An International Monetary Fund mission applauded the government’s efforts to increase revenue but recommended it collect more money from the forestry industry, according to an Asian diplomat who attended an IMF’s donor briefing Wednesday.
Mission leader Chanpen Puckahtikom, assistant director for the IMF’s Asia and Pacific Department, told donors before leaving Cambodia that the government’s performance on collecting tax revenue is impressive, citing actual revenue from value-added tax, the diplomat said.
She applauded reforms on cutting ghost soldiers and downsizing civil servants, but criticized poor budget management and government’s efforts to increase revenue from the forestry industry, the diplomat said.
The IMF suspended loans to Cambodia in late 1996 in part because of the country’s inability to collect legal logging revenue. The government in late January raised the royalty rate from $14 per cubic meter of timber to $54 per cubic meter. But it still has not reached its goal, collecting only 12 percent of the 1999 budgeted revenue so far this year.
Chanpen reported that logging companies reacted negatively to the royalty rate increase, suspending operations. She told donors the IMF mission recommended the government open dialogue with logging industry representatives to ensure cash flow, the diplomat said.
The mission also reportedly asked the government to speed up disbursement of budget money to areas such as health and education, and improve customs administration.
The five-member IMF mission was here for one week to review efforts at economic and financial reform, necessary for the resumption of an $80 million loan.
The mission has signed a non-binding letter of intent for the three-year, seven-installment loan package, but needs approval by the IMF Board of Executives.
Finance Minister Keat Chhon is scheduled to travel to Washington on Sept 23 to discuss reform and the aid resumption with IMF mission members. He is expected to submit the government policy on structural reform.
“This reform commitment is ours, not the IMF’s. The IMF only reviews what we have done and strengthens it,” he said Wednesday. (Additional reporting by Lor Chandara)