Business Magazine

Will Decentralization Lead to More Corruption in Cambodia?

Posted on the 30 April 2015 by Center For International Private Enterprise @CIPEglobal

Watch a short video about the Silaka project.

In 2009, Cambodia’s provincial legislatures became elected bodies for the first time in the country’s history. Against the backdrop of decentralization, this newly democratic level of government is also being called upon to handle a greater share of public service delivery. If they fail to perform, and if their increased budgets result in a dramatic expansion of corruption, democracy could be seen as failing to perform.

Provincial governments currently account for approximately 20 percent of all public sector spending in Cambodia, up from nearly zero in the late 1990s. This figure will continue to rise as provincial governments increasingly bear the financial burden of primary and secondary education, public health and sanitation, local transportation infrastructure, and basic public administration.

To help mitigate corruption risks, there is a need for greater transparency in provincial finances, increased civic involvement in provincial procurement processes, and good governance advocacy at the local level of government. To address this challenge, CIPE launched an innovative project in June 2012 with a Cambodian NGO called Silaka to reduce corruption in provincial government procurement.

Silaka assembled a coalition of local NGOs, businesses and village leaders, and with CIPE’s assistance built the capacity of this coalition to function as an anti-corruption watchdog, a good governance advocate and a clearinghouse of information on anti-corruption and public governance.

Silaka and its coalition partners are now actively engaged in public procurement monitoring, having observed more than a dozen local government tenders in the province of Kampong Thom. In this procurement monitoring process, Silaka and its coalition partners observe the entire life cycle of specific tenders in a systematic manner using a consistent methodology, documenting what is observed and comparing this with Cambodian law. Irregularities and corruption “red flags” are highlighted.

Silaka then publicly disseminates its findings, and presents policy prescriptions to local government officials.

This past month, Silaka published its Procurement Watch Manual, which lays out in detail the methodology used by procurement monitors in this project. The manual includes a “procurement monitoring check list.” Designed to detect potential irregularities in the awarding of public contracts, this checklist asks questions such as:

  • Is the appropriate procurement methodology being followed? Is the procuring entity using a special and restricted method of procurement where open and competitive tenders should be used? For instance, if a contract is directly awarded due to “emergency circumstances”, did the procuring entity justify this action?
  • Do the tender participants have a level playing field – equal and simultaneous access to information and equal opportunity to offer the goods and services? Were the appropriate publications made and in a timely manner?
  • Is the contract altered after being awarded?

The manual provides a conceptual overview of an effective procurement framework, which is based on transparency, accountability, efficiency, integrity and open competition.

As the methodology employed by this project is broadly applicable to almost any country context, this manual provides a “how to” guide for civil society actors interested in launching procurement watchdog initiatives elsewhere in the world.

Countries with strong participation of external stakeholders in public spending have lower levels of corruption, because the involvement of such stakeholders in the public procurement process reduces opportunities for and the return on corruption. As such, the civil-private sector coalition in Cambodia led by Silaka is positioned to have a transformative impact on corruption in Cambodia, and this Procurement Watch Manual is a new tool for anti-corruption practitioners.

John Morrell is Asia Regional Director at CIPE.

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