Cambodia Lacks Clear Spending of Resource Money

Cambodia lacks a clear mechanism for spending revenue from natural resources that could benefit citizens and socio-economic development, experts say. In his book, “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” Paul Collier, an Oxford University economist, says development is about giving ordinary people hope that their children will live in a society that has caught up with the rest of the world.

Natural resources can create a huge opportunity for a country, he told VOA Khmer in an interview, but they must be used for ordinary citizens and not elites. A major benefit can come in education, building what economists call “human capital.”

This doesn’t always happen to resource-rich countries. “There are many reasons why things go wrong,” Collier said. “Often the revenue’s sometimes not captured by the government through taxation. But the more usual problem is the revenue gets badly spent; so, instead of revenue being well spent on good investment, they use it for public consumption, and they become a battleground between politicians.”

It is hard to tell now whether Cambodia is on a path for responsible spending, Antoine Heuty, deputy director of Revenue Watch Institute, based in New York, told VOA Khmer by phone recently.

Revenue from resources like oil and timber can be volatile, so its expenditure must be stabilized in budgets. In practical terms, that means saving resources to ensure consistency and to avoid the disruption of policy and spending.

“Harnessing the revenues to the development requires a sustainable investment path, and that means investing resources domestically and not saving it abroad altogether, because that’s not going to work in the long run,” Heuty said. “So, there is a way to spend the money properly if it is discussed in consultation with citizens, civil society, with parliament in a systematic framework to explain how the money will be used, and to give accounts as how it has been used and to what impact.”

“Having the strategy, making sure that you have proper consultations, and linking that back to the budget are three fundamental features to make sure that expenditures are delivering for Cambodia,” he added.

Such mechanisms are not in place in Cambodia. Even the government’s so-called “rectangular strategy”—which also focuses on reform in fisheries, forests and land—fails to mention management of natural resources.

Cheam Yiep, a lawmaker for the Cambodian People’s Party and head of the National Assembly’s finance committee, acknowledged the lack of regulations, but he said the government and parliament are working on a resources law. For now, revenue from natural resources is simply put into the national budget for general public spending. But there is no substitute for transparency in bringing resource benefits to the public, “with the emphasis upon good public investment,” Collier said.

Oil revenue must be handled well, because it has such tremendous potential to transform a country like Cambodia, said Petter Stigset, a senior advisor of Oil for Development, Norwegian Agency for Development Cooperation, which has been working with the Cambodian National Petroleum Authority on a new petroleum law. “It’s an absolute prerequisite that all the money that flows or will flow from the oil and gas business is controlled,” Stigset said, “that it goes to the state, not to individuals or to anything else.”

This report extracted from VOA News.