Cambodia cuts military budget after IMF concern

PHNOM PENH (Reuters) - Cambodia's government has slashed its proposed military budget for 2009 after the International Monetary Fund questioned the big increase it had announced, officials said on Monday.

In a parliamentary debate on next year's budget, the government proposed military spending of just $160 million for next year, way below the $500 million it had earmarked earlier after a border clash with Thailand in October.

"Before, we planned to divert resources to defence and security, but once we announced the plan, there was some criticism from donors," said Cheam Yeap, head of the National Assembly's finance commission.

"We don't want donors to get nervous about spending in the field so we decided to reduce it," Yeap told Reuters.

The IMF expressed concern about the big increase in military spending at a meeting of international aid donors in Phnom Penh last week.

Cambodia's opposition has also worried about the government's plan to spend more on the military at a time when donors such as the World Bank are contributing millions of dollars to help demobilise troops and slim down the country's bloated army.

The budget for military spending in 2008 is $108 million. Total spending on security, including the police force, is around $250 million.

Officials said the proposed increase in military spending next year would go towards better pay and welfare in the army, not weapons.

Cambodia's total budget for next year is now likely to be around $1.4 billion rather than the $1.8 billion proposed earlier.