Questions surround new incentive plan

via CAAI News Media

Wednesday, 27 January 2010 15:04 James O'Toole

Development community awaits talks with government during six-month transition period

MEMBERS of the development community are awaiting discussions with the government after last month’s announcement of abrupt changes to salary schemes for civil servants, calling continued dialogue essential during the six-month transition period that will precede the compensation reforms.

Under several different salary supplement programmes, donors had been helping the government pay civil servants, including doctors and teachers, often boosting perilously low wages to acceptable levels.

After having announced the cancellation of supplement programmes last month for “all donor-assisted as well as [government-] funded projects and programmes”, Minister of Economy and Finance Keat Chhon revised the government’s position last week in a letter to foreign ambassadors and development partners.

While targeted incentive programmes for civil servants introduced in recent years – Merit-Based Performance Incentives and Priority Mission Groups – are to remain cancelled, straightforward salary supplements will continue during the transition period.

The cancellation of the supplements, originally meant to take effect January 1, took many observers by surprise, and although they welcomed the newly announced transition period, they said much must be done to ensure that social services can continue in the long term.

“How this eventually will work out … I think that depends on the outcome of the discussions with the government and the administrative reform process,” World Health Organisation country representative Pieter Van Maaren said, adding that he looks forward to “constructive dialogue on this issue”.

In lieu of salary supplements, Keat Chhon wrote last week that the government hopes to base new compensation schemes on a principle he termed “Daily Operational Cost”.

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We’re working to find some sort of solution so that services can go on.
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Although Keat Chhon offered no specifics on how this principle would operate, Hang Chuon Naron, secretary general at the Ministry of Economy and Finance, said the government is working on the issue.

“It’s very new, and the government has to discuss it in the next six months,” he said. Though he declined to comment at length on how the system would work, the secretary general allowed that it could function similarly to a per-diem system.

“Instead of calculating the monthly allowance, they have to calculate the daily allowance,” he said, adding that such allowances would be calculated based on “the cost of performing daily work for people who are on [a] project”.

In a letter to the government dated December 17, the UN and other organisations requested a meeting with the government to discuss “how to mitigate the potential adverse impacts of the decision” on supplements. Van Maaren said there had been no response to this request as of Tuesday, though Keat Chhon said in his letter last week that reforms would go forward only after “an appropriate process of consultation”.

Jeroen Stol, country director for Handicap International Belgium, said he hopes the transition period prevents significant disruptions of services in the next few months. “The fact that [the cancellation] was implemented so swiftly created many, many problems for us,” he said, adding that widespread absenteeism would have occurred without the transition period.

Stol and others were unsure of why the decision – announced just weeks before it was to have gone into effect – came so abruptly. Sharon Wilkinson, country director of Care International, brushed off speculation that it had resulted from the government’s desire for greater oversight of fund distribution.

“I think the government’s got oversight…. They certainly know how we use the development funds, and they have every right to know,” she said.

Government officials have said the changes are meant to maintain equity in the compensation of civil servants, and are part of a broader process of public administration reform. Wilkinson said she recognised the importance of this process, but she cautioned that the needs of ordinary Cambodians must not be neglected as these reforms are implemented.

“It’s not going to happen overnight, so therefore we’re working to find some sort of solution so that services can go on for the most vulnerable,” she said.