3. H-A-R Action Plan Implementation

The first two chapters of this Report used empirical evidence to identify the scope and specific nature of the coordination challenge in Cambodia. This broader perspective provides a clearer understanding of the development assistance context of Cambodia and contributes to understanding an approach that might be taken to strengthen aid management and the linking of aid to development results.

The primary mechanism for addressing this coordination challenge is GDCC-TWG mechanism. This Chapter considers some of the specific activities that have been implemented by Government and the TWGs, and attempts to assess their impact in promoting aid effectiveness in the context of the H-A-R Action Plan.

H-A-R Action Plan Implementation through the TWGs

The TWGs reported on their 2006 activities to the GDCC meeting that was held in February 2007. In the main, the TWGs appear to be progressing well, both in regard to implementing their own workplans and with respect to the H-A-R Action Plan.

Particular areas of progress were reported in:

• Development of sector plans and policies, including legislation in some areas including telecommunications, infrastructure, agriculture and water, gender and governance;

• Where these strategies had been developed they were often associated with capacity development strategies;

• Joint approaches to monitoring and review.

Where TWGs experienced less progress, the challenges they encountered included the following:

• Insufficient resources being identified to adequately finance the implementation of TWG activities;

• Representation was not always at a sufficiently senior level to ensure that decisions could be taken while on other occasions issues under the mandate of a ministry other than the Chair of the TWG, including cross-cutting issues, could not be discussed as there was not sufficient cross-Governmental participation.

These observations relating to both progress and challenges broadly confirm the findings of the GDCC-TWG Review that was undertaken in the latter part of 2006. As discussed in Chapter Two, the Review resulted in the production of a 'Guideline on the Role and Functioning of the TWGs' and this was itself followed up with a meeting of all TWG Chairs and Government focal points in April 2007. This meeting discussed potential modalities of CDC support to the GDCC-TWG mechanism and agreed that a needs assessment be conducted to consult further with the TWGs on their aid coordination-related needs. The next sections of this Report therefore proceed to consider in more detail the activities that took place across all TWGs and the progress/challenges reported in implementing each of the five action areas of the H-A-R Action Plan, and may also be used to inform future areas of support that might be deemed necessary by TWGs.

H-A-R: The National Framework for Promoting Development Results

Ownership

Government leadership in the TWGs is linked to the development of plans that clearly articulate national priorities. Good progress has been made at sector/thematic level in elaborating NSDP priorities as programmes/policies are established or are being prepared for health, education, agriculture & water, HIV/AIDS, mine action, energy, fisheries, land, governance, judicial reform, planning, public financial management, and public administration reform. The development of these strategic plans should provide a catalyst for increased programme formulation by Government, moving away from the trend of development partners developing most project proposals and leaving sometimes limited scope for revision by Government. The next phase of the Public Financial Management reform will also make a significant contribution to the linking of plans and budgets at macro and sector level as it will include a focus on the development of sector budgeting practices and procedures.

The Strategic Framework for Development Cooperation Management, which was approved by Government in January 2006, also attempts to enhance ownership and ensure coherent aid management at a macro level by elaborating the respective roles of Government ministries and agencies. Toward the end of 2006 these roles were elaborated in the 'Guideline on the Role and Functioning of TWGs', providing more detail on PIP/MTEF linkages and responsibilities at TWG level, and in providing clearer direction on the supporting role of CRDB/CDC. The Guideline also clarified the leadership role of Government, emphasizing the supporting role of TWGs which provide a forum for dialogue and review.

Alignment

Based on the sector plans and programme-based approaches that have been established, development partners are requested to align their support around the priorities that have been articulated. The alignment of development assistance around NSDP priorities was considered in some detail in Chapter Two, which concluded that development assistance, in the main, is relatively well aligned to national priorities, although alignment must take place at more than an aggregate priority level if a real impact is to be assured toward meeting the Cambodia Millennium Development Goals (CMDGs), in particular on maternal mortality. The new Agriculture & Water Strategy, which was completed at the end of 2006, provides a good example of such an approach and builds on the established successes of the education sector, which reports that all support is routinely aligned

This relates also to efforts to identify multi-year commitments, which the CDCF meeting will attempt to do for the first time with information then recorded in the CDC Database. Chapter Two considered the predictability of CG pledging, for example, and found that in 2006, the first year of the NSDP, recorded disbursements were 83% of pledges made at the CG meeting in March of the same year. This compares quite favourably with the data from 2005 (identified in the Paris Declaration monitoring survey) that indicated that 69% of funds recorded in the Government financial framework at the beginning of the year were then recorded as disbursed in the national system (although it must be noted that the methodologies for measuring these two figures are markedly different). The CDC Database also now allows for predictability to be monitored over time and, based on discussions in the Partnership and Harmonisation TWG, there may be a need for further analysis of this issue to identify and explain challenges to timely disbursement as well as to the accurate recording of aid flows in RGC systems.

The H-A-R Action Plan also envisages the production of a comprehensive capacity programme at sector level, as well as the reduced use of stand-alone PIUs. The OECD survey precluded the need for a national survey and noted that coordinating the provision of capacity development support remains a significant challenge. Although significant sums have been directed to capacity through the broader reform effort (Governance and public sector reform received the second highest level of disbursements in 2006), there is therefore some concern that this support may not be complemented through the provision of coherent support at sector level. It is therefore encouraging to note that sectors and TWGs, including Partnership and Harmonisation; Agriculture and Water; and, Forestry and Environment, have developed comprehensive capacity building strategies in the context of their sector plans.

One consideration for development partners is to work with Government in agreeing new principles for the management of TA, recognising that in a new partnership-based environment TA must display an increased ability to play a convening role and to serve as a bridge between Government and development partners. International TA personnel are expensive and it is therefore reasonable that they should be expected to display the commensurate skills that are suited to the Cambodia development context, i.e. partnership building with a focus on capacity development and knowledge transfer. The effectiveness of TA can also be promoted by establishing clear deliverables together with modalities for jointly monitoring performance and impact.

With regard to PIUs, the Paris Declaration survey recorded only 49 PIUs, although this number may be a significant under-recording as the data collection exercise for this Report indicates that there are at least 152 (see the discussion in Chapter Four). Progress toward developing a strategy was made through the development partners who participate in the Partnership and Harmonisation TWG, and progress toward some form of a Guideline may be forthcoming in 2007. One related aspect of PIU integration concerns the need to streamline incentive payments. The Council for Administrative Reform has issued a Sub-Decree of the harmonised application of performance-related incentives. While some Government agencies, including MEF and CRDB/CDC, were able to establish these schemes with development partner support, others, including the Ministry of Health, have found the process to be rather more challenging although a Performance management System has been established.

Tied aid was also recorded during the Paris Declaration survey with 86% being recorded as untied. This suggests that the issue of aid untying, which is in any case a concern that must be addressed in donor capitals and headquarters, is not of concern and need not occupy excessive amounts of time in the Cambodia aid effectiveness dialogue.

Harmonisation

The analysis in Chapter Two more than adequately emphasised the challenges of deconcentrated and fragmented development assistance. The result of many development partners working in many sectors may be that: (i) the demand for local expertise is high with consequences for coherent and effective development; (ii) priority sectors may exhibit significant coordination problems that undermine the ability to manage and lead; and (iii) there is a risk that partners focus on their own results and profiles, distracting attention, resources and effort from the NSDP effort. The need for development partners to harmonise their support so that a focus on achieving results, as opposed to simply managing aid, can be promoted can hardly be overstated. The expected commencement of a Budget Support programme in 2007 is therefore welcomed by Government as a potentially effective response to this challenge.

Table Twelve. Partnership Analysis: Identifying Co-Financing and Delegated Partnership Arrangements

The methodology in this table is to use implementing partners as the source of data on partnerships; this reveals that some partners who have not reported project activity in 2006 (e.g. OPEC Fund, Norway, Netherlands) are shown here to be the source of some project activity. There are also a number other co-financing partners who have not recorded co-financing support in the CDC Database (e.g. USA, Switzerland). In both cases these financial contributions are not reflected in the main disbursement analysis as, to avoid double-counting, this data is calculated using only funding sources.

Note. Only those partners who were associated with a co-financing arrangement in 2006 (as a co-financer or as implementer) are shown.
 

The efforts that have been made to forge new partnerships were highlighted during the Paris Declaration survey exercise in 2006. The survey's methodology used a 'point of delivery' approach, however, which considered the funds delivered by the implementing partner and in consequence the aid effectiveness efforts of partners passing funds to others were understated. Table Twelve attempts to redress this by analysing partnership dynamics, i.e. the transmission of funding from donor to implementer, and the sectors that have benefited most from these arrangements. The providers of funding are shown along the top row while the implementers to whom the funds have been passed are shown down the left-hand column. The cells contain the sectors in which partnerships have been established, together with the number of arrangements in each sector. The sub-table below the main table then provides summary data on the main sectors in which partnership arrangements have been made.

In summary, the Table Thirteen shows the number of delegated partnership arrangements that were active in 2006. In total, there were 226 partnership arrangements covering a total of 123 projects. For analysis purposes, the number of partnerships is used, as opposed to the sum of the flow, as this provides a stronger indicator of commitment to partnership and the reduction of transaction costs in aid delivery.

Table Thirteen. Delegated Partnership Arrangements

The data shows that Japan is the partner with most delegated arrangements (38), followed by Australia (23). It is noteworthy that a number of partners who's portfolio size is relatively small (e.g. New Zealand and Canada) are also active in forming partnerships and this is a practice that is commended to all partners.

For policy-making purposes, it is also helpful to identify the implementing partners and sectors that are most commonly associated with delegated partnership arrangements. This analysis can provide information on the degree to which new programme-based approaches are promoting the use of more delegated arrangements, or where efforts might be concentrated to encourage the use of partnerships that provide for a more efficient means of delivering aid. It can also highlight those partners that are able to manage the funds of others. Table Fourteen, below, therefore shows two sets of data. First, it shows the largest managers of other partners' funds, with UNDP, WHO and ADB the largest. Second, the table shows that health and rural development activities (especially de-mining) are most associated with delegated arrangements, followed by governance and administration reform. While the health sector has managed to foster 73 partnerships across 52 multi-donor projects, it is perhaps a little surprising that development partners supporting education have not been inclined to develop more co-financing and delegated partnership arrangements.

Table Fourteen. Implementing Partners and Associated Sectors

As the two sectors that have made most progress in developing programmatic approaches – through an Education SWAp and a Health SWiM - it is useful to consider further the development cooperation context of the education and health sectors, as well as the agriculture sector. The analysis has already shown that these are the two largest recipient sectors, with 21 and 22 donors, and 79 and 109 projects respectively in 2006.

Table Fifteen. Project Partnerships in Three Priority Sectors

It is not clear as to the extent to which the introduction of sector-wide programmes in education and health have served to lower transaction costs as the sectors are still characterised by individually implemented project support. Even though these may be aligned with the sector programme, it is likely that the benefits of a programmatic approach may remain elusive. The discussion on NSDP alignment in Chapter Two also questions the extent to which these programmes have allowed for a predictable funding envelope to be identified that is based on the NSDP while the continued large number of projects may not be conducive to coherent sector-wide management or to the strengthening of Government systems.

Managing for Results

The 2007 CDCF will provide the opportunity for a dialogue on the first NSDP Annual Progress Report. This will allow for progress to be reported on the main outcome indicators and for a wider discussion to take place with regard to the wider reform agenda that underlies the NSDP. The Joint Monitoring Indicators will also be presented for endorsement and these are expected to be informed by the key results areas that have been identified by Government and development partners. Some TWGs have also reported progress in adopting the Standard Operating procedures (SOP) and the National Operational Guideline (NOG), for example the Agriculture and Water TWG donors have adopted the SOP for the management of procurement using Government procedures. This TWG's new sector plan, and the launch of their website, www.twgaw.org, also sets out a good practice in developing targets and raising awareness. Other TWGs, including Gender, also reported significant progress in developing monitorable Action Plans that are linked to the NSDP.

From a perspective of linking development assistance to results, the CDC Database provides a Government-wide system of recording aid as an input to NSDP implementation. CDC also provided support to three ministries and TWGs (Agriculture & Water; Education; and Gender) in developing their own information management systems that are linked to the CDC Database and this support is available to other TWGs and Ministries upon request, with the intention being to rationalise data collection and reporting while promoting the use of a results-based management system.

Mutual Accountability

Defining this term has not always proved to be easy but dialogue with development partners during the Paris Declaration survey concluded that, while further strengthening is undoubtedly required, the arrangements that are in place – both the tools such as the JMIs and the processes such as the GDCC-TWG mechanism – do satisfy the requirements. The actions associated with the H-A-R Action Plan are of a practical nature and this Report and the CDCF meeting, as well as the Partnership and Harmonisation TWG, provide the basis for H-A-R Action Plan assessment. Next year may provide an opportunity for a more detailed discussion in the form of a mid-term review, at which point it may be useful to review the Action Plan priorities and activities. The TWG Review was completed in the second half of 2006 and provided the basis for a detailed Guideline that will support TWGs in their aid coordination efforts. The arrangements for managing the Joint Monitoring Indicators were also reviewed and reformed under the mandate of the GDCC during 2006 and it is hoped that these will contribute not only to enhanced mutual accountability but also to the attainment of improved development results.

At a sectoral level, progress toward the establishment or conduct of joint reviews has been encouraging with the education sector conducting an annual review exercise that assesses progress as well as resource needs, and the health sector has continued to hold annual reviews, the most recent of which was in June 2006. The Public Financial Management Reform, and its associated TWG, is also particularly well geared to a results-based agenda. The PFM TWG's reports to the GDCC identify a range of indicators and targets linked to the H-A-R Action Plan, with a comprehensive assessment of progress submitted jointly by Government and development partners.

The H-A-R Action Plan: Summary of Progress

In conclusion, the implementation of the H-A-R Action Plan has proceeded well and as momentum increases there is good reason to believe that more progress will be made. The challenge, as ever, will be to ensure that progress in implementing the aid effectiveness agenda is associated with and complementary to the implementation of the NSDP and the achievement of the priority outcomes. Table Sixteen provides a snapshot summary of the information provided in this Chapter.

Achieving Aid Effectiveness Results

As stated at the outset of this Report, the aid effectiveness work in Cambodia is informed by the need to focus on development results. It is therefore necessary to consider the use of aid effectiveness indicators that may be used to monitor and guide progress. The next Chapter on the Paris Declaration monitoring survey considers this issue and provides a set of indicators that may be associated with the H-A-R Action Plan.

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