Development Cooperation and Partnerships Report 2020

Cambodia’s development has attained many significant milestones over more than two decades. Progress has been made in line with ensuring peace, security and political stability, promoting sustainable and resilient growth, poverty reduction and job creation, as well as strengthening the capacity of public institutions. The economic growth rate reached 7.5% in 2018, the highest rate in the last ten years, and 7.1% in 2019. This has dramatically reduced the poverty incidence to less than 10% and increased GDP per capita to an estimated USD 1,548 in 2018 and USD 1,674 in 2019.

 

Confronting newly-emerging challenges and realizing Vision 2030 and 2050, the Royal Government of Cambodia (RGC) is responsive to the rapidly evolving global context. The Rectangular Strategy (RS-IV), the RGC’s socio-economic development agenda, ensures strong leadership and provides a roadmap to confront new development opportunities and challenges. The NSDP (2019-2023), which fully integrates the CSDGs, operationalizes the RS-IV and associated reforms that increase the RGC’s capacity to mobilize and manage resources to support the implementation of RS-IV and national development goals.

 

Progress on Development Partnerships

Cambodia has made significant progress in implementing development effectiveness and global partnership commitments agreed in Busan in 2011. Through the Development Cooperation and Partnership Strategy’s (DCPS) results framework, the RGC has institutionalized global and national development effectiveness commitments linked with global partnership principles, the CSDGs and RS-IV and NSDP monitoring frameworks. In response to the evolving development cooperation context and to promote results-based partnerships envisaged in the DCPS, the Guidelines on TWGs and JMIs have been revised in an inclusive process. CRDB/CDC has taken a leading role in formulating a new set of JMIs to align and support the implementation of the RS-IV and the NSDP.

 

There are encouraging signs of progress toward realizing global commitments to development effectiveness at country level. Aid on budget has increased significantly, rising from 83% in 2017 to 92% in both 2018 and 2019. Aid predictability performed well at 119% in 2018 and 122% in 2019. The use of the PFM system was 81% in 2019, increased from 75% in 2018. Alongside these significant achievements, some challenges were identified: the use of government’s results frameworks and procurement systems have made little progress at 63% and 50% of 2019 disbursements to the public sector respectively. Despite improvements to the government procurement system, it is not widely used by development partners. Further efforts to achieve DCPS commitments will be made through wider use of the existing RGC’s results frameworks, especially within the TWGs, the effective implementation of JMIs and promotion of partnership dialogue at all levels.

 

Trends in Development Cooperation

ODA is estimated at USD 1.89 billion in 2019. This represents an increase over the USD 1.5 billion received in 2018. Grant assistance remains relatively stable at around USD 800 per annum, with a slight increase recently from USD 813 million in 2016 to an estimated USD 893 million in 2019. Annual changes in total disbursements are largely driven by loans (having accounted for 25% of total disbursements in 2010, the loan share rose to 53% in 2019 with increased programs from France, China, Japan and ADB).

 

China continues to be the largest development cooperation provider. Its disbursement increased to almost USD 500 million in 2019. Multilateral partners are expanding their support, where World Bank and ADB are multiplying their disbursement from USD 17 million and USD 118 million in 2016 to almost USD 70 million and USD 246 million in 2019, respectively. Disbursement by the EU is declining, with the exception of the Commission and France, which increased disbursement to UDS 65 million and USD 207 million in 2019, respectively. Combined disbursements by the six largest development partners – China, ADB, Japan, France, Korea and World Bank – rose to 68% of total support in 2019, compared to 49% in 2016. China and the Republic of Korea are increasing their grant assistance in tandem with rising loan disbursement.

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