CDC - PROGRESS SINCE THE LAST CG MEETING

II. PROGRESS SINCE THE LAST CG MEETING

4. Significant progress has been made since the May 2000 Informal Working Session on Partnerships at the 2000 CG Meeting. The Prime Minister has appointed CDC/CRDB as the RGC’s Partnership Focal Point within the Government. An Inter-Ministerial Steering Committee to Strengthen Development Cooperation Partnerships was formally established in 2001. Key central agencies and those sectoral ministries that were at an advanced stage of discussions on sectoral development partnerships, (such as Health, Education, Rural Development, Agriculture, Women’s Affairs, and others) are represented on the Steering Committee. The membership of the Inter-Ministerial Steering Committee, headed by the 1^st Vice-chairman of CDC, consists of key officials in-charge of Partnership arrangements (either Minister or Secretary/Under-Secretary of State). The Secretary General of the CDC/CRDB also serves as the Secretary General of the Inter-Ministerial Steering Committee. The objective is to ensure that key officials are seriously involved in policy decisions and operational actions for capacity development, integration/enhancement of information and monitoring systems, and for assessing progress and identifying issues during the transition to fully functioning development partnerships, covering dimensions such as procedural harmonization, ownership, and capacity indicators.

5. As the Partnerships Focal Point, CDC/CRDB is responsible for coordinating the resource mobilization activities of the Government, and to provide support to ministries/agencies to enable them to effectively manage the process of establishing partnership arrangements with their national and external partners. However, the Lead Responsibility for sectoral partnerships will remain firmly in the hands of each sectoral ministry/agency. The CDC/CRDB is also responsible for expanding the development management information networks within Government to ensure that there is a functioning government-wide system to monitor the implementation of development programs, and for coordinating with sectoral ministries on issues related to resource mobilization. These tasks, that by their very nature require consensus building, have involved and will continue to involve a lot of work and discussions. Under this institutional framework, the central agencies such as the Ministry of Planning (MoP) and the Ministry of Economy and Finance (MEF) would act as functional service providers in their areas of specialization. The Ministry of Foreign Affairs and International Cooperation (MFAIC) will facilitate diplomatic channels for ODA funds from bilateral donors. The role of the Council for State Reform in these Partnership arrangements is to lead and manage the various policy reform efforts of the Government.

6. The Inter-Ministerial Steering Committee to Strengthen Development Partnerships is supported by a Secretariat, located in CDC/CRDB. In addition, Partnership Working Groups in four ministries, Health, education, Agriculture, and Women and Veteran Affairs have been established. The process of building national partnerships within the Government has begun and RGC is determined to move ahead in forging relationships with all of its national development partners.

7. The RGC is aware that existing regulations governing the role and responsibilities of some ministries/agencies overlap, that sometimes pose additional challenges in coordination within the administrative structure of the Government as well as in building effective partnerships. The Administrative Reforms currently underway will be addressing these issues.

Partnership With Private Sector

8. The RGC considers the private sector, both domestic and foreign, as the “engine of growth”. It now serves as an important source of know-how, skills training, investment, and as a source of tax revenues. The RGC recognizes that improving the business climate and creating an enabling environment for private sector development are key prerequisites for fostering growth, creating jobs, reducing poverty and achieving sustainable economic development. Challenges for the development of private sector include: weaknesses in the legal system, costs of and access to finance, inadequate market information on consumer trends, shortages of skilled labor, inadequate infrastructure that restrict access to markets and raw materials, the quality of the ports, the high cost of essential services namely electricity, water supply, and telecommunications service. In response, the RGC has accorded a high priority to creating conditions that will foster investor confidence.

9. To remove the critical bottlenecks impeding the development of the private sector as well as to provide inputs in the processes of administrative and regulatory reforms, a Government-Private Sector Forum was established in December 1999. It has been meeting once every six months and is supported by seven Business-Government Sectoral Working Groups, which meet monthly to identify and recommend actions to resolve sector-specific problems. Each of the seven sectoral working groups is run by a committee consisting of members from the business community and from the government. The seven sectoral working groups include: Agriculture and Agro-industry; Tourism; Manufacturing and Distribution; Legislation, Taxation and Governance; Services Sector including Banking and Finance; Energy and Infrastructure; and Processing for Exports. It is in these specific areas that the Partnership with the Private Sector will achieve its most significant gains as we expand the level of participation of all stakeholders.

Partnership With The Civil Society

10. The adoption of the Commune Administration and Election Laws in 2001 and the successful election of 1,621 Commune/Sangkat (C/S) Councils in February 2002 represents a bold step forwards in the Royal Government of Cambodia's efforts to promote more responsive public service delivery and to enhance the participation of the Cambodian people in local socio-economic development to alleviate poverty. The election of the Commune Councils has deepened the foundations of democracy and will accelerate the governance reform process through decentralization. The RGC is aware of the immense challenges it faces in formulating and refining the policy and regulatory framework, mobilizing sufficient domestic and external financial resources, developing broad awareness of the concepts and principles underlying democratic local governance and building the capacity of both the Commune Councils and government institutions to effectively carry out their responsibilities and mandates. The Royal Government, however, is confident that the momentum it has already achieved will enable it to meet the challenges. Nevertheless, achieving sustainable gains will require time and will depend in large part on the level of partnerships that are build between the various jurisdictional levels within the government; between government and the donor community; and between government, international and national partners, the local Councils, and especially the civil society.

11. In the first year of the Commune/Sangkat (C/S) Councils mandate, training, capacity building and awareness raising are recognized as top priorities. These efforts will be focused not only on the councils themselves but also on the citizens to whom they are accountable, the civil servants charged with providing support to the councils and in fact the entire local development community with whom the councils must interact. The planning and budgeting process is particularly critical as it will lay the foundation for participation, democratic and transparent decision-making on the use of local public funds, accountability of the councils to their electorates, and the mobilization of financial and human resources for gender sensitive socio-economic development of the commune. As an element of the regulatory framework, under each C/S Council a Planning and Budgeting Committee (PBC) will be formed, consisting of C/S counselors, civil society representatives and one man and one woman from each village. Under the chairmanship of the Commune Chief, the PBC will ensure that broad interactions take place between the commune and communities in the identification of local priorities and will provide assistance in the mobilization of human and financial resources for turning plans into action.

12. The Royal Government is encouraged by the partnerships with NGOs that are developing at provincial level, through the initial capacity building programs, and see this as an important step towards longer-term collaboration. The Commune Councils will need ongoing support beyond formal training sessions, and provinces have been encouraged to establish forums for dialogue with NGOs to promote and guide partnership arrangements. The District Planning Integration process, officially adopted by the Ministry of Planning and reflected in the decentralized regulatory framework, is a particularly strategic feature for negotiating partnerships through the alignment of public sector, NGO and C/S plans focused to respond to expressed local priorities.

13. The Royal Government has established a Commune/Sangkat Fund to finance both the administrative and development budgets of the C/S Councils. The C/S Fund is planned to be financed from both the national budget and contributions from Cambodia’s external development partners, where the combined resources will be subject to a common financial control system. In the 2002 national budget, one percent of domestic revenues, equivalent to some US$ five million, have been allocated to the C/S Fund, and an additional US$ 1.4 have been provided through UNDP by Sweden and the United Kingdom. While the Government remains committed to increasing the percentage of domestic revenues allocated to the C/S Fund, given its limited budgetary resources, the donor contributions will remain essential to further the democratization process at the grassroots level and to institutionalize the processes of participatory decentralized development. The C/S Fund, as a joint financing vehicle, can serve as an important mechanism for developing effective Government-Donor-Civil Society partnerships in this high priority area.

Government-Donor Partnerships

14. Forging effective partnerships with our external development partners is the other challenge that the RGC would now like to seriously embark upon and we would need the support of all our external partners to face this challenge. For the RGC, the starting point for building these mutually beneficial partnerships are the OECD/DAC guidelines and criteria for building partnerships and capacity development activities that were agreed to by all donor agencies and countries at the OECD/DAC Conference in 1999. A systematic implementation of these guidelines and criteria, with established benchmarks, will help the Government not only in effectively managing its development programs but also taking ownership of its development process. The Government and our external development partners need to develop mechanisms that provide for a systematic assessment of the capabilities of the lead agencies, facilitators and proponents as well as for checks and balances between donors who participate in Partnership arrangements under the SWAP and those who intend to continue on with the traditional project-based assistance. The Government would also welcome progress by our external development partners in simplifying and harmonizing their internal rules and procedures to minimize the extra-ordinary burden on the limited capacities within our implementing agencies, and equally importantly, the harmonization of the varied capacity building practices of our external partners.

15. Over the last decade, significant progress has been made at various international forums to strengthen development cooperation efforts of the international community. These have included UN General assembly Resolutions, the OECD/DAC as well as joint initiatives of the World Bank, OECD/DAC, and the UNDP. In all of these arenas the international community has placed a special emphasis on the ownership of the development process by the recipient countries. In practice, however, there appears to be a disconnect between donor countries policies at the national headquarters and the approaches adopted by those responsible for the delivery of the donor supported programs on the ground. This inconsistency between the policies of the national governments of some donor countries and the practices on the ground are problematic for all developing countries that have limited domestic capacity, especially Cambodia.

16. Under the CG mechanism, a number of Government-Donor Working Groups exist that follow up progress on the implementation of various policy and reform issues. These include Government-donor Working Groups on: (i) Administrative Reforms, (ii) Demobilization, (iii) Fiscal reforms, (iv) Natural Resources Management, including land, (v) Governance, and (vi) Social development. From RGC’s perspective these Working Groups have made an important contribution in moving forward the implementation of the reforms. The RGC would like to propose that an additional Government-Donor Working Group should be established, under the CG mechanism, as soon as possible that will examine issues related to Government-donor Partnerships, make recommendations to strengthen the partnerships, and to follow up and periodically report on progress made. Such a group should function along the line of other Government-Donor Working Groups dealing with the reform issues.

17. The UN system agencies in Cambodia have developed a United Nations Development Assistance Framework (UNDAF) for Cambodia. It is RGC’s understanding that the UNDAF serves as the umbrella for the country cooperation frameworks and country programs of all UN agencies. The Royal Government would like to propose that instead of the current practice of separate annual and mid-term reviews of individual UN agency’s country programs, the official reporting of the findings and recommendations of the annual and mid-term reviews of individual agencies be conducted through one coordinated UN system and Government review, in which all UN System agencies and Government ministries/agencies participate at the same time. Such an approach will ensure that the individual agency’s programs conform to the UNDAF objectives, but more importantly, it will minimize the burden on the Government by reducing the number of program review sessions. It will also, increase coordination between UN system agencies as well as between the various ministries and agencies of the Government.

Partnerships Among Donors

18. The coordination among our bi-lateral and multi-lateral partners could be improved. Partnership mechanisms among our external partners to arrive at some agreement on the nature of the participation, in at least the major areas, would minimized situations where the Government is called upon to be the arbitrator. From the Government’s perspective the role of the individual bi-lateral donors or multi-lateral institutions in partnership arrangement should be based on an assessment of the capacities on the ground and the comparative advantages of the donor or multi-lateral institution rather than on donors internal priorities and procedures. The capacity of a partner depends on much more than simply resources, it requires building up trust, having expertise on the ground, which can then build the confidence of the sectoral ministries and among other donors, and a willingness to be flexible in both the timing and use of whatever resources are available. It is therefore critical and crucial that Donors organize and mobilize themselves to optimize the comparative advantages of individual Donors. In particular, the major lending agencies should forge stronger relationships with UN agencies and some bilateral agencies (which traditionally have a stronger in-country presence)

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