Paying for Wage Increases
Change is already happening. The recent announcement by the Finance Ministry to increase wages for civil servants was sparked, in large part, by the Opposition. Months leading up to the election, the CNRP made an even bigger promise of raising wages for civil servants and armed forces from $70 to $250. Promises also were made to increase monthly wages for garment workers from $61 to $150, in addition to pension plans of $10 per month to senior citizens. It’s important to note that the Cambodian government currently provides an annual pay raise of 20% to civil servants and armed forces, but mainly for low-paid workers.
But let’s look more closely at this civil servant wage increase. Where will the government get the money to fund it? Has anyone calculated actual cost? Here’s some simple math to get us started.
Though civil servant data are sparse and typically unreliable, let’s assume that roughly 1.5% of the total population work for the government, a figure supported by a 2003 World Bank report. All things being equal, with growth in civil service employment in proportion to the overall population, we can assume that, in 2013, with a population of 15,205,539 (July 2013 est.), there are 228,083 civil servants in Cambodia today. Now, let’s assume that we raise their wages from $70 to $250 (an increase of $180), and we do that for all 228,083 employees. That would cost the government US$41,054,940. For an aid-dependent country with a weak GDP, it’s not exactly certain how this is going to play out. The intentions are good, though, and this is certainly the direction in which the country needs to head. But, again, leaders need to figure out a plan to achieve lofty goals.
So, the real question is whether the country has the capacity to support radical socioeconomic changes? Despite campaign rhetoric and vague announcements, neither major party proposed real policies to sustain economic growth. It isn’t clear, at least to this writer, how the new government would find the money to pay for important social programs. The CNRP meanwhile proposes to reallocate money – illegally taken from government coffers – to offset costs. They have vowed to “go after” corrupt officials. Though a good idea, that would take years to do. It also isn’t clear how the ruling party will find money to narrow the widening income and opportunity gaps responsible for their waning power.
As an independent analyst and scholar, I’ve been hard on both parties because the Cambodian people deserve better. They’ve been through much over the past century, and there ought to be more than empty promises on the table. But credit should be given where it is due. The CPP deserves recognition for sustaining small but important economic growth over the years, although serious governance changes are in order. The CNRP ought to be praised for pushing against the status quo, fighting for social justice and equality. For example, even though its proposed draft law on minimum wages for garment and state workers was rejected by the National Assembly on April 13, 2013, real steps are being taken to achieve positive change for the people.
The biggest takeaway is this: Before the political bickering even starts, leaders must get serious. They need to figure out a plan to improve current living conditions. There is a clear widening gap between the rich and poor, and a deeper opportunity gap for young people, many of whom are studying and working hard for a better future. The government owes it to the next generation to make things right, to do things better. Yes, Cambodia is overcoming thirty years of war. But it’s also had over twenty years of democracy. The people deserve opportunities, and as a new government is formed, the country deserves continued peace and stability.
Peter Keo is an independent analyst and Cambodia scholar for Global Strategy Asia. He was educated at Harvard University and The University of Chicago, and is completing a doctorate from Columbia University. His research examines post-conflict reconstruction, education, and youth empowerment in fledgling democracies, with a primary focus on US-ASEAN relations. For questions or comments, please reach him at petertankeo@gmail.com.
Change is already happening. The recent announcement by the Finance Ministry to increase wages for civil servants was sparked, in large part, by the Opposition. Months leading up to the election, the CNRP made an even bigger promise of raising wages for civil servants and armed forces from $70 to $250. Promises also were made to increase monthly wages for garment workers from $61 to $150, in addition to pension plans of $10 per month to senior citizens. It’s important to note that the Cambodian government currently provides an annual pay raise of 20% to civil servants and armed forces, but mainly for low-paid workers.
But let’s look more closely at this civil servant wage increase. Where will the government get the money to fund it? Has anyone calculated actual cost? Here’s some simple math to get us started.
Though civil servant data are sparse and typically unreliable, let’s assume that roughly 1.5% of the total population work for the government, a figure supported by a 2003 World Bank report. All things being equal, with growth in civil service employment in proportion to the overall population, we can assume that, in 2013, with a population of 15,205,539 (July 2013 est.), there are 228,083 civil servants in Cambodia today. Now, let’s assume that we raise their wages from $70 to $250 (an increase of $180), and we do that for all 228,083 employees. That would cost the government US$41,054,940. For an aid-dependent country with a weak GDP, it’s not exactly certain how this is going to play out. The intentions are good, though, and this is certainly the direction in which the country needs to head. But, again, leaders need to figure out a plan to achieve lofty goals.
So, the real question is whether the country has the capacity to support radical socioeconomic changes? Despite campaign rhetoric and vague announcements, neither major party proposed real policies to sustain economic growth. It isn’t clear, at least to this writer, how the new government would find the money to pay for important social programs. The CNRP meanwhile proposes to reallocate money – illegally taken from government coffers – to offset costs. They have vowed to “go after” corrupt officials. Though a good idea, that would take years to do. It also isn’t clear how the ruling party will find money to narrow the widening income and opportunity gaps responsible for their waning power.
As an independent analyst and scholar, I’ve been hard on both parties because the Cambodian people deserve better. They’ve been through much over the past century, and there ought to be more than empty promises on the table. But credit should be given where it is due. The CPP deserves recognition for sustaining small but important economic growth over the years, although serious governance changes are in order. The CNRP ought to be praised for pushing against the status quo, fighting for social justice and equality. For example, even though its proposed draft law on minimum wages for garment and state workers was rejected by the National Assembly on April 13, 2013, real steps are being taken to achieve positive change for the people.
The biggest takeaway is this: Before the political bickering even starts, leaders must get serious. They need to figure out a plan to improve current living conditions. There is a clear widening gap between the rich and poor, and a deeper opportunity gap for young people, many of whom are studying and working hard for a better future. The government owes it to the next generation to make things right, to do things better. Yes, Cambodia is overcoming thirty years of war. But it’s also had over twenty years of democracy. The people deserve opportunities, and as a new government is formed, the country deserves continued peace and stability.
Peter Keo is an independent analyst and Cambodia scholar for Global Strategy Asia. He was educated at Harvard University and The University of Chicago, and is completing a doctorate from Columbia University. His research examines post-conflict reconstruction, education, and youth empowerment in fledgling democracies, with a primary focus on US-ASEAN relations. For questions or comments, please reach him at petertankeo@gmail.com.
