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Questions over spending plan

Cars pass a construction area of National Road 6 last year in Kandal province
Cars pass a construction area of National Road 6 last year in Kandal province. Hong Menea

Questions over spending plan

The Council of Ministers on Friday approved a new five-year National Strategic Development Plan (NSDP) – the guiding policy document used by the government – requiring an estimated $26.58 billion in spending and investment, or more than $5.3 billion a year, until 2018.

The plan will succeed the 2009-2013 NSDP, which was estimated to require $15 billion in public- and private-sector investment when it was launched, and will aim to develop sustainable economic growth and alleviate poverty in the Kingdom, the government has said.

But given that the entire national budget for 2014 was worth just $3.4 billion – and relied heavily on foreign loans – questions have immediately been raised as to how the government will be able to fund its goals over the five-year period.

According to a statement released on Friday after Prime Minister Hun Sen approved the plan, the government will use “domestic and foreign financing, including capital investment from the public and private sectors” to fund the NSDP.

This is expected to include money from government coffers, grant aid, official development assistance, loans and private investment.

But critics have been quick to say the planned spending boost will saddle the country with more debt for dubious results.

“I have never seen any outcome from their plans in the way they do it every year. The money is used to build roads and other infrastructure of very poor quality because of rampant corruption. [These loans] will simply place a greater burden on our people,” opposition party whip Son Chhay said.

“Normally, [the government] wants to propose big projects, not small ones, in order to let them take a commission.… They should not take the money to use in an inefficient way like this.”

This year’s budget drew on $920 million in loans from China, South Korea and Japan, with the government set to borrow $3.61 billion through 2016.

But development consultant and social researcher Kem Ley said that the $26.58 billion figure for the NSDP was “just an estimate” and if the overarching plan envelops the sub-national development plan and commune development plan, the cost is actually quite reasonable. “As I understand, the NSDP is the combination of all the national plans from all the line ministries, the development partners, the NGO sector and all of that,” he said.

“If they are estimating covering the full country from the national to the community level, it’s not much money.”

Full details of the latest NSDP have yet to be released.

Cheam Yeap, chair of the parliamentary finance and banking commission, defended the estimates yesterday.

“The draft national strategic development plan for 2014-2018 that was approved by the Council of Ministers is just a plan of the government. The actual expenses will need to be approved by the National Assembly every year,” he said.

But Yeap did not reject the fact that more loans would likely be used. “The government plan is to spend approximately $5 billion a year. But if the government doesn’t have enough, [we] can borrow from others, like China, the EU or Japan. But the government has to explain to the assembly when it passes the budget law.”

ADDITIONAL REPORTING BY VONG SOKHENG

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