POLIC IES F OR CLOSING THE GAP SH AR Expanding access to E D social services P R O SP ER ITY IN YANM ARM ALL ABOARD Policies for shared prosperity in Myanmar This Policy Note was prepared by: Hnin Hnin Pyne (Team Leader and Senior Human Development Specialist); Puja Vasudeva Dutta (Senior Economist); Lars Sondergaard (Program Leader); James Stevens (Senior Operations Officer); Mar Mar Thwin (Education Consultant) and Nang Mo Kham (Human Development Specialist) under the guidance of Toomas Palu (Practice Manager, Health), Harry Patrinos (Practice Manager, Education) and Jehan Arulpragasam (Practice Manager, Social Protection). ALL ABOARD Policies for shared prosperity in Myanmar Closing the gap: Expanding access to social services CLOSING THE GAP Expanding access to Myanmar has an important opportunity to improve the health status and education outcomes of its people after social services decades of underspending and institutional neglect in the social sectors. Low access to health, education and social protection services has severely worsened human development outcomes, which ranked among the lowest in the region. Since 2011, there has been a sea change in public policy with rapidly rising social spending to expand access to services and protect families from poverty. The payoffs are immense – in Myanmar, an additional year of schooling is estimated to be associated with 6.7 percent higher income (World Bank, 2014a), which will be com- pounded with better health and social protection. Although significant progress has been made recently, immense challenges and opportunities remain. Policies to close the gap in access to social services are fundamental to inclusive growth in Myanmar. Context and opportunities for change There are big opportunities to improve human development outcomes in Myanmar, including by addressing disparities across socio-economic groups (figure 1). Only 29 percent of children from households in the poorest quintile were enrolled in secondary school, compared with 80 percent of those from the richest quintile. Women in the poorest quintile have the lowest percentage of births delivered by skilled attendants, receiving post-natal care and practicing exclusive breastfeeding of under 6-month olds. Furthermore, 33 percent of children from households in the poorest wealth quintile were underweight compared with 14 percent of children from the richest quintile. Figure 1: Nutrition outcomes across income groups Gaps in access to education between poor and richer households are more significant than the differential access between boys and girls. There is some evidence of gender gaps at a State/Region level, with lower enrollment and attainment for girls relative to boys in Rakhine and greater dropout rates for boys over girls in those parts of the country where labor market opportunities are drawing children from work. Greater analysis is needed to explore the sub-national patterns and to devise appropriate policy responses. Source: UNICEF and MNPED (2010) 1 There are also opportunities to address big dispar- Closing gaps in access to services will mean tack- ities across geographical areas. Health status and ling difficult terrain, conflict in border areas, and education outcomes fare worse in rural areas than cultural diversity and local norms. These are com- in urban areas (figure 2). Within rural areas, net primary pounded by systems challenges, namely limited and enrollment rate in 2009/10 ranged from 96 percent in fragmented financing, weak human resources, basic Kayah to 69 percent in Rakhine. The highest pass rate physical infrastructure, and scant data. Remote/hard- in the 2010 final examination was 45 percent in Mon, to-reach areas face huge difficulties in deploying and whereas the lowest was 17 percent in Chin. Exclusive retaining qualified teachers, doctors and basic health breastfeeding up to the age of six months ranges from staff. Approximately a third of primary school teachers 1.3 per cent in Rakhine to 40.6 percent in Kachin. nationwide have been teaching for less than 2 years and they will require more support in terms of training Figure 2: Urban and rural health and education indicators and mentoring. In areas affected by conflict, where government presence has been historically limited, social service delivery will need to be harmonized with existing service delivery mechanisms and aligned with the peace process. Services in these areas are delivered by ethnic authorities associated with armed groups that administer these territories. The New Mon State Party, for example, has 142 schools and over 13,000 students. Community based organizations and ethnic health groups deliver prevention and primary health care in conflict-affected areas of Eastern Myanmar. One household survey found that in some of those areas 70 percent of its respondents used ethnic-led health services whereas only 8 percent relied on government Source: Nutrition and access to health care: health services within the last 12 months. UNICEF and MNPED (2010). Net enrollment rates: staff calculations using 2009/10 MICS data 2 Recent shifts in the Union Budget have created an opening to further reverse low public spending on health and education and to reduce the financial burden on households. In 2009, households bore 63 and 82 percent of total education and health costs respectively through direct out-of-pocket payments, one of the highest in the world. This either prevented poor people from accessing healthcare because they could not afford it, or led to further impoverishment as they had to sell assets to access services. In a survey in 2009, almost a third of respondents noted that out- of-pocket costs were unaffordable. The Union Budget can also help to significantly improve the quality of education and health services. Very basic school facilities have made learning condi- tions difficult, as demonstrated by Early Grade Reading Assessment (EGRA) results (figure 3). At the point of health service delivery, quality is severely affected by a shortage of critical inputs. A recent nationally-repre- sentative survey of health facilities found that only 26 percent of them had essential medicines, 41 percent basic amenities, and 57 percent the capacity to provide There is also an opening to establish an effective basic obstetric care. social protection system to help the poor and vulnerable to access services. They currently have limited mechanisms and programs to reduce the expo- sure to risks and to expand their ability to cope with ill-health and other shocks, such as the recent floods. Social assistance spending in Myanmar continues to be extremely low, with only 0.02 percent of GDP, compared to an average of 1.1 percent of GDP among low-income countries. In addition, social assistance Fig 3: Early Grade Reading Assessment programs reach only 0.1 percent of the population, (EGRA) Results, Yangon Region (2014) compared to 39 percent among East Asian and Pacific countries. Source: World Bank Myanmar Early Grade Reading Assessment (EGRA) for the Yangon Region , 2014 3 Recent developments Several reforms have been initiated to improve service delivery, increase utilization and reduce out-of-pocket spending in the health sector. These include: the provision of free essential drugs at township hospitals and below; and free services for pregnant women and children under five. In addition, the Ministry of Health implemented a pilot scheme to incentivize poor women to seek antenatal visits, safe delivery, and postnatal care by paying for transportation, food and lodging. In the education sector also, policies were adopted to encourage children to attend school and reduce dropout rates. Primary and secondary school fees have been eliminated, free textbooks are now provided to all students, and over 70,000 contracted teachers have been recruited. In addition, since 2014 a stipends policy program for poor and vulnerable students has been introduced (grades 5-11) in 8 townships across 4 States changes are and Regions, reaching 36,800 students in the first year. The aim is to reach 184,000 recipients by 2017/2018. delivering results 4 These policies were implemented through a dra- Fig 4: Government expenditure on health matic increase in public spending. Health spending and education (% of GDP) has increased from 0.2 percent of GDP in 2009 to over 1 percent of GDP in 2014. This is equivalent to a nine fold increase in nominal terms between 2009 and 2013. Education spending has increased from 0.7 percent of GDP in 2011 to an estimated 2 percent of GDP in 2014. Furthermore, a promising reform of decentralization has started, through facility grants provided directly to schools, hospitals, and health centers that are at the frontline of service delivery. These policy changes are already delivering results. Out-of-pocket spending as a share of total spending is estimated to have dropped from 63 percent in 2010 to 30 percent in 2015 for education and from 82 percent to 54 percent for health over the same period. Anecdotal evidence suggests that the stipends program so far has encouraged parents to get more involved in their children’s education, to improve attendance, and to cover education costs such as stationary, uniforms, Source: World Bank (1985), World Bank (1995) and transport with the stipend. and World Development Indicators, Ministry of Education and Ministry of Health 5 Regional experiences and lessons Public health spending in Thailand increased from 5 Thailand percent of the budget in 1985 to 17 percent in 2015, which is one of the highest in the world. In addition to reprioritization across the budget, efficiency gains in Thailand’s road to Universal Health Coverage health spending were achieved through better procure- (UHC) may provide valuable lessons for Myanmar. ment of essential drugs and medical services. Further Thailand’s decades of health infrastructure develop- fiscal space was afforded through a 2% additional ment and experimenting with different financial risk surcharge on tobacco and alcohol excise tax, which is protection schemes alone did not deliver UHC. In 2001, used for campaigning on various health risks including however, Thailand launched an ambitious reform known tobacco, alcohol, HIV/AIDS, non-communicable dis- as the Universal Coverage Scheme (UCS). Within one eases and road safety. year of its launch, the UCS covered 47 million people: 75% of the Thai population, including 18 million people Whilst Thailand’s starting point in 2001 was different previously uninsured. This rapid coverage was sup- from that of Myanmar today, the basic ingredients to ported by the readiness of the services, which was success in Thailand are relevant: high-level political enabled by earlier investments in health infrastructure. leadership and commitment to UHC; evidence-based The other 25% of the population were government policy making; and a fiscal framework that ensured employees, private-sector employees, and others who financial affordability and sustainability. All of these can were covered under existing schemes. be applied to Myanmar today (World Bank 2015). 6 Vietnam In Vietnam, the government invested early in tackling socio-economic and geographic disparities in access to education services, which had some similarities to Myanmar’s situation today. In terms of net participation rates in education there was significant progress between 1994 and 2003, going from 91 percent to 98 percent in primary education, 42 percent to 81 percent in lower secondary, and 13 percent to 37 percent in upper secondary. Nonetheless, geographically disadvantaged areas, which included ethnic minority groups, had lower access to education services. To address this, the government provided more resources to remote areas (e.g. for higher teacher Philippines salaries), introduced safety nets in vulnerable provinces, and had targeted fiscal transfers for less developed The Philippines may offer good lessons in rapidly regions. scaling up social protection services from a low base. In 2007/08, the Philippines had high unemploy- Vietnam’s dramatic improvements in education ment and rising poverty and inequality linked in part to outcomes relied on evidence-based policies. This the international commodity price and global financial involved heavy investment in data collection, which crises. Spending on social protection was only 0.4 per- helped improve the prioritization of government cent of GDP in 2007, with the social assistance budget spending and education quality. Vietnam also at just 0.05 percent of GDP, a little over Myanmar today. introduced poverty-targeted cash transfers (stipends) Existing social protection programs were fragmented, to enable children from poor households and those poorly targeted and prone to leakage. living in remote areas to complete schooling. Between 1998 and 2002, the benefit incidence from government In 2008 the government launched a pilot Conditional spending in education increased for the poor and near Cash Transfer (CCT) program to cover 6,000 house- poor from 51 percent to 54 percent in primary education, holds. Within two years, the program was rolled out to from 32 percent to 43 percent in lower secondary, and a million households. Spending on social assistance from 15 percent to 25 percent in upper secondary. The increased to 0.35 percent of GDP. By 2014 the program government introduced tests to monitor education reached nearly 4 million poor households and serves outcomes and adopted minimum quality standards, as the backbone of a modern and consolidated social which further informed budget allocations. International protection system. benchmarking tools show that literacy and numeracy among Vietnam’s students and adult workforce is The CCT program in the Philippines became a plat- widespread, and higher than in a number of richer form to develop delivery systems that have already countries. This in turn has enabled Vietnam to produce proven effective in reaching those in need, responding a strong, productive workforce, which has contributed to disasters, and addressing human development to its development success over the past two decades. constraints. It was the foundation for establishing the National Household Targeting System for Poverty Reduction, known as Listahanan. This established the framework for channeling resources under the National Community Development Program, and in response to natural disasters. The evidence shows that these initiatives have promoted inclusion by enabling poor and vulnerable households to invest in their children’s health and education, and enabled faster response to natural disasters. 7 8 CLOSING THE GAP Expanding access to social services Policy options Spending better: The recent increase in social Better targeting of resources could be facilitated by sector spending in Myanmar could yield the making better use of data from the census and house- greatest benefit if spending is focused on cost- hold poverty surveys.2 In particular this could help to effective interventions, aligned with priority ensure that budgets are linked to addressing problems issues, and focused on lagging geographic that are more prevalent among the poor, such as mal- areas and specific groups. In health this nutrition, and to programs that promote equitable and might mean allocating more for prevention affordable access to services, such as stipends and and public health, which could help reduce maternal health vouchers, which have been initiated or the risks of infection and negative effects piloted in Myanmar. on others. In education, the data suggests that improving the quality of basic education Improving spending quality might also mean is a priority; given the young teaching incentivizing education and health service providers force, more attention seems warranted for so that they work on delivering sector outcomes. One in-service teacher training and mentoring option for this could be through strategic purchasing, programs. For example, Indonesia’s which are explicitly aimed at controlling costs or in-service teacher training used clusters for increasing utilization of particular services. Salaries or professional development, which proved to line budget items do not necessarily incentivize quality be an effective means of supporting a large or cost savings. For example, primary care providers number of teachers with consistent, quality are increasingly paid through capitation, which leads to professional development activities. greater attention to prevention and health promotion, as there is an incentive to keep the population healthy. Improved targeting of public resources is Capitation gives predictability and flexibility to use another dimension of better quality spending. funds for providers and helps to contain costs, but This includes prioritizing lagging rural areas. performance could be further incentivized to facilities, Today more public resources go to urban areas, e.g. through bonuses for delivering specific high priority even though the majority of the population, in par- interventions, such as women giving birth in health ticular the poor, live in rural areas.1 For example, centers or hospitals. urban health facilities, such as teaching hospitals and state/region hospitals, accounted for about 70 Finally, there may also be scope for increased spending percent of total public spending on health in 2013/14. efficiency. For example, in education, the current 92 titles As Thailand demonstrates, achieving UHC required a of textbooks used throughout the school system are of strong rural health network that is adequately resourced such poor quality that they have to be replaced every to deliver essential services. year, compared to other countries where a textbook 1 For further details please see the Policy Note on “Growing 2 Please see Policy Note on “Growing together: together: Reducing rural poverty in Myanmar.” Reducing rural poverty in Myanmar.” 9 can easily be used for three years. Another example financial commitments from donors are in place before is the high level of spending on pharmaceuticals any crises occurs, reducing emergency response in Myanmar. This could be a result of prescription time from eight to two months. In the Philippines, the behaviors of doctors and/or the procurement system, government used its existing cash transfer program by which does not support the use of generic drugs. With channeling donor funds for emergency response when the expansion of Information and Communication Cyclone Haiyan hit. Technologies (ICT), Myanmar could also increase savings by making better use of ICT to deliver training Spending more: Health sector needs are massive and information. Similarly, the use of the expanding relative to current levels of public service delivery. financial services and telecommunications network The fiscal space needed for higher spending on social could greatly improve systems for payment of salaries sectors could come from various sources. Increased for front line staff as well as social protection benefits, efficiency within the sector as highlighted above is while also promoting financial inclusion. one of them. A second source could be reprioritization across the budget. For example in Thailand, providing Pooling resources: In health, pooling of resources universal access to health was, in large part, financed could enable financial risk protection. Larger pools of by a gradual decline in military spending. A third source funds allow for greater cross-subsidization between could be through mobilization of new resources by rich and poor, between young and old, and between improving tax administration and reforming tax policies. healthy and sick. It could also allow for better pur- For example, a number of countries are reforming the chasing of health services (i.e. bigger pool gives greater structure of tobacco taxes in order to raise additional purchasing power) and translate to greater savings government revenues. China and the Philippines are from reduced management and administration. Today recent examples from the region. Myanmar has fragmented and uncoordinated pools financed by the government (i.e. Social Security Board, Harmonizing and converging: In areas affected by Ministry of Health) and by households, not to mention conflict, especially in the Southeast part of Myanmar, many parallel pools of external aid. Moving towards social services are delivered and financed in parallel fewer and bigger pools is common in many countries to national government systems. Rather than efforts aiming for UHC, such as Indonesia and the Philippines. to replace and compete with existing service delivery arrangements, more alignment and synergies through Social protection programs can also provide a common coordination and cooperation are needed to provide platform for pooling development partner (DP) funds to inclusive access to services in all areas. respond to disaster. This is demonstrated by Ethiopia’s Productive Safety Net Program (PSNP) which ensures 10 The table below proposes short-term (within 1 year) and long-term (within 3-5 years) policy options for the next five years (2016-2020) to help deliver on the above four objectives of spending better, pooling resources, spending more, and harmonizing and converging. CLOSING THE GAP Objectives Expanding access to Short-term OPTIONS Long-term OPTIONS social services Expand coverage of stipend Develop a more sophisticated programs to disadvantaged children. “targeting system” that relies on International evidence suggests that household characteristics to identify stipend programs can have a large and the poor and vulnerable. immediate impact on drop-out rates. Spending Establish a common platform to use Implement performance monitoring better results of the 2014 census to identify system of providers (e.g. student geographic areas with greater develop- learning outcomes), holding them ment needs to ensure equitable distri- accountable for quality and access of bution and inclusion. services, particularly among the poor and vulnerable.. Increase pooling or alignment Develop a system for financial risk of resources to ensure sustain- protection, which prioritizes the poor able financing for social protec- and the near poor. Pooling tion programs and for delivering resources an essential package of health and nutrition services for everyone living in the country. Based on a prior analysis of fiscal Regularly review social sector affordability, further increase the grants expenditure to continuously promote currently provided to schools and alignment of government spending on health facilities to ensure more flexible health, education, and social protec- Spending and transparent funds to the frontlines tion with social sector needs. more of service delivery in education and health and to reduce out-of-pocket spending. Harmonize financing and delivery of social services in conflict affected Harmonizing and areas, in line with the Nationwide converging Ceasefire Agreement, which calls for Government and ethnic cooperation on health and education. 11 CLOSING THE GAP Expanding access to social services References Health Information System Working Group, “The Long Road to Recovery: Ethnic and Community Based Health Organizations Leading the Way to Better Health,” February 2015. Health Insurance System Research Office. 2012. “Thailand’s Universal Coverage Scheme: Achievements and Challenges. An independent assessment of the first 10 years, 2001-2010,” Nonthaburi, Thailand. Ministry of National Planning and Economic Development, Ministry of Health and UNICEF. “Myanmar Multiple Indicator Cluster Survey 2009-2010,” 2011. Save the Children, “Assessment, Monitoring, and Implementation Support of the School Grant and Stipend Programs in Myanmar,” 2015. The World Bank, “Building resilience, equity and opportunity in Myanmar: Myanmar social protection notes series,” July 2015. The World Bank, “Myanmar Early Grade Reading Assessment,” 2015. The World Bank, “Myanmar Public Expenditure Review 2015,” September 2015. The World Bank, “Skilling up Vietnam: Preparing the workforce for a modern market economy – Vietnam Development Report 2014,” (November 2013) The World Bank, “Vietnam: Managing Public Expenditure for Poverty Reduction and Growth – Public Expenditure Review and Integrated Fiduciary Assessment,” Volume 2, (April 28, 2005) The World Bank, “Vietnam: Managing Public Resources Better – Public Expenditure Review 2000,” Volume 1 (December 13, 2000) 12 ALL ABOARD Policies for shared prosperity in Myanmar GROWING TOGETHER FINANCING THE FUTURE BREAKING BUSINESS AS USUAL ENERGIZING MYANMAR CLOSING THE GAP PARTICIPATING IN CHANGE Reducing rural poverty Building an open, modern and Fostering competitiveness and a dynamic Enhancing access to Expanding access to Promoting public sector in Myanmar inclusive financial system environment for private sector growth sustainable energy for all social services accountability to all “This Policy Note is part of a series entitled All Aboard! Policies for shared prosperity in Myanmar” CLOSING THE GAP GROWING TOGETHER BREAKING BUSINESS AS USUAL Expanding access to Reducing rural poverty Fostering competitiveness and a dynamic social services in Myanmar environment for private sector growth FINANCING THE FUTURE ENERGIZING MYANMAR PARTICIPATING IN CHANGE Building an open, modern and Enhancing access to Promoting public sector inclusive financial system sustainable energy for all accountability to all CLOSING THE GAP Expanding access to social services ALL ABOARD Policies for shared prosperity in Myanmar The World Bank Myanmar No.57, Pyay Road 61/2 Mile, Hlaing Township, Yangon, Republic of the Union of Myanmar. www.worldbank.org/myanmar www.facebook.com/WorldBankMyanmar myanmar@worldbank.org