Monday, November 14, 2016

Cambodia salary increases 'cosmetic' ahead of elections
Posted 27 Oct 2016 11:13   Updated 28 Oct 2016 00:09

PHNOM PENH:  Cambodia’s long-serving prime minister, Hun Sen, is set to have his salary nearly tripled next year, as the government makes budgetary measures to improve the wages of civil servants.
The leader of more than three decades is to see his current salary of about US$900 per month increase to US$2,500, while government ministers will now earn US$1,115.
According to the prime minister, the increases are the result of the government more effectively collecting tax, and come simultaneously with tax exemptions for lower-paid civil servants.
But that move is little more than a “cosmetic” attempt to win over the support of key voters ahead of upcoming elections, according to author and political analyst Sebastian Strangio.
Earlier this month, the ruling party announced that income tax would be waived for those earning less than US$250 per month, which includes armed forces members and teachers, a large voting bloc in the country.
“The government has the ability to collect revenue to support the operations of the government. Now we have money we can raise salaries for civil servants,” Hun Sen told ministers.
But Strangio argues that it is little more than political manoeuvring, with commune elections - a litmus test for national support - less than one year away, and general elections due to follow in 2018.
“These raises are a way of solidifying the loyalty of the civil service, which has always been a crucial bastion of support for the Cambodian People's Party,” Strangio said.
“It is part of the government’s campaign to address the accurate perception that a small number of people have disproportionately benefited from Cambodia’s recent economic boom.”
The country’s opposition, the Cambodia National Rescue Party (CNRP), supported the moves but claimed credit for the initiative.
“It is proof that the CNRP is a force of positive change,” said Monovithya Kem, the party’s Deputy Director of Public Affairs. “We called for civil servant salary increases in 2013. The government is only taking action because it fears competition.”
Hun Sen has previously said he depends only on his official pay, despite reports that his family has a combined wealth of up to US$1 billion and accusations that much of his vast empire is ill-gotten.
“A monthly salary of US$2,500 is clearly insufficient to cover even the PM’s annual bill for suits, let alone explain the full extent of his wealth. I don’t think the Cambodian people will be deceived on this count," Strangio said.
However, the ability to collect tax - Cambodia has collected 20 per cent more tax this year than at the same period in 2015 - is a positive sign of more effective governance.
It is also a sign of an economy shifting towards taxable industries like construction and manufacturing, rather than agriculture, Keat Heang, managing director of auditing firm Cam Accounting and Tax Services, told the Cambodia Daily. The World Bank has also praised the country for improving its tax systems.
“It’s a step in the right direction,” Strangio said. “The government is increasing its tax revenues, which in the long run at least create the possibility of rationalising government finances.”
The prime minister’s improved salary is now closer to Thailand’s military leader General Prayut Chan-ocha, who earns about US$3,500 per month, but considerably more than Vietnam’s Nguyen Xuan Phuc, whose annual salary, determined by the Communist Party, is slightly more than US$9,000.
The poor remuneration for officials can be a graft enabler, according to Human Rights Watch’s Phil Robertson.
“Official salaries in Cambodia and elsewhere in the region mean little when the reality is these governments function on massive amounts of graft that dwarf government salaries in the first place,” he said.
Cambodia was recently ranked 112th out of 113 nations for perceived rule of law in a World Justice Project report, which, among a variety of measures, measured corruption and open government.
The government dismissed the report, with spokesman Phay Siphan calling it “biased and selective”.
Strangio suggested that if the government was genuine about improving public services, it would need to not only hike salaries further, but also crack down on graft.
“Singapore’s experience shows that salary hikes need to be significant, and coupled with harsh punishment for those who engage in corrupt activities. There is little indication that Cambodia is taking enforcement seriously,” he said.
The budget proposals are expected to be ratified by the National Assembly early next month.


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