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Logo of Phnom Penh Post newspaper Phnom Penh Post - Military winner in draft budget

Military police stand guard during a training exercise in Phnom Penh.
Military police stand guard during a training exercise in Phnom Penh last month. Yesterday, CPP lawmaker Cheam Yeap said that 72 per cent of the defence budget will be spent on salaries for the Kingdom’s armed forces. Sreng Meng Srun

Military winner in draft budget

Government officials were still tight-lipped about the 2014 draft budget yesterday, though some details did continue to trickle out, such as the announcement of a sizeable increase in national defence spending.

Cambodian People’s Party lawmaker and banking and finance committee member Cheam Yeap said yesterday that the Standing Committee of the National Assembly would put the draft budget up for debate in a full session of the assembly – “likely next week”.

While the complete contents of the budget would not be made public until the full session convened, he added, the budget does contain a 17 per cent boost in the $400 million spent last year on defence.

“We have to establish a proper uniform for the armed forces such as shoes and headgear, which is necessary to have appropriate armed forces to ensure the stability of peace and territorial sovereignty,” Yeap said, maintaining the money was not for buying weapons.

Of the proposed $468 million in military spending, he added, 72 per cent would be to pay servicemen’s salaries. However, the presence of so-called “ghost soldiers” has long been a target of opposition criticism, and Cambodia’s relatively large standing army has even been the subject of donor-funded “demobilisation” schemes that have largely proved unsuccessful.

Though Yeap refused to offer further specifics, unconfirmed local media reports cited some notable figures, such as a 20 per cent increase in education funding over last year, and a more than 10 per cent increase in agricultural spending.

Despite the lack of complete figures, the potential for issues with the national debt has raised concerns in some corners.

The International Monetary Fund said in January that Cambodia’s risk of “debt distress” – that is default, or imminent default – would remain low as long as there were continuing reforms.

However, this year’s $3.5 billion budget represents a nearly 35 per cent increase over 2012’s, and Cambodian Institute for Development Study director Kang Chandararot maintained yesterday that reforms are only part of the picture.

“Reforms are tool[s] to increase revenues, not indicator[s] for debt level,” he said in an email. “You can make many efforts (reforms), but sometimes [with] no success (increase in revenues). Revenues serve the source of repayment, not just reforms.”

“We will have difficulty in servicing debt and [gaining the] trust of the private sector on [government] economic management,” he added. “The economy will suffer when repayment [is] due.”

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