Unofficial Translation

Selected Comments at the Launching Ceremony of The Public Financial Management Reform Program – Stage 2

3 December 2011

… In the last four years I may say that I am being relieved from debts. About twenty years ago or 24 years as the Prime Minister of this country, I have come across so many difficulties as at one stage we had adopted the practice of printing money. We have borrowed from private sector for building infrastructure and even for the preparation of the election in 1998. The State owed its employees their salaries some times more than one month. Our people used to complain that there are 100 to 120 days a month in Cambodia. It was  a difficult time for us because we do not have money.

… Everyone could remember that IMF left Cambodia once in 1996 when the country was in turmoil because it did not follow the set norms, especially in 1993, 1994 and 1995 and returned only in 1999. I then assured IMF that from that time first, I would not overspend the budget, second, no more money printing, and third, no more financing from banks, at the same time we introduced value added tax or VAT.

What happened in 2003 could be compared to the situation that the country had 10 Riels while it had 500 Riel in debt. As of now we have 500 or 1,000 Riels as we owe only 10 Riels. In my experience, being the Prime Minister, I felt relaxed when making sufficient money… As the situation has been favorable we could increase salaries for our officials and staff - once at the rate 15% and again 20%. In the last three years no one complains about the Treasury having no money anymore. Before, people with mandate to disburse money did not have money there.

Past Treasury — No Money

You may still remember that in years we had this situation that the treasury did not have money for provincial authorities. When they could disburse some money for only two provinces out of ten or more at a time, they were being accused of corruption. So as I told you we already had the Prime Minister who printed money, who borrowed from banks for payrolls whereas we now have come to surplus in cash. However, this does not mean that we should speed up spending at all. We have to discipline ourselves while implementing the method of acting in accordance with one commander - the Prime Minister, and one acting agent - the Minister for Economy and Finance.

In this instance I would like to seek understanding from those who have been promoted that the State will not bear anymore cost of purchasing cars for you and I have exercised this stringent policy and saved some money in past terms for the sake of building water canals for our farmers. Saving is a must and I have set an example as we could see that I do not spend money building new office of the Prime Minister at all. It were not because Cambodia could not find 20 to 30 million to build one but we wished to use that money in infrastructure - bridges, roads and canals. However, we thank the Government of the People's Republic of China who, having seen the state of the former office, offered to build us a new one.

No Unnecessary Expenses

All I have said is to remind you all of the difficulties that we have overcome but also to warn you against suggesting unnecessary expenses because of the cash available in the treasury. As of now the Prime Minister in our country has efficient power and debt relaxation but perhaps I will not make it to contribute assistance to foreign countries at all. Five years ahead Cambodia would not be able to give assistance to outside, only to pay back foreign debt … We have though sent troops abroad, like to Sudan, to help with de-mining … and if Cambodia were to have more money, I would try to meet the commitment of 0.7% of GDP contribution according to the goal  set for developed world to help poorer countries.

Together Implement PFMRP

The Public Financial Management Reform Program (PFMRP) first should be seen as a victory not only for the Ministry of Economy and Finance but for all institutions and ministries related, and second, reforming financial role is not a separate task of the Ministry of Economy and Finance but there is a demand of participation by all ministries and institutions as any parts of the program are not functioning properly, it will be a failure to all. I would continue to suggest what I have said that if we conduct reform, it would be 99% that we survive, while 1% that we die, but, we would die 99% and survive only 1% if we were to neglect reform.

No Retreat on Reform

We have come this far and I would urge to speed up in this front. Every country is doing the same thing, Japan, France, the US also included. If you notice, the IMF and the World Bank are also on this track. The latest development in the world financial sector made us all asking question as to who would tell who to do what. As of now there would not be a choice between good and bad but only less bad. We should be prepared for impacts and try to cushion and avert it to the least impact. We should try and save ourselves from being bankrupted in the whole country like some countries - Iceland for example.

We have moved this country away from crisis like in the 1970s when we had only 70 people living in the city and we should not let this country falling back to where it was. As everyone is here and our people will also listen to this speech relayed by the media, I would reiterate that no retreat happens on my watch and stringent policy should continue to be implemented no matter how much money we have in surplus at the Treasury. By saying that I would urge you to follow strictly the rule or I would not agree with any actions deemed to be detrimental to this sector reform. There would not be any consent with actions to delay sending money to the Treasury. It is a discipline and we have internal auditing mechanism to monitor that.

Running Again in 2013 Election

You may ask a question as to why this Government is garnering more and more support from one election to another. It is because the Royal Government is doing things in a correct way, and therefore we have to widen the right side and lessen the wrong side. We have come from 64 seats, and then 73 seats whereas 17 seats more have been given by the people in 2008 - a sum of seats representing two-third majority (90 over 123) that not any political party in this world could have achieved. This should be analyzed on the basis of the Royal Government's performance, as it represents also the ruling Party. I have a good understanding that our effort is not for the Party to win but for our nation to win, only that in order for the nation to win, the ruling Party has to have a leading role and a correct path of leadership.

I would urge you to remember that we will meet again in December 2013 to proclaim the third phase as I have a clear objective that I would run for the Premiership again in the next term as I will be 61 only. Why? If we were to lose ten seats by then we would have the majority of 80 seats as well. I would say some people will be Prime Minister in example for a long time to come because even if I do not talk of gaining seats but losing ten seats at a time, by 2018 CPP will still have 70 seats left, so it would be a long time for the opposition candidates to be Prime Minister …■

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