CDC - CBP - 4.4.2. RESULTS OF THE INTERVIEWS

4.4.2 RESULTS OF THE INTERVIEWS

100. The issue of monetary incentives, in particular salary supplements or "topping up" was the main issue that was addressed during the interviews. It was generally recognised that present salary levels in the Cambodian administration were insufficient to provide a "living wage". Civil servants therefore adopt a “survival strategy”, which implies, for example, low attendance at the work place in order to earn supplementary income in other jobs. In order to ensure that tasks related to donor projects are fulfilled donors therefore provide monetary incentives in addition to the regular civil service salaries. For projects funded by the multilateral banking institutions these payments are made from Cambodian counterpart funds. As one donor put it: “Good people are overstretched and very much in demand”.

101. These monetary incentives are often given in the form of salary supplements but some donors have decided to ban such practices. In order to remain competitive in finding dedicated counterparts, such donors may adopt alternative strategies which include payments “for tasks performed”, “for overtime”, for "preparation" of or "attendance" at workshops, or even “fictitious mission expenses”, etc. These strategies are much less transparent than salary supplements.

102. One donor, who does provide salary supplements, commented on the ban of some donors on these supplements: “What is the difference between paying budget support and giving salary supplements? It is in the eye of the beholder”. Another donor, who does not condone salary supplements, stated: “We do not believe that we should contribute with salary supplements to pulling government officials out of other government activities”.

TABLE 20: NUMBER OF PERSONS PAID SALARY SUPPLEMENT BY FUNCTION PERFORMED AND RANGE OF MONTHLY PAYMENT

FUNCTION IN THE PROGRAM/PROJECT	NUMBER OF PERSONS PAID SALARY SUPPLEMENT AND RANGE OF MONTHLY PAYMENT
FUNCTION IN THE PROGRAM/PROJECT	UN AGENCIES Range Monthly No. % Payment	IFIs, ADB and EC Range Monthly No. % Payment	BILATERAL Range Monthly No. % Payment	NGOs Range Monthly No. % Payment	TOTAL Range Monthly No. % Payment
Program Director/Manager/ Coordinator	73 2.9% $100-450	33 4.1% $120-1,500	24 4.6% $130-850	30 3.2% $145-350	160 3.4% $100-1,500
Technical Advisor/Supervisor	3 0.1% $180-350	28 3.5% $276-450	17 3.3% $170-350	0	48 1.0% $170-450
Project Officer/Technical Officer	397 15.9% $40-180	48 6.0% $150-500	11 2.1% $150-500	147 15.5% $50-200	603 12.7% $40-500
Counterpart Staff	29 1.2% $83-180	145 18.1% $100-600	32 6.2% $150-170	0	206 4.3% $83-600
National Counterpart Staff	47 1.9% $40-180	0	70 13.5% $50-360	0	117 2.5% $40-360
Provincial/District Counterpart Staff	48 1.9% $58-112	0	230 44.4% $60-200	0	278 5.8% $58-200
Field /Operations Staff	87 3.5% $20-100	0	55 10.6% $60-140	741 78.1% $10-120	883 18.6% $10-140
VDC/Commune and District Level Personnel/village volunteers	901 36.2% $40-80	0	0	0	901 18.9% $40-80
Support Staff	21 0.8% $10-150	509 63.5% $40-300	37 7.1% $20-300	30 3.2% $20-231	597 12.5% $10-300
Driver/cleaner/Guard	0 …	31 3.9% $40-150	42 8.1% $35-200	0	73 1.5% $35-200
Other	886 35.6% $40-80	8 1.0% …..	0	0	894 18.8% $40-80
TOTAL	2,49 100% …..	802 100% ……	518 100% ….	948 100%	4,760 100%

103. Full transparency is limited to the UN system with its published scale for salary supplements and to the Ministry of Economy and Finance (MEF) with its official scale for salary supplements in connection with loan projects. Australia and the International Monetary Fund also apply the UN scale.

104. There was a consensus among those interviewed (multilaterals, bilaterals and NGOs) that more transparency and less competition among donors in the area of salary incentives were highly desirable. Due to the lack of transparency and of agreement among donors there is a great deal of suspicion about the practices of other donors. In some interviews it was said that “we do not do that but we know country X does (or the INGOs do)”. In other interviews there were complaints that other donors paid higher supplements making recruitment of counterparts difficult. One donor thus incriminated denied that it had any activity in the area mentioned and that the suspicion was therefore groundless. Another complaint was that some donors paid better per diems which influenced attendance at workshops and seminars.

105. It also appeared from interviews that some donors break their own rules on salary supplements in order to get good counterparts. One donor who denied giving salary supplements was in fact identified as providing such incentives. Another donor on reviewing the questionnaire on salary incentives replied:” You are asking me to put on paper that I am twisting the rules, cheating. No way!!” As yet another donor put it: “Everybody is cheating”. Still another donor indicated in this connection that “there is a lot of spurious accounting”. One example of circumventing the rules concerns one donor agency that instead of paying salary supplements has put an entire unit of a Government Department on its payroll. Salaries range from close to 500 US dollars to more than 1,600 dollars per month. The unit in question continues to work as before. The donor when asked for clarification acknowledged that this was “bizarre” and indicated that the practice would be discontinued.

106. Many donors reported that they were aware that some government counterparts were receiving salary supplements from more than one project. In one case, it was indicated that one civil servant received as many as five salary supplements. It was also mentioned that salary supplements are paid even at the highest levels of the administration. Some respondents indicated that they considered this inappropriate as it might put into question the integrity of the government.

107. Some donors underlined the fact that monetary incentives (whether in the form of salary supplements or in the form of per diems, attendance allowances, etc.) are often shared among others than the direct recipient. “Financial incentives are shared among many people: superiors, the party, other people in the “clan” and ministry. It is a clan system based on payment and loyalty. It is a bit like Europe in the 17^th century”. Some donors therefore in certain cases practice (or plan to practice) group payments to a team leader who then distributes the monetary incentives to his team.

108. One donor indicated that he considered that to replace the present system of salary supplements by a common fund managed by the officials concerned would be very dangerous and would be very difficult to monitor properly.

109. Many donors and some government officials stressed that the whole system – government pay structures and the parallel income structure – has to be addressed. As one donor put it: “This entire problem is linked to the government’s and parliament’s unwillingness to address the issue of salary policy straight on”. Another donor expressed the problem in the following way: “There is a vicious circle in this country: low tax revenues leads to low civil service salaries which leads to inefficient tax collection which leads to low tax revenues etc.” Yet another donor said that “the key is tax enforcement/reform that allows the financing of a sustainable budget”. Another donor stressed that salary increases needs/presupposes good management and a cleanup, which includes the firing of inefficient people.

110. There were diverse views expressed by donors on present government initiatives to improve the pay structures through the so called AA-allowances and the Priority Mission Groups (PMG). While some donors welcomed these initiatives, many expressed their doubts that they would resolve the present salary problems.

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