Gov’t Spending Not Targeting Poverty: Group

A recent report by the NGO Forum on Cambodia has called into question the government’s spending in 2007 and its budget for 2008, saying that there was not enough focus on the government’s stated objective of reducing poverty in the fastest possible manner.​​​

The report, which uses data from the 2008 Budget Law, noted that last year several ministries linked to poverty reduction did not spend all of the money allocated to them for capital expenditures, which include longer-term expenses like construction or renovations.

The report also claims that the government’s 2008 budget does not prioritize many of its “priority ministries.”

Finance Ministry Secretary-General Hang Chuon Naron on Sun­day, however, said it was too early to draw conclusions regarding last year’s government spending as final figures will not be available before late March, and that the criticisms may reflect an in­complete understanding of the bud­get process.

The NGO Forum report states that, in 2007, the priority Ministry of Education spent nearly all of its capital budget and the Ministry of Health actually overspent by 123 percent. But the other five priority ministries—Rural Development, Agriculture, Justice, Women’s Affairs and Land Management—sig­nificantly underspent.

Chhith Sam Ath, executive director of the NGO Forum, said last week that the Rural Develop­ment and Agriculture ministries, which spent only 74 and 50 percent of their capital budgets respectively, were of particular concern given the effect they could have on alleviating rural poverty.

The report also notes that many government institutions overspent their recurrent budget—money for immediate expenses such as sal­ar­ies, travel and office supplies—in 2007. The report argues that the ad­ditional money put forward to cover these overruns went disproportionately to non-priority areas.

The report is also critical of budget allotments for 2008, noting that overall recurrent expenditures were up 21 percent compared to 2007, but that none of the priority ministries are in the top 10 beneficiaries, by percentage, of that in­crease. Of particular note, the re­port states, is a 55 percent in­crease in “precautionary expenses” to $132 million. The Ministry of Agri­culture, by contrast, received only an 11-percent increase.

In the area of the capital budget, NGO Forum said it was disappointed to see that the Ministry of Rural Development had actually had its funding cut by 14 percent.

“We would like to readjust those funds to be used for poverty reduction and not contingency spending,” said Chhith Sam Ath.

Hang Chuon Naron said the pre­paration and implementation of the budget was more complicated than what was reflected in NGO Fo­rum’s report.

He noted that a figure included in the report showing that the Min­istry of Industry had overspent its recurrent budget by 275 percent in 2007 was not due to salaries or travel expenses. Rather it went towards government subsidies to the state-owned Electricite du Cambodge, which enabled the utility to not raise electricity rates in 2007.

He added that, in general, us­ing percentages of money spent was not the best measure of effectiveness.

“You have to look at the results, not just how much you spent,” he said. “You can spend a lot on things that aren’t really necessary.”

As for the 2008 capital budget, Hang Chuon Naron said the bud­get law does not reflect the full extent of what the government in­tends to spend because of the com­plexities surrounding mo­ney from donors. As a result of the tangled dynamics of securing do­nor funding, only about half of de­vel­opment assistance to Cam­bodia makes it into the budget law, he said.

In general, he added, about 80 percent of the government’s capital expenditures goes to the ministries of Public Works and Rural Devel­op­ment for road construction and to the Ministry of Water Resources for irrigation projects.

“It is known that these infrastructure projects tend to benefit the poor most,” he said.

Hang Chuon Naron said that the 55 percent jump in funds for precautionary expenses was in part the result of the upcoming July election as well as contingency spending for things like road maintenance. He ad­ded that these funds are also used in case donors are slow in dispersing funding, meaning that the government would have to shell out money to prevent delays.

Chhith Sam Ath said that NGO Forum plans to update their analysis when final figures for 2007 be­come available.