2013 National Budget to Rise Above $3 Billion

Government spending next year will total more than $3 billion, a 16.2 percent increase from the $2.6 billion set aside for 2012, according to a draft of the national budget obtained Friday.

The first draft of the budget, which was distributed to lawmakers at the National Assembly on Thursday, calls for spending increases of between 10 and 20 percent across the board, with the military and security sectors seeing a sizeable increase in their budgetary allocations.

The budget states that the government will allocate some $400 million, or 13.32 percent of all spending, toward the defense and security sectors, a 17.3 percent increase over last year’s allocation. Of that amount, the Ministry of Defense will receive $245 million, with the rest of the spending going toward the Interior Ministry.

The largest allocation of funding will be distributed to the social affairs sector, which includes nine ministries: education, health, women’s affairs, social affairs, labor, culture, information, religion and environment.

According to the draft budget, social affairs spending in 2013 will increase 15.8 percent to reach more than $686 million.

Funding for education, according to the draft budget, will increase from $245 million this year, to almost $280 million in 2013, while a total of $225 million will be allocated to the health sector, up from $193 million in 2012.

The Ministry of Women’s Affair’s has been allocated just $7.7 million next year.

The economic sector—which includes agriculture, commerce and tourism—has been earmarked for slightly more than $254 million, compared to $231 million this year.

“The draft budget was prepared in the context of Cambodia recovering quickly from the global economic crisis [in 2009] and because it is showing economic growth likely to reach 7 percent this year despite inherent risks,” the draft budget states.

The Council of Ministers said last month that the 2013 budget—which comes in a national election year—will be used to give a 20 percent pay raise to civil servants and armed forces. However, there is no mention of such a raise in the draft budget allocations.

Although the national budget is steadily growing in size, critics say the government should be giving a larger proportion of its annual expenditure to priority sectors such as agriculture, health and education.

The International Monetary Fund in its periodic review of Cambodia’s economy has also consistently expressed that point of view.

The agriculture sector will receive only $35.3 million of next year’s spending, just 1 percent of the total budget.

Though the government wants more private investment in agriculture, economists say more state support for ordinary farmers is needed in order for investors to enter the market at a quicker rate.

“People are always saying that there is not enough going into agriculture, but money that does go there is not for the farmers as much as it is for researching technologies and funding conventions to generate investor interest,” said Mey Kalyan, senior adviser at the Supreme National Economic Council.

“Cambodia does not have the resources to make the bigger investments, and this has always been a limitation for us,” he said.

Opposition SRP spokesman Yim Sovann said that the proposed budget fails to designate enough funds to priority sectors, namely in vocational training and health.

“We need to have more of a budget to ensure that our people live a healthier life and receive better education. We should allocate at least 40 percent more on these things, because people should be able to afford to use the hospitals when they are sick and go to high school for free,” he said.

He also said that the budget is not enough to subsidize rising costs in basic necessities such as electricity and gasoline for the poor.

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