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91. During its second mandate, 1998-2003, the Royal Government has remained committed to increasing investment in education and training that is critical for achieving sustained economic growth and productivity improvement. The Royal Government significantly increased the recurrent budget allocations for the education sector over the last three years - from 13.6 percent of total Government recurrent expenditure in 2000 to 18.3 percent in 2003 with a target of 20 percent by 2005. In addition, over 60 percent of the education sector allocation was designated for basic education with an emphasis on maximizing pro-poor expenditures. Significant progress has been made over the last five years to expand equitable access to basic education and in improving its quality and strengthening the efficiency of use of resources allocated to education. 92. The Government’s education reform process that began in mid 1999 has resulted in the formulation of an education policy and strategic frameworks that set out the overall sector development priorities, sub-sectoral targets and a medium term education expenditure framework for the years 2001-2005. The Education Strategic Plan (ESP) 2001-05 was developed in consultation with donors and NGOs and approved in April 2001. The Plan outlined the phasing of priority education policy and strategy reforms for the next five years. The Education Sector Support Program (ESSP) 2001-05 was developed to consolidate the priority recurrent and capital expenditure programs to achieve the medium-term policy and strategy objectives defined in the ESP. The ESSP development process involved 14 different working groups within the Ministry of Education, Youth and Sports (MOEYS). A joint review and appraisal of the ESP/ESSP 2001-05 took place in June 2001. The appraisal results were incorporated into the final version of the ESSP 2001-2005 document, and reflected in the detailed implementation planning by MOEYS for 2002. Subsequently, MOEYS in collaboration with its development partners carried out two joint ESSP Reviews, one in September 2002 and one in May 2003. 93. The ESP and ESSP also provided the overarching policy and implementation framework for improving the livelihoods of poor people using education as a critical factor in enhancing social development and economic growth. Key strategies focused on reducing the poverty trap in accessing education by reducing the cost burden on poor families. The ESP recognized the critical role of educating girls in promoting family health, improving nutrition and contributing to economic development. The RGC remains committed to achieving the goal of "Education for All" (EFA) by ensuring equity in the attainment of nine years of basic education for all children and ensuring access by the children of the poor households to education, especially by improving the quality and number of public education institutions and providing scholarships to poor students. The scholarships are provided to students from poor families, disabled children, children from ethnic minorities, and disadvantaged groups - especially disadvantaged female students who live in remote areas. As access to primary and lower secondary school has increased, demand for post-basic education has expanded. Providing opportunities to the poor for accessing upper secondary, technical and vocational education and training, and higher education are now a priority area for policy development. 94. Through the implementation of the ESP 2001-2005 significant progress has been made in improving equitable access to education services, improving the quality and efficiency of education, strengthening and developing the institutional capacity for decentralization of the education system, and in strengthening partnerships with the development partners to mobilize resources for the education sector. 95. In the year 2000, the Royal Government introduced the Priority Action Program (PAP) for budget allocations for four ministries: Education, Health, Agriculture, and Rural Development. In the case of the Education sector, the PAP was initially focused at primary school level in 10 provinces and was subsequently expanded to cover all levels throughout the whole country. This initiative has produced remarkable results. As a result, enrolment in primary schools has increased from 2.1 million in academic year 1998-99 to 2.7 million in academic year 2002-03. The number of students in lower secondary schools has increased from 226,057 in academic year 1998-99 to 416,000 in academic year 2002-03, or by around 84 percent. Enrolment in upper secondary schools has increased by over 56 percent over the same period. The transition rates from primary to lower secondary level have improved from 74.3 percent in 1988-99 to 83.2 percent in 2002-03, and from lower secondary to upper secondary level from 39.4 percent in 1998-99 to 59.2 percent in 2002-2003. 96. School facilities have expanded greatly over the last five years from 13,011 school buildings with 47,823 classrooms in 1998-99 to 14,717 school buildings with 56,804 classrooms in 2002-03. 97. Primary Education: Overall enrolment in primary schools has continued to expand, as mentioned above, from 2.1 million in academic year 1998-99 to 2.7 million in academic year 2002-03. Over this period, the increase in the number of children entering primary schools in the poorest communes was considerably higher than in the richer communes. The growth in girl's enrolment in primary schools continues to outstrip that for boys (girls 27 percent, boys 22 percent since 1999), which is reducing the enrolment gender gap. In short, the poverty/education gap in primary education is declining and the ESP strategy has had a significant impact to improve equity in access to education for the poor. Some factors that have contributed to this success include: the abolition of start of the year parental contribution, provision of additional school facilities and poverty (and gender) targeted incentives including school feeding programs in the poorest communes. Whilst there has been some reduction in repetition and drop out rates since 1999, resulting in significantly reduced public and parental costs, progress has been below target. Addressing these issues remains a priority through a combination of strategies including further reduction in cost burdens, increasing facilities in underserved areas, quality improvement and efficiency measures. Primary schools in the poorest communes are still relatively understaffed. 98. Secondary Education: The number of lower secondary schools has increased from 367 to 486 and the number of students has increased from 283,578 in 2000/2001 school year to 459,986 in 2003/2004 -- an increase of 62 percent. Over the same period, the number of female students has increased 104,816 to 192,730 -- an increase of 84 percent. While the gross enrolment rate has increased from 27 percent to 39 percent, the net enrolment rate has increased more slowly from 17 percent to 21 percent. Enrolment in remote areas remains very low with only 2,800 students attending grades 7-9. The total number of upper secondary schools has increased from 151 in 2000/2001 school year to 212 in 2003/2004. Upper secondary school enrolment has grown from 105,086 in 2000/2001 to 153,758 in 2003/2004. Net enrolment has remained roughly constant at around 7-8 percent over the past four years. Girls and ethnic minority students represent about 33 percent of the total students. A key barrier to access is the lack of a secondary school in many of the poorest districts and communes. Around 1000 communes currently lack lower secondary school facilities for grades 7-9, and around 50 districts lack upper secondary school facilities for grade 10-12. A major priority is immediate and rapid expansion of secondary school construction in underserved areas (particularly lower secondary). Complementary strategies aim to provide incentives through targeted scholarships for the poor (including scholarships for girls). 99. Higher Education: The Royal Government of Cambodia has paid more attention to quality training management in higher education. An Accreditation Committee for Higher Education was established to monitor the quality of training and to ensure that graduates are capable and of sufficient quality to work for the socio-economic development of the country. The number of privately supported students in both public and private institutions has risen from 32,000 in 2001-02 to 43,000 in 2002-03. 100. Technical and Vocational Education and Training (TVET) Public and Private Technical and Vocational Education and Training (TVET) in all provinces and municipalities has also grown. This is due to promotion of private sector participation in the management and provision of both formal and informal high quality, effective technical and vocational education and training. Enrolment is around 5,500-6,000 students at Ministry training institutions and roughly 8,000 students in private and NGO operated institutions. Graduates from vocational training and specialized training in 1998-99 numbered 1,096 secondary graduates; 7,687 primary graduates. In 2002-03 the numbers were: 2,202 secondary graduates, and 1,388 primary graduates. HEALTH SECTOR 101. Public Health Services delivery: Since 1998, significant progress has been made in both provision of basic health services, diseases controls interventions and promotion of women and child health. The total number of health centres (HC) with adequate capacity to provide minimum package of activities (MPA) increased from 386 in 1998 to 823 in 2003. The number of referral Hospital (RH) with major surgical operation increased from 3 in 1998 to 15 in 2003. The success of disease control interventions is demonstrated by an increase in cure/detection rate of tuberculosis, decrease in prevalence of adult tested HIV positive, and decrease in incidence and case fatality rate of malaria, dengue hemorrhagic fever, measles and cholera, and the eradication of poliomyelitis since 2000. The percentage of pregnant women with at least two antenatal care visits increased from 19 percent in 1998 to 33 percent in 2003. The use of modern contraceptive methods delivered by the public health facilities increased from 9.7 in 1998 to just over 19.9 percent of the married women aged 15 to 49 in 2003. In 2003, 70 percent of children aged 12-59 months received at least one vitamin A supplement. 102. The pilot program to expand basic health services in 5 Operational Health Districts (OD) in partnership with the private sector (NGOs) through contract arrangements has proven to be very successful. The evaluation of the pilot program show that the contracting arrangements increased the provision of basic health services from two to three fold, and in some OD, the health expenditure of the poor household was reduced by 60-70 percent within 3 years (1998-2001) of the pilot project. More over the average annual recurrent costs of contracting out remained within the expected range. This program is planned to be expanded to 11 Operational Health Districts over the 2004-07 period with assistance from a few external partners. 103. As part of the enforcement of health legislation a sub-decree on professional medical ethics was approved by the Prime Minister on 28 August 2003. The Cambodia National Medical Council and the five Regional Medical Councils recently established have started to develop, disseminate and implement various regulatory frameworks and procedures. The draft regulatory framework on tobacco control was submitted to the Council of Ministers in June 2003. Guidelines on smoke free places were developed and circulated to all health facilities. A draft law on the marketing of breast milk substitute is being prepared. 104. Behavior Change and Communication (BCC): To improve awareness of good health and nutrition practices mass campaigns were launched using TV-radio spots in combination with the installation of billboards, and distribution of posters/leaflets. One Booklet on health prevention during flood, and the Laws and regulations on professional ethics were distributed to health professionals in all provinces. 105. Quality Improvement: The establishment of the Quality Assurance Office with a clear vision, mission and role in the MOH under the Hospital Services Department has laid down the foundation for quality improvement. Significant achievements in 2003 include the beginning of a quality culture in the MOH, and the establishment of a working group for quality improvement. An action plan for 2004 and 2005 has been developed, including the design of a consumer satisfaction assessment tool, a system of hospital quality performance assessment and guidelines for accreditation/ licensing of public/private health facilities. Two provinces are piloting quality assurance teams at Provincial Health Department level. 106. Human Resource Development: A top priority for human resource development in the health sector is training to support the development of the RH and HC to provide basic health services. The number of students completing training at the five schools of technical medical care (Nurse, Midwife, Lab. technician) increased from 109 in 1998 to 559 in 2003. Through the basic surgery-training program 36 general medical doctors were trained as surgeons to work in the rural RH during the period 1998-2003. Around 12,000 participants coming from HC attended in-services-training on various MPA modules during the same period. The 2003 target to train 84 percent of OD offices and 75 percent of Provincial Health Department on health service management was achieved. 107. Health Financing: The Royal Government has increased the budget allocations for the health sector by 224 percent over the years1998-2003. In spite of the substantial increase the current budget allocation represents an expenditure level of only US$ 2-3 per capita. It is estimated that a level of US$ 12 per capita is needed to provide the basic health services. Given this gap in funding, the health sector remains dependent on donor contributions in both the short and medium terms to develop adequate capacity to deliver the needed services. 108. Institutional Development: The Health Strategic Plan (HSP) 2003-2007 was prepared in close collaboration with development partners. The plan was launched by the Prime Minister in August 2002. The first Annual Health Sector Performance Review was conducted in April 2003 jointly by the Government and its partners with the objective of reviewing progress in health sector development, identifying key achievements, issues and constraints in the six key areas of HSP, and identifying indicators and priorities for its implementation for 2003-2004. Central, provincial and operational district government officials, donors and NGOs, as well as commune councils representing consumer groups attended the Review. The review provided a report on Health Sector Performance in 2003, the agreement on priority actions for 2004-2005 as well as measurable targets for 2004. As part of this review key external partners have committed to support the priority actions for 2004-2005 with emphasis on maternal and child health and access to quality health services for the poor. The MOH is currently preparing plans to implement the priority actions. The MOH is also currently working on a review to streamline its planning processes and procedures. 109. At this early stage of the implementation of the HSP 2003-2007, the MOH faces many challenges, such as how to gradually achieve a balance in the financing of priority public health interventions between external and budget resources. Other challenges in managing the Sector-wide Management approach include: (a) better access to information on donors commitments for preparation of MTEF, PIP and Annual Operational Plan; (b) harmonization of various mechanisms for planning and monitoring and evaluation required by different donors' agencies as well as government agencies; and (c) identification of adequate incentives for staff working on coordination, planning and monitoring and project management. 110. As the first step to achieve organizational and management reforms of structure, systems and procedures of the MOH, a functional analysis in two provinces and five central MOH units was completed in 2003. |
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2.4.2 ECONOMIC SECTORS AGRICULTURE, FORESTRY AND FISHERIES 111. During its second mandate, 1998-2003, the development of the agriculture sector was an important element of the Royal Government's strategy to reduce |
Economic Sectors § Agriculture, Forestry & Fisheries § Manufacturing and Mining § Tourism § Trade |
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poverty in rural communities, achieve food security, and foster equitable and sustainable economic growth. While the total output of the agriculture, forestry and fisheries sector increased over the 1998-2003 period, the sector's contribution to total GDP declined from 43.7 percent in 1998 to just over one-third in 2002 because of the rapid growth of the industrial sector during this period. In spite of the rapid growth of the industrial sector, agriculture, forestry and fisheries sector continues to be the main source of employment for nearly 80 percent of the labor force. Since 85 percent of the population lives in rural communities and 75 percent of the poor are farmer-headed households, the performance of this sector continues to be a key factor for achieving sustainable economic growth, poverty reduction, and development of the rural economy. The development of the agriculture sector over the last five years was severely affected by adverse climatic conditions that have ranged from severe flooding to drought over the years. Notwithstanding the frequently unfavorable climate changes, efforts to improve the productivity of crop production have yielded favorable results. The rice crop yield increased from 1.79 tons per hector in 1998 to 2.1 tons per hector in 2002/2003. 112. In spite of the significant progress made, the development of the agriculture sector continues to be constrained by inadequate transportation and irrigation infrastructure, lack of agriculture inputs, inefficient marketing and inconsistent institutional support. Reforms have been underway to develop a market-based system focusing on land reforms, price liberalization and adoption of legislation to permit joint ventures between the state and foreign investors. The Ministry of Agriculture, Forestry and Fisheries (MAFF) has been re-organized with support from development partners. Extension services have been expanded to cover research on rice varieties and the transfer of agricultural know-how to farmers. Simultaneously, policy and institutional reforms are being supported by strategic public investment programs, which include village water and roads, rural infrastructure restoration and employment generation. 113. The total gross domestic product of the agriculture sector (crops, livestock and poultry, fisheries and forestry and logging) has increased by 7.9 percent over the 1998-2003 period from 5,094 billion CRs in 1998 to 5,496 billion CRs in 2003. Year over year changes were effected by climatic conditions that resulted in declines in output between 1999 and 2000 and 2001 and 2002 because of severe flooding. Within the agriculture sector, between 1998 and 2003, the share of crops and livestock and poultry in total agriculture output has not significantly changed over this period. The share of the fisheries sub-sector has increased and accounted for nearly one-third of total agriculture sector output in 2003. The share of forestry and logging sub-sector has declined significantly over the 1998-2003 period from nearly 724 billion CRs in 1998 or 14.2 percent of agriculture sector output to around 342 billion CRs or 6.6 percent of the agriculture sector out in 2003. 114. In 2003, out of a total of 2.7 million hectors of land cultivated, 2.1 million hectors or 78 percent were devoted to the production of rice, 6 percent to other food crops, 4 percent to industrial crops, and 6 percent to fruits and other crops. Out of 2.1 million hectors of land devoted to rice production, the irrigated area is estimated to be around 430,000 hectors (about 23 percent of total rice area). Paddy production in 2003 increased by 23 percent from 3.8 million tons in 2002 to 4.7 million tons in 2003 resulting in a surplus over estimated domestic consumption by more than 686,000 tons. The increased rice production is primarily a result of the introduction of new high yield varieties with new farming technologies developed and introduced by the Cambodian Agricultural Research Institute (CARDI) through the MAFF extension services. It is worth noting, however, that current yield levels and cropping intensities in rice are still low, approximately 2 tons per hector, compared with those under similar ecosystems in neighboring countries that have yields in the 5-8 tons per hector range. 115. Although the bird flu outbreak in 2003 had adversely affected the production of livestock as a whole, animal stock and poultry grew by 2.6 percent. In 2003, the Royal Government significantly increased the number of animal health workers to reduce the mortality and morbidity rate of livestock. A variety of anti-epidemic measures were taken to improve the quality of the livestock products 116. Rubber has long been a major commercial crop and potential export earner for Cambodia and, as a labor-intensive crop, has the potential for poverty alleviation through rural employment creation. During 1998-2003, 57 experimental plantations were established in Rattanakiri, Mondulkiri, Kratie, Kampong Cham and Kampong Thom with support from development partners. The AFD funded project on small scale rubber development is going well and has been well received by farmers. 117. Fisheries Management: Significant progress has been made in the management of this sub-sector. The fishing lot reform process is currently in its second phase in several provinces. More than 56 percent of the fishing lot boundaries have been reserved for local communities to establish community-based fisheries management system. A Royal Decree on the establishment of community fisheries and a Sub-Decree on the management of community fisheries have been prepared and are awaiting approval of the Government. Although the legislative process is still underway some 360 community-fishery lots have already been established across the country with assistance from development partners. The Fisheries Law has been reviewed by the Council of Ministers and is scheduled to be submitted to the Parliament. In February 2003, the Inland Fisheries Research and Development Institute was established. The Institute has become a key national institution for research on fisheries development and management, providing ideas, access to state-of-the-art science and technology, and a source of information and documentation for the public, particularly fisheries communities and fishermen. 118. A Master Plan for fisheries management to the year 2011 is currently being prepared to guide the development of the fisheries sector. The Ministry of Agriculture, Fisheries and Forestry has also launched initiatives on the conservation and management of fisheries resources including the prevention of illegal fishing, demarcation of fishing lot boundaries and safeguarding and identifying fishing sanctuaries. 119. Local aquaculture development is a component of the Royal Government's policy on poverty reduction. Aquaculture production has contributed to improving the living conditions of farmers and generating incomes in addition to crops. Initiatives for the development of local aquaculture are now underway in provinces of Svay Rieng, Takeo and Kampong Speu. 120. Food security and nutrition: There has been some progress in improving food security and nutrition in 2003, reflecting increased agricultural production, better roads and market developments. However, there is still unevenness across the country between surplus and deficit districts. In terms of meeting the MDG1 of halving the proportion of people who suffer from hunger by 2015 one of Cambodia's greatest strength lies in its potential for producing up to one million ton more rice without resorting to deforestation, as the cultivated area is still below the pre-war period. Moreover, increasing the yield from 2 tons to 3 tons per hector will have significant beneficial impact on food security. 121. At the policy level, attention is being given to increase awareness on malnutrition, iron deficiency, children feeding and salt iodization through workshops, training programs and advocacy. Much more remains to be done in this area, as domestic production of iodized salt covers only 20 percent of the national requirement, while vitamin A coverage among children 6-59 months old is only 34 percent and the number of mothers who receive iron supplements is still low. The Royal Government has established Provincial Nutrition Coordination Committees in a number of provinces and commissioned to prepare Provincial Action Plans on Food Security and Nutrition. 122. The decision by the RGC to introduce community forestry and community-based fisheries has improved access by the poor and benefited the rural population. Priority action in 2003 was to help communities to improve management and reduce illegal fishing. After the reforms of fishing lots in late 2000, the number of fishing lots was reduced from about 235 covering almost one million hector to 164 covering about 420,000 ha. The reduction of fishing lots has also reduced the number of conflicts with farmers in communities living on fishing lot boundaries or in their proximity. However, there is only limited improvement in the provision of micro credit and the costs of credit to poor households are still high. 123. Forestry Management: The RGC has made significant progress since the last CG Meeting in 2002 in its efforts to achieve sustainable management of forestry resources. The implementation of forestry sector reforms has reached a critical stage, where all stakeholders are required to pay attention to strengthening the institutional capacity and improving coordination to ensure smooth implementation of policies. Following is the overview of some of the Government’s most important accomplishments in the forestry sector. 124. In keeping with existing commitments, the Royal Government has not issued any new forestry concessions. However, small salvage operations and other works in accordance with Cambodian laws and regulations have continued. The Royal Government has continued to pursue vigorously illegal logging operations. In the course of performing their duties 7 forest administration officers have been killed and 34 have been injured. Some 1,386 illicit sawmill plants, 653 timber processing handicraft, 39 medicinal vine powder manufacturing handicraft, 24 Tepiro oil manufacturing handicraft, 159 aloe steaming and forest sub-product processing ovens have been removed, destroyed and put out of business, and 332 offenders were apprehended and prosecuted. 125. Illegal logging, wildlife smuggling, corruption and encroachment on forest land have been reduced from the crisis proportions prior to the Government’s reform program. The Government’s crackdown on illegal logging has consisted of measures across the full spectrum of forest law enforcement, prevention, detection and suppression. The RGC's entire approach to resource management, including concession management reform, community forestry and protected areas management is aimed in large part at preventing crime. In June 2004, the Royal Government issued Order No 01BB to prevent, suppress, and eliminate forest land clearing and encroachment and has established a National Committee and Sub-national Committees at the provincial level to implement this order. 126. Forest crime monitoring and reporting efforts have continued unabated in spite of the well known disputes with the previous official Independent Monitor, Global Witness. The Royal Government would like to see a more strengthened and improved monitoring and reporting effort to strategically utilize its scarce enforcement resources to priority problems. Although, a new Independent Monitor has been appointed, Société Générale de Surveillance (SGS), the Royal Government welcomes the work in Cambodia of Global Witness, other NGOs and civil society organizations concerned with forest law enforcement. Wild Life Conservation Society, Conservation International, WildAid and other groups are also important partners in monitoring forest crimes in Cambodia. The Royal Government would like to obtain additional expert technical advice on forestry law enforcement. 127. Forest concession system and individual concessions have been radically restructured to make them more accountable and responsive to the public interest. The Royal Government has continued to implement its forestry management reforms, including consummation of revised contracts with the remaining concessionaires, measures to improve community consultations and to avoid social problems and adverse environmental impacts. It will continue to raise the technical standard of practices by concessionaires and the Government agencies involved in forestry concession management. 128. On the legislative front, the Royal Government has developed additional regulatory instruments and guidelines required to implement the 2002 Forest Law. A Sub-Decree on Community Forestry was enacted in December 2003 to put public forest assets under the stewardship of local communities in the framework of approved management plans and benefit sharing arrangements. The Sub-Decree was the result of over six years of consultations and work with many stakeholders and advisers and compliments other measures, such as the Sub-Decree on Social Land Concessions to make the country’s land resources more productive and better managed. 129. The Royal Government has been working in partnership with various donor agencies and non-governmental organizations to pilot community forestry initiatives in different parts of the country. Nearly 110,000 hectares have been developed under community forestry arrangements. The RGC will continue these partnerships under the framework of the new Sub-Decree. MANUFACTURING AND MINING SECTORS 130. The Royal Government's efforts during its second mandate, 1998-2003, to foster the development of a free market economy by opening access to its markets, providing incentives to attract foreign investments, and securing access for its products in overseas market through special trading rights such as the Most Favoured Nation (MFN) and Generalized System of Preferences (GSP) arrangements that have been extended to Cambodia by many industrialized countries have yielded significant results. Between 1998 and 2003 the manufacturing sector's share in total GDP has grown from 12.7 percent in 1998 to 19.5 percent in 2003. 131. The Royal Government's Industrial Development Action Plan for the period 1998-2003 had two goals: the development of export-oriented industries, and the development of import-substituting production of selected consumer goods. These goals were to be achieved by promoting the development of: (i) labor-intensive industries, (ii) natural resource-based industries, (iii) small and medium enterprises, (iv) agro-industries, (v) technology transfer and upgrading the quality of industrial products, (vi) establishment of industrial zones, and (vii) the development of import-substituting production of selected consumer goods. 132. During the last five years, the development of labour-intensive manufacturing was focused on the textile and garment sub-sector. The Royal Government has continued to provide support for broad-based industrial development by: (i) encouraging expansion of the SME sector, (ii) improving the performance of State-Owned Enterprises through corporatization and privatization, (iii) stemming the flow of illegally imported products, (iv) reducing barriers to export such as export taxes and inefficient provision of trade facilitation services (e.g. licensing), (v) reducing barriers to importation of business inputs, (vi) enhancing the linkage between SMEs and between SMEs and large industries, (vii) promoting a national productivity centre to assist small and medium size firms to increase productivity and reduce production costs, (viii) establishing a National Institute of Standards to ensure product quality matches regional and international standards, (ix) establishing a National Laboratory with the technical capacity to undertake physical, chemical, microbiological, and mechanical analyses of products that establish the quality and other specifications of these products, (x) establishing an industrial property rights bureau to protect new products, designs and technologies from illegal copy, (xi) promoting vocational training domestically and overseas, and (xii) upgrading the legal framework in the areas of factory law, industrial zone law, patent and industrial design law, weights and measures, and industrial safety. 133. During the period of 1998-2003, the Cambodian Investment Board approved 497 projects that planned to invest around 2.4 billion dollars and employ around 374,000 workers. Of these 359 were implemented and the reported capital investment on these projects totalled just under 1.6 billion US dollars. They planned to employ just over 164,000 workers. Of the 359 investment projects, 187 were involved in the textile and garment manufacturing, 74 in non-textile manufacturing, 36 in the tourism sector, 32 in infrastructure and related activities, and 30 in agriculture and agro-industries. Of the 359 investment projects that were implemented 72 have undergone expansion and have invested an additional US$135 million. Most of the expansion, 56 out of 72, has occurred in the textile and garment sub-sector. 134. The investment law was amended in the year 2003 to reduce administrative formalities in approval process and to reduce the period from submission to approval of investment projects. 135. Within the manufacturing sector, that contributed around one-fifth of total GDP in 2003, textile and garment manufacturing accounted for two-thirds of the manufacturing sectors'' output in 2003. Food, beverages and tobacco are the other major activity in the manufacturing sector accounting for 15.1 percent of manufacturing sector's GDP in 2003. The total value of production of garment factories has increased from US$ 457 million in 1998 to US$ 1,665 million in 2003. 136. Mining sector: After the law on Mineral Management and Exploration was promulgated in July 2001, licenses have been issued to local and foreign companies for mineral exploration and mining in the following areas:
137. Mining sector's contribution to total GDP is relatively small. It has, however, slightly increased from 0.2 percent of total GDP in 1998 to 0.3 percent in 2003. TOURISM 138. Tourism has continued to play an important part in the rebuilding of the national economy. Cambodia has world-famous attractions including the archeological sites of Angkor Wat, world-class hotels in Phnom Penh and Siem Reap, a rich history, and a culture that dates back thousands of years. The number of tourists coming to Cambodia has steadily increased from 288,524 visitors in 1998 to 786,524 visitors in 2002 – or at an average annual rate of 28.7 percent between 1998 and 2002. Because of combined impact of the violent demonstrations in Phnom Penh in early 2003, the Iraq war, the outbreak of SARs in the region, and the uncertainties related to General Elections the number of tourist arrivals declined for the first time in 2003. Although tourism activity recovered somewhat in the second half of 2003, overall tourist arrivals declined from 786,524 in 2002 to 701,014 in 2003 or by around 11 percent. 139. The Royal Government’s policies for the tourism sector have been based on two basic principles. First, the development of the tourism sector should be carried out in a manner that is sustainable, anchored in the cultural heritage, history, and the exquisite nature of Cambodia’s terrain, but more importantly, development that contributes to poverty alleviation. Second, the development of the tourism sector should be carried out in a manner that that makes Cambodia a preferred destination in the region contributing to the principle of ASEAN as a single destination. To foster the development of the tourism sector, the Royal Government has implemented the following measures:
140. To promote tourism, the Ministry of Tourism in collaboration with Raffles International organised a grand Charity Concert in the Angkor Wat complex in December 2002. The world-famous opera singer, José Carreas, performed at this event that was attended by more than 1,000 international visitors. The other major events have included: hosting the 8th ASEAN Summit of the ASEA Tourism Forum (ATF 2003) in Phnom Penh in January 2003, organizing the ASEAN Cultural Week, the World Buddhist Conference, the Greater Mekong Sub-region Summit, and the Cambodian-Japanese Traditional Music Concert in Siem Reap in November 2003 to celebrate the 50th anniversary of Cambodia-Japan Friendly Diplomatic Bond. The international media has also been active in airing programs in their countries on the tourism sites in Cambodia. Some of the networks have included: NHK television of Japan, NBC television of the United States, TV 5 of France, National Geographic, Discovery, BBC and CNN. TRADE 141. The trade sector in Cambodia is and will continue to be of fundamental importance for achieving economic development and the creation of job opportunities. Half of GDP growth between 1999 and 2003 was contributed by one sector, the garment industry, which continues to be the major contributor to trade in Cambodia. In recent years, trade activity in Cambodia has benefited from preferential trade agreements, like the Generalized System of Preferences (GSP) and Everything But Arms (EBA) scheme. 142. Accession to the World Trade Organization (WTO): Cambodia became a Member of the World Trade Organization (WTO) on 11 September 2003 at the Fifth WTO Ministerial Conference at Cancun, Mexico - as one of the first two LDCs along with Nepal. Joining WTO has marked the final step in bringing Cambodia back into the major regional and international organizations that govern international economic relations. The benefits of accession to the WTO need to be measured both in terms of market access and the resulting improvements in the governance systems that must be vigorously implemented to send a positive signal to trade and investment partners. For the garment industry the accession presents not only a challenge to become more competitive in the regional and global markets but also opportunities for expansion because of the removal of the quotas for Cambodian exports to 147 members of the WTO based on MFN principles and non-discriminatory practices. As a member of both the WTO and ASEAN, Cambodia will be able to work towards bilateral free trade with the United States of America under the U.S. so called Enterprises for ASEAN Initiative (EAI). 143. Regional Integration: Cambodia became a Member of ASEAN in 1999. As a new member, Cambodia has benefited from numerous new initiatives of the more advanced members of ASEAN to assist the newer and less developed members such as the ASEAN Integration System of Preferences (AISP) (349 items). Also, other framework agreements with ASEAN dialogue partners have also been beneficial for Cambodia, such as the Special and Preferential Tariff (SPT) from China (297 items), General System of Preferences (GSP) from Japan (226 items) and Republic of Korea (78 items). Cambodia has persevered in its efforts to pursue opportunities to expand South-South trade within and outside of the ASEAN neighborhood. The possibilities of joining the Global System of Tariff Preferences among developing countries which fosters trade are now being explored. Some of the landmark initiatives of ASEAN that are worth noting include: Framework Agreement for ASEAN-China Economic Cooperation; the Framework for Comprehensive Economic Partnership between ASEAN and Japan; the ASEAN-India Economic Partnership Agreement; the ASEAN-South Korea Free Trade Area; and soon the AFTA - CER free trade area. Ultimately an increase in investment, production and consumption in ASEAN dialogue partners will result in increase of demand for production inputs and for finished goods from ASEAN and Cambodia. Better market access to ASEAN dialogue partners' markets will help Cambodia's economy to grow. 144. At the ASEAN Summit held on 8 October 2003 in Bali, Indonesia, ASEAN Leaders adopted a framework to establish an ASEAN Economic Community (AEC) by 2020. The aim is to create a single market and production space of more than 500 million people, with a combined gross domestic product (GDP) of over US$ 600 billion in 2002. 145. Sub-Regional Economic Integration: Other sub-regional socio-economic development initiatives worth noting include: the Greater Mekong Sub-region; the Thailand-Cambodia joint development within the framework of Ayeyawady Chao Phraya Mekong Economic Cooperation (ACMECS); the Cambodia-Laos-Thailand Emerald Triangle; and the Vietnam - Laos - Cambodia Development Triangle. 146. Bilateral Trade Cooperation: Bilateral trade relations between Thailand and Cambodia have been steadily growing. Aside from trade Cambodia has also explored other avenues to further expand the trade transactions with Thailand. Trade Account mechanisms with Thailand are being explored as a way to enhance international trade and business transactions that will include government guarantee for trade payment settlement; lessening the dependency on hard-currency transfers and banking fees relating to international trade and payment transactions. Thailand had also approved the product list consisting of 310 items under the ASEAN Integration System of Preferences to Cambodia. Under the ACMECS's One Way Free Trade Policy or Duty Free Import Thailand has reaffirmed its plans to purchase various agricultural products from Cambodia such as soybean, maize, castor bean, potato, sweet corn, cashew nut, eucalyptus and groundnut. Other ACMECS's initiatives include: a feasibility study on establishing a Wholesale/Export Market in Cambodia; and a feasibility study on establishing special economic zones at Koh Kong, Poipet, and Pailin. 147. Bilateral trade with China has significantly increased reaching a volume of USD 320 million in year 2003. China has granted GSP treatment for 279 items mostly agricultural products and is considering expanding the list up to 439 items. In the area of textiles, China has signed a MoU for the development of a 500,000 spindles textile plant in the proposed Sihanoukville Textile Industrial Park. In addition, a MoU to promote economic and trade relations and technology cooperation was also signed between the Cambodia Chamber of Commerce (CCC) and China Council for the Promotion of International Trade (CCPIT). 148. In 2003, Canada granted duty free and quota free market access to Cambodia's textiles and garment products exports. 149. In 2002, Cambodia and Viet Nam renewed an agreement on goods in transit to facilitate exports from Cambodia to third country via Viet Nam. In 2001, both countries signed an agreement on cross border trade in order to exchange traditional goods between the people of the two countries living along the borders. 150. In 1999, Cambodia signed an agreement with the EU that allowed Cambodia to export textile products to Europe without quota and duty. In 2001, EU implemented a policy that allowed all LDCs, including Cambodia, to export all goods into EU without duty and quota, except arms. 151. In 1996, Cambodia and the U.S.A signed a trade agreement under which Cambodia was given the Most Favored Nation (MFN) status for exports to the US. This agreement allowed Cambodia to export its products to US at the same tariff rates applicable to WTO members. In 1997, the US granted GSP status to Cambodia. In 1999, Cambodia and the US signed an agreement to export textiles to the US based on quota for 11 types of textile products from Cambodia. 152. Contribution to Poverty Reduction: The National Poverty Reduction Strategy (NPRS), launched by the Royal Government in March 2003 included a full chapter on trade. The trade policy matrix presented in the NPRS outlined poverty reduction objectives, defined strategies to achieve these objectives and finally measures to monitor outcomes, evaluate impacts and the process to make adjustment, if needed. The ultimate aim is to protect and preserve the jobs of 250,000 garment workers and 1.5 million people whose livelihood depend on them as well as to strengthen and diversify its current export base. 153. Special attention must be given to increasing domestic value added content of individual exports and to look at developing new export sectors, if the export sector is to further contribute to poverty reduction in Cambodia. Tree crops, specialty crops, agro-processing, fish farming and processing, skilled labor services (e.g. software development services) might be relevant opportunities for Cambodia along those lines. In addition to increasing the value-added content of exports, Cambodia needs to regionalize and decentralize its export production if the benefits of globalization are to be distributed more widely within the country. 154. A large number of studies have been carried out over the last five years with assistance from Cambodia's development partners. These have included studies on: Regional Development of the Phnom Penh-Sihanoukville Growth Corridor; Improvement of Marketing System and Post-Harvest Quality Control of Rice in Cambodia; and the Feasibility study on the Establishments of a Paddy Market; Private Sector Assessment and SME development; Assessment of the Agro-Industrial Situation in Cambodia; Export-led Poverty Reduction Program (EPRP); Diversified Agriculture and Agro-Processing Supply Capacity Study; and the E-Trade Bridge Strategy; and Impact of Export Promotion Zones on Poverty Reduction. 155. The Cambodian trade sector has also benefited from the Integrated Framework for Trade Related Technical Assistance to Least Developed Countries (IF) in defining Cambodia's Pro-Poor Trade Strategy. The IF in Cambodia has to be considered an example for its effectiveness and good achievements in comparison to other countries that applied the same methodology and process. 2.4.3 PHYSICAL INFRASTRUCTURE
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existing infrastructure. During the last five years, the Royal Government's efforts have focused on rebuilding the road network, rehabilitating and expanding the deep sea Sihanoukville Port, and international airport facilities at Phnom Penh and Siem Reap. 157. The Road Transport plays an important role in moving freight within the country. So far, within the road network system, primary routes connecting to neighboring countries -- Vietnam, Lao PDR and Thailand -- have not yet been completely rehabilitated. The rehabilitation, improvement and connection of the main national roads/corridors to the regional transportation networks are a high priority of the Government. 158. Over the last five years, the RGC with assistance from Japan, ADB, World Bank, and other bilateral agencies and several NGOs had focused on rehabilitation of primary road network, including bridges and ferry crossings, in order to facilitate the transportation of goods and services and the integration of markets. Between 1998 and 2003, 2,350 km of roads were rehabilitated with assistance from development partners and domestic budget resources. Significant projects have included: the Mekong Bridge at Kampong Cham (February 2002), and Koh Kong bridge (2001), the reconstruction of RN 6 & 7 from Phnom Penh to Kompong Cham, as well as the rehabilitation of long sections of NR 1, 2, 3, 5, 11, 21, 31, 33, 61, 63, 66, and 72, and the construction and rehabilitation of a number of bridges, mostly along NR 1, 5, 6 and 7. 159. The Royal Government has also from its own limited budget resources financed the repair and rehabilitation of some 2,096 km, of crushed stone surfacing, of some sections of primary (e.g. NR 48, 56, 57, 58, 59, 67, 69a, 73, 76, 78) and secondary roads which link isolated areas to promote socio-economic development in rural areas. The Government plans to accelerate the rate at which the road network is rehabilitated and made serviceable by adopting a policy of staged construction, by simplifying contracting procedures, and by using short-life (five year) rehabilitation techniques. 160. Overall, the rehabilitation of all main national or primary roads (NR 1-7), a total length of 1,988 km is planned to be completed by the end of 2007. Also, the rehabilitation and reconstruction of an additional 1,850 km of roads is planned using short-life rehabilitation techniques. The first priority for this work will be the secondary national roads linking Phnom Penh to the provincial capitals, and a second priority will be the national roads and provincial roads that link adjacent provinces. 161. Road Maintenance was also a high priority during the second mandate of the Royal Government. Around US$ 5-10 million annually had been allocated for road maintenance from the domestic budget. 162. The railways at present are limited to 2 lines, both are in poor condition due to acts of sabotage and limited maintenance activities. The northern line extends from Phnom Penh to Poi Pet (385km), however, the last section from Sisophone to Poipet has not been used since the early 1970’s. The southern line extends from Phnom Penh to the port of Sihanoukville (263km). The emergency repairs to some key railway lines including bridges have been done under the Emergency Flood Rehabilitation Project supported by ADB and National Budget. 163. River transport used to be an important means of travel in the past. Inland ports and waterways played a very important role in the country. Agricultural and forest products, oil and bulk cargo, and heavy machinery used to be transported through inland waterways. Passenger water transport can also play an important role in supplementing the land transportation systems. At present, most of the waterway traffic is on the Mekong river between Phnom Penh and Ho Chi Minh city and Phnom Penh upstream to Kratie. Vessels of up to 5,000 tons can navigate along the Mekong up to Phnom Penh during most of the year. Traffic on waterways other than the Mekong is by means of small craft and constitutes a very small volume. Inland ports and waterways development are being seriously considered by the Royal Government. However, only a few projects have been implemented. In recent years, there has been a continuing shift from river transport to vehicle transport as the main mode of travel. 164. International Ports and Shipping: The two main ports in Cambodia that serve most of the country’s international trade are Phnom Penh Port and Sihanoukville Port. Phnom Penh Port is an international river port located along the west bank of the Tonle Sap River that is around 332 km inland from the open sea. The port has a strategic geographical location in the centre of commercial and industrial areas that are located within a 13 km radius. The location is also well connected with good natural inland waterway network. In 1995, the Phnom Penh Port was rehabilitated and a new berth - 300 meters long and 20 meters wide - was constructed. This new berth has a capacity to load and download from vessels ranging from 2500 to 5000 DWT in dry and rainy seasons, respectively. Phnom Penh Port is now a multipurpose terminal serving mainly container traffic. The cargo throughput recorded in 2002 and 2003 were 427,368 tons and 533,659 tons respectively. It is expected that the Port’s container throughput will continue to increase as more and more shipping lines start to see the comparative advantages of the Port. 165. Sihanoukville port is located 230 km south west of Phnom Penh and is the only deep sea port of the country that handles most of the container cargo. Nearly 70 percent of imports enter Cambodia through Sihanoukville Port for transport to Phnom Penh by rail and road. Sihanoukville port has a draft of 7.5-8.5 meters and a capacity of 11,000GRT. Cargo throughput is more than 1.5 million tons annually (1.77 million tons in 2003). At present the port is handling container cargo in limited volume. Rehabilitation work that started in July 2000 with a loan of US$ 41 million includes the construction of 400m new quay for general cargo and 11 berths, a 240-meter long berth, 60,000 cubic meter container yard, 50,800 cubic meters to a depth of 8.5 – 9.0 meters. The construction is expected to be complete in 2005. The planned second stage construction to be carried out over the 2004-2007 period with a loan of US$ 35 million includes the construction of a container terminal with 3 berths that will be 450 m long, 10 m deep and 4 container cranes, as well as a bulk cargo terminal with 2 berths that will be 300 m long and 8.5 m deep. 166. The RGC’s policy is to encourage greater private sector participation (PSP) in the provision of road and road transport services and infrastructure. Under the BOT scheme, Koh kong Bridge and National road No.4 has been transferred to a private company for maintenance. The Road from Banteay Srei to Koh Ke, 13 Km from RN5 (PoiPet) to Cambodia-Thai border is under construction by a private company. Other projects within the transport sector include improvements to the international port in Phnom Penh and Sihanoukville, Keo Phos Port, renovation of the Phnom Penh International (Pochentong) airport with new traffic control and passengers' facilities and upgrading of Siem Reap airport and facilities through a BOT arrangement. WATER RESOURCES AND METEOROLOGY 167. Cambodia is a country with an abundant potential supply of water. Its rivers and streams, lakes, aquifers and marine waters are an important resource for national economic development. The Mekong and Tonle Sap River system play an important part in maintaining aquatic ecosystems, and is a basic resource for national development. 168. The part of the Mekong River basin that is within Cambodia generates 75,000 MCM/year of surface water runoff, and its aquifers contain an estimated 17,600 MCM of groundwater. This volume is more than 100 times the amount that is currently used. Annual rainfall varies between 1,400 mm and 3,500 mm. Each year, the Mekong River carries 475,000 MCM from Cambodia to the South China Sea. In spite of the abundance of potential supply of water in some areas people still face shortages of freshwater during the dry season. In the rainy season while there is too much water in some areas, other areas continue to experience shortages of water due to lack of irrigation infrastructure. Irrigation infrastructure is still insufficient and requires substantial improvement. 169. To address these challenges the Royal Government established the Ministry of Water Resources and Meteorology in 1999 at the start of its second mandate. It is responsible for the rehabilitation and development of Irrigation Systems, Flood Protection Dikes, and Sea Protection Dikes (Polders) to ensure the availability of sufficient irrigation water for agricultural crops, and flood control systems to protect public and private property and agricultural land and to minimize the adverse effects of natural calamities. The Ministry has been working with many development partners to implement its priority programs and projects. These partners have included: JICA, AFD, EU, UNDP, FAO, KOICA, ADB, WB, IFAD, Japan, France, Italy, and India. 170. Preparation of Legal Framework: The Ministry working with other Government institutions and the development partners has prepared and submitted to the Parliament in April 2002 the draft of the Law on Water Resources Management. Subsequently, a National Policy on Water Resources Management was prepared and approved by the Council of Ministers in January 2004. 171. Rehabilitation of Irrigation Infrastructure, Drought Intervention and River Bank Protection: The Ministry has rehabilitated: 315 Irrigation Systems for rice cultivation covering an area of 153,149 ha (Rainy season 89,383 ha and dry season 63,766 ha); Flood Control Dikes that now provide protection over an area of 113,500 ha; and Sea Protection Dikes (Polders) to protect sea intrusion into the cultivable land an area covering 16,680 ha. The total cost of these rehabilitation efforts was 5.2 billion CRs and US$ 86.5 million. Droughts are a recurring phenomenon in Cambodia. To mitigate against these adverse effects on agricultural production, the Ministry provided water pumps to drought affected rice production areas. A high priority was assigned by the Royal Government to improve river embankments. The embankment along the Mekong River in the provincial town of Kampong Cham, totaling 5.2 km, was restored using domestic budget resources 172. Early Warning and Disaster Management System: Over the past few years droughts and floods have caused a lot of damage in terms of human suffering, damage to private and public property and loss of economic activity. Establishing an early warning and disaster management system has been a high priority of the Royal Government. The Ministry is strengthening its meteorological functions and developing a meteorological and hydrological data base to be able to respond to natural disasters in a timely manner. So far, meteorological facilities in five provinces have been equipped and improved. Some 102 rain gauges in provinces have been installed. Twenty 20 hydrological stations along the main rivers have been repaired or installed as well as 77 water gauges have been installed at the observation points along the main rivers. 173. Human Resources Development: Over the last five years, the Ministry has provided training to 484 staff in disciplines related to water sector development and meteorology. POTABLE WATER 174. The Royal Government's National Policy on Water Supply and Sanitation has set the goal of expanding the supply safe water to improve the living standards and the welfare of people to reach Cambodia Millennium Development Goals. The support of international financial institutions and donor countries has been sought to rehabilitate and construct water supply systems to respond to the urgent needs of the people. The Royal Government has also sought the participation of the private sector in this sector. At present, 85 percent of the population in Phnom Penh and 15 percent of the population in provincial towns has access to piped water. Out of 24 provincial towns, five provincial towns, Odor Meanch Chey, Mondul Kiri, Preah Vihear, Pailin and Krong Kep municipalities, have no water supply systems. 175. Over the last five years, significant progress has been made to rehabilitate the water systems. With World Bank financing the Sihanoukville Water Supply system has been rehabilitated and expanded to increase production from 2,000 m3 to 8,000 m3/day, and 1320 households have been connected. With financing from a ADB loan water supply systems in six provincial towns (Battambang, Pursat, Kampong Thom, Kampong Cham, Kampot and Svay Rieng) are being rehabilitated and work will be completed in 2005. This project will supply safe water to about 10,000 families. With grant aid from Japan, the Siem Reap Water Supply system is being constructed. The Cambodia Provincial and Peri-Urban Water and Sanitation Project with World Bank financing is being implemented in 43 locations in urban areas. POWER GENERATION AND DISTRIBUTION/TRANSMMISSION NETWORK 176. The development of a power generation and distribution network that can deliver electricity at low-cost continues to be an important element of the Royal Government's economic policy. Attracting private sector investment and participation in the production and distribution of electricity to key provincial and urban centers, rural areas, and putting in place power transmission grids that link Cambodia with neighboring countries have been high priorities of the Royal Government during its second mandate. As a result, during the second mandate, total electricity generation in Phnom Penh and provincial towns increased from 414,953,000 kwh in 1998 to 742,369,700 kwh in 2003 - an average annual growth of 15.8 %. 177. With the support of a number of Cambodia's development partners and the private sector a number of power projects were completed or are under construction now and planning for new projects is currently underway. Some of the projects that have been completed included:
178. Work is scheduled to be completed on the rehabilitation of power systems in eight provincial towns in early 2005. Seven of these are in the provincial towns of Kampot, Prey Veng, Banteay Meanchey, Rattanakiri, Kampong Speu, Takeo and Svay Rieng. These are financed with a loan of US$ 18.6 million from the ADB. The eighth in the provincial town of Stung Treng is financed by a grant of Euros 3.75 million from AFD. 179. A feasibility study to construct 2 x 90 MW power plant in Sihanoukville was completed in 2002 with assistance from Japan. Work on this power plant will be carried out in 2007-2010. Another feasibility study of Kamchay Hydropower plant was also completed in 2002 with the assistance of the Government of Canada through CIDA. This project is now in the bidding process by the private sector. Feasibility studies of hydropower sites of Battambang 1& 2, Atay, Russey Chrum, Stung Pursat are also underway. Also, a report on Electric Power Technical Standards of Cambodia was completed in March 2004. The Royal Government is aware that consideration of hydro-power stations in Cambodia requires close attention to the necessary balance between growth, environment and social equity objectives. Every precaution is being taken to avoid the mistakes of neighboring countries, where the development of hydro-power has led not only to environmental and social but also to economic problems. In planning the rural electrification projects special attention needs to be paid to maximize rural employment creation to generate alternative incomes for the rural poor. 180. To enhance power sharing among GMS countries, an Inter-Governmental Agreement on Regional Power Trade in GMS was signed by the six Ministers of energy on November 3rd 2002 The agreement paved the way for the development of large scale power generation and the transmission of power between GMS countries. 181. To import electricity for communities adjacent to the borders with Thailand and Vietnam, the Royal Government signed Power Trade Cooperation Agreements with Vietnam (June 1999) and Thailand (February 2000). Under the agreement with the Provincial Electricity Authority of Thailand power is being supplied to Koh Kong, Poipet, Pailin, Osmach, Otdarmeanchey, Kamrieng, Phnom Proek and Sampeou Loun. People living in those areas now enjoy a low electricity rate of 600 CRs per kwh instead of 2500 CRs that they previously paid. Another PPA was signed in July 2002 to supply power to provinces: Banteay Meanchey, Battambang and Siem Reap. The transmission grid from Thailand to these provinces is to be constructed by the private sector and is expected to be completed in 2007. Following the signing of the Power Cooperation Agreement between Cambodia and Vietnam, a PPA was signed to import power through a 220 kv transmission line to Phnom Penh and to supply the southern part of the country. The construction of the transmission grid is being financed by the ADB and the NORDIC fund. Through an agreement with the Vietnam Power Company, power is being supplied to the following communities adjacent to the Vietnam border: Ponhea Krek, Memuth of Kampong Cham province, and Bavet of Svay Rieng Kampong Trach of Kampot. Private sector participation is being sought to extend the supply from Vietnam to Snoul of Kratie, Kirivong of Takeo, Chrey Thom, and Khaom Sam Nor of Kandal province. 182. To narrow the development gap between the new ASEAN members (Cambodia, Lao, Myanmar, Vietnam) and the six old ASEAN members, ASEAN has prepared an integration plan for energy infrastructure to supply power to areas that are currently under served through bilateral power sharing agreements (Thailand-Cambodia) and (Vietnam- Cambodia), public-private partnership to construct and inter-connect power grid (Lao- Vietnam), (Thailand-Myanmar), (Lao-Thailand) and (Lao-Cambodia) and pilot projects to improve the supply of power in rural areas of Cambodia, Lao, Myanmar and Vietnam. 183. The Royal Government has also promoted the development of Solar energy, wind energy, Biogas, Biomass, micro-hydropower, hybrid system, and geothermal energy. Some solar power systems have been installed in cooperation with international organizations/agencies in some areas of Sihanoukville, Pursat, Takeo, Kampong Cham, Kampong Chhnaing, Preahvihear, Siem Reap and Kampot. NEDO (Japan) has set up a Solar/Hydropower hybrid system of 100 kw installed in Kampong Cham and Solar/biogas power hybrid system of 100 kw has been installed in Sihanoukville. 184. Rural Electrification Fund (REF): An important requirement to eradicate poverty of the population living in rural areas is the availability of electricity at an affordable price for economic, social and household uses. On equity considerations between the rural poor and the "better off" urban population, the Royal Government is creating a REF to increase the availability of electricity at affordable price in rural areas. The REF will be financed using funds from donations, grants and other sources. Through "smart subsidy" arrangements it will encourage entrepreneurs to invest in the production and distribution of electricity in rural areas, in particular investment projects using renewable energy technologies. POST, TELECOMMUNICATIONS, AND NATIONAL INFORMATION SERVICES 185. At the start of the second mandate of the Royal Government, telecommunications communications to and from the provinces had to rely on out-of date, worn-out VHF radio links that were in poor condition. This system had only several thousand subscribers in provinces and districts who received a very poor quality of service. The improvements over the last five years have indeed been phenomenal. At the end of 1998, the average national tele-density was 0.69 per 100 people and 2.17 in Phnom Penh. At the end of 2003, the national average had increased to 3.82 and 33.00 in Phnom Penh. As at 31 December 2003, there were 526,698 subscribers using the services provided by the Ministry of Post Telecommunications (MPTC) and the four telecom companies operating in Cambodia. The international gateway 001 of the MPTC has been handling 28.7 million minutes of incoming calls and 8.7 million minutes of out-going calls per year. The international gateway 2 of RTI which started its operation in 2001 handled 3.6 million minutes of outgoing calls and 7.9 million minutes of incoming calls. 186. At present there are 4 internet service providers with a total of 7,152 subscribers. The total number of subscribers served by each service provider is as follows:
187. Just a few years ago, there was no reliable postal service. During the last five years the postal service has improved significantly. Over time, the postal services have gained more and more confidence of its users. There is now a regular surface mail delivery to Poipet (Thai border), Bavet (Vietnam border) 4 times a month. EMS service has been introduced and is now available in 21 provinces and municipalities and 16 Districts. The EMS mail to international destinations is sent out twice a day to over 90 countries in the world. The transfer of funds using domestic money orders has also been introduced by the MPTC. 188. Regarding Information, the role of the Ministry of Information (MoI) is to keep people in all parts of the country informed to the fullest extent possible regarding domestic, regional and international news, and to assist through the available media (TV, radio, print) in the upgrading of their general, technical and scientific knowledge. 189. The Ministry of Information disseminates official statements made by the King, the Senate, the National Assembly, the Royal Government and the Ministries and Institutions to local and International sources through bulletins, magazines, photos and electronic media. The capacity of the National TV’s transmitter has been upgraded to10 kw that now provides coverage to an area of 145 thousand square kilometers serving 10 million peoples. Through an arrangement with Thaicom–3 TVK’s programs can now be viewed in 126 countries in 4 continents. Local TV stations in Sihanoukville, Kok Kong, Bamtambang, Pursat, Siem Reap, Ratanakiri, Mondulkiri broadcast their own programs as well as programs of the the National TV. The broadcasts of the National Radio of Cambodia (RNK) cover 70 percent of the land area. It broadcasts its programs 17 hours a day in the local language from 5:30 AM to 22:30 PM, as well as in five other languages—English, French, Thai, Laotian and Vietnamese twice a day. The FM Radio station operates everyday from 5:00 AM to 24: 00 PM with local and International News and other useful programs and entertainment. There are also local AM radio stations in a number of provinces and municipalities such as Battambang, Stungtreng, and Sihanoukville, and FM stations in the provinces of Pursat, Kompong cham and Battambang.
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