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Jun, 2018

As the economy grows, FMIS will be a Core Decision Making Tool

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For last two centuries, Cambodia’s economic growth still continues its strength and World Bank has considered this country as an average low-income country in 2015. Meanwhile, Asia Development Bank has looked upon this country as a country, among other countries, that has the most economy’s growth in the Asia and it is called Tiger’s New Economy in Asia in 2016.

According to International Monetary Fund’s report (IMF) in 2017, it revealed that Cambodia’s economy is continuously strengthening while average inflation is increased by 3% in 2016. Moreover, Ministry of Economy and Finance has shown that Cambodia’s economy in 2017 stabilized because Gross Domestic Product (GDP) keeps the growth around 7% which includes industrial sector 9,9%, service 7,1%, and agriculture 1,6%.

In the public financial framework, the outcome of collecting revenues is still strong, revenue is increased from 15% to 20% in each year in the last 5 years, and international organizations evaluates that  outcome that has never had before among the countries in the region, and among the countries that have similar development level. Actually, national budget revenue is increased from 15.06 percent of GDP in 2013 to 19.64 percent of GDP in 2017; meaning that it is increased 2 times or proximately 4.58 percent of GDP. Meanwhile, the budget expenditure is increased roughly 1,8 times that this budget allocation, allocated on important prioritized sectors, shows the implementation of budget expenditure precisely and effectively.

The above achievement can be accomplished because the strong implementation of Public Financial Management Reform Program (PFMRP) is an essential part of “Rectangular Strategies” of Cambodian government. From 2016 to present, the PFMRP implementation has been in phase III “Budget Policy Linkage” which FMIS is a needed backbone to push this reform program to be successful. As the matter of fact, in the 2017 review meeting and evaluation of 5-year achievement of PFMRP,  Samdech Akka Moha Sena Padei Techo HUN Sen, Prime Minister of kingdom of Cambodia, has stated that state budget expenditure management will be more effective, efficient, transparent, and accountable and the system will provide full and timely information about the condition of national public finance that is an vital basic for analyzing and making decision in dividing and using public financial resource of whole nation most effectively, when FMIS is fully operated.

Until the present, FMIS is the only system rolled out to 25 Municipal-Provincial Treasuries for recording financial transaction since 2017. FMIS is currently rolled out to key General Departments of Ministry of Economy and Finance, 10-line ministries, and Authorized Budget Entities of Ministry of Economy and Finance, and Ministry of Environment. For 2019 implementation, there are another 10-line ministry and 25 municipal-provincial Departments of Economy and Finance which will be using FMIS for recording financial transaction. In 2025, FMIS, government’s vision, will be only automated system used for effective public financial management and budget implementation in Cambodia to participate in promoting economic growth and sustainable development.