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Promises promises, but can they pay for them?

Promises promises, but can they pay for them?

In contrast to the cautious approach of the ruling Cambodian People's Party (CPP),

the country's other two main parties have gone to the electorate with a bag full

of costly promises, and few concerns over their ability to fund them.

Funcinpec and the opposition Sam Rainsy Party (SRP) maintain that cracking down on

corruption, tax avoidance and smuggling will comfortably fund their proposed multimillion

dollar post-election spending sprees.

Rainsy has promised to increase the monthly salary of every government worker to

$100. Figures from the International Monetary Fund (IMF) show that there are 292,500

civil servants, which makes the SRP's proposal a potential vote-winner.

The IMF states that the current average government salary is $28 a month. To increase

that by $72 would cost the Treasury $253 million annually, adding more than 30 percent

to the national budget.

It is little wonder that Prime Minister Hun Sen has poured scorn on the proposal

and warned civil servants that they will never see the dollars promised. But it has

not deterred Funcinpec, which has gone one step further.

"[Rainsy] says $100, we say at least $100," says Serey Kosal, a senior

advisor to Prince Ranariddh.

The CPP's election policy document runs to 59 points, but gives few details and no

costings for any of them. On the subject of civil servant wages, the document simply

states that salaries will be raised to "appropriate levels".

The CPP's Khieu Kanharith says that pay rises will follow economic development.

"A $100 dollar salary is unrealistic," Kanharith says. "Sam Rainsy

can say this because he won't be in the government. It's better not to specify. We

don't make a promise that we can't fulfill."

Both the SRP and Funcinpec say they will target rampant corruption as the source

of their revenue collection. Kanharith acknowledges corruption exists, but maintains

that "it is not the problem". He is suspicious of the large sums cited

by the SRP and Funcinpec.

"How do they know this? They must be involved in it to know this. The important

thing is sustainable development. We have created this [and] without inflation,"

he says.

Rainsy dismisses skepticism about his proposals, and says it will prove easy to find

the money. His figures suggest there are currently 340,000 state employees.

"I will not print money and I will not increase tax," he says. "Number

one: Once we cut down on the number of ghost soldiers and ghost civil servants, etcetera,

we should be left with just 250,000 state employees. Then there are the 'zombies',

people who really exist but only turn up to work to collect their pay. We only want

to pay people who work."

Once that first step is completed, he says, cracking down on smuggling alone should

fund the wage increases.

"This is very plausible. Smuggling is the largest item," he says. "When

I was Minister of Finance [in the early 1990s], Cambodia had 18,000 cars and we imported

140,000 tons of petroleum. Now we have 80,000 cars but, according to the government,

we only import 83,000 tons."

And Rainsy maintains he can find "countless other sources of revenue" such

as combating the smuggling of cigarettes and building materials.

Other costly promises from the opposition are $104 million extra for education and

a further $70 million for health. The full effect of the budget increase is planned

for 2004.

The opposition leader says that raising public sector wages is key, because it will

break the vicious cycle of petty corruption. The IMF is in sync with Rainsy in describing

the low wages as "a serious impediment to development", but it portrays

wage increases as an uphill battle.

In its most recent country report, which was issued in March, the IMF notes it has

taken the best part of eight years to increase salaries by just eight dollars a month.

The government has previously made public its plan to increase the average wage to

$52 by 2006, but the IMF is cautious about even this modest proposal.

"Implementing this program ... will pose major macro-economic challenges to

the government as it is dependent on meeting ambitious targets for fiscal revenue,"

its report notes.

Rainsy is more optimistic. If he wins, he expects he will be able to increase government

revenue rapidly.

"As finance minister I increased customs revenue by three times in three months,

and I increased salaries by an average of 30 percent. Now I want to do the same thing

but on a larger scale," he says.

He has produced a range of estimates of potential revenue sources, saying official

state revenue should be five times more than is currently raised. Sources he claims

are not being collected are: Revenue from rubber plantations, which should generate

$10 million annually; income from fishing; the entry fees to Angkor Wat; port fees

at Sihanoukville; the rental tax which is not being enforced; and cash from telecommunications

and air traffic.

He maintains that this money, plus a wealth tax on the Kingdom's richest citizens,

will comfortably pay for his party's promises.

Many of the SRP's ideas are also being touted by Funcinpec as post-election cash

cows. Smuggling, rubber plantations and Sihanoukville Port are also in the sights

of the royalists.

"For example, we have made a study of the new scanner at the Port of Sihanoukville,"

says Serey Kosal. "It should be generating an income of $300,000 per month."

Kosal says the royalists will use the extra money to modernize the country's decrepit

military. Despite donor unease with the number of personnel in the military-which

takes around 10 percent of the national budget-he says it is a priority that Cambodia

keep pace with its neighbors.

"When the Prince was First Prime Minister he had 30 planes," Kosal says.

"Now we have nothing, only the helicopter of Samdech Hun Sen."

Funcinpec has pledged it will not borrow money in order to implement its plans. It

too believes a corruption crackdown will deliver the necessary revenue for a program

of nation building.

"Prime Minister Hun Sen has had the job for five years, but he cannot do it,"

says Kosal. "Why? Because he does not have a vision. Prince Ranariddh has big

plans. He wants to revisit all the things he wanted to do when he was First Prime

Minister but couldn't.

"For example, he will restore irrigation to the whole country, restore hydrology

to make cheaper electricity for here and for export. More foreign investment is also

a priority."

Kosal says reform will take place in three areas currently under Funcinpec's control:

Education, justice, and health. Asked why there has been so little reform in those

ministries over the past five years, he says they were unable to act.

"You must understand that our ministers don't have power and don't have the

right to make decisions. The only people who can make decisions are all in [Senior

Minister] Sok An's hands," he says. "We want to implement our plans but

we can't without power."

Kosal promises a widespread crackdown after the election on corrupt officials, no

matter which party they belong to.

"At this time we know about corruption, but we do not have power and can't speak

out," says Kosal. "We need to keep quiet and live according to our opportunity,

but after 2003 you will see those corrupt officials affected, even if they are from



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