The Ministry of Finance was preparing to halve the 1995 health budget - from
about $19 million to just $10 million - until finally persuaded not to by senior
The top-level intervention - by both health ministry
officials and Western agencies - went as far as Prime Ministerial level, the
Under the new 1995 budget the Defense Ministry will be
the Kingdom's biggest spender - its $85 million [220 billion riel] represents
about one-fifth of the entire national budget.
The Finance Ministry had
prepared a draft budget based on the level of spending each ministry achieved in
The Health Ministry had been bound up by logistical problems
trying to spend last year's $19 million [50 billion riel] budget, primarily
because - unlike most under-developed countries - as much as 80 percent of its
money was earmarked for medical supplies, equipment and medicines rather than
In its first year of operating under a centralized financial
budget, the Health Ministry struggled for the first nine months of 1994 to free
up the money to buy the equipment.
Consequently, when the Finance
Ministry began the 1995 budget round, the Health Ministry was initially
penalized for not spending its 1994 allocation.
The Ministry of Finance's
strict monetary guidelines were waived when it was decided that halving the
health budget would have been politically unacceptable.
Cambodian ministries spend the bulk of their budgets on salaries.
Although less money has been given to health this year - down $1.8
million to $17.2 million [44.8 billion riel ] - Western experts say that the
budget should be workable.
However, while they say Cambodian health
cannot be necessarily improved just by giving the ministry more money, they
point out that spending on health at just US$1.50 per head of population is
among the lowest in the world.
The World Bank's guidelines for the
minimum standard of health care is $ 12 per head of population each year.
Health centers in provincial areas have retained the same level of money
as set out in the 1994 budget. Health cuts will occur in the central area, where
national health programs and hospitals are administered.
has budgeted to spend $407 million [1,058 billion riel] in 1995, up from $342
million [890 billion riel ] in 1994.
The big movers in this year's
national budget [in order of spending power] are:
- Defense - up $2.2 million to $85 million [220 billion riel]. [20.8 percent
of the national budget, compared with 18.4 percent last year].
- Interior - up $1.5 million to $48 million [125.7 billion riel].
- Finance and Economy - up $3.3 million to $45.2 million [117.5 billion
- Education - up $1.6 million to $ 44.9 million [ 116.8 billion].
- Public Works and Transport - down $ 2.1 million to $ 44.2 million [115.5
- Agriculture - down $ 270,000 to $23.9 million [62.6 billion riel].
- Rural development - a new ministry this budget round previously under
control of the Cabinet of Minister, $20 million [52 billion riel].
The budget for the Cabinet of Ministers has been more than halved as three
secretariats previously under its control assume ministerial status.
Royal Palace budget is halved to nine billion riel after reconstruction and
improvements spent last year.
The biggest increase by percentage is that
of the Ministry of Industry, Mines and Energy. In 1994 it spent just over eight
and a half billion riel. Its 1995 budget has been struck at more than 53 billion
The budget statement says that investment, agriculture and rural
development were priority areas for 1995, as was building of roads, bridges,
water and electricity supplies [despite the Public Works Ministry suffering the
biggest budget cut ].
The government has predicted growth for 1995 at
around 6.7 percent, though any repetition of the floods and drought experienced
during the latter half of 1994 would decimate that figure.
rate last year was 5.2 percent, against a forecast of 7.5 percent.
Inflation is reckoned to be ten percent for 1995. The inflation rate for
1994 blew out to more than 30 percent [against a forecast of 17.8 percent],
again directly attributable to the rice crisis.
Tax reforms, under laws
passed with the budget vote by the National Assembly, are designed to remove the
dependency on customs revenue, which makes up more than 60 percent Cambodia's