BUREAUCRACY, LOCAL GOVERNMENT, TAXES, WELFARE AND CORRUPTION IN CAMBODIA

BUREAUCRACY AND LOCAL GOVERNMENT IN CAMBODIA

Aid from Western countries, Japan and international institutions like the World Bank provides about half the budget of the Cambodian government. In 1999, a value added tax and stricter income tax collection policy were introduced. Corporate tax rate: 20 percent, compared to 17 percent in Singapore and 35.6 percent in Japan.

Below the central government are 24 provincial and municipal administration. In rural areas, first-level administrative divisions are called provinces; in urban areas, they are called municipalities. The administrations are a part of the Ministry of the Interior and their members are appointed by the central government. Provincial and municipal administrations participate in the creation of nation budget; they also issue land titles and license businesses. [Source: Wikipedia +]

In practice, the allocation of responsibilities between various levels of government is uncertain. This uncertainty has created additional opportunities for corruption and increased costs for investors. The provinces are still largely ruled by warlord-like governors and local official whose primary loyalty is to themselves and the ruling party. They have traditionally maintained power through violence and intimidation.

The national government has traditionally maintained power by installing village leaders loyal to them. Since 2002, commune-level governments (commune councils) have been composed of members directly elected by commune residents every five years. There are separate elections for about 1,600 village mayors and town councils in 1,621 communes. Communes are made up of clusters of villages.

In late 1980s, the country was divided into eighteen provinces (khet) and two special municipalities (krong), Phnom Penh and Kampong Saom, which are under direct central government control. The provinces were subdivided into about 122 districts (srok), 1,325 communes (khum), and 9,386 villages (phum). The subdivisions of the municipalities were wards (sangkat). [Source: Library of Congress, December 1987 *]

An elective body, consisting of a chairman (president), one or more vice chairmen, and a number of committee members, runs each people's revolutionary committee. These elective bodies are chosen by representatives of the next lower level people's revolutionary committees at the provincial and district levels. At the provincial and district levels, where the term of office is five years, committee members need the additional endorsement of officials representing the KUFNCD and other affiliated mass organizations. At the commune and ward level, the members of the people's revolutionary committees are elected directly by local inhabitants for a three-year term. *

Before the first local elections, which were held in February and March 1981, the central government appointed local committee officials. In late 1987, it was unclear whether the chairpersons of the local revolutionary committees reported to the Office of the Council of Ministers or to the Ministry of Interior. [Source: Library of Congress, December 1987]

Welfare in Cambodia

Cambodia is a poor country with little welfare or social security. According to the Cambodian government: “The Royal Government would cut down to the maximum of the vulnerability, and increase the chance for the poor and indigent citizens to be able to participate in the social and economic programs. It would firmly carry out the labor law and the international convention on labor unions in order to secure the right and privilege for the workers, employees, and employers. It would establish a good working condition to benefit the handicapped persons, the orphans, the widows, and the indigent men and women, so their livings could be better conditioned. It would defense the right of women and children according to the universal convention. It would engage the women in politics and in other social and economic fields. It would assist the minority to involve in restoring the economic, social, and cultural heritage. [Source: Tourism of Cambodia =]

“To succeed the social rehabilitation and development, there is an important factor to be addressed; that is the task of building social conscience, confidence, and self- determination, which produce quality work. The idea and stand on ordinary productivity to improve the skill and the knowledge of know-how in agreement with the rules of development must be encouraged. =

“The Royal Government initiates tough measure to restore and to promote culture heritage and national civilization, to end the declination of national culture, to highlight the social ethic, and to promote the national cultural characteristic and progress. For that, the Royal Government has to expand the education of culture and civilization, to promote the general understanding of the national identity and pride, and to stop the flow of the foreign culture, which affects the national culture. =

“On health matters, the Royal Government would promote health service to public and private sectors, disease prevention, mother and child care, fight against the contagious disease, and health check up and treatment in State hospitals and clinics. On social issues, the Royal government would upgrade the standard of living of the people and to ensure the equal benefits for the people from all walks of life.” =

History of Welfare in Cambodia

American scholar on Southeast Asia, Donald J. Steinberg cites twelfth-century King Jayavarman VII as having begun a public welfare system in Cambodia. Jayavarman built public rest houses along the roads, distributed rice to the needy, and banned tax collectors from places where the sick were cared for. [Source: Library of Congress, December 1987 *]

Beginning in 1936, the French colonial authorities passed legislation affecting the hours of work, the wages, and the worker's compensation for foreign employees. Later, Cambodians were covered. A system of family allotments was instituted in 1955. Under this system, employers were required to contribute a monthly sum for the welfare of the worker's family. *

A few welfare organizations were established in Cambodia under the Sihanouk regime. In 1949 the National Mutual Help Association was founded to provide money, food, and clothing to the needy. In 1951 the Cambodian Red Cross was organized to provide aid to disaster victims, especially those suffering from floods. The Women's Mutual Health Association was formed in 1953. It was associated with the Preah Ket Mealea Hospital in Phnom Penh, where it provided prenatal and child care. During the 1950s, the Association of Vietnamese in Cambodia opened a dispensary in Phnom Penh. The most ubiquitous source of assistance for the average Cambodian, however, was the network of Buddhist wats that extended down to the grass roots level. Also, relatives and, in the case of the Chinese, extended families and business associations provided assistance to needy members. *

In the PRK under the government's gradual evolution toward Marxist-Leninist socialism, the ability of the wat to extend charitable aid was seriously impaired because these institutions existed in conditions of near penury, following their active suppression under the Khmer Rouge, and they were barely tolerated by the PRK regime. Instead, fragmentary evidence suggests that public welfare was decentralized and, because of the paucity of resources, received only small amounts in funds from the central government. According to available literature, the care of needy persons was entrusted to local party and government committees and, at the lowest echelon, to krom samaki (solidarity groups). Leaders at these grass-roots levels thus were able to evaluate true need and to extend aid varying from in-kind assistance to informal job placement. Such decentralization avoided the bureaucratization of welfare but, at the same time, it carried its own potential for abuse because aid could be apportioned on the basis of fidelity to regime and to party, or even to enforce loyalty to local leaders. The extension to the local level of such social services, however, indicated that the PRK was slowly extending its presence in the countryside, thus reinforcing its claim of nationhood, and its control over its territory and over Cambodian society at large. *

Corruption in Cambodia

In Transparency International 2012 Index on corruption, Cambodia was ranked 157th among 176 countries, above Burma and Laos in the region, on a scale in which 1 is least corrupt and 176 is most corrupt. Unsurprisingly, the government has rejected the report. For Preap Kol, executive director of the Cambodian Chapter for Transparency International, “it is understood that it is to save its face”.

After decades of civil war and political violence, corruption has pervaded almost every sector of Cambodian public life, with a system of patronage well entrenched in society. Both petty and grand forms of corruption are widespread. Law enforcement agencies are perceived as the most corrupt and inefficient sectors, lacking the independence, resources and capacity to effectively investigate and prosecute corruption cases. Weak systems of checks and balance, ineffective accountability mechanisms and scarce opportunities for public participation further contribute to the deteriorating situation. The enactment of the long awaited anti-corruption law has been pending for years. [Source: u4.no/publications

In Report from a Stricken Land , Henry Kamm, wrote, "Corruption flourishes from the highest to the lowest level of officeholder. Cambodia's patient and passive people watch their county's treasure vanish into criminal hands, while their leaders mock the people's rights and ignore their needs.” The U.S. ambassador to Cambodia called corruption a “cancer that threatens this country’s political, economic and social development.”

In the early 2000s an estimated $300 million to $500 million was lost to corruption every year in Cambodia, , according to a study prepared for the U.S. Agency for International Development. According to the study four fifths of the people in the private sector who were asked said it was necessary to pay bribes and 71 percent of them said they paid bribes relatively frequently. The effects of corruption are highly visible. There are numerous Mercedes and other expensive foreign cars on the streets of Phnom Penh. Government officials with small salaries jet off to expensive holidays in Hong Kong, Europe and the United States.

Aid money is routinely diverted or misused. Donated medicines is sold for large profits at shops owned by government leaders. The National Museum in Phnom Penh only sees about 10 percent of the money it takes in. The rest goes to the government and what is done with it nobody outside the government knows. Corruption is so bad that sometimes government officials stage protest against other government officials because they were left out of lucrative deals. The political scientist Craig Etcheson told the New York Times, “Every position is a graft centers. This place has some f the worst corruption in the world.”

The Khmer Rouge was relatively uncorrupt. Corruption began after Soviet and Chinese aid was cut off in the 1980s and the government opened Cambodia to foreign investment. It multiplied when large of U.N. peacekeepers arrived in 1992 and 1993. One Cambodian scholar told Philip Shenon of the New York Times in the 1990s, "Cambodia crawls with greed and corruption at the highest levels. Corruption creates resentment and inequality and helps dissatisfied people fall under the spell of the Khmer Rouge."

Donors Call Corruption in Cambodia 'A Cancer'

Foreign donors has threatened to cut off aid unless something is done to tackle corruption. Hun Sen has responded by pushing anti-corruption legislation, simplifying and modernizing the tax system and eliminating excessive regulation. In December 2004, Associated Press reported: “Foreign donors of aid to Cambodia criticized the government for failing to curb corruption, saying that it was ruining the impoverished nation and suggesting that they might have to reconsider future plans on financial assistance. "It is no exaggeration to view corruption as a cancer that threatens this country's economic, political and social development," the U.S. ambassador to Cambodia, Charles Ray, said at the opening of a two-day conference at which the donors, known collectively as the Consultative Group, will determine what aid to give Cambodia next year. [Source: Associated Press, December 7, 2004]

"Without doubt, the misuse of donor resources undermines the effectiveness of assistance and puts the prospects for future contributions in jeopardy," Ray said. "There is widespread consensus that defeating corruption is the key challenge facing Cambodia." The World Bank's country director, Ian Porter, said that the government's work on decentralization of power was commendable but that there were "big disappointments in some crucial areas" like legal and judicial reform and fiscal management. In a report issued before the conference, the bank warned, "Failure now to accelerate reforms will prove very costly for Cambodia's poor and for its future as a country."

Prime Minister Hun Sen responded to the criticisms with assurances that his administration would aggressively fight corruption. He said that his government planned to pass anticorruption legislation, simplify and modernize the tax system, eliminate excessive regulations and motivate "public servants in order to reduce the opportunities for corruption."

The French ambassador to Cambodia, Yvon Roe d'Albert, praised some government efforts over the past three years, like the establishment of a school for judges. But he noted little progress in other areas, including a failure to adopt a code of conduct for judges. Cambodia should "spare no effort to restore the credibility of Cambodia's judicial institutions, which have been seriously undermined by corruption," he said in a prepared statement.

See Business

Corruption and Life in Cambodia

On who is corrupt in Cambodia, Preap Kol, executive director of the Cambodian Chapter for Transparency International, said: “The majority of the people fall into corruption as a receiver or as payer of a bribe. Corruption is systematic and it is a way of life. But if most of the people are involved in corruption and if everyone is arrested and guilty according to the law: how many more prisons should we be building in Cambodia? “Over the last 20 years, I have seen it to be embedded in the culture and the mind of people. [Source: Clothilde Le Coz, Asian Correspondent, December 21, 2012 \/]

When asked if its it true that some officials have to pay $ 5,000 month to keep their position in Cambodia, Preap Kol said: “Well, if one says it is $ 5,000, it could be much more in reality for some very senior positions. I would also add that you will not see high ranking officials taking their families far from home during Khmer New Year holidays… they are all at home to receive their “gifts”. This is when the money comes in for people to be able to keep their jobs. It is considered as a gift; a gratitude from subordinates to their superiors. No law says gratitude of that kind is prohibited.” \/

In 2008, the journalist Joel Brinkley wrote: “It's no secret that Cambodia is thoroughly corrupt. As an indirect result, the rich and the powerful can commit, well, murder and face few if any repercussions. A primary rule of foreign correspondence is to avoid applying the values of your own country on the nation you are covering. But then, some events appear so outrageous that the rule does not apply. Police actually removed the car's license plates, to conceal the driver's identity? So I asked Khieu Kanarith, Cambodia's information minister, about the case. He fumbled about for a moment and then explained, "I understand he had his wife in the car, and I don't think he was paying attention to what he was doing." OK, but the police removed the license plates? Khieu had to think about that for a moment but finally managed to say, "You try to cover the plates because it's harder to sell a car if it's been in an accident." As a reporter, sometimes it's hard to keep a straight face. But then, being Cambodia's information minister is a tough job. [Source: Joel Brinkley, McClatchy-Tribune information service, August 21, 2008. Brinkley is a former Pulitzer Prize-winning foreign correspondent for The New York Times and now a professor of journalism at Stanford University /\]

“Later I asked Joseph Mussomeli, the U.S. ambassador, about this, and he shook his head. "This goes to the whole culture of impunity here. Who you are, who you know, is more important than following the law. And the police are too intimidated, too deferential, to the wealthy and powerful." Why else would the traffic police assertively avoid the scene of the accident, even with a dying man lying in the street? They knew full well that the owner of a Cadillac Escalade SUV in this exceedingly poor country is quite likely to be well connected. /\

“Impunity is a word that comes up over and over in Cambodia. Last month, two men speeding by on a motorbike shot and killed Khim Sambor and his 21-year-old son as they walked down the street. Khim was a reporter for Khmer Conscience, an opposition newspaper, and not surprisingly the paper had been writing critically about the government. No one has been arrested. That is true for dozens of apparent contract killings in recent years just like that one. No one has proved that government officials are behind them. But then, why else would the police make no effort to solve any of these crimes?...Over the years, I have worked in many corrupt states - Iraq, Sudan, Afghanistan, among others. But in none of them is the corruption so pervasive, even pandemic. Cambodians deserve better.” /\

Hun Sen and the "Mafia on the Mekong"

In August 2008, Raphael Minder wrote in the Financial Times: “Hun Sen was returned to power in a landslide electoral victory with the backing of a business community that has benefited from strong growth and political stability after decades of war. Still, the government’s record has continued to be stained by international corruption studies that rank Cambodia among the most corrupt nations in the world. On that topic, Mr Kith Meng echoes government officials, emphasising the billions of dollars of foreign investment that have poured into Cambodia in recent years as vindication of Mr Hun Sen’s efforts to guarantee a fair and transparent business and legal environment. “From outside, people can make any statement they want, but those [investors] who actually come here realise that Cambodia is a place where they should do business,” he says. [Source: Raphael Minder, Financial Times, August 17, 2008]

It is not clear where all the corruption money in the Hun Sen administration comes from. Much of it is believed to come from illegal logging and illegal sales of land and other natural resources, the extraction bribes from domestic and foreign businesses and skimming off of international aid. Some may come from drug smuggling and human trafficking. The Far Eastern Economic review has reported extensively on the close links between the government, gangsters and the notorious super-drug trafficker Theng Bumma.

On the Hun Sen’s government's notorious reputation as the "Mafia on the Mekong," Shawn W Crispin wrote on Asia Time Online: “Cambodia emerged from nearly three decades of civil war only to become known as a regional hub for illicit business, including rampant money laundering, drug smuggling, human trafficking and illegal logging. .Hun Sen and his Cambodia People's Party's (CPP) have been directly linked to shadowy figures reputedly involved in illicit businesses, including his established ties to businessman Theng Bunma, who has contributed millions of dollars to the premier's past election campaigns and also implicated by US authorities for alleged drug trafficking. As Cambodia's aboveground economy booms, state concessions are no doubt providing rich new sources of legitimate revenues for Hun Sen's government. [Source: Shawn W Crispin, Asia Time Online, September 06, 2007]

Small Scale Corruption

In most cases you needed an ID card to get a job. To get an ID card sometimes requires the payment of a $1,000 bribe.

Describing what it took to get permission to sleep at one temple near Angkor Wat , Karen Coates wrote in Archeology magazine, “Getting permission put us face to face with Cambodian egos and stratified social order. It requires several meeting with Preah Khan’s top guardian cop...a few minor altercations with government workers: a multitude of phone calls and faxes to Phnom Penh; several rounds of beer, and a $60 bribe. It all comes down to power.—the most precious commodity in Cambodia.”

Aid money from the government and foreign donors for flood relief has gone into the pockets of corrupt officials rather flood victims. Food aid and tents have been given out to villages that supported the ruling party and not given to ones that supported the opposition.

See Floods, Police

Corruption Violence in Cambodia

In September 2012, the Wall Street Journal reported: “On Sept. 11, the body of Cambodian journalist Hang Serei Oudom was found stuffed into the trunk of his car with his head bashed in. At the time of his death, Mr. Oudom was writing about collusion between local businessmen and officials in the mountainous northwest. There as elsewhere in the country politicians, officials and logging companies have conspired to clear-cut virgin forests that are supposedly protected by the government. [Source: the Wall Street Journal, Tuesday, September 25, 2012 ++]

“The murder of Mr. Oudom is hardly an aberration in Cambodia. At least 10 journalists have been killed in Cambodia since 1996. Social activists have fared no better: In April, a military policeman shot and killed environmentalist Chhut Vuthy as he investigated illegal logging in southwestern Koh Kong province. Dozens more have been summarily imprisoned for protesting illegal land seizures. ++

In 2008, journalist Joel Brinkley wrote: “Hun Chea, a nephew of Cambodia's prime minster, was speeding along a busy downtown street a few days ago when he ran down a man on a motorbike. Phnom Penh's streets are teeming with motorbikes, hundreds of them, criss-crossing busy traffic without seeming to look or care where they are going. Collisions are inevitable. But that's not the point of this story. Hun was tearing down the street at high speed when he hit the biker, witnesses reported, and his car ripped off an arm and a leg. The biker, Sam Sabo, was killed. Hun began to drive off, but running over the motorbike had shredded a tire. He had to pull over, so there he sat in his big black Cadillac Escalade SUV. [Source: Joel Brinkley, McClatchy-Tribune information service, August 21, 2008 /\]

“Now, listen to how the Phnom Penh Post newspaper described the events that followed. "Numerous traffic police were seen avoiding the accident scene, but armed military police arrived. They removed the SUV's license plates and comforted Hun Chea" while Sam Sabo lay bleeding to death in the street. A military policeman was overheard telling Hun: "'Don't worry. It wasn't your mistake. It was the motorbike driver's mistake.'" A few days later, Hun gave the dead man's family $4,000 in hush money, the paper reported. Case closed.” /\

Fighting Corruption in Cambodia

Preap Kol, executive director of the Cambodian Chapter for Transparency International, said: “While there is no improvement on the culture , there are some improvements on the actions. As an example, an anti-corruption law has been passed and the anti-corruption Unit (ACU) has been established to implement it. “Hence, for the first time in Cambodia, criminals cases have been brought to the public’s attention; especially from officials in the land management and judiciary systems. More civil society is now engaged in it. But corruption still tops the list of news topics everywhere and it is the core problem for Cambodia. This is why fighting it should be a top priority for the country.”[Source: Clothilde Le Coz, Asian Correspondent, December 21, 2012 \/]

“In 2012, 4 cases involve the judiciary. there is a very significant problem of check and balances. Embassies and foreign donors are now trying to be the check and balances. Unfortunately, the problem lies at the top of the executive, legislative and judiciary systems. There is also the fact that many elected parliamentarians are serving as ministers. The Prime Minister is also a member of Parliament. How can they have a neutral view of their conduct from the legislative perspective?” \/

One what more should be done, Preap Kol said, “The Constitution should be amended to improve check and balance and more laws are needed. For example, the Access to Information law is crucial to allow access to information and more transparency. It was drafted and discussed once but now it is put on hold. It would allow budgets, national expense and public service reports to actually be published and accessible to civil society and the public. \/

“For this matter. T.I.C has a different approach from some other organisations regarding corruption. We are trying to make people speak out about corruption. Some other organisations are more cautious than TIC; the U.N is one among others for they think the reaction of the government can be negative when using the word corruption or anti-corruption in a dialogue with the government. But at TIC, we put the words out there and want to break through the nerve of society and enable them to speak the word corruption and anti-corruption comfortably. We would like to bring a movement together to see more people and institutions work together to fight corruption to make civil society stronger in demanding for accountability and transparency.” \/

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Tourism of Cambodia, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

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© 2008 Jeffrey Hays

Last updated May 2014

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