CDC - Statement by Keat Chhon


6^th Consultative Group Meeting for Cambodia Phnom Penh, Cambodia, June 20-21, 2002 Session VI: External Financing Requirements and Pledging Session Statement by Mr. Keat Chhon Sr. Minister, Minister of Economy and Finance Vice-Chairman of the Council for the Development of Cambodia Royal Government of Cambodia

Mr. Co-Chairman, Excellencies, Ladies and Gentlemen, 1. We have had intensive discussions over the last two days on progress that Cambodia has made in the areas of macro-economic management and many of its reform programs as well as socio-economic development priorities, including the development of the private sector as an engine of growth. On behalf of the Cambodian delegation I would like to express our appreciation for an open and frank discussion of the issues. I would like to assure our development partners that the Royal Government of Cambodia would take all the steps necessary to address the issues that have been raised. 2. As we have reiterated many times during our discussions, the alleviation of poverty among Cambodia’s population through economic progress and social development is the highest priority of the Royal Government. Our needs for external assistance are summarized in our paper “Socio-economic Development Priorities and External Assistance Needs”. The programs and projects that constitute our Public Investment Resource Mobilization Program for the 2002-2004 period will be financed both from the National Budget and with the assistance of our external development partners. The PIP includes both on-going programs that are being implemented as well as high priority planned programs and projects. 3. As I reported yesterday, our budget revenues have been growing and we are committed to implementing additional measures that will further enhance our revenue base. Nevertheless, the fact remains that in spite of this growth in domestic revenues we are dependent on the support of our external partners to finance our development programs and projects. 4. Over the years, you, our external development partners have been generous in providing support to Cambodia’s Public Investment Program. I would like to emphasize that at the last five CG Meetings for Cambodia held so far, as well this CG meeting we have worked hard to keep our resource mobilization targets for external assistance at around US$500 million per annum to cover both on-going and new projects, including budgetary/balance of payments support. Your pledges over the years have been near or have exceeded this target. At the last CG meeting in 2001, the pledges amounted to US$ 556 million. On behalf of the Royal Government I am also pleased to report that over the last three year, 1999-2001, disbursements have steadily increased from just under US$ 400 million in 1999 to nearly US$ 472 million last year (2001). The RGC is gratified by the support of its external development partners and hopes that they will continue to provide their support to enable Cambodia to achieve its goal of reducing poverty among its people. 5. The total costs of the Government’s High Priority Public Investment Program for the next three years (2002-2004) is estimated to be around US $ 1,389 million. The Government of Cambodia has committed from its own resources over US$ 148 million for these development programs. After adjustments for estimated available Government counter part funds (US$ 148.2 million), and taking into consideration the requirements for budget support (US$ 150 million), and balance of payments support from IMF (US$ 67 million); the total of the core of our requirements for external assistance over the next three years amount to just over US$ 1,457 million that averages to around US$ 486 million per annum. Some of our external development partners have already committed to provide just under US$ 613 million. Thus a gap of around US $ 845 million in the financing of these development programs remains at the present time for which the RGC is seeking additional support from its external development partners. 7. I would like to note that nearly three-quarters of the resources we seeking are for on-going programs and projects. Also, nearly three-quarters of the resources we seek are for social sector and infrastructure development programs and projects. 8. Ladies and Gentlemen, the countries and organizations you represent, and those that are not present here, have been generous in giving us advice and assistance. The time has now arrived for Cambodia to take the ownership of its development programs. We will require your continued goodwill and assistance in the true spirit of partnership to help us move in this direction. 9. Please, if possible make pledges of your assistance in total terms that is, including any amounts that might have already been committed, for the three-year period, 2002- 2004. Once the pledges have been made we will start discussions individually with you on the programs and projects that you are planning to provide support for. 10. I will be happy to provide clarification on any questions you may have. Thank you for your kind attention.