4. CONCLUSIONS

64. The Royal Government of Cambodia faces daunting development challenges. Although significant progress has been made, much remains to be done. The development partners of Cambodia have been generous in supporting Cambodia’s development efforts. The RGC is gratified by the support of its external development partners and hopes that they will continue to provide their support to enable Cambodia to achieve its goal of reducing poverty among its people.

65. The Royal Government is encouraged by the fact that the ODA provided by its development partners during the Second Mandate of the Government, 1999-2003, increased by 9.5 percent to US$ 2.4 billion from US$ 2.2 billion during the period of its First Mandate, 1994-1998. The Royal government is also encouraged by the fact that the ODA disbursement rate, the ratio of disbursements to pledges, also steadily increased from 75.8 percent in 1999 to 83.6 in 2002.

66. For its part the Royal Government remains committed to optimizing the benefits of the support that is provided by its development partners for the people of Cambodia. It remains committed to vigorously implementing its reforms agenda and achieving the Millennium Development Goals by building mutually beneficial partnerships with both national and external partners.

67. At this stage of development of Cambodia, the Royal Government of Cambodia places a high priority on securing financing of development programs/projects through grants from Cambodia’s development partners. The data presented in this report shows that the composition of ODA in terms of type and terms of assistance has changed over the last ten years. During the last five years the share of loans in total ODA constituted 26.5 percent of total ODA as compared to 16.7 percent in the period of 1994-98. The Royal Government recognizes that the increase in the loans portion of ODA has implications for future national budgets because of the resulting increase in the size of the national debt and related debt service charges. The Royal government would welcome the support of its development partners to set up and operationalize a Debt Management System at the Ministry of Economy and Finance that will enable the Ministry to examine the implications for national debt and debt service charges of any new proposed loans to support development activities.

68. The agriculture and rural development sectors are expected to play an important role in the Royal Government's poverty reduction strategy. The data presented in this report indicates that the volume of ODA targeted at the agriculture sector declined from 44.1 million US$ in 2000 to 36 million US$ in 2003. Similarly, in the area/rural development sector ODA disbursements have declined from 67.3 million US$ in 2000 to 44.6 million US$ in 2003. Both these sectors require continuing support of Cambodia's development partners in order to achieve Cambodia's Millennium Development Goals.

69. It has been noted that in some cases the data reported is based on budgets rather than the actual or preliminary estimates of disbursements. The Royal Government would like to make a request to its development partners to assist the Government by providing all requested data on "disbursements" in a timely manner.