3. IDENTIFICATION AND FORMULATION OF DEVELOPMENT
     COOPERATION ACTIVITIES

3.1 IDENTIFICATION

18. The identification and formulation of development cooperation activities, either programs or projects, shall follow a process that involves:

• alignment of development partner supported activities with Cambodia’s national development policies and priorities;

• articulation of a country strategy for development partner assistance to Cambodia;

• identification of programs and/or projects through a government-development partner consultation process in the context of established national priorities, sectoral plans and related programs to address priority needs.

This process shall minimise transaction costs by reducing development partner requirements, such as ad hoc identification and formulation missions.

19. In accordance with the general guiding principles for development cooperation set out in Chapter 2, Section 2.1, development partners shall identify and formulate development cooperation activities that:

• Are based on national and sectoral development objectives and on jointly agreed policies, implementation strategies, and intended results.

• Are situated in the context of national, sectoral or thematic programs where such programs exist.

• Are supportive of Government efforts to develop national, sectoral or thematic/issue strategies and programs, where such strategies and programs are evolving.

• Establish joint responsibility with the Government for identification of development cooperation activities and their formulation.

20. The CRDB at the Council for the Development of Cambodia (CRDB/CDC), and the Joint Technical Working Groups shall be the institutional mechanism for coordinated planning and programming, including identification of development partner assistance programs. Where there are capacity gaps in the institutional mechanism, the concerned parties shall carry out a capacity assessment and take action to fill the identified gaps. Development partners shall provide support to strengthen the necessary institutional capacities.

3.1.1 COUNTRY ASSISTANCE STRATEGY

21. Prior to engaging in identification and formulation of assistance programs/projects,, development partners shall ensure that their country assistance strategy is aligned with Cambodia's development objectives and priorities within the framework of concerned development partner's country policies and priorities. The development partner’s country strategy may take the form of a country assistance strategy paper, aide memoire or note on the outcome of consultations with the Royal Government.

22. The country strategy paper shall clearly outline the development partner’s understanding of Cambodia’s development issues and constraints, Government priorities to achieve its Millennium Development Goals (MDGs), the development partner’s assistance strategy, the broad areas of program support, the arrangements for programming of development partner assistance, and the implementation arrangements for development partner supported activities. A country assistance strategy shall cover a period of three to five years.

23. Development partners are encouraged to coordinate among themselves and prepare joint country assistance strategies in order to:

• enhance joint programming by development partners in close consultations with national stakeholders;

• reduce administrative burdens on the Government;

• allocate responsibilities and program components in accordance with each development partner’s comparative strength;

• eliminate duplication and overlap of development partner support; and

• optimize the provision of resources to a sector or national program.

24. Development partners participating in a joint country assistance strategy may prepare their own country strategy document for their internal purposes, such as, approval by the development partner's government and/or the executive board of multilateral institutions.

25. Development partners shall initiate the country strategy formulation process, while the CRDB/CDC shall coordinate the consultation process on behalf of the Royal Government with Government line ministries, national institutions, local government, and civil society organisations.

26. Development partners shall get the endorsement from CRDB/CDC on behalf of the Royal Government before submission of their country assistance strategy paper for approval from their government and/or executive board. A formal process of signing the development partner's country strategy paper by the CRDB/CDC shall not be required.

27. Development partners shall endeavour to work with common set of data and tools for data analysis, particularly in regard to MDGs and other priority development issues.

28. In cases where a development partner may choose not to develop a country assistance strategy; it may prepare an “Aide Memoire” or “Note” reflecting decisions reached during consultations with the Government. Such consultations shall cover topics such as review of the progress of the development partner's ongoing assistance programs and plans for future activities. The consultation process may lead to the formulation of new development cooperation activities.

29. The CRDB/CDC shall coordinate these consultation processes on behalf of the Royal Government. The Aide Memoire or Note shall be signed by the CRDB/CDC and the development partner representative.

30. While some development partners may wish to proceed straight from their country assistance strategy paper to a project identification process, the Royal Government encourages all development partners to seriously examine the possibilities of participating in sector, thematic or issue-based programs.

31. The country program shall outline development partner's assistance priorities, areas of support, and implementation arrangements for program activities. It shall be prepared based on consultations between the development partner and concerned Government agencies.

32. The CRDB/CDC shall endorse development partner's country program on behalf of the Royal Government. A country program may cover a period of three to five years and shall be subject to mid-term or annual review.

3.1.2 PROGRAM AND PROJECT IDENTIFICATION

33. A development partner may identify possible programs or projects during the course of preparation of development partner country strategy, during the process of on-going consultations with Government, or during current program or project implementation. The Royal Government encourages all development partners to work towards shifting the programming modality of their cooperation activities away from stand alone projects to sector, issue or other program-based approaches in programming their activities. Sector and thematic programs not only provide better alignment of ODA supported activities with Cambodia’s national development priorities to achieve the Millennium Development Goals -- but more importantly -- they provide a framework to development partners for harmonizing their practices around jointly agreed priorities and actions. Sector, thematic or issue-based program offer a number of advantages that should be given careful consideration in the processes of identification of development cooperation activities, such as:

• Enhancing Government ownership of the development process -- as compared to stand alone projects that are delivered without an overall framework.

• Reducing the burden on the development partners and the Government institutions of managing a large number of uncoordinated projects as well as minimizing overlaps and duplication of development partner supported activates.

• Making governance of development cooperation programs and projects more transparent because of jointly agreed institutional/management arrangements for the sector or thematic program.

34. The Royal Government shall have the leadership and management responsibility for the formulation of sector, thematic or issue-based programs in consultation with members of the concerned Technical Working Groups. The lead ministry, as chair of the TWG, shall provide leadership and exercise management responsibility for coordination with development partners who are providing support within the context of the sector, thematic, or issue-based program.

35. Where a sector, thematic or issue-based program has not yet been developed, the Technical Working Group shall give priority to the preparation of a sector, thematic or issue-based programs in their area. The Government lead agency shall provide leadership in identifying priority projects within the context of the sector, thematic or issue-based program.

36. Development partners who are unable to participate in the sector, thematic or issue-based program, may chose to support the sector, thematic or issue-based program through projects that are within the overall framework of the sector, thematic or issue-based program.

37. With the framework of the agreed country assistance strategy, country program or aide memoire, development partners may field project identification missions. These missions shall be coordinated by the CRDB/CDC in consultation with concerned Government ministry or agency and the Technical Working Group. In the case of sector, thematic or issue-based programs, the program management framework shall establish the procedures for such missions.

38. Development partners are encouraged to undertake joint development partner identification missions in order to reduce the administrative burdens placed on national institutions as well as to facilitate aid coordination. To the greatest extent possible, the Technical Working Group mechanism shall be used for planning and coordinating joint project identification missions.

3.2 PROGRAM AND PROJECT FORMULATION

39. The following principles shall guide program and project formulation:

• The Royal Government shall have the leadership and coordination responsibility for program and project formulation.

• The Royal Government and development partners shall assume joint responsibility for the design of development cooperation activities.

• A comprehensive assessment of the technical, financial, managerial and administrative capacities that will be needed to achieve the results of the program or project shall be carried out and a strategy to deal with the identified capacity gaps shall be developed and included in the design of the program or project, including the allocation of resources in the program or project budget to support merit based pay initiatives (such as MBPI/PMG schemes), if necessary.

• The program or project design shall clearly define the roles and responsibilities of the Royal Government institution(s) and funding development partner(s) in the management of the implementation of the program or project.

• The project formulation shall be approached as an analytical process of problem clarification and problem-solving. The process shall facilitate and enable learning.

• Project formulation shall clearly outline the desired results to be achieved and to remedy the identified problems.

40. Project formulation shall begin with an agreement between concerned Royal Government institution(s) and development partner(s) to develop a program or project concept. Program or project formulation shall be a collaborative exercise involving participation of the development partner(s), Government, and other stakeholders.

41. Program or project formulation exercises shall include: setting output indicators, targets and activity details with schedule, budgeting and funding, and management arrangement between the development partner(s) and the concerned implementing Government institution(s) to achieve program results and outcomes. In the formulation process, any external consultants recruited for the task shall work under the direction of the development partner(s) and the identified implementing institution(s) for the program or project.

42. Any data collection and analysis, field visits, and consultation with stakeholders in the process of program or project formulation shall, to the greatest extent possible, will follow a participatory approach in obtaining input and building consensus. It shall strive to contribute to learning for the parties involved.

43. Development partners are encouraged to undertake joint formulation missions under the guidance and direction of the identified implementing Royal Government institution(s). In planning the joint formulation missions, participating development partners shall identify the lead donor and establish administrative arrangements amongst themselves.

3.2.1 FORMULATION OF PROJECTS OUTSIDE THE FRAMEWORK OF A SECTOR, THEMATIC OR ISSUE-BASED PROGRAM

44. The formulation of a project that is outside the framework of a sector, thematic, or issue-based program but is within the agreed framework of a development partner's country strategy shall be managed by the Royal Government institution(s) that has(ve) the responsibility for the area of support of the project. In the formulation of such a project special attention shall be paid to ensuring that the proposed project addresses Royal Government's priorities in that area and that the institutional and management arrangements for the project are in line with the best practices of other programs and projects that are being implemented within the proposed implementing sector ministry or agency.

3.2.2 DOCUMENTATION

45. The outcome of program or project formulation process is a document that sets out a contextualized statement of the problem or problems to be solved, related analysis, and, in a logical framework, a solution to the problem expressed as intended results to be achieved. The document shall have the status of a legal instrument when approved and signed by the all concerned parties. Development partners are encouraged to standardize the format of the program and project documents to reduce the time and associated costs for producing this documentation.

46. The key areas that shall be covered in a program or project document include:

• Context and situation analysis

• Capacity assessment and requirements for capacity development

• Strategy and objective of donor support

• Project description, that includes:

  • Project strategy

  • Outcome and partnership strategy

  • Outputs and activities

  • Inputs

  • Sustainability, risks and prior obligations

  • Management arrangements

  • Monitoring, review and evaluation with learning

  • Reporting

• Work plan

• Budget

• Annexes, such as:

  • Legal instruments for execution and implementation arrangements

  • Terms of reference of key consultants and experts

  • Strategy and scope of training

  • Equipment specification

More details on these key elements are described in Annex 2.

3.3 APPRAISAL AND APPROVAL OF PROGRAM/PROJECT

47. Development cooperation programs/projects shall be subject to appraisal at two levels:
First, the concerned government agencies and proposed funding partner(s) shall undertake the appraisal of the proposed program or project(s). This appraisal process may involve more than one review meetings and field visits to consult with a broad range of stakeholders in the appraisal meeting, such as, concerned civil society organisations, academic and research organizations, and development partners. A representative of CRDB/CDC and the consultants, if any, engaged in the program or project formulation shall participate in the appraisal meetings. Second, where a joint Technical Working Group exists, it shall review the appraisal report to ensure that aid coordination is optimised and duplication is avoided, and in the case of existing sector, thematic or issue-based programs, to ensure that the proposed management structure are in line with the organizational and management structure of the sector, thematic or issue-based program.

48. While additional appraisal criteria may be applied depending on program or project content, the following general criteria shall be considered in appraisal of all development cooperation projects:
 

1. Consistency with the national development objectives and priorities.

2. Consistency with a sector, thematic or issue-based program approach.

3. Extent and manner in which capacity development needs are addressed.

4. Utilization of national delivery structures and systems in implementation.

5. Cost effectiveness.

6. Appropriateness and feasibility of proposed technical approach.

7. Efficacy of arrangements for learning and adaptation.

8. Sustainability and impact of the proposed program or project.

49. Following completion of the appraisal process, the project documentation shall be finalised taking into account the comments and recommendations of the stakeholders and the appraisal meetings.

Roles and Responsibilities of Relevant Government Institutions
and Development Partners

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