Defense, Education Get Boost in New Budget

The Cambodia Daily | 22 October 2015

Buoyed by increased revenues gained by recent tax-collection reforms, next year’s national budget will provide across-the-board spending increases, including a 28 percent boost for education and a 17 percent boost for defense, according to a draft approved Wednesday. 

Marking three straight years of significant increases for the two ministries—all since the ruling CPP’s shock losses at the 2013 national election—total government spending will rise 12.3 percent to $4.27 billion next year from $3.8 billion this year.

The draft was approved by Prime Minister Hun Sen in a Council of Ministers session Wednesday, with spokesman Phay Siphan posting the draft document to his Facebook page after the meeting’s conclusion.

Among the biggest winners are the security forces, with the Defense Ministry [of Vietnam against the Cambodian People] to receive a 17.3 percent increase to $379 million and the Interior Ministry, which controls police, to receive a 21.6 percent raise to $275 million.

Other major beneficiaries will be the Education Ministry, which has been allocated about $497 million—an increase of 28.2 percent from last year—and the Agriculture Ministry, up 25.1 percent to $46 million.

The Health Ministry will get 8.6 percent more to bring its allocation to about $271 million, while the new National Election Committee (NEC) will receive about $28 million—a 763 percent increase—to help build a new voter list and prepare for the 2017 and 2018 elections.

Mr. Siphan, the Council of Ministers spokesman, said by telephone that reforms implemented in November 2013 that increased enforcement of often-ignored tax laws had helped allow for the increases—as had foreign lending.

“We do have more money, extra money, that we are able to invest in more industries like health and education. Income depends on proper tax collection, so the amend- ments to taxation helps,” Mr. Siphan said.

“Don’t be surprised to see that expenditure is higher than income, because we have foreign aid as well as borrowing. But borrowing is stable; we follow the rule of law and maintain a public debt ceiling.”

Mr. Siphan said the government keeps the debt ceiling at 40 percent of gross domestic product (GDP). In August, he said public debt was at about 31.1 percent of GDP, a mostly stable figure over the past decade.

Next year will mark the third straight year of large increases for education and the security forces, with both benefiting much more in that period than the overall 42.3 percent increase on the $3 billion budget handed down in 2013.

The $497 million given to the Education Ministry, which has been a focal point of the CPP’s post-2013 election reforms, means next year it will have double the amount allocated to it in the 2013 national budget, when it received $245 million.

Similarly, the collective $654 million budget for the security forces—under the ministries of defense and interior—represents a 63 percent increase since 2013, when the ministries received a combined $400 million.

Spokesmen for the defense and interior ministries could not be reached. Education Minister Hang Chuon Naron said the increase to his ministry will be spent mostly on teachers’ salaries and training.

“It will enable us to have increased salaries. Mainly now we will focus on the salary situation and teacher training,” he said.

Mr. Chuon Naron, who became minister in September 2013, has embarked on a campaign to extinguish cheating on exams and internal corruption, angering many of the low-salaried teachers who relied for years on informal payments from their students.

“This budget will help. Next year will be good for salaries, training and undertaking our reforms,” he said.

NEC spokesman Hang Puthea said the $28 million allocated to the election committee would help its efforts to build a new digitized voter registry ahead of the 2017 commune elections and 2018 national election.

“The NEC is very happy to hear that the Council of Ministers has allocated more money for the NEC but today the NEC still needs more funds to do its job,” Mr. Puthea said.

“In order for the elections to produce fruitful results that every political party contesting the elections can accept, the NEC appeals to the local and international communities to help donate more funds,” he said.

In June, the European Union promised about $11 million to the NEC for the voter list, but the NEC has said it is racing against the clock in its efforts to register every Cambodian as pledged in post-2013 electoral reforms.

CNRP lawmaker Son Chhay, who is deputy chair of the National Assembly’s Banking and Finance Commission, said the draft budget was difficult to analyze given that there is rarely, if ever, any transparency on how the ministries spend the money they receive.

“When it comes to spending, there’s no details about what they are spending on. [Officials] can still pocket 30 to 40 percent of what is allocated to them. If we could spend that money, we would not need to borrow,” he said.

“The government claims that they have worked hard to improve the collecting of revenue through taxation, that’s why there’s some increases, but I heard they will still borrow around $1,000 million next year,” he added.

“Look at the debt Cambodia now owes to China, we now have $8,000 million. That’s a lot of money.”

Mr. Chhay also noted the increases toward security spending and said more transparency would show whether the money is going toward things like soldier salaries or instead toward enriching officers and funding political repression.

“The country needs money to defend the country. It should not be spent for the purpose of corruption or to counter the rise of free speech and demonstrations,” he said. “You have to be frank with the public. Where is the money going?”