252. Following the General Elections held on 27 July 2003 that have been recognized by national and international observers to be free, fair, transparent, and credible the Royal Government of Cambodia was formed and took office in July 2004 to implement the political platform of the coalition partners in the Third Legislature of the National Assembly.  Humbled by the will of the people, the Royal Government remains fully committed to achieving peace and national reconciliation, stability and social order, democracy and respect for human rights, national independence, sovereignty and territorial integrity, and sustainable development that will ensure progress, prosperity, harmony, decent livelihood and dignity for Cambodians from all walks of life and the entire nation.

253. The Royal Government, during its Third Mandate, will continue to vigorously implement and deepen its reform programs in order to achieve Cambodia's Millennium Development Goals. For the Royal Government, maintaining and accelerating the pace of reforms is a life and death issue for Cambodia. Progress must be made in implementing the reforms agenda, with the needed support and assistance from Cambodia's development partners, to get Cambodia out of the vicious cycle of poverty and to regain its position as a strong and proud nation. A failure to build on the momentum achieved so far in implementing the reforms will not only be a lost opportunity but will result in people continuing to be mired in poverty, endless conflicts and instability.

254. The overarching goal of the Royal Government of Cambodia during the Third Legislature of the National Assembly is to firmly and steadily build Cambodian society by strengthening peace, stability and social order, entrenching democracy and promoting respect for human rights and dignity. The Royal Government will promote sustainable and equitable development, and strengthen Cambodia’s social fabric to ensure that the Cambodian people are well-educated, culturally advanced, engaged in a dignified livelihood and living in harmony in family and society. The key priorities of the political platform of the Royal Government in the Third Legislature of the National Assembly are: (i) the promotion of economic growth; (ii) generation of employment for all Cambodian workers; (iii) implementation of the Governance Action Plan and thereby ensuring equity, social justice and enhanced efficiency and effectiveness of the Royal Government; and (iv) accelerated implementation of broad reforms in all sectors to reduce poverty and achieve sustainable development.

255. Soon after the formation of the Royal Government of the Third Legislature of the National Assembly, it presented to Cambodian people and all development partners its Rectangular Strategy that outlines the economic policy agenda for implementing the political platform. The Rectangular strategy builds on the successes of the Triangular Strategy that was implemented during the second mandate. The successful implementation of the Triangular Strategy during the second mandate has brought about a profound transformation of Cambodia from a region of uncertainty, war, internal strife, instability and backwardness into an epicenter of sustained peace, security and social order, respect for democracy, human rights and dignity, cooperation and shared development.  Over a very short period relative to the long histories of many developed countries, the Royal Government has demonstrated that Cambodia is fully capable of engagement on an equal footing with all partners, in regional and international affairs.  The positive gains achieved so far have bolstered confidence in Cambodia’s bright future, laying the foundation for sustained economic growth, increased trade, investment flows, and tourism that have generated employment and incomes for Cambodians, thereby reducing poverty and improving the well-being of the people.

256. The Rectangular Strategy as the economic policy agenda for the third mandate of the Royal Government  builds on key elements of Cambodia's Millennium Development Goals, the Cambodia Socio-Economic Development Plan 2001-2005 (SEDP2), the National Poverty Reduction Strategy 2003-2005 (NPRS), and the various policies, strategies, plans and reform programs. All of these strategic frameworks had been formulated through broad consultations with all national and international stakeholders, including representatives of civil society and the donor community. 

257. The Rectangular Strategy is the Economic Policy Agenda of the Political Platform for the Third Mandate of the Royal Government. It has been formulated and prepared by screening, highlighting and streamlining the reform programs into a comprehensive, systematic, intertwined, mutually-reinforcing package of priorities that is easily understood and will serve as the key tool of the Royal Government to implement and manage the economic policy agenda of the nation. Its aim is to promote economic growth, generate employment for Cambodian workers, ensure equity and social justice, and enhance efficiency of the public sector through the implementation of the Governance Action Plan and in-depth reforms that are coordinated and consistent across all levels and sectors. The Royal Government of Cambodia in the Third Legislature of the National Assembly will thus be known as the "Government of Growth, Employment, Equity, and Efficiency".

258. The Rectangular Strategy was presented by Samdech Prime Minister Hun Sen at the first Cabinet Meeting of the new Government. It was published and has been widely disseminated to all national and international development partners and civil society. Briefly, the Rectangular Strategy is an integrated structure of interlocking rectangles, as follows:

First, the core of the Rectangular Strategy is good governance focused at four reform areas: (i) anti-corruption, (ii) legal and judicial reform, (iii) public administration reform including decentralization and de-concentration, and (iv) reform of the armed forces, especially demobilization.

Second, the environment for the implementation of Rectangular Strategy consists of four elements: (i) peace, political stability and social order; (ii) partnership in development with all stakeholders, including the private sector, donor community and civil society; (iii) favorable macroeconomic and financial environment; and (iv) the integration of Cambodia into the region and the world.

Third, the four strategic “growth rectangles” are: (i) enhancement of the agricultural sector; (ii) private sector growth and employment; (iii) continued rehabilitation and construction of physical infrastructure; and (iv) capacity building and human resource development.

Fourth, each strategic “growth rectangle” has four sides:

• Rectangle 1: Enhancement of Agricultural Sector which covers: (i) improved productivity and diversification of agriculture; (ii) land reform and clearing of mines; (iii) fisheries reform; and (iv) forestry reform;

• Rectangle 2: Continued Rehabilitation and Construction of Physical Infrastructure, involving: (i) continued restoration and construction of transport infrastructure (inland, marine and air transport); (ii) management of water resources and irrigation; (iii) development of energy and power grids, and (iv) development of information and communication technology;

• Rectangle 3: Private Sector Growth and Employment covers: (i) strengthened private sector and attraction of investments; (ii) promotion of SMEs; (iii) creation of jobs and ensuring improved working conditions; and (iv) establishment of social safety nets for civil servants, employees and workers; and

• Rectangle 4: Capacity Building and Human Resource Development, including: (i) enhanced quality of education; (ii) improvement of health services; (iii) fostering gender equity, and (iv) implementation of population policy.

259.  The Royal Government of Cambodia has devoted significant time and made concerted efforts over the last decade to rehabilitate and develop the nation from the ashes of genocide under the Khmer Rouge and protracted wars. It has succeeded in restoring peace, political stability, law and order, democracy, respect of human rights and economic stability. The Royal Government has been implementing a comprehensive reforms program that along with many successes has encountered enormous challenges, difficulties and obstacles.  Cambodia has also made significant progress in making a transition from a centrally planned economy to a dynamic market based system, a process that began in the mid 1980s.

260. Nevertheless, the most formidable development challenge faced by the Royal Government now is the reduction of poverty and the improvement of the livelihoods and quality of life of a rapidly growing population. The Rectangular Strategy is the economic policy tool that the Royal Government will implement to reduce poverty during the period of its new mandate and to move forward in achieving Cambodia's Millennium Development Goals. The Royal Government recognizes that Cambodia still has a long way to go, and has to overcome numerous obstacles to achieve long-term progress and prosperity for the country and its people. Thus, the promotion of the harmonized efforts of the Cambodian people in poverty reduction will continue to be an important objective of the Royal Government during the Third Legislature of the National Assembly.

261. The Royal Government appeals to all its development partners -- the donor community, the private sector, non-governmental organizations, civil society; as well as the civil servants in all ministries/institutions, members of the legislative, executive and juridical branches, members of the armed forces, the authorities at all levels and each and every citizen to provide all necessary support and to actively participate in partnership with the Royal Government in the implementation of the political platform and the economic policy agenda of the Royal Government of the Third Legislature of the National Assembly.

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