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Cambodia's army cut plan set to begin

PHNOM PENH: Cambodia should be able to divert tens of millions of dollars a year from the military under a plan to cut the the armed forces and rein in excessive security spending, a World Bank official said.

The demoblisation plan, which over the next three years will see the size of the armed forces cut by an initial 31,500 men down to around 100,000, is due to begin in coming weeks.

"Currently the cost for security -- military and police -- is about 2.9 percent of GDP," chief of the World Bank office in Phnom Penh, Bonaventure Mbida-Essama, told Reuters in an interview.

"That is thought to be extremely high and it's preventing the government, which is in a peace-time situation, from doing the right investments in critical areas of the social sectors like health, education and rural infrastructure."

The demobilisation plan, drawn up after consultations with the World Bank and other donors, begins with a pilot project in which 1,500 men will be settled in communities by the onset of the rains in May. The government will then cut 10,000 troops a year over the next three years, taking the total figure to 31,500.

That should result in annual saving of 0.9 percent of GDP, which is projected to be $3.42 billion this year, or savings of some $30 million a year.

"The tentative target that has been set for 2002 is that security spending should come down in the first phase to two percent of GDP, maximum, or below," Mbida-Essama said.

"They have also said, very clearly, that they are considering a second phase...to go down further, maybe to between 60,000 and 70,000 (men)."

Cambodia's aid donors have long pressed the government to cut its bloated military which has been eating up close to half the annual budget in recent years.

Expenditure on education, health, agriculture and rural development accounts for only 2.0 percent of GDP. About $5 is spent per Cambodian per year on health and education compared with $150 per person in Thailand. Public infrastructure relies almost entirely on foreign aid.

The surrender of the last Khmer Rouge rebels just over a year ago has restored peace and the troop cut plan is now a main plank of the government's economic reform programme.

Donors have pledged more than $4 million for the pilot project. Demobilised soldiers will get $240 and some basic supplies and training.-Reuters