Gov’t Plans On “Allowances” Replacing Salary Supplements for Civil Servants

The government will reexamine how it provides pay incentives to civil servants, with the hope of creating a new incentive scheme within the next six months, Hang Chuon Naron, secretary-general of the Ministry of Finance, said yesterday.

One plan, which was discussed during a retreat on public finance reform held this weekend in Preah Sihanouk city, would involve giving allowances to all civil servants, not just those who work on donor-funded projects, Mr Chuon Naron said.

“We want to have allowances for different kinds of services the government provides, like for example, teachers or medical workers,” he said. “We will discuss different kinds of allowances for these sectors to create a system for civil service.”

In early December, the government surprised many by ending its longtime practice of allowing donor organizations to provide income supplements to members of the country’s low-paid civil service who work on specific development projects.

Members of the international aid community and civil servants currently receiving salary supplements said last week that the government’s decision could lead to a decline in public services, increased corruption as poorly-paid government workers try to make ends meet, and an eventual exodus from the public sector.

The government’s decision to end all civil service pay supplements also applied to salary reforms known as Merit-Based Performance Incentives and Priority Mission Groups, which were jointly funded by donors and the government, and were intended to bring order to ad hoc salary supplementation from non-governmental entities.

“We agreed that in light of the suspension of MBPI/PMG, in the next six months we will come to some concrete formula for providing incentives so that the government can continue to implement the reform program, but also to deliver public services,” Mr Chuon Naron said.

One key difference between the now-banned salary supplements and the allowances that was discussed at the meeting is that the latter would be applied to all civil servants, not just those who work on donor-funded projects.

“It’s not salary supplements, and it’s not MBPI…because these measures would be across the board for all civil servants and not just for some,” he added.

The government has repeatedly said that one of its biggest issues with salary supplementation and the MBPI/PMG scheme was the inequity they supposedly engendered within the country’s burgeoning civil service.

Minister of Finance Keat Chhon cited this “disharmony” in a Dec 4 letter to World Bank Country Director Annette Dixon informing her of the ban on supplements.

“We don’t want to see employees in the same area treated differently,” Council of Ministers spokesman Phay Siphan explained last week.

“For example, two of us work in the same office and have the same responsibilities, so why should one who works on a project with an NGO get more money? That is going to be creating what we call a disparity among people who work in the same place, and we don’t want an unjust working area.”

Mr Chuon Naron emphasized that no concrete decisions were made this weekend: “We have some ideas, but we need to further discuss them with our development partners, so we have not yet decided anything conclusively,” he said.

He added that talks on salary supplementation were only part of what took place at the retreat, which was held to discuss the government’s Public Financial Management Reform Program.

“MBPI is only a component of this reform,” Mr Chuon Naron said.

A 2007 joint statement by Cambodia’s donors called Merit-Based Performance Incentives “an important incentive for moving forward the PFM [Public Financial Management] Reform Program. In remarks delivered at a 2008 review of the PFM program, IMF Resident Representative John Nelmes also singled out MBPIs for praise, calling them a “good example” of progress in public finance reform.

Representatives of development partners including the World Bank, the Asian Development Bank, the European Union and Japan attended the weekend retreat, Mr Chuon Naron said, but it was unclear whether they were involved in talks on salary supplements.

One senior civil servant who currently depends on salary supplementation said that he had “heard positive things” from his superiors about decisions made at the weekend meeting. The civil servant, who spoke on condition of anonymity because of the sensitivity of the topic, said he was optimistic about the government’s plans.

Prak Sokhon, secretary of state at the Council of Ministers, said yesterday that he had not attended the retreat and had no new information about the government’s position on salary supplementation.

Putu Kamayana, ADB’s country director, also said he had no new information about the future of pay supplements.

“I’d be interested to hear about that, as would all the development partners and NGOs,” he said.

(Additional reporting by Kuch Naren)

 

 

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