Logo of Phnom Penh Post newspaper Phnom Penh Post - Logs cash reverts to Finance



Logs cash reverts to Finance

Logs cash reverts to Finance

A controversial attempt to divert vast logging profits to the Defense Ministry, has been dropped under domestic and international pressure.

The co-premiers were forced to scrap a decree they signed in June which would have allowed the defense ministry to sign lucrative logging contracts and pocket the proceeds, according to documents obtained by Reuters on Aug 12.

"They [the two prime ministers] were afraid of the pressure from the IMF [International Monetary Fund] and the international community because they were violating the law," said an informed source familiar with the agreement.

"They [the government] have now accepted that all the revenue from the wood be transferred back to the Ministry of Finance," the source said, demanding anonymity.

According to documents obtained by Reuters three new agreements have been drawn up to resolve a damaging debate over the June decree signed in secret by First and Second Prime Ministers, Prince Norodom Ranariddh and Samdech Hun Sen.

This was in direct contravention of the Budget Law which says all state revenues must be put in the budget, and be controlled by the Finance Ministry.

Government officials said at the time that the decree was worth "millions of dollars" to the defense ministry.

The June decree also contravened the government's own undertakings to international loan bodies such as the IMF, legal experts said.

The IMF's senior representative in Phnom Penh, Reza Vaez-Zadeh, denied the IMF had pressured the government to drop the contentious decree, but expressed disapproval of it.

"We have made our concerns very clear to the government - that [the deal] is obviously an issue related to [financial] sources which is important for the implementation of the budget law," Vaez-Zadeh said.

"We are against any agreement that takes a major (income) source from the budget," he said.

One diplomat said the scrapping of the decree would help restore financial credibility to the government.

A memo obtained by Reuters and signed on Aug 5 on behalf of the two prime ministers, stated that all revenue from timber exports would be paid directly to the Ministry of Finance.

According to Finance Ministry figures Cambodia earns about $40-$50 million dollars per year from timber exports.

King Norodom Sihanouk said earlier this week that recent natural disasters including floods and drought were caused by massive deforestation.

In the 1960s Cambodia had 70 percent forest coverage but now less than 30 percent of forests remain in the whole territory, Sihanouk said.

In his Aug 8 letter sent from Beijing Central Hospital, the monarch warned that "Cambodia could become a country of wilderness like some countries in Africa" within the next 10 or 20 years.

MOST VIEWED

  • Phnom Penh placed in two-week lockdown

    The government has decided to place Phnom Penh in lockdown for two weeks, effective April 14 midnight through April 28, as Cambodia continues to grapple with the ongoing community outbreak of Covid-19, which has seen no sign of subsiding. According to a directive signed by Prime Minister

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Hun Sen: Stay where you are, or else

    Prime Minister Hun Sen warned that the two-week lockdown of Phnom Penh and adjacent Kandal provincial town Takmao could be extended if people are not cooperative by staying home. “Now let me make this clear: stay in your home, village, and district and remain where

  • Businesses in capital told to get travel permit amid lockdown through One Window Service

    The Phnom Penh Municipal Administration has issued guidelines on how to get travel permission for priority groups during the lockdown of Phnom Penh, directing private institutions to apply through the municipality's One Window Service and limit their staff to a mere two per cent. In

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Ministry names types of business permitted amid lockdown

    The Ministry of Labour and Vocational Training singled out 11 types of business that are permitted to operate during the lockdown of Phnom Penh and Takmao town, which run through April 28. Those include (1) food-processing enterprises and slaughterhouses; (2) providers of public services such as firefighting, utility and