Next year's Sub-National budget to rise 22pc to $100m, says govt

(Post by CAAI News Media)

Wednesday, 07 October 2009 15:00 Chun Sophal

THE government announced Tuesday it would boost its allocation of funds in the 2010 budget for spending at the subnational level to US$100 million from $82 million this year.

The money is allocated under the budget line for Sub-National Development Programmes, which is earmarked for spending by capital, provincial, district and divisional administrations.

“With this increase to the budget, we hope that Sub-National Development Programmes such as road infrastructure, irrigation systems and rural sanitation in all provinces and city will bear more fruit,” Minister of Economy and Finance Keat Chhon told a conference on the national budget in Phnom Penh.

The conference was attended by 400 officials from provinces and cities across the country.

Keat Chhon said that $65 million was expected to be financed by 15 development partners through 20 projects. The remainder would come from the state budget.

The ministry is expected to allocate 77 percent of the money to sub-national administrations, 18 percent to national administrations and 5 percent to other programmes. The new budget would boost the money allocated for spending at the commune level by 31 percent compared with 2009. Each commune will receive around $22,300.

The Supreme National Economic Council’s deputy secretary general, Phalla Phan, told a Greater Mekong Sub-region conference on energy last week that the Cambodian government had spent 15.6 percent more in the first seven months of this year compared with the same period in 2008. The extra spending was designed to boost the economy during the economic crisis, he said, without placing an exact figure on the total spent during the period.

The International Monetary Fund predicted last month that increases in the civil service and wage bill this year and higher capital spending would raise the budget deficit to 6.75 percent of GDP, up from 2.75 percent last year and well ahead of the government’s target of 4 percent for the year.

It also said that the bulk of the additional spending was taken up by an increased wage bill for the civil service and military and cautioned the government to avoid any further wage bill expansion and instead direct any extra spending at the priority areas of health, education and rural development.

ADDITIONAL REPORTING BY STEVE FINCH