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Road to a better Cambodia: Increase local government funding

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The National Assembly in January ratified two amendments to laws intended to improve the representation and efficiency of sub-national administrations and local elections. Heng Chivoan

Road to a better Cambodia: Increase local government funding

Despite decades of political stability and economic growth, the post-conflict Cambodia is still struggling to address extreme poverty, poor governance and the improvement of public services as the result of weak institutions and a bureaucracy in which state functions and resources are centralised and patronaged.

Indeed, the Cambodian government has introduced decentralisation and deconcentration reforms in an effort to strengthen the efficiency of service delivery and local community development.

As the key implementer, however, local government is struggling with insufficient funding, which poses significant threats to the success of the reform agenda.

This reform effort cannot be realised without increased funding for local government.

The absence of laws and regulations to empower local government towards self-sufficiency and tax autonomy has made local government rely entirely on the national government and development partners.

Population geography suggests that although the majority of the population lives outside cities and urban areas, only a small proportion of the national budget has been allocated to local government.

The 2019 budget of local government, for instance, accounts for only three per cent, approximately $129.6 million, of the total national budget of $4.3 billion, while the 2020 budget will be increased to just 3.1 per cent of the national budget.

This budget has made little impact and does not create an enabling environment for local government to consider investing in the innovation of its service delivery systems, capacity building for its personnel and large-scale developments projects.

Insufficient

Indeed, approximately 40 per cent of the total budget is spent on administrative and councillor allowances, and only the remaining 60 per cent is spent on small-scale development projects.

Capacity constraints among officials in local government can no longer be ignored and needs to be timely addressed.

The old structure of local government was designed for managing the civil war and for ensuring political control over rural communities, which discouraged policy consultation and citizen engagement.

With the war over, the system remains in place, and local authorities are facing the vicious but invisible opponent of extreme poverty, which they are not trained to deal with.

Given the fact that local officials are often poorly educated and not tech-savvy, local government is operating in the old-fashioned way, which is often costly and lacking accountability.Local government has struggled to recruit professionals and fresh graduates to replace its ageing personnel as a result of insufficient funding and poor incentives.

Having professional and well-trained officials at the local level is key to the efficiency and accountability of local government, and this prompted the Ministry of Interior to consider transferring 6,000 civil servants from the national to the local government. However, this policy action cannot create significant impacts without sufficient funding and incentives.

Own tax rates

The adoption of laws and regulations that enhance the self-sufficiency and tax autonomy of local government will boost economic activity and infrastructure development for the local community.

The local government should be given the authority, for instance, to set their own tax rates and practices.

This policy action will boost tax revenue in terms of effective tax collection and the willingness of taxpayers who would be willing to pay when they knew where their money would be spent.

This policy proposal should not be perceived as a threat to the government’s political influence on the ground.

Decision-makers need to understand that, rather, the Angkor governance system, in which power and resources were absolutely centralised in the hands of a small group of nobles, is no longer fit for the modern Cambodia.

In the age of globalisation, Cambodian people need more than just peace and paved roads, including sustainable local development and quality public services, which cannot be realised without having an accountable local government.

A moderate increase of funding for the local government is therefore the road to a better Cambodia.

Sopharith Sin is the recipient of an Australia Awards Scholarship. He is currently pursuing a Master’s degree in Public Policy and Management at the University of Melbourne, Australia.

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