Spending Still Leans Toward Military Items

Despite the government’s articulated commitment to fiscal reform, defense and security still account for more than half of the country’s expenditures, according to figures through August.

And, as in recent years, spending on defense and security is ahead of budget, while expenditures on health and social affairs lag far behind.

About $80 million was spent on defense and security in the first eight months of this year—more than 50 percent of total domestic expenditures of $158 million, according to figures in a Ministry of Finance report.

“This ratio is incredibly high and just unacceptable,” the opposition Sam Rainsy Party said in a statement Friday. “In other countries, the figure does not normally exceed 10 percent.”

The Ministry of Finance is supposed to have disbursed about 67 percent of the government’s projected budget by the end of August, but it has spent only 55.9 percent so far, the report shows.

Defense and security already have spent 69 percent of their budget for the year, compared with 23 percent for public health and a paltry 13 percent for social affairs and labor.

Soy Sokha, the government’s economic adviser, argued Sun­day that the Finance Ministry is responsible for how to implement the projected budget, not the government, which only deals with budget allocation. “If a ministry spent more than what it is allocated, the government would inspect [later]…to see how necessary it was.”

And if ministries don’t spend their budgeted amount, the excess could be transferred to the next budget year, Soy Sokha said.

Officials of the Finance Ministry could not be reached for comment Sunday. Finance Mini­ster Keat Chhon is out of the country, but has maintained previously that the government needs to continue to spend more money on defense than social services to ensure peace and security.

Donors said they are well aware of the budget disbursement problem and plan to discuss it at the next donors meeting on Oct 27.

“Unfortunately, the pattern [on budget expenditures] hasn’t changed so much—the priority goes to the defense and security sector,” said Henk Bekedam, the World Health Organization’s chief technical adviser to the Ministry of Health.

Bekedam pointed out that every year over the last three years the Health Ministry has been able to receive only 15 to 20 percent of its allocated budget in the first six months, hindering operations.

British Ambassador George Edgar said it is common know­ledge in the donor community that the implementation of the health budget has been slow. Overall, the donor community is looking for more balanced spending, he said.

Te Kuyseang, the Ministry of Health’s director-general for administration and finance, noted that one reason health expenditures are so low is that medicine ordered for government hospitals hasn’t yet been paid for. That payment—about $7 million—comes later in the year, he said.

The budget and revenue report through the first eight months shows other problem spots. Spending on agriculture and rural development, considered to be important for the country’s well-being, also are way behind budget, at 37.8 percent and 43.3 percent respectively.

On the revenue side, only about $5 million from timber royalties have been collected so far this year—only 27 percent of what was budgeted for the year. The International Monetary Fund, which halted aid in late 1996, wants improvements in the forestry sector before re-engaging in Cambodia.

The eight-month figures do show some positives, such as the government’s new value-added tax. The tax already has accounted for more than $56 million of revenue, nearly what was budgeted for the entire year.

But it is the spending on defense and security that most rankles opposition leader Sam Rainsy, a former finance minister.

“The armed forces which have always had the lion’s share of the budget, continue to overspend state resources,” the Sam Rainsy Party said in Friday’s statement.

“Where­as expenditures to promote development and welfare for the people are always below targets,” the statement said.

 

 

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