National budget approved in spite of gross lack of quorum at the NatAss

NatAss ratified the 2012 budget draft law

24 Nov 2011
Everyday.com.kh
Translation from Khmer by OssDey

The 2012 budget draft law was ratified by 86 votes (out of 86) at the NatAss at 11:30 AM on 24 Nov 2011 in spite of the SRP and the HRP MPs’ boycott of the session. According to this draft law, the budget amounts to $2.695 billion, $1 billion of which will be borrowed from overseas.

SRP pledges budget boycott

Wednesday, 16 November 2011
Meas Sokchea with additional reporting by David Boyle
The Phnom Penh Post

Opposition leader Sam Rainsy has declared his party will boycott parliament’s debate of the 2012 budget draft law in an attempt to render its adoption invalid.

In a statement obtained by the Post yesterday, Sam Rainsy said the boycott was intended to cast doubt over the legality and validity of a budget that allowed a corrupt government to exploit state revenues while increasing foreign debt.

Citing article 76 of the constitution, which states “The [National] Assembly consists of at least 120 members”, the statement said the withdrawal of SRP lawmakers – who occupy 26 of 123 seats – would at least cause donors to reassess their commitments to Cambodia.

“More precisely, when it comes to the ratification by the National Assembly of loans from international institutions and foreign countries, even a little doubt is enough for serious and professional creditors to stop, reduce or delay any loans that appear more risky,” it read.

Defense Spending Expected to Rise Into 2012 [-It takes a lot of money to maintain Hun Xen's bodyguard unit?]

The $304-million defense and security budget for 2011 was less than Cambodia’s neighbors last year.

Thursday, 18 August 2011
Heng Reaksmey, VOA Khmer | Phnom Penh

“We divide [the budget] depending on the reality of each year.”

Cambodia expects to bump up its military and defense budget next year, an increase that comes amid an ongoing standoff with Thailand over the border near Preah Vihear, officials said Wednesday.

Defense remains a priority sector for spending, garnering $304 million in 2011, when it also saw an increase. Officials say they expect to prioritize health and education spending for 2012.

However, national defense remains a primary concern, with an ongoing border dispute that began in July 2008 and has led to a number of deadly skirmishes over the last three years.

As a result, the government has begun a recruitment drive for 5,000 more soldiers—many of them to replace retiring troops—who will train for three months before they are sent to the northern border.

Ranking of country providing info on budget

Click on the chart to zoom in

Cambodia's score: 15

Meaning: SCANT or NO INFORMATION

National Assembly Passes $2.4 Billion Budget

NatASS
The 2011 budget, totaling $2.4 billion, allocates military and security spending of $304 million, including $190 million for the Ministry of Defense. (Photo: by VOA Khmer)

Chun Sakada, VOA Khmer
Phnom Penh Friday, 26 November 2010

“The sectors of the government considered a priority, like the Ministry of Agriculture, received 1.8 percent of the total expenditure.”

With a day of mourning for the Diamond Bridge tragedy behind it, the National Assembly took up debate and passed next year’s budget, approving an increase of nearly half a billion dollars.

The 2011 budget, totaling $2.4 billion, allocates military and security spending of $304 million, including $190 million for the Ministry of Defense. The Interior Ministry received $114 million, health $169 million, and education $223 million.

Ouk Rabun, secretary of state for the Ministry of Finance, told lawmakers his ministry would accept recommendations from the National Assembly on “better public finance management.”

The main opposition, the Sam Rainsy Party, said it did not support the budget, claiming it had misplaced funding priorities.

“The sectors of the government considered a priority, like the Ministry of Agriculture, received 1.8 percent of the total expenditure,” Yim Sovann, a spokesman for the party, said. The ministries of rural development, land management and water resources each only receive 1 percent of the total, he said.

Kingdom near bottom in budget transparency

Friday, 12 November 2010
Buth Reaksmey Kongkea
The Phnom Penh Post

In Southeast Asia, only Vietnam provides its citizens with less information about how the government spends its money than the Kingdom. Without a transparent budget process, it is “virtually impossible” for Cambodians to hold their government accountable.

This is according to a new report released by the Open Budget Initiative, a project of the United States-based Center on Budget and Policy Priorities.

The NGO Forum on Cambodia sponsored a workshop on the subject with about 100 regional economic experts yesterday in Phnom Penh.

“I would like to appeal to the Government of Cambodia to continue to do more in improving our budget transparency ranking as well as encourage more public participation in the budget process,” said Chhith Sam Ath, executive director of the NGO Forum.

Cambodia-specific research in the report led by Chea Kim Song, development issues program manager for the NGO Forum, concluded that “the government provides the public with scant information on the central government’s budget and financial activities assessed by the survey” and gave the CPP-led government a score of 15 out of 100.

In Southeast Asia, the Philippines ranked highest with 55. Thailand earned a 42, and Vietnam was the least transparent at 14. Laos, Myanmar and Singapore were not rated.

The survey of 94 countries found “poor transparency and accountability” around the world, with an average global score of 42, and 74 countries failing to meet “basic standards”.

A number of factors led to Cambodia’s abysmal ranking, according to the report, including the limiting of important budget documents such as the draft budget law and the mid-year review to internal circulation.

The government also does not release a non-technical version of the budget that would allow citizens to better understand spending priorities.

Chea Kim Song said Cambodia lacked proper budget oversight.

Neither the National Assembly nor the National Audit Authority has adequate authority, time or resources to act as effective checks on the budget process.

Minister of Information Khieu Khanharith dismissed the criticism.

“We do not care about Cambodia’s score ranking”, he said, and claimed that NGOs “are lazy because they did not read Cambodia’s budget reports, which had been published by our government every year”.

Survey Finds Transparency Deficiency in Budgeting

Chun Sakada, VOA Khmer
Phnom Penh Thursday, 11 November 2010

“These are the countries that will need to quickly improve their transparency level to march with neighboring countries.”

Cambodia has nudged up slightly in its budget transparency, but it remains one of the lowest ranked countries in the region.

The Washington-based International Budget Partnership's annual budget survey found Cambodia's budget slightly more open than in 2008, and a more open than that of Vietnam.

On a scale between one and 100, Cambodia ranks 15 this year, up from 11 in 2008.

“Cambodia's score compared to regional countries has a very low rank, but it is higher than Vietnam,” said Chea King Song, a development manager for NGO Forum.

The average score for Southeast Asian countries was 36. Thailand scored 41, while the Philippines scored 55.

“In Cambodia and Vietnam scant information is provided,” according to the budget survey. “These are the countries that will need to quickly improve their transparency level to march with neighboring countries.”

The survey also found a weak legislative arm without enough power to amend budget proposals made by the executive branch or to hold public hearings on budget issues.

Cheam Yiep, head of the National Assembly's finance committee, called the report unfair.

“We work based on laws,” he said. “We do not keep information under the table. Cambodia works hard for transparency, public participation, effectiveness and good governance for the budget.”

Leah April, a public sector specialist for the World Bank's office in Cambodia, said Cambodia has made efforts to improve transparency in its public finances and is working to develop an information system to provide more timely information.

[Bloated] Draft budget approved

Sunday, 17 October 2010
Nguon Sovan and James O’Toole
The Phnom Penh Post

The Council of Ministers has approved a draft budget law for 2011 calling for an increase in spending of more than US$400 million compared to last year, including a $22 million rise in national security and defence spending.

Although a sector-by-sector breakdown of the budget was not available, Cheam Yeap, the chairman of the National Assembly’s Banking and Finance Committee, said spending would target key “social needs”.

“For Cambodia, our priority sectors are still education, health, rural development, agriculture, women’s affairs, social affairs and physical infrastructure,” Cheam Yeap said.

The draft budget calls for $2.4 billion in spending for 2011, up from $1.97 billion for this year, for a roughly 18 percent increase. This year’s $1.97 billion represented roughly a 4.6 percent increase from the previous year.

Council of Ministers spokesman Phay Siphan said the budget for defence and security spending had risen from $276 million to $298 million.

This bump, he said, had been driven mainly by the military wage bill.

“The government raises salaries for them by 20 percent annually and has to pay benefits to retired officials,” he said. He could not provide detailed data on allocations for other sectors, but said “social sectors” had been the focus.

Officials at ministries including Education and Rural Development could not be reached for comment yesterday. Minister of Health Mam Bunheng said he was busy when asked about next year’s health spending.

Voice of America reported on Friday that the Ministry of Health was allocated $165 million for 2011 and the Ministry of Education budgeted $218 million, representing year-on-year increases of $21 million and $20 million – or 13 percent and 9 percent.

The 7 percent increase in defence spending fell far short of last year’s 24 percent rise, which drew criticism from civil society groups that said it was unjustified in view of the Kingdom’s needs in other sectors.

Still, it was likely to be viewed with some annoyance by donor countries, who have continually pushed the government to direct more revenue towards its self-described “priority” sectors, said Carlyle Thayer, a professor at the Australian Defence Force Academy.

“It’s a pebble in the shoe,” Thayer said. “It’s an irritant, but [donors] have got a lot of scar tissue.”

In June, donors announced a record $1.1 billion in development assistance for the subsequent 18-month period.

Cheam Yeap said the government could tap its $95 million reserve budget if further funding was needed for national security and defence. In addition, Prime Minister Hun Sen signed a document in February approving a controversial programme in which local businesses provide funding to military units.

Chheng Kimlong, a lecturer in economics at the University of Cambodia, said the government would do well to focus spending on sectors that “reproduce investment or another stream of revenues”, including education and infrastructure development.

The government deficit was 5.9 percent in 2009 and will drop to roughly 5.3 percent this year, according to the Asian Development Bank.

Although spending is set to increase 18 percent in 2011, ADB senior country economist Peter Brimble said this should not jeopardise what the International Monetary Fund described in September as the Kingdom’s “favourable debt sustainability outlook”.

“In the decision to increase the budget to this amount, we would be confident that the government would be careful to balance their objectives to reduce poverty against the need to maintain responsible debt-management practices,” Brimble said.

Cambodian state pay to jump under higher 2011 budget

18 Oct 2010
By Prak Chan Thul

PHNOM PENH, Oct 18 (Reuters) - The Cambodian government has drawn up a $2.4 billion budget for 2011, 17 percent higher than this year's, and some of the extra money will go towards a 20 percent pay rise for civil servants and the military, officials said on Monday.

Prime Minister Hun Sen said the increase in the budget would go mainly to the education and health sectors, and to fund the pay rise.

Phay Siphan, secretary of state at the Council of Ministers, told Reuters that details would be published when the budget goes to parliament for approval this week.

"All the increases are due to many factors, such as inflation, a 20 percent salary rise for civil servants, and army reform, which includes training and providing additional equipment," Phay Siphan said.

Phay Siphan said another priority was infrastructure to help farmers. "We will invest in road infrastructure, irrigation and rice seeding," he said.

Cheam Yeap, the chairman of parliament's finance commission, said the government was targetting spending of almost $300 million on the military next year, which he described as a small increase over this year.

The 2010 budget was set at $1.97 billion, of which $274 million was earmarked for defence and security spending.

The International Monetary Fund has criticised the high level of military spending in the past and it could again be a bone of contention with international aid donors, who contribute a large proportion of Cambodia's state budget.

In June, donors promised Cambodia $1.1 billion in aid for 2010, up from pledges of $990 million for 2009.

(Editing by Alan Raybould)

Council of Ministers Approves $2.3-Billion Budget for 2011 [-Spending bonanza for the cash-poor Phnom Penh regime]

Last month, September, Cambodia purchased 94 T-55 tanks from eastern Europe to bolster its military capacity. (Photo: Reuters)

Chun Sakada, VOA Khmer
Phnom Penh Friday, 15 October 2010

The Council of Ministers on Friday approved a draft budget of more than $2.3 billion for 2011, an increase of $445 million over the year before.

The Council approved military and security spending of $298 million, including $185 million for the Ministry of Defense.

The Ministry of Interior was budgeted $111 million, the Ministry of Health $165 million and the Ministry of education $218 million.

Defense and security spending reflected an increase of $22 million over the previous year, the largest increase overall.

Spending for the Ministry of Interior rose $1 million, while the Ministry of Health and Ministry of Education saw increases of $21 million and $20 million, respectively.

Opposition official criticizes the plan to increase the 2011 budget

20 July 2010
By Kim Pov
Radio Free Asia
Translated from Khmer by Socheata and Heng Soy
Click here to read the article in Khmer

On 20 July, opposition MP Son Chhay criticized the plan to increase the 2011 national budget, saying that the plan will hit a snag because Cambodia’s revenue is not on par with the government expenditures.

Son Chhay indicated that national revenue dropped between 2009 and 2010, and furthermore, starting from next year, a number of countries will start to demand repayment of their loans to Cambodia. Therefore, Son Chhay thinks that these are problems that would prevent the plan for a major increase in the budget.

Son Chhay said: “Where will the government take [the money] from? Because, we can see that the collection of national revenue is plagued with problems, even in 2009 and also in 2010, tax collection and customs taxes have dropped, so where will the money come from? Even if we count on foreign aid, there is no way to come up with $3 billion [for the budget].”

Son Chhay’s criticism came after a meeting of the National Assembly (NatAss) finance committee was held on Monday 19 July. The meeting also included the presence of officials from the ministry of Finance and it was focused on the discussion of the strategy for the 2011 national budget.

During the meeting, comrade Keat Chhon, the minister of Finance, estimated that the national budget must be raised to $3 billion, based on the budget request received by the ministry of Finance.

CPP MP Cheam Yeap, the chairman of the NatAss finance committee, added that the budget must be raised, whether by a small or a large amount, in response to the country’s development plan and a number of ministers must see growth in 2011, such as the ministry of Education, the Health ministry, the ministry of Rural Development and the ministry of Agriculture.

He explained further about the plan to seek income to pare the expenses in the 2011 budget: “The potential source of revenue comes from the customs tax collection, from the business tax collection, and from grants without having to pay back.”

Source from the ministry of Finance claimed that revenue for 2011 will only amount to about slightly over $2 billion, but the request for budget is close to $3 billion. Therefore, the 2011 expense budget exceeds the revenue by about $700 million, and the 2011 budget exceeds the 2010 budget by close to 40%.

The ministry of Finance will hold further meetings in August to review the requested budget increase for 2011.

Hun Sen: government spent too much on civil servants' salary

Thursday, March 18, 2010
By Khmerization
Source: RFA

Prime Minister Hun Sen is unhappy that his government spent too much money on paying the salary of civil servants, reports Radio Free Asia.

Speaking on 17th March in a meeting to hear the reports about the government's 2009 achievements, Mr. Hun Sen has ordered all ministries to stop recruiting more staff in an attempt to save money. He said only teachers and medical staff are allowed to be recruited. "Only teachers and medical staff are allowed to be recruited. In other institutions, if they have 100 staff and if 30 staff retired, 70 are kept and they won't be allowed to recruit any more staff because past expenditures have exceeded our micro-budget", he said.

Mr. Hun Sen also said in the past, expenditures on civil servants' perks such as free petrol, phone bills, allowances, accommodation, food and travelling expenses on overseas missions have exceeded the micro-budget. He said from now on, if necessary, ambassadors and diplomats in Cambodia's overseas missions will attend the conferences and meetings in the countries they are based in instead of sending officials from Cambodia in order to save the money.

According to government figures, expenditures on civil servants' perks is equivalent to 4.4% of Cambodia's Growth Domestic Product (GDP), which is considered too high for any country.

Mr. Yim Sovann, spokesman for the opposition Sam Rainsy Party, said there are corruption involving in applying for allowances and perks from many government officials. "They inflate the invoices. They only received one invoice, but they presented two invoices (for reimbursements) and sometimes they inflated the invoices three times higher than the real charges in the invoices because they connived with the service providers and vendors. This has caused the government to lose a lot of money because there is no control put in place. This is only the tip of the iceberg and this is not a new issue, it is an old issue, so it is good that (Mr. Hun Sen) has raised the issue. So, we want to see his words become a reality and we wish that these words are transormed into concrete measures in order to tackle unnecessary expenditures and to save our National Budget because all these money are coming from the sweat and blood of our citizens", he said.

The opposition parties have in the past accused the government of unnecessarily recruiting hundreds of civil servants every year but it has never made the figures public. Mr. Yim Sovann also appeal to the government to punish those officials who inflate the invoices in the past.

Sacrava's Political Cartoon: The Micro-Budget

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

2010 Budget Sees Increases in Key Sectors [-Another bloated budget?]

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
01 December 2009

The National Assembly on Tuesday passed the draft law for the 2010 budget, with overall spending reaching nearly $2 billion.

Defense and security spending increased by more than $50 million, while health and education spending rose nearly 20 percent and 11 percent, respectively.

The overall budget of $1.99 billion was an increase of more than $100 million from the year before.

Defense and security received $276 million, the Ministry of Health $144 million, the Ministry of Education $198 million, the Ministry of Agriculture $20 million, and the Ministry of Water Resources $8.8 million.

Finance Minister Keat Chhon thanked the National Assembly for passage of the new budget and said Cambodia was on track to reduce poverty by 1 percent in 2010.

The three parliamentarians of the Human Rights Party did not vote for the budget, because spending in areas like health care and education were only raised a small amount, HRP President Kem Sokha said. “Bigger spending was on defense and security.”

“The 2010 national budget forces people to pay taxes, and put tax payment pressure on the poor and rich as they suffer from the world economic crisis,” said Yim Sovann, a spokesman for the opposition Sam Rainsy Party.

National Budget Risks High Deficits: World Bank

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
04 November 2009

The economy fell from a nearly 7 percent growth rate in 2008 to a 2 percent contraction so far in 2009

Cambodia’s recently drafted 2010 budget could put pressure on the economy by running high deficits that exceed external financing, the World Bank said Wednesday.

The Council of Ministers this week green-lighted a $2 billion budget for next year, increasing money allotted for health services and decreasing that for security, in an overall increase of more than $100 million.

The government “is facing difficult choices in drafting the 2010 budget,” the World Bank said in a regional update. “Sustaining high deficits that exceed available external financing would put pressure on macroeconomic stability.”

“The government is trying to bring the fiscal deficit to a level that supports growth—which remains below potential—without compromising macroeconomic stability,” the World Bank said.

Cheam Yeap, a ruling party lawmaker and head of the National Assembly’s finance committee, said the budget suffered from the world economic crisis.

Next year’s budget “cannot avoid difficulty,” he said. “However, the government is prepared to strengthen its macroeconomics with clarity, fairness and goodness.”

Kem Sokha, president of the opposition Human Rights Party, said the government should avoid high deficits, which would require loans from foreign countries and increased taxes.

“The government can increase its expenditure,” he said. “But the government must prevent corruption and collect taxes to avoid the loss of income.”

In the proposed 2010 budget, which must be approved by the National Assembly, expenditure decreased in the ministries of Defense, Education and Interior, but slightly increased for the Ministry of Health.

Cambodia wants to see an annual economic growth rate of 7 percent, while reducing poverty by 1 percent, Council of Ministers spokesman Phay Siphan said.

The economy fell from a nearly 7 percent growth rate in 2008 to a 2 percent contraction so far in 2009, but the Bank said signs of recovery could see a 4 percent growth next year.

Cambodia gives big boost to military budget

14% of the national budget will be allocated to defense, including the upkeep of Brigade B-70 (Left), Hun Sen's private bodyguards unit, in stark contrast to the 1.7% budget spent on agriculture, Cambodia's economic backbone

By Ek Madra

PHNOM PENH, Oct 31 (Reuters) - Cambodia, one of Southeast Asia's poorest countries, plans to boost defense and security spending by 23 percent next year, its budget showed on Saturday, raising the prospect of a clash with the IMF.

Cambodia plans to spend $274 million on defense and security next year, up from $223 million this year, the budget showed. The total budget for calendar 2010 was $1.97 billion, which meant the military was allocated about 14 percent of total spending.

That compares with 1.7 percent spent on agriculture, the backbone of Cambodia's economy, and 0.7 percent on water resources. About 1.7 percent was set aside for rural development.

Military spending is a sensitive topic in Cambodia because of the millions of dollars of donor money flowing into the country, largely to social programmes.

"This big budget for defense is meant for preventative measures in response to international conflicts," said government spokesman Phay Siphan.

Siphan said the spending was unrelated to tensions with neighbouring Thailand over land surrounding a 900-year-old, cliff-top Hindu temple known as Preah Vihear. Skirmishes in the border area have killed seven troops in the past year.

Thailand is challenging a U.N. decision to make the temple a world heritage site under Cambodian jurisdiction. Cambodia was awarded the temple in a 1962 international court ruling that did not determine who owns 1.8 square miles (4.6 sq km) next to it.

The International Monetary Fund (IMF) criticised Cambodia last year for its military spending, leading the Cambodian government to cut back its defense budget during a debate in parliament after questioning by the IMF.

"Donors will not be happy," Ou Vireak, head of the Cambodian Center for Human Rights, said of the latest military budget.

He said Prime Minister Hun Sen was likely trying to whip up nationalist support by projecting an image of a strong military at a time of heightened tension with Thailand.

"By doing so, he is turning the country effectively into a military state," he said.

(Editing by Jason Szep and Dean Yates)

Cambodian parliament passes budget of 1.77 billion dollars

Tue, 09 Dec 2008
DPA

Phnom Penh - Cambodia's National Assembly on Tuesday passed a 2009 budget of 1.77 billion dollars, topping last year's expenditure plan by 28 per cent. The budget came less than a week after a pledge of more than 1 billion dollars for 2009 from donor nations, and will increase government spending on defense, health, education and agriculture.

Defense and security will receive 20 per cent of the 2009 budget, while 16 per cent will go to education, 11 per cent to health, and agriculture will receive 1.7 per cent.

Ouk Rabun, secretary of state for the Ministry of Economy and Finance, told the assembly the ruling Cambodian People's Party would ensure the budget was implemented fairly and efficiently.

"We will fairly carry out the 2009 budget in accordance with government measures," he said.

Representative Chheang Vun said told the assembly the budget represented an effort by Prime Minister Hun Sen the party to "strengthen security and development, reduce poverty, and introduce reforms as well as improving education, health and agriculture."

Opposition Sam Rainsy Party member Yim Sovan said no members of his party voted to approve the budget.

"We did not vote to approve the new national budget because we have some concerns over the unclearness of tax collection and expenditure in the construction of infrastructure," he said.

Sam Rainsy Party lawmakers earlier in the week criticized the government for increasing military spending, saying funds could be better used in the areas of education, rural development and women's affairs.

Bloated 2009 budget approved

Cambodian parliament approves national budget of over $ 1.88 bln for 2009

PHNOM PENH, Dec. 9 (Xinhua) -- The Cambodian National Assembly (NA) here on Tuesday approved the 2009 national budget of over 1.88 billion U.S. dollars with its emphasis on education, health and military defense.

"We thank the parliament for it agreed with the request of the government for the expenditure of the national budget for 2009, and it will contribute to reducing poverty in the country and lead to more economic growth," Ouk Rabun, secretary of state of the Ministry of Economy and Finance, told the parliament after the approval.

In 2009, the Ministry of National Defense is expected to get about 160 million U.S. dollars for salary rise and pension of the troops as well as construction of new military headquarters, according to Tea Banh, Deputy Prime Minister and Minister of National Defense.

The budget will also prioritize programs of education, health, agriculture and land management, said Cheam Yeap, chairman of the NA committee of finance, banking and audition.

The national budget for 2009 has a 29.6 percent rise over that of 2008. Last week, donor countries pledged nearly 1 billion U.S. dollars of aid for Cambodia in 2009.