COUNCIL FOR THE DEVELOPMENT OF CAMBODIA (CDC)

IV. OBJECTIVE AND BASIC PRINCIPLES OF RGC'S DEVELOPMENT
COOPERATION MANAGEMENT STRATEGY

22. The main objective of RGC's Development Cooperation Management Strategy is to improve aid effectiveness to maximize its benefits for the people of Cambodia through strengthened national systems and procedures, and aid coordination and resource mobilization mechanisms that are based on principles of Cambodian leadership, ownership and mutual accountability to achieve RGC's Rectangular Strategy's goals, and the priorities of the National Strategic Development Plan to reduce poverty and to achieve Cambodia's Millennium Development Goals.

23. To achieve the objective of the Development Cooperation Management Strategy, the Royal Government and all development partners shall adhere to the following basic principles:

All development cooperation programs and projects of multilateral, bilateral and NGOs shall be aligned with development priorities of the Royal Government.
All development partners, multilateral, bilateral and NGO shall fully respect Royal Government's ownership of development cooperation programs and projects.
To the greatest extent possible all development partners shall shift the programming modality of their cooperation activities away from stand alone project approach to sector/thematic and/or program-based approaches in programming their activities that shall eventually be funded through budget support.
In sector/thematic areas where policies and strategies for implementing national development priorities are not fully developed or lack rigor, appropriate partnership arrangements (e.g. TWGs) shall be used to assist concerned Royal Government institutions in elaborating policies, strategies and programs.
All development cooperation programs and projects shall include, where needed, a provision on capacity development of the program or project implementing institution(s) of the Royal Government.
To the greatest extent possible, development cooperation activities shall make appropriate use of Cambodian institutional mechanisms, delivery systems, and human resources.
To the greatest extent possible development cooperation activities shall be predictable and aligned with national budget cycles, financial systems and national monitoring systems.
The development partners of Cambodia shall ensure that their practices do not create excessive burden on Government administrative and management systems, and shall give a high priority to harmonizing and simplifying their practices and procedures.
Concurrently, the Royal Government shall continue to give a high priority to implement its reform programs to improve its institutional systems, mechanisms, and procedures to facilitate greater efficiency and effectiveness of development cooperation activities.
The Royal Government shall exercise its leadership responsibility in all institutional mechanisms used for resource mobilization and aid coordination to ensure transparent accountability by all partners: Royal Government, bilateral and multilateral development partners, and NGOs.

24. All development programs and projects funded through Official Development Assistance (ODA) shall be planned, designed, and implemented to achieve the over-arching national goal of poverty reduction and to reach Cambodia's Millennium Development Goals (CMDG). The National Strategic Development Plan (NSDP) 2006-2010 has been prepared to achieve these national goals. All development programs and projects shall align with the national development priorities outlined in the NSDP’s. All development programs and projects shall be directed to foster sustainable and equitable economic growth by enhancing the productive capacity of the economy, building human capital, and supporting the rehabilitation and development of critical infrastructure needed to further promote, expand and sustain the development process. At this stage of development of Cambodia, the Royal Government of Cambodia places a high priority on securing financing of development programs/projects through grant aid from its development partners.

25. The use of loans shall be made only in those cases where it has been established that resources from grant aid are not available and that the proposed program/project will contribute to investments that will accelerate economic growth. In all cases, the implications of each new loan shall be carefully examined, including its impact on macro-economic stability, before acceptance of the loan. Loan assistance may be considered in case of:

infrastructure development programs and projects that can produce large impact on national economy and have a high internal rate of return on investment; and
areas that help generate and promote external sector transactions that enhance the foreign exchange earnings capability.

In the case of large programs and projects that require feasibility studies or other pre-investment analysis that are being considered for financing through loans, such work shall be financed through grant aid. The Royal Government shall:

stop use of loans for studies not directly related to an investment programs/projects; and
minimize expenditure on consultants and foreign experts out of loan assistance.

26. Technical assistance needs to make a sustainable contribution to Cambodia’s development process. Reliance on technical assistance and expatriate consultants shall be rationalized and reduced by building domestic institutional capacity through the transfer of expertise and technical know-how, and making appropriate and selective use of technical assistance. In planning for TA it shall be ensured that it supports and does not substitute local capacity and is demand driven. Technical assistance shall be focused on facilitating implementation of large projects, implementation of Royal Government's reform programs, and for functions related to developing strategies for national socio-economic development, and for building capacity at the central and local levels to formulate, implement, and monitor development activities. The Royal Government strongly discourages the financing of technical assistance programs and projects through loans. The Royal Government also strongly discourages the practices of multiple studies on the same subject/topic being carried out by development partners. The Royal Government also strongly urges development partners to first discuss and agree with the Government before dissemination of documents and reports.

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