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Eighth High-Level Consultations
Overview The Government of Australia and the Royal Government of Cambodia held High-level Consultations (HLCs) on their development cooperation at the Palais du Gouvernement in Phnom Penh on May 20, 2009. The Cambodian delegation was led by H.E. Keat Chhon, Deputy Prime Minister, Minister of Economy and finance and First Vice-Chairman of the Council for the Development of Cambodia (CDC). The Australian delegation was led by MR. Richard Moore, Deputy Director-General, Australian Agency for International Development (AusAID). A list of participants is at Annex I to this Résumé.
Exchanges were substantive, reflecting shared interests established during a long history of development cooperation between the two countries. Discussion focused on the global recession, aid effectiveness and Australian aid to Cambodia for the fiscal wear 2009/10. Parties advanced discussion on the next Australia Cambodia Country Strategy. Senior representation from Cambodian line Ministries enabled detailed exchanges on sector-specific issues including health, agriculture, infrastructure, and law and justice. In his opening remarks H.E. Keat Chhon welcomed the Government of Australia's commitment to increase official development assistance to 0.5 per cent of Gross National Income by 2015. His Excellency noted that Australia was a well-regarded development partner that brought new ideas to the table and transferred knowledge to counterparts. Australia's focus on health and gender equality were strongly endorsed. Mr. Moore stated that Australia aims to he a responsive and reliable partner. Notwithstanding significant budget pressures, Australian aid to Cambodia would not be cut in the 2009/10 fiscal year. Mr. Moore noted that Cambodia's spectacular gains in poverty reduction were sometimes under-appreciated, but he cautioned that maintaining gains in poverty reduction would require broadening the base for growth and enhancing social protection measures for the vulnerable. H.E Ambassador Margaret Adamson noted the importance of effective management of land resource, in particular transparent management of land resettlement with just compensation. In this regard H F. Ambassador Adamson also noted the importance of ongoing governance reform and progress in the passage of the anti-corruption law. Discussion then proceeded through four substantive sessions. Session I : The impacts of the global recession Both parties discussed the impact of the global recession. The economic downturn had seriously reduced revenues in both countries and difficult choices needed to be made. A prolonged period of debt was likely to follow. In these circumstances, the growth of 5 per cent in the Australian global aim program was a significant achievement and a reminder of the importance placed by the government of Australia on good international citizenship. Both delegations then exchanged views on practical measures for cooperation to mitigate the impacts of the recession. Proposals by Australia to consider bringing forward small scale infrastructure work in the agricultural sector bolstered by complementary assistance to the World Bank's Development Policy Operation were endorsed by the Cambodian delegation. There was discussion on Health Equity Funds. Both parties acknowledged the importance of these In protecting the most vulnerable from potentially catastrophic health costs. Further work to consolidate and expand these mechanisms is anticipated. The Importance of resisting trade protectionism was underlined. Fiscal stimulus is Important to address the immediate need to create employment and raise domestic demand but should position the economy for long-term growth by investing in strategic infrastructure. The centrality of establishing and maintaining a sound medium term expenditure framework was noted as an important lesson from the Australian experience. Session 2: Aid effectiveness Cambodia outlined progress against international benchmarks for measuring aid effectiveness. There was clear improvement in areas concerning the amount of aid reported on budget, the predictability of aid, and the quality of public financial management. However, there were fewer coordinated missions and less joint analytical work. Cambodia noted that aid was not being untied quickly enough. Australia responded by reiterating its commitment to the Paris Declaration on Aid Effectiveness noting that the choice of modalities was driven by a realistic assessment of country context and prospects for success. Nearly 28 per cent of Australian aid was provided through program-based approaches, almost doubling the proportion over the last two years. Australia committed to the increased use of program-based approaches and strengthening government systems as measurable aid effectiveness priority in 2009. Reference was made to the draft Annual Program Performance Review (APPR) for Australian aid to Cambodia in 2008. Cambodia reiterated that APPR tool allows it to evaluate the effectiveness of Australian aid and undertook to respond in writing to the content of the Review in the next few weeks. Session 3: Australian aid to Cambodia Australia confirmed that estimated total ODA flows to Cambodia for the 2009/10 fiscal year were $61.4 million. In an effort to demonstrate greater transparency in the presentation of the figures, the estimate now included infrastructure flows to Cambodia previously accounted elsewhere in the budget papers. The meeting noted that maintenance of overall aid flows to Cambodia, compared to the estimate for 2008/09, was a significant achievement given domestic budget pressures in Australia and additional geographic and thematic priorities for the Australian aid program. While overall funding has been maintained there would be some variations to sectoral funding. There would be early discussion to agree now best to manage these variations. There was substantive discussion on the draft Australia-Cambodia Country Strategy. The budget outcome and the global recession required some reconsideration of the key directions proposed. It was agreed that further discussions would be needed over the next three months to clarify these issues before a final set of options could be presented to decision makers. In this context, the request to Australia from the Government of Cambodia for $US22 million in co-financing for the rehabilitation of the national rail line was discussed. The Government of Cambodia confirmed that the rail rehabilitation was a very important project with strategic links to the ASEAN rail network. Cambodia welcomed a discussion about re-prioritisation of Australia's investments to accommodate consideration of the co-financing request. Australia confirmed that it was actively considering involvement in the project and noted that Thai intentions regarding the upgrade of the rail on the Thai side of the border needed to be investigated. The critical importance of properly managing resettlement issues was emphasized especially having dedicated expertise on the ground to resolve problems. Session 4: Sector-specific discussions The central role of agriculture in supporting the economy during the economic downturn was recognised. There is an urgent need for quick action on agricultural productivity, food security, and rural employment in the short term. Cambodia highlighted short term priorities including accelerating investments in rural infrastructure, particularly small scale irrigation; and improving markets for seeds and fertiliser. Australia agreed to support these efforts and to align agricultural support with the World Bank's Development Policy Operation. Both parties endorsed integration of the Strategy on Agriculture and Water into the national budget.
Australia's partnership with Cambodia in the health sector was discussed. Cambodia outlined the challenges facing the health sector. Discussion focused on MDGs 4 and 5; the impact of the global recession; social safety nets; sector financing; and capacity development. Samdech Prime Minister Hun Sen's commitment to maintain the national budget allocation for this year was noted. Cambodia outlined plans to train more midwifes and reaffirmed the Health Ministry's target of 1-2 midwives in every health centre. The 2010 Cambodia Household Data Survey will provide data on the impact of new midwives on maternal health. The role of NGOs in service delivery was endorsed. Cambodia's track record in reducing the spread of HIV was discussed and both sides agreed on the importance of harm reduction services. The meeting discussed progress in the law and justice sector. Australia noted that while there has been progress in some areas it is less than both sides would have wished. A clear prioritisation of reforms with political support is now needed and these reforms need to be properly costed. Reference was made to the Indonesian experience in dealing with corruption which had proven both effective and politically popular. In response, Cambodia noted progress in the establishment of model courts and the establishment of strategic plans for police and prisons. Draft laws to reform police and prisons had been prepared. Difficulties in demonstrating results were recognised. Coordination among the three key justice institutions - police, courts, and prisons - needed to be improved, while protecting judicial independence. Both parties briefly discussed existing infrastructure investments of mutual interest. These activities include the Cambodia Road Asset Maintenance Project, Southern Coastal Corridor Project and Cambodia Rural Energy Service Project. With the potential addition of rail rehabilitation this work will comprise a significant component of the aid program, which aims to generate employment and enhance trade. The meeting agreed to revisit the Cambodia Country Program Strategy to include this prominent infrastructure sector, noting that this will have implications on other activities and plans for support under the Strategy. Australia will host the next High Level Consultation in Australia at time and place to be agreed between the Governments of Australia and Cambodia. SIGNED, ON THE 21st DAY OF MAY, 2009 AT PHNOM PENH,
ANNEX 1 List of Participants
Participants from the Australia Government Richard Moore, AusAID Deputy Director General, Asia Division, Co
Chair of HLC
Participants from the Royal Government of Cambodia H.E. Kent Chhon, Deputy Prime Minister, Minister for Economy and
Finance, Co-chair of HLC Agriculture H.E. Chan Tong Yves, Secretary of State MAFF, Co-Chair TWG/AW Health/HIV H.E. Prof. Eng Hout, Secretary of State, MOH & Co-Chair of TWG-H Justice H.E. Prum Sokha, Secretary of MOI PFM issues within sectors H.E. Hang Chuon Naron, Secretary General, MEF Infrastructure Mr. Cheam Sovanny, Deputy Director, MPWT |
