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CONSULTATIVE
GROUP MEETING, Phnom Penh, 19-21 June 2002 Consultative
Group Meeting Poverty Reduction Discussion
points
Session
II (a): Status of the Poverty Reduction Strategy Taking
stock of progress since last year. 1.
The full PRSP (F-PRSP) process in Cambodia started off in early
2002, following the submission by the RGC of a progress report on the
preparation of PRSP (December 2001). Under the aegis of the Council for
Social Development, Government has formally established sector working
groups tasked with the preparation of the F-PRSP. National level
poverty diagnostics and monitoring arrangements are in place in the form
of the PMATU. Government has stated its intention to focus on selected
priority public actions (mainly education, health, agriculture, rural
development, trade, governance to include decentralisation, administrative
reforms and public expenditure mgt.). Programme-based and costed priority
actions will feed into annual budget planning processes and Medium Term
Expenditure Framework. Finally a participatory strategy (broad-based
both at central and local levels) is gradually evolving and strengthening
the overall PRSP process. Targets for assessing future progress on national fight against poverty 1.
The Millennium Development Goals (MDGs) represent a test for
the collective wisdom and foresight of the global community in tackling
the daunting task of reducing world poverty by half by 2015. From last
year’s agreement to launch a new “development round” of trade
talks at Doha to the UN Conference on Financing for Development in
Monterrey earlier this year and extending on to the forthcoming World
Summit on Sustainable Development in Johannesburg later this year -
marking the 10th anniversary of the historic Rio Earth Summit - leaders
from both developed and developing countries have been starting to map out
a Global Deal aimed at matching new commitments for halving extreme
poverty with resources and action. 2.
The eight Millennium Development Goals that were endorsed by 189
member states at the historic United Nations Millennium Summit enjoy unique
global authority. They represent a partnership platform of mutual
self-interest between the countries of North and South. The Millennium
Development Goals represent an Agenda for Action. They can guide the strategic
focus and priorities of national PRS, by striving to promote dialogue
and necessary trade-offs towards achieving the millennium goals. Because
the power of the MDGs is political, not programmatic, they are not
a PRSP or an UNDAF or a bilateral aid agreement. Finally, the MDGs
represent development outcomes. They leave space for developing
countries to seek their own path, rather than be prescriptively
micro-managed by international development officials. However,
international support will be contingent on progress towards these
outcomes. The
way forward—priority actions 2.
In Cambodia, the issue of arriving at a country-owned,
participatory, result-oriented, vision-based, poverty focused PRS
represents a real challenge. Therefore there is a need to balance approach
between achieving PRS principles and Government’s commitment to submit a
F-PRSP by October, 2002. Accordingly, the exercise is to be seen
essentially as an opportunity to gradually develop a national leadership
capacity capable to drive pro-poor reforms, on the basis of a credible
data and information basis (fiscal, programmatic and developmental based).
The following paragraphs outline some of the complexities of the exercise. 3.
Striving to achieve ONE strategic planning exercise: The
critical elements of the PRS process are de facto funded by different
donors and the challenge is therefore for Cambodia to take a strong
leadership in coordinating these various elements into a coherent and
strategic framework. SEDP II is influencing the direction of some critical
instruments, e.g. (Medium Term Expenditure Framework, Public Investment
Programme). The World Bank is facilitating a Public Expenditure Review,
and overall PRSP preparation, while the UN/UNDP in partnership with SIDA
are focusing on poverty monitoring and assessment (PMA). Furthermore,
support to sectoral ministries is provided by a broad range of
multilateral and bilateral donors. 4.
Macro-economic bias: Thus far, the PRSP process has given
insufficient attention to the importance of thematic development issues,
including pro-poor, gender-sensitive, rights-based approaches to
development; the need for the participation and empowerment of the poor;
the impact of the spread of HIV/AIDS; and the positive and negative
consequences of globalisation issues including trade. 5. Consultation
trade-off:
Poverty reduction is a political challenge. It touches on critical but
sensitive issues involving rights
and entitlements. It yields losers as well as beneficiaries. Patient and
inclusive dialogue is needed, not necessarily as a road to consensus, but
in order to promote understanding of the hard choices involved. In this
respect, the national PRS could play a critical role in enhancing cross-sectoral
dialogue, trade-offs and alliances, including achieving greater
effectiveness in development management, using the MDG as the minimum
development platform. Donor
coordination and partnership 3.
It is important to re-iterate that the international effort
against poverty is expected to be organized in significant part around two
instruments: a PRSP to secure country level coherence (Bretton
Woods Institutions) and a national and global monitoring system (UN). The
UN’s role in monitoring of the Millennium Development Goals, is drawing
on the mandate given to the UN system by the Millennium Summit held in
September 2000, the UN’s convening power, its normative role and its
country presence. 4.
In the year 2001, the UN system has facilitated preparation of the first
MDG report (2001). It is hoped that the forthcoming full MDG report
(2003) will be the outcome of a national mobilization effort, under the
aegis of the Council for Social Development (CSD) and involving national
stakeholders alongside donors, the UN system and Bretton Woods
Institutions. 5.
A CG process that would adopt at the minimum the Millennium
Development Goals (MDGs), would allow to build upon
a shared vision and commitment as to the development perspectives of
Cambodia. Such a partnership compact between Government and donors would
allow to bring more focus, priorities, consistency and continuity in
development partnership arrangements. It is encouraging to see that such a
thrust is gradually emerging through the CG Working Groups initiatives on
establishing development indicators and benchmarks, including in some
instances the adoption of the MDGs as the common platform. However, the
challenge remains to ensure that such a performance measurement platform
will eventually be made consistent with the national planning and
monitoring process. 6.
In the context of such a partnership compact, the RGC
is subject to multiple reporting in relation to Cambodia’s progress on
its development agenda. This includes: (i) MDG report to the UN
General Assembly (every two to three years); (ii) annual PRSP progress
report to the Executive Board of the IMF and WB; (iii) annual report to
donors in the context of CG. One would suggest to adopt a more
rationalized and strategic monitoring and reporting framework, with the
PRSP and CG reports to be combined and form the annual assessment,
complemented by the three year outcome based MDG reporting exercise. Thematic priorities: HIV/AIDS Taking
stock of progress thus far 7.
HIV/AIDS has been acknowledged at the Millennium Summit (Sept.,
2000) as a critical developmental challenge, which could have a
devastating impact on every effort to lift people out of poverty. It was
further re-iterated at the occasion of the U.N. General Assembly
Special Session on HIV/AIDS (UNGASS, June 2001). HIV/AIDS, alongside
other diseases (e.g. malaria, tuberculosis and others), do have serious
impact on poor people’ s ability to emerge from poverty, and on the
prospects for national economic growth. 8.
Cambodia faces an AIDS epidemic that potentially could reverse
the development gains made since peace returned to the country. It is
estimated that 2.8% of the adult population is infected with HIV, among
the highest in Asia; that many tens of thousands have already died as a
result; and that possibly two hundred thousand people including children
will develop AIDS within the next 5-10 years. 9.
The leadership and broad partnership stance that the RGC has
adopted in addressing the HIV/AIDS epidemic by steering reforms as
outlined in the “National Strategic Framework for a Comprehensive and
Multi-Sectoral Response to HIV/AIDS, 2001-2005” is already yielding
valuable results. Of great encouragement for this concerted response are
the indications of a reduction in the HIV/AIDS prevalence rate. 10.
In the context of a broad partnership on HIV/AIDS, the United
Nations Country Team in Cambodia is working to significantly enhance its
support to the national response against HIV/AIDS on the basis of the
UNDAF (2001-2005). In doing so, the UNCT has developed a Common
Strategy that clearly sets out the future emphasis of the Team both
collectively and individually. 11.
In line with the above, the
CHDR has opted to focus on addressing key human development challenges
in relation to HIV/AIDS. Such a research effort will spread over a period
of two years. This year’s Progress
Report on the “Societal Aspects of the HIV/AIDS Epidemic in Cambodia”
sets a framework that outlines the fact that HIV/AIDS deepens the
poverty of households and nations, while poverty favours the spread of the
disease by increasing the vulnerability of individuals to infection. 12.
It is important to note that the responsibility to prepare the
Progress Report was entirely a national effort, with four
institutions involved in the research work. These institutions are the
Ministry of Planning, the Royal University of Phnom Penh, the National
AIDS Authority, and the National Centre for HIV/AIDS, Dermatology and
STDs. Overall technical support has been provided by a local research
institute, the Cambodia Development Research Institute (CDRI), This new
partnership arrangement is designed to strengthening national ownership
on the outcomes of the key findings and policy recommendations of the
CHDR(s), by allowing for an in-country and demand- driven research effort. 13.
CG
Paper: “Developmental implications of HIV/AIDS”‘. The paper
is a contribution to ongoing national efforts in assessing and shaping a
multi-faceted response to a complex developmental challenge. The paper is
the outcome of a close research effort involving the National AIDS
Authority (NAA) and the UN Country Team in Cambodia, all aware of the
opportunity cost for development should HIV/AIDS be marginalized in
national policy and planning. It represents a collective effort and
commitment to the Declaration of the Special Session of the UN General
Assembly (UNGASS) on HIV and AIDS (June 2001) and the Millennium
Declaration (September, 2000), to which Cambodia is a signatory. 14.
The priority objective of the paper is therefore to stimulate
discussion around HIV/AIDS in Cambodia focusing on the critical
questions of indigenous capacity, ownership, leadership, civil engagement,
and new possibilities for knowledge-sharing, for which the revolution
in new technologies offers ample opportunities. Accordingly, the paper
outlines several key policy issues for consideration by national
decision-makers. 15.
The paper critically assesses the linkages between the HIV/AIDS
epidemic and Cambodia’s
efforts towards achieving the Millennium Development Goals. It establishes
that HIV/AIDS does raise significant new development challenges, which
require a shift from a top-down health/disease specific approach to the
epidemic to a more holistic developmental approach that is gender
sensitive and people centred with a focus on empowering individuals,
communities and society. 16.
Furthermore, the paper outlines the fact that HIV/AIDS could
reverse progress on Cambodia’s efforts to achieve the other Millennium
Development Goals. Accordingly, a strategic and multi-sector response,
which addresses both HIV/AIDS and other national development priorities
must be captured in Cambodia’ key development policy frameworks,
including the Poverty Reduction Strategy Paper (PRSP). Targets
for assessing future progress on national fight against HIV/AIDS. •
MDG: Combat HIV/AIDS, Malaria and other Diseases •
Target: Have halted by 2015 and begun to reverse the spread
of HIV/AIDS •
Indicators: (i) HIV prevalence among 15-to-24-year-old pregnant
women; (ii) Contraceptive prevalence rate; (iii) Number of children
orphaned by HIV/AIDS The
way-forward: emerging priority 17.
The UN facilitated paper on “the Developmental Implications of
HIV/AIDS” looks critically at the Trade Related Intellectual Property Rights (TRIPS) Agreement and its
implications on HIV/AIDS and access to HIV treatment drugs. Cambodia
has expressed its desire for accession to the World Trade Organisation (WTO).
Cambodia needs to ensure that it negotiates and legislates WTO membership
such as to take full advantage of the TRIPS provisions that would enable
it to access existing and new HIV treatment drugs and vaccines in the most
appropriate and equitable manner. Furthermore, treatment equity issues,
like other equity issues, treatment compliances and related regulation on
the availability of ARV drugs in the market need to be urgently addressed
in public policy. UNDP
Support to the National Strategy 18.
As the U.N. General Assembly Special Session on HIV/AIDS (UNGASS)
held in June 2001 clearly demonstrated, strong leadership at all levels of
society is essential for an effective response to the epidemic. The UNGASS
Declaration of Commitment, signed by many countries including Cambodia,
calls for a new and innovative
type of leadership in response to HIV/AIDS. This leadership should
have governments at its centre with the full involvement of civil society,
the private sector and people living with HI V/AIDS (PLWHA) 19.
Leadership dialogue is one of seven strategic elements identified
by the UNCT to form the basis of its common strategy. As reflected in the
Integrated Work Plan (IWP) on HIV/AIDS 2001-2002 for the United Nations
System in Cambodia, UNDP is the agency within the UNCT providing the lead
for this important component. The Resident Representative Special Meeting
on Strengthening the Country-Level Response to HIV/AIDS, held in
Johannesburg in November 2001, further concluded that leadership
development is a crucial key to assist countries in scaling up the
response to achieve the UNGASS commitment. Thematic Priorities: Gender Equity and Empowerment Targets
for assessing future progress on gender equity and empowerment •
MDG Goal: Promote Gender Equality and Empower Women •
Target: Eliminate gender disparity in primary and secondary
education, preferably by 2005, and to all levels •
Indicators: (i) ratio of girls to boys in primary, secondary
and tertiary education; (ii) ratio of literate females to males of
15-to-24-year-olds; (iii) share of women in wage employment in the
non-agricultural sector; (iv) proportion of seats held by women in
national parliament Priority
actions 20.
The mainstreaming of gender in development policy, institutional
reforms and budgetary processes remains a great challenge in Cambodia.
More specifically, in the context of the national PRS, it requires to move
from a sector-based approach towards a developmental, cross-sectoral
process. Such an approach calls for renewed debates on development
priorities and necessary trade-offs as a key condition to effectively
mainstream gender and other development themes, such as HIV/AIDS,
governance, etc. into the national PRS. It requires hard work and broad
partnership arrangements involving sector and economic ministries, and
other development partners. UNDP
Support to Gender equity and empowerment 21.
UNDP is currently facilitating gender mainstreaming in the national
PRS through active involvement of the MoWVA in working with sector
ministries on the priority policy matrices, including integration of
targets and indicators for monitoring and evaluation. In addition, UNDP is
facilitating the work of MoWVA on the national budget development process,
which will involve forward planning, analysis of costs and advocacy work,
thus strengthening the capacity of the Ministry to carry out its mandate.
Finally, UNDP is facilitating development of a policy on gender
mainstreaming (GM) in local governance, building upon the experience of
Seila on GM in provinces. 22.
UNDP has serious concerns regarding the lack of direction and
capacity of the Cambodian National Council of Women (CNCW), including in
relation to reporting to CEDAW (which is their principal function).
Session II(b): Mainstreaming Trade into Poverty Alleviation - Status of the Taking stock of progress achieved thus far 23.
The economy seems to be increasingly open and trade represents
currently 22% of GDP. The RGC is very committed to liberalisation
measures, to AFTA and to pushing for membership of WTO. The RGC has
published in the year 2001 a ‘Pro-poor Trade Integrated Framework’ and
aims to mainstream trade policy into the PRSP. Cambodia has a historic
opportunity to play a larger role in the global arena by sharing
Cambodia’s IF experience with the rest of the world. In addition, it is
important to note that none of the LDCs has so far been able to accede to
the WTO since its transformation from the GATT in 1995. Cambodia’s
accession would provide tremendous impetus to LDCs ‘ efforts to be
effective partner in the multi-lateral trading system. 24.
The Integrated Framework
(IF) on Trade and Poverty process is considered as a key initiative in advancing the new
global partnership paradigm and ethic, as re-iterated in the Millennium
Declaration (September, 2000). The Millennium Development Goals,
especially the goal on the development of a Global partnership for
Development (Goal Nb. 8), points to the establishment of an inclusive and
equitable globalization, which can be best achieved through a “human
development paradigm”. 25.
The WTO Ministerial Conference (Doha - November, 2001) and the
Financing for Development (FfD) Conference (March,
2002) provided
additional opportunities in addressing the capacity needs of LDCs in
relation to trade and poverty reduction. 26.
In 2000, a Memorandum of Understanding on the IF was signed
between the Royal Government of Cambodia UNDP, ITC and the WTO on behalf
of the other IF members. 27.
In accordance with the October 2000 Memorandum of Understanding,
the International Trade Center (ITC) and UNDP Phnom Penh worked closely
with the Ministry of Commerce towards producing a paper entitled “A
Pro-Poor Trade Sector Strategy for Cambodia. A Preliminary Concept
Paper” The Concept Paper was tabled at the pre-Consultative Group
(CG) meeting held on the 27 January 2001. In addition, the MoC facilitated
the integration of key elements of the Preliminary Concept Paper into
the SEDP-II. 28.
The RGC developed and presented at the CG meeting in Tokyo
(2001) a Road Map for pro-poor trade reforms, which outlines three key
principles: (a) strengthening the capacity of the MoC to lead and manage
the formulation (later on, the implementation) of the pro-poor trade
sector integration study through a broad partnerships with all key trade
sector stakeholders and with development partners; (b) developing the
right linkages to ensure proper assessment, targeting and monitoring of
poverty reduction targets in the context of the PRSP formulation and
implementation efforts; (c) capacity building approaches that are
consistent with “best practices” and tailored to the specific
Cambodian circumstances. 29.
In August 2001 a team of consultants, led by the World Bank, worked
with MoC officials in Cambodia to prepare a draft of a diagnostic study.
The study has the following components: (i) macro assessment, trade
policy, trade facilitation, poverty analysis; (ii) sector studies: rice,
diversified agriculture, fisheries, garments, tourism, labor services. The
study is referred to as the Integration and Competitiveness Study.
The IF sponsored diagnostic study was well received by development
partners on this initiative, i.e. donors and co-operating agencies. There
is a need to build on the momentum generated so far by consolidating
earlier achievements. 30.
Since the adoption of the IF, a number of actions have been taken
at the country-level principally to explain and build consensus around
the concept of a pro-poor trade sector strategy. At country level, the
MoC has held several meetings of the IF Steering Committee; made
substantive presentation of the Concept Paper at the RGC’s semi-annual
retreat (year 2001) for senior government officials - approximately 500
senior officials; dialogue sessions with the business community under the
umbrella of the Business Forum; awareness raising through national media;
a public workshop to review the draft Integration and Competitiveness
Study (November, 2001). Furthermore, the RGC used the opportunity of global
platform such as the LDC III meeting (May 2001, Brussels), WTO
Ministerial Conference (Doha, November 2001), Conference on
Financing for Development (March, 2002, Monterrey) to further
outlining its efforts to the international community. 31.
These initial efforts are impressive and provide a basis for
deepening the synergies thus far developed among trade sector stakeholders
under the leadership of the MoC. Targets
for assessing future progress on pro-poor trade reforms.. •
MDG: Develop a global partnership for development •
Target: Develop further an open, rule-based, predictable,
non-discriminatory trading and financial system •
Indicators: (i) Proportion of exports (by value and
excluding arms) admitted free of duties and quotas; (ii) Average tariffs
and quotas on agricultural products and textiles and clothing; (iii)
Domestic and export agricultural subsidies in OECD countries; (iv)
Proportion of ODA provided to help build trade capacity. Priority
actions 32.
Useful lessons have been learned in the early stages of the IF
country specific initiatives. More specifically, the critical priority of
strengthening of a country-driven constituency on trade and poverty and
the promotion of a critical mass of trade related leadership capable to
drive a human development stance in overall reform path and facilitate
necessary trade-offs. Furthermore, the critical importance to ensure
effective mainstreaming of IF with ongoing Government led policy and
strategies for poverty reduction (i.e. SEDP II, PRSP and GAP), include
linkages with existing policy-based institutional mechanisms. 33.
The relationships between trade liberalization and the reduction
of both poverty and inequality remain unexplored in Cambodia. The
RGC’s programme of trade liberalization is essentially built on the
premises of a FDI led export growth strategy (as opposed to a domestic led
investment and growth strategy). How such a policy stance will translate
into development gains at country level is still to be fully established. 34.
The ongoing process of negotiating Cambodia’s accession to WTO
could provide new impetus for Cambodia’s economic and social development,
provided that the conditions of membership are supportive of such an
agenda. What is required is to set a priority agenda for further policy
review to better evaluating and identifying the developmental implications
of greater integration in the multi-lateral trading system. 35.
Furthermore, what is also required is greater alliance and
partnership with other LDCs, with the key objective to ascertain their
common agenda and concerns in a more decisive way, including overall
negotiating positions. Opportunities to learn from other regional
partners experience in negotiating WTO accession would be beneficial.
A point in case is China, whose experience could provide tremendous
insights to Cambodia including on such critical matters as addressing the
loaded agenda for WTO compliant legislation. 36.
By way of illustration, and towards addressing the MDG on
“Halting and Reversing HIV/AIDS by 2015”, Cambodia could address
its HIV/AIDS concerns in relation to TRIPS, including their integration
into patent legislation. The Trade Related Intellectual Property
Rights (TRIPS) Agreement and its implications on HIV/AIDS and access to
HIV treatment drugs is becoming an emerging issues. Cambodia needs to
ensure that it negotiates and legislates WTO membership such as to take
full advantage of the TRIPS provisions that would enable it to access
existing and new HIV treatment drugs and vaccines in the most appropriate
and equitable manner. 37.
Cambodia is in the process of finalizing a Patent Law. The
current draft law has several provisions that are not required by the
TRIPs Agreement and are therefore certainly not necessary for Cambodia’s
WTO membership. The TRIPs Agreement contains some special provisions for
developing countries, that were recently re-affirmed and especially
extended for Least Developed Countries (LDCs) in the WTO Declaration on
the TRIPs Agreement and Public Health (Doha, 12-14 November 2001). The
current draft patent law for Cambodia does not take advantage of these
provisions. Donor
coordination and partnership arrangements on trade 38.
In the context of the IF (see above), UN involvement in trade
reforms is more framed within the broader context of economic and social
development. The interventions are centred around the MDGs, including
the priority objective to supporting multilateral policy discussions
designed to promote international economic cooperation for development and
to facilitating technical cooperation programmes focused on addressing
practical obstacles to sustainable development. 39.
These programmes can be clustered in six broad areas: (i)
contribute to a better understanding of international economic problems
and of their solutions; (ii) strengthening negotiating capacities as
regards international trade and investment; (iii) improve national systems
and procedures for trade expansion in such areas as trade efficiency,
customs, etc; (iv) contribute to national policy development, in
particular addressing the relationship between trade, technology, finance,
investment and poverty; (v) promote cooperation among developing
countries; (vi) strengthening domestic supply capacities. 40.
The UNDP support towards a MDG framed response to trade reforms
is highlighted in several UNDP interventions at country level to include,
Poverty Monitoring and Assessment, Macroeconomics of Poverty Reduction,
and promoting innovative development partnerships models, based on
Cambodian leadership, ownership and accountability. 41.
As a follow-up to the IF diagnostic study (2001), Ministry of
Commerce, in partnership with ITC and UNDP facilitated the preparation of
a “pro-poor trade reform programme”, which is to be funded by
the Japanese Government, through the UNDP managed Human Resources
Development Fund. The total programme budget amounts to US$ 500,000. The
programme aims at addressing appropriate policy and related national
capacity needs in the context of ongoing trade reforms and poverty/human
development challenges. 42.
More specifically, the programme will pursue three priority
objectives: (i) to promote a broader national constituency on trade
and poverty through a strategic and information-based partnership
development approach (to be facilitated by ITC and UNDP); (ii) to further
elaborating on the links between poverty reduction/human development
and trade expansion (to be facilitated by UNDP); (iii) to enhance
opportunities for effective allocation of ODA towards trade, through the
strengthening of supply side responses in three product sectors namely:
diversified agriculture and agro business, fresh water fisheries, and
handicraft (to be facilitated by ITC). A priority focus of the UNDP and
ITC facilitated programme will be to strengthening the capacity of 8
national professionals in undertaking pro-poor trade policy analysis,
monitoring and overall partnership development involving government, civil
society, and private sector. 43.
In addition, MoC in partnership with UNDP and ITC are in the
process of launching an e-trade initiative. The programme is
expected to assess the e-trade readiness of Cambodia and develop related
capacity in partnership with government, civil society and private sector. 44.
In addressing the complex linkages between trade and poverty/human
development, UNDP/BDP has recently
published several policy-oriented documents. These documents provide
an expanding platform for UNDP support to national efforts in addressing
pro-poor trade related policy questions. 45.
Several other development partners do provide support to the RGC in
relation to its overall pro-poor trade reforms.
The list of current or anticipated support is captured in the IF
diagnostic study appended technical assistance matrix. |
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