Bonuses for Civil Servants Suspended Amid Uncertainty

Almost a month after the government partly retracted a controversial decision to end bonuses for civil servants working on donor-funded projects, the future of these payments is still shrouded in uncertainty. Donors have not resumed paying bonuses, saying that the government’s current position is unclear, while civil servants have been forced to absorb sharp cuts to their most recent paychecks.

In December, Minister of Finance Keat Chhon announced a ban on these bonuses, also known as salary supplements. The decision took the international aid community by surprise and led to widespread outcry, with donors and NGOs saying it could lead to a crisis in the public sector.

Many civil servants bolster their low incomes with these supplements, which reward government workers involved with key aid projects.

The ban, which came into effect on Jan 1, jettisoned all bonuses, including major pay reforms known as Merit-Based Performance Incentives and Priority Mission Groups, which were standardized and partly funded by the government.             But on Jan 21, Minister of Finance Keat Chhon partly withdrew the earlier decision, reiterating the ban on MBPI/PMGs, but allowing donors to pay ad hoc bonuses once again.

In a letter to development partners including the UN, the World Bank and the Asian Development Bank, Mr Chhon invited them to replace MBPI/PMG bonuses with straightforward salary supplements, essentially reverting to a pre-reform status quo from several years ago.

The letter also announced a stopgap scheme called “Daily Operational Cost,” which would seemingly function as a series of per diem payments for civil servants involved in certain projects. However, the plan-referred to as a “new modality”-was couched in bureaucratic jargon and not explained at length.

Putu Kamayana, country director for the Asian Development Bank, said yesterday that donors were currently preparing a joint letter to the government asking for a face-to-face meeting to seek clarity about the new proposal.

The plan “is not very clear, and that’s why we need to have a meeting about it,” Mr Kamayana said.

“It can be interpreted in many ways, so we want to have a discussion to be clear on what they intend and what would be acceptable to everyone so as not to disrupt any of these important programs that we are supporting.”

ADB has currently suspended supplements, and Mr Kamayana said he believed that the government’s other development partners had too.

“Certainly that’s our position, and that is the position of other donors as I recall.”

A senior civil servant speaking on condition of anonymity said yesterday that all donors had halted the payment of salary supplements, causing him and his colleagues severe economic distress.

“The matter is that donors have decided to temporarily halt the salary payments, because they claim they don’t clearly understand the meaning of the letter and the type of reforming salary supplements the government has in mind.”

The civil servant, who is in charge of four major donor-funded projects, said that “hundreds” of civil servants at his ministry alone are currently being affected by the bonus freeze.

“It has a terrible impact on civil servants, and I have received a lot of complaints from officials about their family economics,” he said.

“We are really concerned and hoping that donors will meet with the government soon.”

A female civil servant who also asked for anonymity said she had not been paid bonuses for working on donor-funded projects in either January or December.

“Since the government decision [in early December], I have not been paid yet,” she said. “I earn very little, but the salary supplements from donors helped my family a lot.”

Government officials declined yesterday to comment at length about the bonus issue, with the Ministry of Finance referring questions to the Council of Ministers, and the Council of Ministers referring questions to the Ministry of Finance.

However, Hang Chuon Naron, a secretary of state at the Ministry of Finance, reiterated yesterday that it would take at least six months for a long-term reform scheme to be put into place.

“Basically what the government wants to do in the meantime, because people are working on projects, is to allow [donors] to continue incentives instead of giving salary supplements for the people working on the projects, [so] they are paid on a daily basis instead of a monthly basis,” he said, describing the proposed DOC measures. “How that is implemented I don’t know yet.”

Mr Chuon Naron said he did not know whether donors had actually paid out salary supplements through this or any other scheme in January.

But Sin Somuny, the executive director of medical NGO Medicam, said that donors had absolutely halted the payment of supplements because they found the government’s stance confusing.

“At the moment, nothing is clear, and that’s why the approach of development partners is to wait and see,” he said.

“I can’t really interpret the letter either,” he added.

Mr Somuny said he was unhappy that the situation had devolved to the point where civil servants in the health sector are barely being paid. He blamed donors for not taking advantage of the government’s softened stance.

“At first the government said all incentive schemes are terminated. Now they say, we’ll eliminate PMG/MBPI, but you can continue other salary incentive schemes until the new modality is developed. So that is a flexibility that we should move on,” he said.

“Why are we now saying, ‘No no no, we don’t pay anything?’ Why wait? People need survival,” he said. “It’s a deadlock now. It’s a game on both sides. Why play this unnecessary game that will have adverse impact on the poor and on people’s lives?”


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