Finance Ministry Defends Ambiguity in 2014 Budget Bill

The Finance Ministry on Wednesday defended itself against recent reports that some 45 percent of the government’s $3.4 billion draft budget for 2014 remains unallocated, issuing a statement explaining that the money will pay for loans, subsidies and other vital expenses.

The ministry’s explanation still left much to puzzle over, however.

The spending bill, some $400 million more than this year’s budget, was passed by the ruling CPP’s one-party National Assembly last week and is expected to sail through the Senate today.

“Some print media has exaggerated information regarding the draft law on financial management for 2014, in particular the unallocated budget or ‘miscellaneous expenses’ of the government,” the ministry said in the statement.

According to the statement, some of the reportedly unallocated $1.53 billion—approximately $58 million of it—will go toward repaying the interest on the country’s mounting foreign loans.

The ministry said the $1.53 billion also includes $82 million for paying down the principal on those loans, $62.5 million for the Ministry of Transportation, $48.1 million for electricity subsidies and $15 million for the country’s diplomatic missions.

But the statement is vague on how most of the $1.53 billion will be spent. For example, $865 million is allocated for unspecified “ministries and institutions” and another $37.5 million for unnamed donor-funded projects.

The true unallocated figure, the ministry says, is just about $129 million and most of it, $104 million, will go toward more infrastructure projects.

The ministry added that “$24.7 million will come from loans for current expenditures for urgent needs and other incidental needs, including humanitarian, natural and social calamities as well as national sovereignty and national security.”

The total $3.4 billion draft budget for 2014 includes $489 million for the ministries of defense and interior, a 17 percent increase over the last budget. The draft also calls for taking on an additional $920 million in foreign loans next year.

NGOs and the political opposition regularly criticize the government’s national budgets for allocating too much for security and defense at the expense of social sectors such as health and education, and for relying too much on high-interest foreign loans rather than collecting more taxes and stamping out corruption.

Yem Ponhearith, a spokesman for the opposition CNRP, said the budget should not include any unallocated expenses at all, and that the Finance Ministry’s clarification was still too vague.

“We can’t understand clearly what they say about these unallocated funds,” he said. “We don’t understand why there are unallocated funds, because all the expenses must be transparent and accounted for. They should clearly specify what they will spend it on.”

Neither Cheam Yeap, who chairs the National Assembly’s finance committee, nor officials at the Finance Ministry could be reached for comment.

The ruling CPP passed the budget in the National Assembly last week without the opposition because the CNRP is refusing to take its seats in protest against July’s national elections, which it accuses the CPP of winning through fraud.

In another statement Wednesday, the 11 opposition lawmakers in the 61-seat Senate said they would also boycott today’s scheduled vote on the budget in the upper chamber. The 50 senators of the CPP are expected to quickly pass the budget.

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