COUNCIL FOR THE DEVELOPMENT OF CAMBODIA (CDC)

III. CURRENT SITUATION AND RECENT INITIATIVES TO
STRENGTHEN DEVELOPMENT COOPERATION

13. In recent years, aid coordination and management has undergone a number of changes in response to an increasing flow of external assistance, to an increasing mix and number of foreign and national players in development, and to a more complex, cross-sector and multi-disciplinary development agenda. The Royal Government of Cambodia (RGC) has set up management systems and institutional mechanisms to support aid coordination and management through the Council for the Development of Cambodia.

14. In spite of major improvements, the current situation is such that a significant proportion of ODA still bypasses the National Budget process because of the practice of direct funding by development partner agencies to project implementers. This situation has resulted in inadequate Government ownership of many projects; in “piece-meal” efforts and insufficient coordination by development partner agencies on sector issues and institution building; in a proliferation of different procurement, disbursement, auditing, and progress monitoring procedures among agencies; and in the formation of development partner-supported project management units staffed either by expatriates or by nationals with "topped up" salaries, which have adversely impacted on Government’s institution building efforts.

15. To respond to these concerns the Royal Government of Cambodia presented its overall vision for a New Development Cooperation Partnership Paradigm for Cambodia to improve ODA effectiveness at the 4th Consultative Group Meeting held in Paris in May 2000. It was discussed, accepted in principle and supported by all development partner representatives present at that meeting. This strategic vision was offered as ideas on the nature, structure and implementation options for building partnerships to support the achievement of Cambodia's national development goals through more collaborative arrangements. The Royal Government has been working hard in collaboration with its development partners to achieve this vision.

16. An important principle of the new paradigm is to build development cooperation partnerships based on a common vision, shared objectives, mutual trust, mutual accountability, and mutual transparency. The Royal Government's proposal, presented to development partners in late 2003, to restructure the ad hoc working groups under the CG mechanism (composed primarily of development partner representatives that evolved since 1999) was a step in this direction. This restructuring was agreed to with the development partners and endorsed by the Prime Minister at the Pre-CG Meeting held on 10 September 2004. There are now, 18 sector/thematic joint (Government-Donor) Technical Working Groups. These TWGs are chaired by a senior Royal Government official to enhance Government ownership and on the development partners side are represented by lead donor coordinator(s)/facilitator(s). Also, a high level Government Donors Coordination Committee (GDCC) has been established to coordinate these TWGs and to provide policy guidance, to set priorities, and to resolve problems/issues raised by the TWGs. The Prime Minister has appointed the Sr. Minister, Minister of Economy and Finance and the First Vice-Chairman of CDC to be the Chairman of GDCC and the Secretary General of the Cambodian Rehabilitation and Development Board (CRDB) at CDC as the Secretary General of GDCC. The membership of GDCC includes ministers and head of government agencies, ambassadors or heads of diplomatic missions, and country representatives of multilateral institutions. The GDCC meets on a quarterly basis. Also, a Secretariat to assist the GDCC has been established at the Cambodian Rehabilitation and Development Board (CRDB) at CDC.

17. The restructuring of the Working Groups and the creation of the GDCC represents a fundamental change in the institutional set up for planning, managing and monitoring progress on the implementation of development cooperation activities on a quarterly basis. Ensuring that these new mechanisms function effectively and efficiently to improve aid effectiveness is a high priority of the Royal Government. Accordingly, the Cambodian Rehabilitation and Development Board at the Council for the Development of Cambodia (CRDB/CDC) -- that is the focal point within the Royal Government for mobilization of external development assistance and aid coordination functions -- shall:

establish close liaison with the sector/thematic joint Technical Working Groups (TWGs) to maintain up to-date information on progress that is being made by TWGs to implement their Action Plans and to present a summary quarterly progress report on the work of TWGs to the GDCC;
operationalize and make fully functional the Secretariat to support the work of the GDCC; and
provide support to the Chairs of the TWGs to ensure alignment of development partner supported activities with Royal Government priorities, the harmonization of development partner practices, and to build capacity of the concerned Royal Government institution(s) in order to improve the effectiveness of development assistance that is mobilized and delivered in the sector/thematic area of the TWG.

18. The Royal Government shall continue to strive to provide leadership and to assume full ownership of its resource mobilization and aid coordination functions based on principles of mutual accountability. Since 1996, the Royal Government has utilized the Consultative Group meeting mechanism as a forum for government and donors to take stock of joint work and progress made by the Royal Government against reform commitments and for ODA mobilization. While the first five CG meetings for Cambodia were held outside Cambodia, the Royal Government is encouraged by the success it has had in organizing the last two CG Meetings in Phnom Penh. In order to take greater ownership of policy dialogue processes and resource mobilization, the Royal Government intends to explore all options to effectively and efficiently carry out these functions.

19. In the international arena, the Royal government has been actively participating in the work of the OECD/DAC on harmonization and alignment issues since 1999. The Royal Government considers the "Good Practices" papers produced by OECD/DAC’s Working Party on Donor Practices to be an important contribution to efforts of the international community to improve aid effectiveness. The "Good Practices" papers were completed towards the end of 2002 and presented at the First High Level Forum organized by the OECD/DAC in February 2003 in Rome. The Royal Government endorsed the commitments made in the Declaration that was issued at the close of the Forum -- now known as the Rome Declaration. In this Declaration nine specific commitments that emphasized that:

ODA must be based on true partnership and mutual accountability between development partners and recipient countries to achieve better results;
ownership and leadership of the recipient country government in framing and implementing national development strategies and translating these strategies into prioritized results-oriented operational programs;
Recipient country to take lead in managing and coordinating aid at all levels;
development partners assistance to be aligned with recipient country development strategies and priorities; and
development partners to harmonize their practices and procedures among themselves and with those of the recipient country.

The Royal Government’s Action Plan on Harmonization and Alignment to implement Rome Declaration's commitments was approved by the Council of Ministers in November 2004; and a Declaration signed by 12 development partners who have shown willingness to support the implementation of the Action Plan on Harmonization and Alignment on 2 December 2004 are important steps to improve aid effectiveness in Cambodia.

20. The Royal Government has in the past and will continue to give a high priority to improving aid effectiveness to reduce poverty and to achieve the Millennium Development Goals. The Sr. Minister, Minister of Economy and Finance and the First Vice-Chairman of CDC participated on behalf of the Royal Government in the Second High Level Forum that was held in March 2005 in Paris to review progress made in implementing the Rome Declaration's commitments and the core principles put forward at the Marrakech Roundtable on "Managing for Development Results" held in Marrakech in February 2004. The Second High Level Forum was attended by Ministers of developed and developing countries responsible for promoting development and Heads of multilateral and bilateral development institutions. The Sr. Minister, Minister of Economy and Finance and the First Vice-Chairman of CDC presented at the Forum "Cambodia's Report on Progress Toward Enhanced Aid Effectiveness" at the Second High Level Forum. At the end of the Second High Level Forum the Paris Declaration was issued.

21. It is a high priority of the Royal Government to continue to be an active participant in the discussions in the international arena on enhancing aid effectiveness to reduce poverty and to achieve MDGs; and to take actions necessary to ensure that CRDB/CDC and the line ministries and agencies lead the processes and analytical work required to monitor progress on the implementation of Rome and Paris Declarations. The Royal Government recognizes that the capacity of CRDB/CDC and line ministries and agencies needs to be significantly strengthened to perform these functions effectively and efficiently. The Royal Government would appreciate the support of all its development partners to build capacity of these institutions. The broad based assistance that UNDP has provided since the mid 1990s through its Support Programme at CRDB/CDC has helped the Royal Government in formulating policies and institutionalizing processes to manage ODA in order to optimize the benefits of external assistance for the people of Cambodia. The Royal Government has decided that after the current phase of this UNDP Support Programme that will end on 31 December 2005, the next phase shall be designed as a multi-donor supported program on Aid Coordination and Partnerships.

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