reducing Emissions from Deforestation and Forest Degradation)
mechanism may also allow for PAs to generate revenues from the restoration, maintenance and
enhancement of existing forest carbon stocks. A REDD+ Readiness Roadmap for Myanmar was
produced in 2013, and, as yet, pilot projects are only in the very preliminary stages of discussion.
No other voluntary carbon projects appear to be recorded or under development in the country.
Several ASEAN countries are using forest carbon finance as a source of funding for PAs and
biodiversity conservation. In Malaysia, sales of carbon credits have been used to finance the
51
rainforest conservation on the eastern side of the Yayasan Sabah concession area, within the Ulu
Segama Forest Reserve and contiguous with Danum Valley Conservation Area. The project
involves retiring logging rights, and protecting and rehabilitating 25,000 hectares of degraded
rainforest through planting indigenous tree species and undertaking sustainable forest
management activities. So far, over 11,000 hectares of rainforest have been restored. The
project has been validated, verified and registered under the Verified Carbon Standard scheme.
In China, forest carbon finance is being used to regenerate degraded lands just to the south of
Gaoligongshan Nature Reserve, with the aim of restoring wildlife habitat and creating a buffer
zone between the nature reserve and surrounding villages. The project applies Climate,
Community and Biodiversity Project Design Standards. About 2,000 local farmers contribute land
and labour to the scheme and will own any income from forest products generated, while a
commercial forestry farm has provided the main investment funds and is overseeing forest
restoration and management activities and will own the carbon credits produced by the project.
Forest carbon finance is considered to be a PA financing mechanism with low-medium potential
for further development in Myanmar. At the present time, CDM projects may also have only
limited applicability, due to the complex (and often costly) requirements for design and
registration. International voluntary carbon markets would currently appear to offer the most
potential for generating PA funding – in particular the segment of the market which combines
forest carbon with the generation of biodiversity, social and other co-benefits. However here,
too, projects must be validated and verified according to accepted third-party standards, which
require time, money and expertise to apply. Finding a buyer for the emissions reductions
generated can also be difficult. The place of PAs in the emerging national REDD+ programme
bears further investigation – although it should be noted that this is only in its very early stages,
and it remains unclear as to whether viable REDD+ markets will in fact emerge either at a global
level or in Myanmar
Cross-sectoral fiscal earmarking & transfers
Fiscal instruments have long been used as a means of generating public revenues in other
sectors of the economy, and over recent years have started to be used as a way of funding PAs.
The most usual form of fiscal transfers is to allocate to PAs all or a part of the taxes and other
income from products and services which use or impact on the environment. Although less
common, there are also some examples of unrelated revenue streams being earmarked for PAs
or nature conservation. As all public revenues are remitted to Union and State/Region Funds in
Myanmar, at the moment no mechanisms exists for transferring fiscal revenues directly from
other sectors to PAs (i.e. outside routine annual subventions to MOECAF from central budget
funds).
Several examples exist in ASEAN countries of environmental-fiscal transfers from sectors that
depend on biodiversity or ecosystem services. For example, the Philippines Reforestation,
Watershed Management, Health and/or Environment Enhancement Fund is enabled by the
52
Electric Power Industry Reform Act of 2001 as a mechanism for returning hydropower revenues
to catchment conservation. It is managed by the Department of Energy, and funded via
government-imposed "Social Responsibility" compensation from electricity generation
companies levied at PhP 0.01 per kWh of production. These funds are then accessed by means
of annual work plans submitted jointly by the hydroelectric power company and the local
government to the Department of Energy. India’s 2011 draft guidelines for ecotourism in and
around protected areas, prepared by the Union Ministry for Environment and Forests, proposes
a “local conservation cess” on private tourism activities near PAs to be levied as a proportion of
total turnover tax, with revenues being earmarked fund protected area management,
conservation and local livelihood development. In Belize, all air, land and sea travellers are
required to pay an international departure tax of USD 39.25, of which USD 3,75 is designated as
a conservation fee and paid into the national Protected Areas Conservation Trust fund.
There are few, if any, regional examples of fiscal transfers from products and services that have
only an indirect link to nature conservation, or are not related to it at all. Cases do however exist
in other parts of the world. In the United States, 10% of tobacco tax revenues in California is
earmarked for parks and wildlife habitat conservation, Missouri’s 0.05% tax on sales of personal
property and retail services is allocated to the Department of Conservation, and both the
Nebraska Environmental Trust Act and the Great Outdoor Colorado programme are financed
through earmarked state lottery funds. Along similar lines, the UK Heritage Lottery Fund
provides almost USD 0.6 million a year to fund nature conservation and cultural heritage
projects in the UK. In 2014, more than USD 1 million was provided from Dutch Postcode Lottery
funds to support seven PAs in Africa and around USD 20 million was provided by the Dutch and
Swedish postcode lotteries to the Peace Parks Foundation to protect rhinos.
Fiscal earmarking and transfers is recommended as a PA financing mechanism with medium
potential for further development in Myanmar. There are many taxable products and services
which are linked to PAs, biodiversity and ecosystems, that do not currently contribute towards
biodiversity conservation. It is however important to note that the principle of cross-sectoral
fiscal earmarking transfers to some extent contradicts the government’s current stated policy of
centralised budget allocation and public financial management. Ongoing public sector financial
reforms, including fiscal decentralisation, may however allow for such arrangements to emerge.
Earmarking is also broadly in line with the principle of user pays, which is already established as
a basis for nature conservation and environmental financing in Myanmar.
Sub-national ecological-fiscal transfers & retention
Several countries now operate systems whereby public revenues are redistributed from national
and subnational to local levels, with the aim of helping lower‐tier governments cover the
expenditures required to provide nature-related public goods and services. They usually target
regions which contain a especially large area under protection, host biodiversity of exceptional
significance, or provide particularly valuable ecosystem services to other sectors and parts of the
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country. Although there is no precedent for ecological-fiscal transfers to the subnational level in
Myanmar, regular transfers of funds already take place from Union funds to Regional and State-
level budgets.
One of the earliest examples of ecological-fiscal transfers is provided by Brazil’s ICMS Ecológico
or ‘Ecological Value-Added Tax’. Since the early 1990s, the Federal Constitution has allowed for
25% of the revenues from a tax imposed on the circulation of goods, services, energy and
communications to be allocated to municipalities. Of this share, 75% is distributed according to
an index of municipal economic output, and the remaining quarter is allocated according to
criteria defined by each state. A growing number of states are basing these criteria on
environmental characteristics, and using fiscal revenues to compensate for land-use restrictions
associated with conservation. In the State of Paraná, for example, five percent of municipal tax
share is allocated based on watershed and biodiversity conservation areas. Fiscal transfers to
municipalities are determined by indices which consider the size of the protected estate, the size
of the municipality and PA management categories, as well as a PA "quality index" (May et al.
2002). A similar system operates in Portugal, where the proportion of land under protection is
used as an indicator in the allocation of lump‐sum transfers to local governments based on the
provisions of the Local Finances Law 2007. Transfers per hectare are higher if protected area
coverage in relation to municipal area is beyond 70% (Ring et al. 2011). Similar systems have
been proposed (but not yet implemented) in Indonesia (Mumbunan et al. 2012) and India
(Kumar and Managi 2009).
Decentralisation and local-level retention of PA revenue collection provides another model for
sub-national ecological-fiscal transfers, whereby central government waive the requirement for
a PA to remit revenues to the national treasury and allows all or some of the income earned to
remain at the site level. Under these arrangements, retained revenues are often shared three
ways between the PA managing authority, local administration and/or adjacent communities. In
Indonesia, for example, the national decentralisation policy of 1999 provided an opportunity to
grant Bunaken National Park ‘pilot project’ status. This allowed for the PA to determine the level
at which user fees would be set and to keep the resulting revenues (rather than follow the
normal system of remitting all revenues to central government). In 2001 an entrance fee system
was introduced, with the proceeds being shared 80% with the National Park Management
Advisory Board for management and conservation activities and 20% with local government,
including using just under a third of revenues to fund a small grants programme for each of the
villages in the park (Erdmann et al. 2003).
In Thailand, National Parks are permitted to retain up to fifteen percent of self-generated
revenues at the site-level (for example from concessions, fines and penalties, accommodation
charges, entry fees, charges for the use of recreational facilities and donations). Another half can
also be transferred back to the PA if a proposal is prepared and submitted to the Department of
National Parks Headquarters. The remaining funds are retained at the central level for allocation
to other PAs (20%), used to cover unforeseen or emergency expenses (10%), and allocated to
the administrative authorities around PAs (5%).
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Sub-national ecological-fiscal transfers are recommended as a PA financing mechanism with
medium potential for further development in Myanmar. If current processes of deconcentration
and decentralisation in environmental management continue (for example via township-level
Forest Departments and subnational Environmental Conservation Departments, and even via