‘Disappointed’ UNDP Cites Gov’t Inaction Commitment

The UN Development Pro­gram, one of the government’s key reform partners, has criticized the government for not acting on policy suggestions aimed at strengthening the administration and weaning the country from international aid.

In its annual report released last week, the UNDP singles out its public administration and public finance reform programs as having largely failed because of a lack of government commitment to undertake key actions.

The report blames the failure on government administrators who didn’t work hard enough to replace international aid with local tax revenues. In re­cent years, foreign assistance has accounted for roughly half of the government’s budget.

“This is of particular concern to UNDP, since an effective and efficient public administration and fiscal management are paramount requirements for peace and sustained poverty reduction,” the report says.

An economic adviser to the government countered Tuesday that if the UNDP expects its programs to be carried out, it needs to provide substantial funds in ad­dition to technical assistance. He also noted that the government recently has made some positive steps to increase its tax base.

The criticism comes in the UNDP’s report on its 1997 activities. UNDP officials stressed Tues­day that the report is largely po­sitive and overall reflects a good partnership with the government.

The report details, among other things, UNDP’s progress in helping build schools, libraries, wells, roads and clinics, the expansion of its judicial advising program from six to nine provinces, and the organization’s partnership with the Cambodian Mine Action Center in raising money for demining.

The UNDP spent $17.6 million in Cambodia in 1997 and raised $20 million from other sources. The organization reported that its focus has shifted from “quick impact” projects to development that can be sustained over the long term.

A senior UNDP official, who re­quested anonymity, ranked the public administration and finance programs as high on UNDP’s priority list and two of the most im­portant reform projects that the government could tackle.

The finance reform program, for example, outlined tax administration reform and recommended ways the government could raise revenues by taxing such items as property, small-business transactions and small item purchases.

The administration reform program pushed for, among other things, a salary scale for public servants, pension plans for re­tirees, and fine-tuning job descriptions and department responsibilities within ministries.

More than $5.5 million has been spent by the UNDP on the two reform programs over the past three years.

The finance reform program stalled after the International Monetary Fund, which ran the pro­gram, pulled out of Cambodia last year because of the government’s failure to control corruption in the forestry industry and meet benchmarks set out in an economic reform plan.

The administrative reform plan ended prematurely except for one technical program establishing a computerized legal database, the UNDP official said.

Aspects of both programs have been successful, the official said. “But all together…it has certainly been very disappointing.”

According to the report, the public adminstration plan will be resumed “as soon as the Royal Government shows signs of real commitment.”

“What we would really wish is that it would be undertaken once the government is established,” the UNDP official said.

Te Duong Tara, an economic adviser to the Council of Minis­ters, argued Tuesday that the government has made progress in putting into place a tax system. Earlier this year, the government enacted a small-business revenue tax, he noted.

And in January, a value-added tax, which targets small purchases, goes into effect, he said. A property tax is still being debated.

As for broad administration reform, Te Duong Tara said such tasks are too expensive without funds from a large lender like the IMF or World Bank.

“I don’t agree [with UNDP’s criticism] because, in fact, in order to make the programs successful we need the supporting funds and without the supporting funds…it cannot be implemented,” Te Duong Tara said.

He pointed to an armed forces demobilization plan that has been dormant since several foreign donors suspended crucial funds following last year’s collapse of the coalition government.





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