FIRST CAMBODIA DEVELOPMENT COOPERATION FORUM,
JUNE 20 2007
Observations from the lead DP Coordinator – draft
CDCF as a forum for genuine dialogue
Many have noted that the
Forum has provided an opportunity for a genuine dialogue between the
Royal Government and its development partners, with a frank and open
exchange of views.
Building on and reinforcing
ongoing regular discussion, there has been considerable synergy and
convergence between speakers. Indeed, my colleague from the IMF
noted that the Government was so responsive that their presentation
anticipated and answered most of the questions the Fund had prepared.
On other issues, a clear
consensus on fundamental concerns and objectives exists between the
Government and its partners, even if there continue to be differences
of opinion on the path or pace by which reform should proceed
towards those objectives.
Summary of progress and challenges in the
last 15 months
This Forum, and the discussions which
preceded it, have provided an opportunity to take stock of progress made
since we last met15 months ago.
has continued at a very high level (10.8 percent in 2006, and a
projected 9 percent in 2007), while inflation has remained low and
revenues have grown significantly.
Information from the 2005
Demographic and Health Survey shows marked progress in health
outcomes since 2000. Child mortality rates, for example, have
fallen by a third; HIV prevalence is now at or below 1 percent.
Around two-thirds of the
Joint Monitoring Indicators (JMIs) agreed at the CG meeting in March
2006 have been met either fully (e.g., public financial management
reform, strengthening of aid harmonization and alignment) or almost
fully (e.g. infrastructure, human development, or private sector
However, a number
of reforms have shown only very minor progress
since March 2006, and have fallen short of JMI targets. Notable amongst
these are governance reforms and management of economic land
concessions. On the anti-corruption law, whilst there is clearly
a lack of consensus regarding a realistic timetable for completion, we
welcome both the dialogue that has been possible during the CDCF, and
the direction from the Prime Minister that this discussion should
continue through direct meetings over the coming months.
Key achievements over the last 2 days
Apart from taking stock of progress over the
last year, the CDCF has also provided opportunities for high-level
dialogue on key issues of development strategy. On some key issues, these
discussions have moved us closer to agreement.
The Prime Minister
highlighted the importance of public sector pay for civil service
reform, and noted the early success achieved with the Merit-Based Pay
Initiative (MBPI) in the Ministry of Economy and Finance. We fully
share the Prime Minister’s assessment; and we appreciate his proposal
that CAR and the development partners to work together to reach
consensus on the framework for salary reform, and to expand the coverage
of the MBPI.
Development partners share
the Government’s concerns that land is managed fairly and efficiently
for sustainable growth and poverty reduction. We are very encouraged to
hear that five economic land concessions have had been cancelled
for failing to implement the contracts signed with the Government. We
welcome the news that a joint Ministerial review will now resolve how
much of the land recovered will be allocated to genuinely poor landless
households through social land concessions.
The development partners
appreciate the Government’s concern to maximize the long-term benefits
it obtains from oil and gas. The decision to embed the
taxation regime for oil within the Law on Taxation is a welcome
move. However, we do not see any contradiction between working to this
end, and working to ensure that the resulting revenue flow is then used
well for national development.
A number of other initiatives on
macroeconomic and private sector development policy were also described,
and welcomed by partners. These include:
a report on the status of
the draft Law on Concessions, currently before the National
good progress on the
Customs Law; and
a commitment to avoid
Government borrowing on non-concessional terms, even though the
recent acquisition of sovereign credit ratings opens up this
Building on discussion during and prior to
the Forum, the CDCF formally endorsed a new set of JMIs agreed for
completion before the second CDCF in December 2008. Government and
development partners agree on the need for Government ownership of and
commitment to the agreed reform actions; even if, inevitably, there has
been some frank discussion in the process of formulating these joint
The CDCF has also provided a useful
opportunity for open and informed discussion about what we, as Cambodia’s
development partners, could do better.
We congratulate CDC on the
production of the 2007 Aid effectiveness report.
This provides an impressive indicator of the Government’s growing
capacity to monitor aid flows and lead debates on harmonization and
alignment. Participants expressed the hope that in future better
data from donors—including the emerging donors—will enable
additional RGC-led analysis, and provide a still stronger basis for
evidence-based recommendations regarding aid policy and management. The
development partners look forward to working with CDC on the forthcoming
study on technical cooperation.
Encouragingly, the Aid
Effectiveness Report concludes that there has been progress in donor
behaviour, although active dialogue and participation has yet to be
reflected in better aid practices. There was agreement with the
Report’s conclusions that what is required now is not new initiatives,
but implementation of existing commitments that define Cambodia’s
comprehensive harmonization and alignment agenda. In particular,
Government and partners agreed with the principle that there should be a
concerted effort to move from project-based to sector-wide approaches to
development cooperation, while acknowledging that the pace of this
transition will vary between sectors.