Excellencies, Ladies and Gentlemen:
It is an honor to participate in the first Cambodia Development and Cooperation Forum, and to deliver on behalf of the Royal Government of Cambodia’s development partners some remarks on macroeconomic developments and policies, public financial management (PFM), and private sector development (PSD) reforms.
Overall macroeconomic developments have been impressive in the period since development partners and the Royal Government met at the Consultative Group meeting a little over one year ago. Growth has remained very high and inflation low, government revenues have grown significantly, and budgets have increasingly focused on priority development objectives in line with the National Strategic Development Plan. Public financial management reforms being put in place are increasingly lending credibility to the budget, while the business environment is improving through private sector development initiatives.
Development partners commend the Royal Government for their policy implementation efforts in these areas, and the clear successes that have resulted. Cambodia is one of the fastest growing economies in the world today, in no small measure as a result of sound and prudent implementation of macroeconomic policies and structural economic reforms, and strong financial and technical support from development partners. Moreover, as pointed out in the World Bank’s Equity and Development Report, the benefits of this growth have been shared reasonably equally over the period between 1997 and 2004. This is very good news.
Macroeconomic, public financial management, and private sector development reforms have contributed to the positive outcomes both directly and indirectly. Together, they provide a stable and predictable environment necessary for growth, address governance in the management of public resources and help to channel those resources efficiently and transparently toward achieving the Cambodian Millennium Development Goals (CMDGs), and they broaden the base of economic activity and strengthen linkages between growth and poverty reduction.
In conjunction with rising economic fortunes are higher hopes and expectations for tackling some of the more difficult reforms that have not progressed as quickly as earlier planned. One must not lose sight of the fact that poverty continues to be widespread even after considering the gains made over the past decade, with deep pockets in rural areas, and significant income gaps remain between the rich and the poor. New issues have also emerged, including in particular developing the legal and policy framework to maximize the benefits of Cambodia’s oil discovery while managing the risks.
The challenge now is to take advantage of the very positive environment to make progress on some of the key development issues facing Cambodia, so that deeper inroads can be made in reducing poverty and achieving the CMDGs. In this light, development partners would like to raise the following issues in the spirit of constructive dialogue, on which the views of the Royal Government would be most welcome:
Once again, let me congratulate the Royal Government for the successes that have been achieved, and reiterate that development partners remain committed to working closely with you in pursuit of your development reform agenda. We look forward to a fruitful and constructive dialogue at this first CDCF meeting.