Logo of Phnom Penh Post newspaper Phnom Penh Post - Time to put the brakes on the gravy train

Time to put the brakes on the gravy train

Time to put the brakes on the gravy train


Question: How many ADB consultants does it take to screw in a light bulb?

Answer: None. After their salaries are paid, there is no money left in the

budget to buy a light bulb.

Protestors in Phnom Penh before the June donors' meeting rail against a lack of effective foreign aid.

In June the Phnom Penh Post shone a small light on a dark corner of the international

aid community. The Asian Development Bank-funded "Tonle Sap Environmental Management

Project" had budgeted $8.3 million (or 46 percent) for consultants out of a

total budget of $20.5 million. International consultants were scheduled to receive

$12,000 per month and an extra $80 per day for expenses. Worse, these sums were part

of an ADB loan, meaning that someday Cambodians would have to pay all of this back.

The Cambodian government questioned these sums and held up the signing of the contract.

Director of Fisheries Nao Thouk said, "I think this is too much because we have

to pay the loan back to the ADB. They should keep the salaries as low as possible."

Opposition MP Son Chhay, who since 1993 has led the parliamentary battle against

corruption, stated his objections in the language that makes him the favorite of

Cambodians who watch the National Assembly's proceedings on television.

"We want to vomit ... It is ridiculous when the average Cambodian only gets

$200 a year. What can we do? Some deal has been made outside the country and there

is no transparency and accountability."

According to the Post, "An ADB statement tried to downplay the controversy,

claiming that a typical project would see around 5 percent of costs allotted to salaries."


A hardly-noticed study in 2000 by the Cambodia Development Resource Institute (Technical

Assistance and Capacity Development in an Aid-dependent Economy: the Experience of

Cambodia, Working Paper 15) makes clear the systemic nature and jaw-dropping costs

of overused and overpaid TA.

Guess what percentage of aid to Cambodia is soaked up by technical assistance? Ten

percent? Twenty? Thirty? You'll be amazed (if you're not, you should be).

According to CDRI, "From around 19 percent of the total in 1992, the share

of TA rose to 46 percent in 1996 and 57 percent in 1998, mainly at the expense of

food aid and assistance for budgetary, balance-of-payments, emergency and relief

purposes" (emphasis added). Instead of investing in long-term capital, such

as roads, sewage plants or schools, or overseas training for Cambodians, or feeding

hungry Cambodians, donors are using aid to pay salaries to foreigners.

The sums are staggering. In 1998, $230.5 million of a total of $403.9 million in

external assistance was spent on technical assistance. Between 1992-98, a total of

$1.1563 billion was spent on TA. From 1995-98 the figure was over $200 million each

year. In 1997, technical assistance accounted for 74 percent of the entire expenditure

of the Cambodian government.

In many ministries, the amount of TA exceeded the entire annual budget. In agriculture,

perhaps the most important ministry in the Cambodian government, technical assistance

was 205 percent of the ministry's budget. For health, it was 168 percent. In education

it was 130 percent.

In justice, the sector that donors constantly say is critical so that Cambodia can

develop the rule of law necessary to attract legitimate foreign investment and end

the reign of impunity, the ratio of TA to the ministry's budget is 403 percent.

For years, those working on judicial reform have asked donors to consider paying

the salaries of judges so that they could have a living wage and be held accountable

for corruption. Donors such as the World Bank have consistently refused, saying it

would be too expensive.

Do the math. If there are 200 judges in Cambodia (an overstatement at present) and

they are paid $500 per month, it would cost donors $100,000 per month, or $1.2 million

per year. This is less than one-half of one percent of the total that donors blithely

spend on TA.

Money is not the problem. Priorities are. If this one reform had been brought in

ten years ago, when some in UNTAC first proposed it, it's possible that much more

progress on legal and judicial reform would have been made by now. But this would

have involved paying Cambodians instead of foreigners, a bizarre taboo among donors.

So which donors are the worst offenders? When NGOs carry out projects, the average

international "expert" costs $43,800, while for "multilaterals, bilaterals,

companies or government" the figure is $127,381.

Bilateral donors, already miserly when it comes to international aid, recycle almost

half of their aid to Cambodia as salaries for (primarily) their own citizens. When

the pitiful amounts that Western countries are giving in foreign aid are considered,

this practice is even more pernicious.

Only five countries (Denmark, Norway, Netherlands, Luxembourg and Sweden) meet the

UN's target of giving 0.7 percent of GDP in overseas aid. France gives only 0.34,

the UK 0.32, Germany 0.27, Japan 0.23 and the US comes last, with 0.11.

Japan's practice of tying foreign aid to the sale of Toyotas is infamous. They are

not alone. British-based Reality of Aid reported in 2000 that for the United States,

"71.6% of its bilateral aid commitments were tied to the purchase of goods and

services from the US".

Does Cambodia need all these foreign consultants? There is no doubt that there are

some jobs that, in the post-Khmer Rouge, post-US embargoed Cambodia, few Cambodians

have the training or education to carry out. The skills base is thin (though not

as thin as often assumed). In many cases, there are jobs that just have to be done

by foreigners, since there is no one else to do them.

"I have no problem paying a reasonable salary to a foreigner if a job needs

to be done," says Paul Matthews, the former head of UNDP in Cambodia. "The

standard should be that the job is absolutely necessary and the person is capable."

"But," Matthews goes on, "too often TA becomes an addiction. Even

if money is well spent there is a problem of sustainability with TA. Most TA is a

waste of money in the absence of certain conditions, such as good governance, a functioning

judiciary, the rule of law, etc. The Cambodian government hasn't made the reforms

necessary to use TA well."

Another problem is the quality of TA. Donors rightly talk about accountability in

Cambodia, but there is precious little for the expats who swallow up so much foreign

aid. While many foreign consultants work at a high standard, everyone working in

the aid industry knows of incompetent foreigners whose performance would not be tolerated

at home. But rare is the expat who loses his or her job as the result of incompetence.

Part of the problem is the difficulty of overseeing projects from the home office

in Washington or Paris. More important are the very low standards in an area with

no core constituency among taxpayers and voters.

According to Matthews, "There is a triangle: donors, recipients and the development

industry. This is a powerful lobby and there is little public scrutiny in donor countries

of this."

Technical assistance often becomes a matter of expediency for donors and government

officials in a hurry. It is easier to pay someone an excessive salary than to struggle

to find the right people to complete a project.

Many consultants end up as little more than political advisors to ministers. They

become cheerleaders for government and indispensable as fund-raisers. Many even write

reports on behalf of the government, favorably evaluating their own projects or responding

to donor concerns on issues like financial controls, logging or good governance.

There is an even darker side to TA. According to Matthews, "There is always

a suspicion that those receiving such high salaries are making deals - bribes, computers,

cars, etc.- in exchange for such high salaries. It is the government that approves

these salaries in many cases and it is hard to understand how it sees these to be

in its self-interest. The UN and other donors have auditors but they are quite happy

to find $10 missing from petty cash while ignoring the fact that $20,000 salaries

are being paid for TA."

At any given time there are dozens and sometime hundreds of consultants in Cambodia

making more than $10,000 per month. For example, an advisor to the Minister of Commerce,

reportedly took home $17,000 a month. Forestry advisors currently make salaries of


Compensation for foreign staff in Carere, the UN's rural poverty program - responsible

for improving the living standards of the poorest of the poor - exceeds $10,000 per


Unlike when they work at home, the salaries of foreign consultants are usually tax-free.

The cost of living in Cambodia is much lower. To have the same disposable income

at home would require a gross income twice as high, and perhaps more. Working in

Cambodia is a huge windfall for most foreign consultants.

In the mid-1990s the big joke around Phnom Penh was the salary of Matthew Varghese,

the UNDP's "Poverty Alleviation Expert." He was making $10,000 per month

- around 50 times the average Cambodian's annual income, or 600 times their monthly

wages. We all laughed about just whose poverty he was alleviating.

But it wasn't funny. In a country with such appallingly high rates of infant and

child mortality and low rates of literacy and clean drinking water, every aid dollar

is sacred.

To waste even a thousand dollars on a consultant's salary - two days of Mr. Varghese's

time - is to miss the chance to dig a well in a village without access to clean water,

condemning children to sickness and, on a more mundane level, its residents to walk

long distances to fetch bone-crushingly heavy buckets of water (try carrying a pole

over your shoulder with buckets full of water hanging from each end some time) back

to their dismal huts. Two months of his time would have built a village school. One

day of his month would have paid for about 20 teachers.

So how much is too much? This is a question that few want to grapple with. While

the aid industry argues that it must pay high salaries to get the best people, in

reality the market is largely an artifice.

According to Matthews, who spent almost 30 years in the aid field before retiring,

"This is not a transparent, competitive market. This is not even a market. It

is now largely a self-dealing arena."

When the UN human rights office was starting its "Judicial Mentor Program,"

one of the donors was UNDP (before Matthews arrived). We submitted a budget that

included $3,500 per month for each international judge or lawyer, which seemed to

be enough to attract high quality, motivated people, but not so much as to be a misallocation

of resources or offensive to Cambodians.

Virtually the only item that the UNDP official in charge of the program complained

about was the salary level. He said it was too low.

"International lawyers are normally paid between $8,000 and $12,000 by UNDP,"

he explained. If the salary was too low in Cambodia, it could adversely affect the

entire salary structure for such services globally. We resisted, and in the end the

salary was set at $3,500.

In reality, salaries are what the donor community wants them to be. Donors do not

need to pay exorbitant salaries to find capable people - or at least people who are

as capable as the average foreign consultant. Perhaps there should be one guiding

principle of overseas aid work: "The more one is paid, the less he or she is

worth." Or, put more positively, "The less one is paid, the more he or

she is worth."

Nothing illustrates this better than the excellent work done by most United Nations

Volunteers and their counterparts with VSO, VSA and OSB, who make a major contribution

to the well-being of Cambodians. If they are willing to work for $300-$1,500 per

month, why can't wealthy donors find more senior people for, say, $3,000-$5,000 per

month? Why shouldn't commitment to the welfare of Cambodians, demonstrated by the

willingness to accept less than would be paid at home, be part of the job description?

It is time to bring these artificially high salaries down to earth. Does anyone need

to make more than $5,000 per month in Cambodia? Can a case be made that one cannot

live on that amount, and even save a significant sum?

Until donors address this problem, ethical aid workers will face the quandary of

how to respond when offered a job with a ridiculously high salary.

There are a number of moral options. One is to say no. Another is to negotiate down

the salary. Perhaps most creative is to accept the high salary, and give the excess

away. Form a coalition with other overpaid expats and build a school, dig some wells,

donate to an orphanage. Such donations have the added allure of cutting out the large

overhead taken by official donors.

While the internationally prescribed cocktail of laissez-fair economics and large-scale

international aid has made virtually no impact on the standard of living of the average

Cambodian, the international aid industry has made out like a bandit.

If between 1992-98 every foreign consultant's compensation had been cut in half this

would have released $578.15 million in additional aid. Imagine the difference that

could have made in the lives of ordinary Cambodians. Think of a project that hasn't

been funded that you think could make a difference. The money was on the table, and

then it was snatched away.

In the 1980s there was a popular T-shirt satirizing US army recruitment commercials

with the slogan: "Join the army. Travel to exotic, distant lands. Meet exciting,

unusual people. And kill them."

In the new millennium, it could be rephrased: "Join the aid community. Travel

to exotic, distant lands. Meet exciting, unusual people. And make a killing."

- Brad Adams worked as a human rights lawyer in Cambodia from 1993-98. He

is now writing a book on Cambodia.


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