Poverty Reduction Strategy in Cambodia

(i) NGOs’ Poverty Focus

Deciding who and how many constitute the poor in Cambodia requires a broad understanding of poverty, and not simply a limited income/consumption approach. This broad understanding of poverty should include the concept of human rights as well as actively requiring the participation of the poor themselves, not only in defining poverty but also in identifying why they think they are poor and how they believe they can rise out of poverty. It is from this perspective that NGOs approach poverty reduction.

The I-PRSP recognizes broad dimensions of poverty that include lack of opportunities, vulnerability, low capabilities and social exclusion. While it presents some of the factors that cause poverty as well as policy recommendations to address them, it glosses over the importance of structural causes of poverty. These structural causes are closely linked to why certain groups of individuals continue to control Cambodia’s productive resources, to the detriment of the poor majority population. The structural causes of poverty perpetuate inequity: currently, some Cambodians are able to live in luxury in the Phnom Penh area while others eke Out a meager existence in remote villages, isolated mine-affected pockets, on urban rooftops or even in the forest. Therefore, the empowerment of the poor and voiceless should lead to policy actions that distribute Cambodia’s productive assets equitably and build upon the social networks and institutions of the poor.

(ii) Poverty Reduction: Balance between macro-economic and social & environmental policies

The Royal Government's strategic motto is “Poverty reduction through high economic growth over the long term by ensuring environmental sustainability and social equity.” In practice, rapid growth has often come at the cost of environmental degradation, social disruption and rising inequality. In the particular case of Cambodia, an overemphasis on high economic growth may be problematic as long as there are not adequate social regulations (e.g. minimum wage legislation, social security) and environmental regulations (e.g., pollution thresholds) in the country’s legal and institutional framework.

Economic growth is emphasized as a prerequisite to poverty reduction. However, the position of human development and poverty reduction within the overall economic policy framework determines the type of growth and the equity priorities pursued. For instance, processes such as the Poverty Reduction Strategy Paper (PRSP) or the Integrated Framework for Trade-Related Technical Assistance to Less-Developed Countries (IF) put a premium on aggregate growth targets and emphasize specific “profitable” economic sectors. NGOs reiterate that development strategies require comprehensive participatory poverty impact analysis in order to identify the policy instruments that will most effectively target the poor and ensure development with equity.

A focus on growth with equity would also include maximizing the poverty reduction impact of fiscal, monetary and trade policies, the incentives for Foreign Direct Investment (FDI) and the regulatory environment. For instance, a Public Expenditure Policy should allocate the budget to target basic social services and focus on closing regional and/or gender gaps in education, health, and other key human development indicators. The macroeconomic policy framework should place poverty reduction at the center of the development targets. At the same time, at the center of poverty reduction strategies are the people and stakeholders for which they are intended, and who must participate in all phases of this process.

(iii) Cambodia’s Poverty Reduction Strategy: Lessons from the process to date for the process ahead 
 NGOS  spoke out last year about the lack of donor coordination in supporting preparation of the I-PRSP, the Second Socio-Economic Development Plan (SEDP II) and the full PRSP, which implied duplication of tasks, an additional burden for government officials and compressed timeframes for input and consultation at each stage. Since then, attention has been given to ensuring that the full PRSP further develops the contents of the SEDP II and the timeline for completion of the full PRSP was extended. Effort needs to be made to ensure that poor coordination does not arise again in the future.

NGOs have provided inputs at every stage of the strategic planning process. However, time constraints apparently prevented the incorporation of NGO comments into the I-PRSP. Some NGO comments were taken into account in the final draft of the Main Volume of SEDP II. Though the detailed annexes remained unchanged. The NGO inputs to the I-PRSP and to the SEDP II were recently handed out at a Workshop on Preparation of the full PRSP. NGOs also intend that this NGO Statement to the CG Meeting be used as an input to the preparation of the full PRSP.

In view of this year’s full PRSP, and based on the lessons learnt in the last couple of years, NGOs would like to emphasize the following points in order to achieve a true country-driven, result-oriented and participatory PRSP document:

     Continue to focus on participation by all interested stakeholders and in the process as a whole:

In order to foster the participation of all interested stakeholders, NGOs would like to encourage prompt translation into Khmer language of all draft documents, enabling Cambodian civil society to read and understand the plans and thus facilitating Cambodian input. NGOs are particularly concerned that no non-NGO, community or grassroots level participation has been elicited in the drafting process of the PRSP. In particular, special attention should be drawn to include vulnerable and marginalized groups such as the poor, women, disabled, children, ethnic minorities, etc. Vulnerability and marginalization are both causes and consequences of poverty, and poverty reduction is unlikely to be achieved unless the rights and the needs of these groups are taken into account.

Regarding participation in the process as a whole, NGOs are concerned that elements of the PRSP such as the macro-economic framework may have substantial input from the World Bank and the IMF before there is any wider discussion among stakeholders. NGOs hope that the PRSP will remain a participatory process, and that the concept of participation will extend to all elements of the PRSP. Further, NGOs encourage establishing explicit indicators of the level of participation involved in all components of the final PSRP as well as that of the external documents that are linked to the PRSP process, especially the Public Expenditure Review (PER), the trade policy and the development-related plans of line ministries. NGOs would like to see a country-driven PRS in which the level as well as the quality of participation in each section of the PRSP is not only strongly encouraged but also clearly stated in each section of the final document.

     NGOs encourage government, donor and NGO coordination to avoid duplication of tasks and additional burden for government officials. NGOs propose building on previous lessons learnt and maintain an alive and flexible PRS document to adapt to the changing needs of the Cambodian reality. In particular, the overlapping timelines and agendas of the World Bank/IMF requirement for a three-year “country-owned” PRS and the Cambodian Constitutional requirement for a five-year development plan need to be reconciled. Otherwise, they have the potential to duplicate efforts and slow down the planning processes. Maintaining a flexible and alive poverty reduction strategy document would potentially allow better coordination among all players and avoid the draining of human resources. Different timelines on both government- and donor-driven requirements could be built into a long-term process or re-evaluation of poverty priorities for Cambodia. The input from the Poverty Monitoring and Analysis Technical Unit of the Council for Social Development (PMATU), among others, could be invaluable for the evolution of Cambodian poverty reduction priorities.

The NGO community believes that monitoring and accountability are key to ensuring implementation of the PRSP and other development reforms. Poverty alleviation strategies should focus on lessening the gap between the rich and the poor, between the city and the countryside, and between men and women. Therefore, the NGO community believes that the “yardstick” to evaluate success or failure of reform efforts should be what happens to the poor and most vulnerable groups in Cambodia. These groups would include, among others, the landless poor, exploited women and children, older people or the sick and disabled. NGOs are ready to contribute in this monitoring function through their knowledge and experience working directly at the grassroots level.

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