The government must show more commitment to the financial reform of public funds and enact more robust transparency mechanisms for revenues generated from Cambodia’s nascent extractive industries, NGO and donor officials said yesterday at a conference on Cambodia’s development.
NGO Forum and the British government’s Department for International Development (DfID) said the government should also allow independent auditing of the national budget and prioritize more accurate reporting of the revenue streams from oil, gas and mineral revenues.
The recommendations, outlined in a paper released at the conference in Phnom Penh, will be submitted to the government ahead of June’s all-important annual donor meeting, when a new set of development targets will be formally adopted for the country.
“We would really like to see some big steps on the reform programs over the next few months,” said Matt Mahama, an economic advisor to Britain’s DfID.
“We’re pretty much at a stage where we need a plan for design.”
While recognizing that the government’s public financial management reform program had made some progress—the government published an audited report of the 2006 national budget last year and a system for the monthly publication of oil, gas and mining revenues on the Table of State Financial Operations (TOFE) has been devised—NGO Forum said there is still ample space for improvements.
A website where the government can announce bidding opportunities and information on contract awards—slated for enactment in 2010 under the PFMRP—is still not operational and information on Cambodia’s debt levels is still not publicly available.
Moreover, independent oversight of the national budget, which economists said focused too heavily on the military and civil service wages during the economic crisis, is still very limited.
“NGOs believe that progress can continue to be made in improving transparency throughout the budget process,” according to the position paper released at yesterday’s conference.
Youk Bunna, deputy director of the public financial management secretariat within the Ministry of Finance, said the government was dedicated to public financial reform, but admitted that major improvements are needed.
“In regard to progress, of course some areas have been slow—slower than expected,” he said.
Mr Bunna offered as an explanation the sheer size and complexity of training a skilled work force capable of sustaining any revised changes to the management of the government’s finances, as well as finding the funding to implement the technological changes required to uphold the system.
“This is a big task. It requires a lot of coordination. It is a big complex task,” he said.
Mr Mahama said that caution in trying to draft laws perfectly the first time was one reason why the needed reforms are taking so long.
“We would ask them to perhaps balance this justifiable caution with a bit of impetuous and action,” Mr Mahama said.
Critics say the real reason for the government dragging its feet is a lack of desire for real change.
Quickening reform “is not a technical obstacle, it seems the obstacles are politically involved,” SRP lawmaker Mu Sochua told the conference.
NGO Forum yesterday also called on the government to bolster its level of transparency from revenues generated for oil, gas and mining.
An announcement from Prime Minister Hun Sen in April that French oil giant Total had paid $8 million into a social fund and $20 million as a signature bonus have led to growing questions as to where the money has been deposited. Similar multimillion-dollar payments from Australian miner BHP Billiton and Indonesian company MedcoEnergi in 2006 have also never shown up on the government’s books, rights groups say.
NGO Forum also called for the TOFE to contain more details on where revenues from the extractive industries are generated and for more stringent control over the allocation of funds from the national budget.
Mr Bunna, of the Ministry of Finance, said that the government was currently drafting a law to regulate oil and gas revenues, and reaffirmed the government’s commitment to adopt the guidelines laid out inside the Extractive Industries Transparency Initiative.
“Donors and development partners have to work with government to see what achievements they would like to see over a certain period of time, Chhith Sam Ath, executive director of NGO Forum, said in an interview.
Although stopping short of saying that donors should stop funding if they do not see genuine attempts to reform the government’s financial system, Mr Sam Ath did say that donors should not offer unconditional support.
“We want to see the donors also take serious action,” he said.
