4. THE WAY FORWARD

4.1 ACTION PLAN ON HARMONIZATION AND ALIGNMENT TO
      IMPLEMENT THE ROME DECLARATION’S COMMITMENTS

45. In moving ahead with the implementation of the Action Plan, the Royal Government recognizes that there are serious challenges ahead. The most serious of these challenges is the divide between agreed global policies on harmonization and alignment by the authorities at the national or headquarters of the development partner, and the follow up actions needed to change the practices and behavior of donor operations at the country level. In the case of a number of bi-lateral partners, the authorities in the capitals have now prepared their Action Plans for harmonization and alignment in line with OECD/DAC principles. It is however, not clear whether or not the authorities at the capital or headquarters have fully examined the operational implications of the policies that they have agreed to, and where necessary, taken actions to amend the rules and regulations that govern the planning and management of their ODA resources. Early this year, on behalf of the Royal Government, the Cambodian Rehabilitation and Development Board of the Council for the Development of Cambodia (CDC/CRDB)) had asked the OECD/DAC Task Team to not only share these Action Plans with partner countries but also to closely monitor and periodically report to partner countries on:

• whether or not the Action Plan prepared at the capital of a member country or the headquarter of a multi lateral organization has been shared with their country field offices;

• whether or not the capital of a member country or the HQ of multilateral organization has provided clear direction or instructions to their country field offices to implement their national or HQ action plan; and

• what authority has been delegated to country field offices to implement the action plan in the partner country context.

46. In terms of the management of the implementation of the Action Plan, the Royal Government would like: (i) the Government-Donor Partnership Working Group to continue to provide the overall policy direction; and (ii) the newly restructured sectoral/thematic Joint Technical Working Groups to take the responsibility for the day to day operational management of the implementation of the activities in the Action Plan and for monitoring progress in their areas.

47. As mentioned earlier, since the mid 1990s, the current UNDP Support Program located in the Cambodian Rehabilitation and Development Board of the Council for the Development of Cambodia (CDC/CRDB) is scheduled to be completed at the end of 2005. Given the expanded scope of the aid coordination, harmonization and alignment issues resulting from recent developments in the international arena and in the country, in particular the need to build capacity of CDC/CRDB and the line ministries and agencies to implement the Action Plan on Harmonization, provide support to the Secretariat of the GDCC, and the Partnership Working Group; the Royal Government would begin discussions with development partners in early 2005 to develop a multi-donor Support Program for CDC/CRDB to be financed through a poled resources arrangement.

48. The Royal Government recognizes that achieving full harmonization is a long-term process and in some areas may be difficult in the shot-term. It has, therefore, adopted a gradual approach with an immediate focus on areas where some concrete steps can be taken in the short-term that would increase the national ownership of the development cooperation activities, lessen the burden on implementing agencies, and minimize the unintended adverse effects of some donor practices, notably those related to capacity development.

4.2 PREPARATION OF THE NATIONAL ODA MANAGEMENT AND
      UTILIZATION POLICY

49. Over the next year, the Royal Government will prepare its National ODA Management and Utilization Policy. This work will be carried out under the umbrella of the Government-Donor Partnership Working Group. Some background for the preparation of the policy framework has already been carried out with UNDP support.

4.3 SECTOR AND/OR THEMATIC/PROGRAM BASED APPROACHES FOR
      ODA PROGRAMMING

50. The Royal Government would like to emphasize the important role that sector/thematic programs can play not only in better aligning ODA supported activities with Cambodia’s national development priorities to achieve its Millennium Development Goals, but more importantly, in providing a framework for harmonizing donor practices around jointly agreed priorities and actions. Cambodia’s experiences with its sectoral/thematic programs show that sector-wide and/or broad issue based programs are not only more effective in aligning donor assistance with national priorities but that they also provide a practical framework for harmonizing donor practices as well as in enhancing Government ownership of the development process -- as compared to stand alone projects that are delivered without an overall framework. In addition to the existing sector programs in the Education and Health sectors, and the SEILA program that have been operating for some time now, as well as the newly formulated Public Finance Management Program, and on-going work in the areas of Private Sector Development and Land Management  -- the Royal Government would welcome its development partner's support to prepare sector wide programs in other key sectors as well, such as, agriculture, rural development, and infrastructure.

51. The Royal Government’s National Poverty Reduction Strategy was launched in March 2003. Moving ahead with the implementation of this strategic framework, the challenge has been on how to clearly define the entry points for programming the agreed upon poverty reduction action plan. The experiences in the implementation of poverty reduction strategies in other parts of the world, in particular Africa, have not been very encouraging. Learning from these experiences as well as on basic conceptual grounds, the Royal Government believes that well defined sectoral and cross-sectoral programs that fully incorporate the action plan of the poverty reduction strategy are the most effective entry points for programming poverty reduction initiatives in Cambodia.

4.4 STRENGTHENING PARTNERSHIPS BETWEEN PUBLIC SECTOR
      INSTITUTIONS, NGOS AND CIVIL SOCIETY AT THE SUB-NATIONAL
      LEVELS

52. The Royal Government believes that the civil society and NGOs have played and should continue to play an important role in monitoring the implementation of poverty reduction initiatives. Cambodian NGOs are a part of the civil society as well as international NGOs who represent the international civil society. NGOs can contribute much to poverty reduction plans based on their development experiences and are in a strong position to convey the needs and concerns of vulnerable groups to policy makers. The Royal Government would like to encourage a greater participation of the trade unions, ethnic associations and farmers' association in the monitoring of the implementation of the poverty reduction initiatives. To better target poverty reduction initiatives the participation of the poor and vulnerable groups in the monitoring of the poverty reduction efforts also needs to be strengthened. There is also a need to strengthen the capacity of the Parliament in order for it to make concrete inputs.

4.5 STRENGTHENING PARTNERSHIPS WITH THE PRIVATE SECTOR 

53. For the Royal Government improving the business climate and creating an enabling environment for private sector development are key pre-requisites for fostering growth, creating jobs, reducing poverty and achieving sustainable economic development. It will continue to remove bottlenecks that impede the development of the private sector in partnership with its private sector partners. The Royal Government hopes that the measures put in place to further strengthen the key institutional mechanisms to support the implementation of the Rectangular Strategy, at the last Government-Private Sector Forum held on 20 August 2004, will produce the desired results. The Royal Government encourages its private sector partners to continue to raise their concerns as well as present their suggestions to create an environment that will enable the private sector to develop, contribute to diversifying the economic structure of the economy and sustained economic growth, and the alleviation of poverty.