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UK-Royal Government of Cambodia Development Partnership Talks, 19 March 2009
Minutes of meeting
Introduction
HE Keat Chhon, Deputy Prime Minister and Minister for Economy and Finance, opened the meeting noting how the 1st partnership talks in 2007 had provided a forum for equal partnerships and had contributed to strengthen the collaboration between the governments of Cambodia and the UK. He highlighted how DFID was a valued development partner for its support to key reforms bringing financial support, useful perspectives and know how on development, and making a significant contribution to aid effectiveness in modelling best practice aid delivery and reducing transaction costs. He was looking forward to discussing DFID’s short and longer term plans and hoped that DFID would still consider a 10 year Development Partnership Arrangement as discussed in 2007.
HE Andrew Mace, British Ambassador, made the opening remarks for the UK, emphasising the importance and timeliness of these talks in light of the forthcoming decision to be made by DFID Minister on the future of the country programme. He noted that there had been good progress on the partnership commitment benchmarks and was looking forward to discussing areas where progress had been slower. He also hoped that dialogue could be strengthened in the future while adopting a lighter approach which would reduce the reporting burden on the government.
Session 1 – DFID’s country programme evaluation and future plans
Adrian Davis introduced the session by referring to DFID’s vision when opening an office in Cambodia in 2000. The intention was to run a small, innovative programme with limited duration on the basis that DFID would continue providing funding after a ten year period but not necessarily with a country presence. The evaluation findings identified DFID’s key strengths as follows: the presence in-country of a high quality adviser team; links with the Embassy; the strong partnership with the World Bank; the provision of robust inputs to policy dialogue; flexibility of funding; and the willingness to take risks. But the evaluation also concluded that the previous approach of fully delegating programmes to other donors was "neither appropriate nor advisable". It highlighted the lack of a long term strategy and overambitious objectives (in terms of the financial and human resources deployed) as key weaknesses. The evaluation concluded that DFID’s objective on health was largely achieved and some progress was achieved on the objectives on local government reforms and impact of aid. The livelihood objective was the area with the least achievement.
Adrian Davis also gave an overview of the future options, a summary of which is attached. The first decision that Ministers will have to make is whether they want DFID to close its office by 2011. If they choose this option, DFID would only implement existing commitments and no new spending would be agreed. If Ministers agree to keep a DFID presence beyond 2011, three distinct options are proposed: i) supporting the voice of the poor; ii) MDG results for the poor and excluded; or iii) saving women’s lives. A DFID senior management review meeting will be held on 25 March to review documents before being submitted to Ministers a week later. A Ministerial decision is expected in early May.
HE Keat Chhon made a strong call for continued support from the UK particularly in light of the impact of the global financial crisis. Although their vision is to reduce the need for donor assistance, the crisis is undermining scope for further progress in achieving the MDGs and requires additional support from donors. Local government reforms also require substantial external funding to support extension of public service at local level.
HE Chhieng Yanara quoted the evaluation finding that “continued DFID influence and presence as a champion of aid effectiveness and a positive force within the donor community is as important as continued or increased financing”. The Royal Government of Cambodia valued the following DFID strengths: i) vision and commitment to the principles of effective aid; ii) partnership approaches at the sector level; iii) delegation of support to other partners instead of seeking high visibility and attribution, but nevertheless exerting a strong influence; and iv) support to programme based approaches which strengthened national ownership and capacity. The Royal Government of Cambodia wished DFID to continue championing aid effectiveness and build on momentum in sectors where DFID has provided significant support to date. For example, they did not see much scope for further progress on local government reforms without DFID playing an active role.
HE Dr Hang Chuon Naron and Mr Saravuth from the Ministry of Economy and Finance also expressed their concerns about DFID future plans and stressed the importance for DFID’s continued support to public financial management (PFM) reform programme. As the programme is being rolled out to line ministries, challenges will increase. Based on current progress, it is likely that the programme will go beyond 2015 while funding from the multi-donor trust fund is secured only until 2011. DFID support would also be welcome to help line ministries increase mobilisation of revenues and maximise the impact of expenditure.
The Cambodian Government finds it difficult to express any preference for the three proposed options as they see the current country programme fairly focussed on four objectives. They will provide a written response to be endorsed by the Prime Minister in early April. Session 2 – Assessment of progress against Cambodia/UK partnership commitment benchmarks
It was decided to skip presentations by line ministries on each benchmark under their responsibility to save time for discussion. The UK delegation noted overall good progress on most benchmarks, with seven of them fully achieved but outstanding issues related to anti-corruption, economic land concessions, the adoption of the sub-decree on domestic violence and transparency in oil and gas revenues.
On planning, DFID welcomed progress in taking forward the Ministry of Planning’s strategic and detailed annual operational plans and stressed the importance of the Ministry’s lead role in building the links between planning, budgeting an aid management, a core area of work highlighted at the CDCF in December 2008. Mr. Tavrak from the Ministry of Planning expressed concerns about slow progress in getting funding to implement the Ministry's strategic plan. DFID committed to working closely with the World Bank to speed up the process of designing the trust fund to support the Ministry of Planning and invited them to participate in the forthcoming annual review of the joint World Bank/DFID programme supporting poverty reduction and planning.
On health, DFID praised the Cambodian Government for the impressive progress made to exceed the target of increasing the proportion of deliveries attended by skilled health personnel in the public sector and welcomed the Cambodian Government’s increased focus on maternal health. DFID also confirmed its continued support to the second multi-donor Health Sector Support Programme (£35m over the next 5 years) and valued the contribution of this programme in modelling a more harmonised way of working which strengthens government leadership and systems. In this context, DFID welcomed progress in finalising the Merit Based Pay Initiative (MBPI) in the health sector which provides a good opportunity for donors to align with government-led initiative and contribute to stronger human resource management systems. However, DFID stressed the importance of a well planned and transparent transition process for all donors supporting supplements in the sector to ensure that the MBPI objectives are met.
Dr Chuor from the Ministry of Health confirmed the Ministry’s preference for different MBPI project-based schemes because of donors’ different approaches and does not always requires counterpart funding in some cases. Dr Hang Chuon Naron from the Ministry of Economy and Finance announced that the Ministry is reviewing all MBPI-PMG schemes to assess what the government can afford, including subsequent annual increase in shares to be covered by the national budget. Key reform areas would be prioritised following a discussion with the Council of Administrative Reforms. HE Yanara welcomed DFID’s contribution to improve harmonisation and alignment in the health sector but requested that the new multi-donor health programme (HSSP2) explore ways to work through government systems more. DFID explained that the programme already uses government planning systems for allocation of funding and that the programme design commits to moving from a secretariat to implementation through government systems after two years. DFID would welcome working with the Ministry of Health on developing a road map to achieve this transition.
DFID raised concerns over the lack of progress on anti-corruption and asked for an update on the reasons for further delay in finalising and adopting the anti-corruption law and a revised timeline. HE Om Yentieng, Chairman of the Anti-Corruption Unit, responded that the Cambodian Government is committed to getting the law passed within the next two years. The draft anti-corruption law has been redrafted to be consistent with the new penal code and is ready for inter-ministerial discussion which will take place once the penal coded has been passed. The penal code itself is now ready for submission to the Council of Ministers. HE Om Yentieng also indicated that the Anti-Corruption Unit would need more power to ensure independent investigation of corruption cases.
HE Om Yentieng, President of the Cambodian Human Rights Committee, presented recent progress in improving conditions in prisons which include: increased supply of clean water, access to beauty care for women, and vocational training. HE Andrew Mace welcomed the finalisation of the report under the Covenant on Economic, Social and Cultural Rights to the Human Rights Treaty Committee, which provides a good overview of the human rights situation in Cambodia, and praised the government for progress on legal reforms in light of capacity constraints. He also welcomed progress in improving prison conditions and pre-trial conditions. However, there are other issues of interest to the UK Government and Parliament on which on-going dialogue would be welcome such as land evictions. The UN system provides a useful framework for this.
On PFM reforms, DFID welcomed the launch of the second stage of the programme in December 2008 but encouraged the Cambodian Government to maintain focus on Platform 1 activities that have not yet been completed. DFID also urged the Cambodian Government to maintain momentum in the face of falling revenues and reduced fiscal space as it would be important to see an acceleration in the implementation of the reform programme which slowed significantly in the last two years. DFID noted that the Cambodian Government’s decision not to endorse EITI is disappointing. In the context of PRGO discussions, the UK and donors are waiting to hear about government plans to improve transparency in the oil, gas and mining sector. The recent report by Global Witness also highlighted the need for improved reporting.
HE Dr. Hang Chuon Naron provided an update on progress in improving fiscal transparency under the PFM reform programme and land rights issues. These are two areas where the lack of progress has delayed further budget support disbursements by the UK an other donors. The Cambodian government has adopted an action plan which goes beyond the EITI as it requires all ministries dealing with oil, gas and minerals to report on tax revenues and non tax revenues on a monthly basis. This information feeds into the Table of Financial Operations available online. Other measures include the use of a single treasury account for transferring revenues to Treasury.
HE Dr. Hang Chuon Naron also explained the reason for slow progress on titling of indigenous communal land. Progress has been achieved in establishing land boundaries in three pilots in Mondulkiri and Rattanakiri provinces. However, it could take a year to complete the registration process for another 100 or so communities as the process of agreeing whether they qualify for indigenous status is complex and time consuming. An independent audit has been commissioned to identify how to speed up the process. The Ministry of Economy and Finance plans to mobilise PRGO money in the future to assist the Ministry of Land in land registration. As an interim measure, provincial governors have agreed to a moratorium on land sale.
DFID welcomed efforts to increase transparency and encouraged the Cambodian Government to include a platform for bringing together government, private sector, non government organisations and donors in their action plan in the EITI spirit. HE Keat Chhon responded that the Cambodian Government understands the benefits of EITI but is concerned about the high transaction costs and prefers to deal with transparency under the PFM reform programme. He mentioned that the Cambodian Government reports to Parliament on budget operations on a quarterly basis in line with the Public Finance Law. Such reports have been available and made public since 2002. The Deputy Prime Minister also raised concerns about the tendency of civil society and development partners to take more notice of reports by some NGOs and media than information disseminated by the Cambodian Government.
On UK benchmarks, Adrian Davis explained the reasons for not making progress on the 10-year Development Partnership Arrangement which was proposed at the Partnership Talks in 2007. DFID had first decided to postpone discussion after Cambodia’s national elections and DFID country programme evaluation. The evaluation findings indicate that it would be unlikely to proceed with such an arrangement which was linked to the vision of working entirely though other donors by 2011.
HE Yanara noted DFID’s efforts to provide data on disbursements through the Cambodia ODA database and the resulting high rate of predictability. He understands constraints on the UK budget process but encourages the UK and other development partners to review their practices so as to be able to provide full multi-year predictions. He recommended that the proposed workshop to make further progress in aligning budget support with the Cambodian budget cycle involve policy, technical and operational levels. He also welcomed DFID’s contribution to improve harmonisation and alignment but encouraged further efforts (see additional comments on p 3).
Session 3 – Revised partnership principles
Adrian Davis offered the Cambodian Government to consider a revised approach to UK-Cambodia partnership talks in the future. The organisation of these talks in their current form, which involved participation from about 50 persons and extensive preparation, creates a significant burden on the Cambodian government.
HE Yanara welcomed the opportunity to explore different modalities that would maximise the value added of bilateral consultations. It was agreed that, in the future, the Cambodian Government and the UK would meet on an annual basis for a more focused and technical review of DFID’s country programme with scaled down participation. There would no longer be a need to select separate benchmarks on poverty reduction, public financial management and accountability. The existing GDCC reporting process on JMIs would be used to assess progress in those areas. However, it was decided to keep UK partnership commitment benchmarks in the spirit of mutual accountability.
Human rights is an important area under DFID’s conditionality policy for which there is a need for strengthened dialogue. HE Andrew Mace suggested to replace existing benchmarks with an overall assessment of progress on human rights. Such an assessment could be based on regular dialogue between the Cambodian Government and other EU resident missions drawing on existing processes and reports.
HE Om Yentieng, President of the Cambodian Human Rights Committee, welcomed the idea of dialogue on human rights with the UK and other EU member states while building on existing reporting mechanisms under UN human rights treaties. The British Ambassador will follow up with the President of the Cambodian Human Rights Committee how best to move forward in carrying out an overall assessment of human rights.
Conclusions
Adrian Davis thanked the Cambodian Government for their level of flexibility and willingness to engage in a substantive debate with a real sense of exchange and partnership.
HE Keat Chhon closed the meeting by expressing how pleased he was with the frank and fruitful discussion that further strengthens the cooperation between the two countries. The Deputy Prime Minister reiterated the wish of the Cambodian Government to continue to work with DFID in the future and learn from DFID’s perspectives and ways of working.
Attachments: Background note on future options Draft UK partnership commitment benchmarks |