World Bank lauds finance management

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The World Bank is saying the implementation of a financial information management system has seen a relatively large fiscal stimulus in Cambodia. KT/Fabien Mouret

The World Bank (WB) has acknowledged that the Cambodia Public Finance Management (PFM) system has now been substantially strengthened, particularly at the central level, while it faced critical challenges including poorly designed budgetary systems and inadequate domestic revenue.

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Ellen Goldstein, the WB country director for Cambodia, Myanmar and Laos, said yesterday that the leveraging and experimenting with approaches for sustainability was the result of an international workshop held under the Public Financial Management Reform Program (PFMRP) that was introduced in 2005. Previously, budget formulation and execution was weak with an overwhelmingly cash-based PFM system that was in efficient, she said.

“Today, through the reform efforts by the government of Cambodia, Cambodia PFM systems have been substantially strengthened, particularly at the central level, and notable successes of the program include a remarkable revenue collection performance, the total elimination of payment arrears going back to 2007, improved budgetary processes with smooth implementation of the budget formulation cycle and the implementation of a financial information management system (FMIS),” Ms Goldstein said.

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FMIS which is now fully operational at central offices of the Ministry of Economy and Finance and all provincial treasuries to support the timeliness of payments and the accuracy of financial reporting.

Ms Goldstein said the improved revenue performance had allowed the funding of several key reform activities, including the introduction of a relatively large fiscal stimulus of two percent of GDP to mitigate the negative impacts of the 2008-2009 global financial crisis on the most vulnerable – farmers and garment workers – increased allocations to the education sector and improved compensation for civil servants under the public administration reform programme.

Aun Pornmoniroth, the Minister of Economy and Finance and chairman of the PFM Steering Committee, said Cambodia’s PFMRP was organised using a “platform approach” and is being implemented in stages.

He said that during each stage of the reform implementation, Cambodia tried to build one of the four platforms at a time, while preparing the ground for the next platform and promoting further progress in the already achieved platforms.

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