Govt ends civil salary incentives

(CAAI News Media)

Wednesday, 23 December 2009 15:04 James O'toole and Vong Sokheng

NGOs concerned about impact

THE government has terminated salary supplement programmes for civil servants, sparking concerns that public services, particularly for poor Cambodians, will suffer in the face of inadequate compensation for government employees.

Under such salary supplement programmes, development organisations had been bolstering salaries for civil servants in a range of sectors over the past several years.

“The termination of the … incentive schemes will apply to all cases across the complete portfolio of projects and programmes irrespective of the funding sources,” Minister of Economy and Finance Keat Chhon wrote in a letter dated December 4 and obtained by the Post Tuesday. “It is, therefore, applicable to all donor-assisted as well as [government-] funded projects and programmes.”

In justifying the decision, Keat Chhon explained that the government was concerned that the salary-supplement schemes could be an obstacle to wider civil-service reforms necessitated by the global financial crisis. The minister added that incentive-based pay schemes could be perceived as unfair.

Minister of Information Khieu Kanharith echoed these concerns Tuesday, saying that salary supplements that are not uniformly distributed “cause bad feelings in the workplace and lead to declines in productivity”.

Chan Theary, executive director of the Reproductive and Child Health Alliance, said the implications of the government’s decision were not yet clear, and that she worried about the potential consequences for the health sector.

“It seems like if this happens, the implementation at the grassroots level will be destroyed,” she said.

Niklas Danielsson, a child- and adolescent-health specialist at the World Health Organisation, said employees at health centres, which treat large numbers of poor Cambodians, already earn low salaries and could suffer from the policy change.

“We are concerned about the potential implications if salary supplements are removed, particularly in service delivery at the health centre level,” he said.

Asian Development Bank (ADB) spokesman Chantha Kim said civil service reform and a review of the government’s compensation system could greatly benefit the Kingdom. He cautioned, however, that a simple reduction in salaries could do more harm than good.

“ADB … shares concerns with other development partners about the possible negative impact the cancellation of salary supplements might have on the delivery of some essential social services, especially to the poor,” he said.

The ADB and other development organisations, Chantha Kim added, have requested a meeting with the government “to discuss measures to mitigate the negative impacts on social-service delivery”.

A World Bank document from 2006 that appraised a project including pay incentives for government employees, stressed the importance of civil service wages in promoting development and good governance.

“Perhaps the principal risk to the [National Strategic Development Plan] is the capacity of the civil service to deliver. Moreover, it is clear that low public sector wages provide a breeding ground for corrupt practices,” the document said. “At the same time it is apparent that low pay is a leading cause of Cambodia’s relatively poor standing on public sector performance.”

The value of the pay incentives proposed in the document was US$7.8 million, though figures were not available on Tuesday for the overall value of the salary programmes terminated by the government this month.

Rong Chhun, president of the Cambodian Independent Teachers Association, said the government’s decision to end salary supplements can only be effective if it is accompanied by wider reforms.

“There have been many complaints by civil servants alleging that partisanship and corruption in government have reduced transparency and directed funding to the wrong recipients,” he said.

Officials from the Ministry of Economy and Finance declined to comment Tuesday.