Executive Summary

Cambodia’s quest for a new paradigm of development cooperation has been gathering speed in recent years. The Royal Government of Cambodia (RGC) presented an overall vision of the new partnership paradigm at the Consultative Group (CG) meeting in May 2000, proposing a "paradigm shift" in the current thinking and practices from "Donorship" to "National Ownership."

There are some compelling reasons why the new partnership paradigm is needed at this time.

First, the experience of development cooperation (or lack thereof) since late 1980s points to the need for much improved partnership arrangements. In the past, development cooperation in Cambodia was generally donor-driven, paid insufficient attention to Cambodian ownership, and created heavy dependence on foreign aid. This was in part due to historical circumstances. The first post-conflict government was established after the UN organized general elections in 1993 and had to operate in a fragile political environment where former conflicting parties formed a coalition government while the civil war against Khmer Rouge continued along the Thai border. The government therefore was not fully prepared to take leadership of development cooperation at a time when donors were sending hundreds of mission to Cambodia. Second, the ambitious state reform programs launched in 1999, building on the long-awaited peace and more stable political environment, require new partnerships that include the broad participation of stakeholders. It is recognized that development cooperation with external partners must be better managed for these programs to be successful and if this new inflow of assistance is to be used effectively and efficiently. Finally, a National Poverty Reduction Strategy (NPRS) has been developed through broad participation of stakeholders, but its implementation remains a challenge. New partnership arrangements need to be advanced further to implement the NPRS effectively as envisaged.

To move forward, the government and donors established the Government-Donor Partnership Working Group (PWG) under the CG mechanism in late 2002 for strengthening government-donor partnerships in Cambodia. The current study is intended to assist this endeavor. It aims to examine some good practices of aid coordination in Cambodia, analyzing their mechanisms and achievements, and drawing useful lessons from them.

Four cases of good practices have been selected for this purpose (see Table 1 for a brief overview of each case studied).

  Sector-focused aid coordination:
Education -- Sector Wide Approach (SWAp)
Health -- Sector Wide Management (SWIM) and Tuberculosis Sub-Sector (TB)
  Cross-cutting-issue focused aid coordination:
Local Governance -- SEILA
Public Finance – Technical Cooperation Assistance Program (TCAP).
The study aims to offer recommendations on the following aspects, based on the four case studies:
A. General approaches to aid coordination; and
B. Specific recommendations for action.

Table 1. Overview of the four cases studied

1. Education (SWAp): The Ministry of Education, Youth and Sport (MOEYS) introduced a sector-wide program, named SWAp, to implement national education reforms in 1999. The SWAp was started to ensure that all donor-funded projects would support a single sector policy and expenditure program developed under government leadership, and that a common approach to planning, implementation and monitoring and evaluation would be adopted. Through SWAp, the MOEYS developed an Education Strategic Plan (ESP) anda rolling Education Sector Support Program (ESSP) with broad participation of stakeholders. The MOEYS, donors and NGOs jointly reviewed education sector performance in 2002 and 2003.

2. Health (SWiM and TB Sub-Sector): The Ministry of Health (MOH) introduced a sector-wide program for health in early-1999, named Sector Wide Management (SWiM). The government and its external partners jointly developed a Health Sector Strategic Plan 2003-2007 (HSP), a rolling Medium Term Expenditure Framework (MTEF), and a 5-year Implementation Plan of HSP. The first joint sector program review was held in April 2003. The National Tuberculosis Control Program (NTP) is one of the four health sub-sector programs under the overall national health system in Cambodia. A National Health Strategic Plan for Tuberculosis Control 2001-2005 was jointly developed in broad consultation with stakeholders.

3. Local Governance (Seila): Seila started in 1996 as a national program with core funding from four donors. Seila’s objectives are to foster local development and poverty alleviation, build capacity of provincial and commune authorities for managing sustainable development, and generate lessons for national policies of deconcentration and decentralization. Seila has developed unique decentralized systems for planning, programming, financing, implementation, monitoring and reporting for both provincial and commune levels, including organizations, management instruments and processes. Since 1996, Seila has gradually increased the number of provinces it supports, and now covers all provinces andmunicipalities and communes in Cambodia.

4. Public Finance (TCAP): TCAP is a technical assistance program covering economic and public financial policy, developed under the lead of the IMF and in cooperation with four other donors in 2000. The Program’s objectives are to strengthen the institutional and human resource capacities of six key Departments and agencies in the government. Under the program, the government has prepared a number of policy papers, research papers and legal documents for economic and fiscal policy reforms, and offered training activities for government officials. The program is scheduled to be completed by the first quarter of 2004.


A. General approaches to aid coordination

The overall finding from the current study is that one size does not fit all. Aid coordination arrangements are diverse among the cases studied, reflecting the fact that they have evolved over time to meet local needs and conditions in the respective sectors or cross-cutting issues. However, certain key approaches during this process have been crucial to their success. These are (1) a broadly inclusive, participatory process, and (2) learning by doing.

The four cases studied suggest the critical importance of the right process of developing aid coordination for a sector or issue. In Health and Education, a broadly inclusive, participatory process of aid coordination has created room for discussion and negotiation between the government and donors and among donors themselves, and helped formulate a shared vision for sector programs. Seila also practiced a broadly inclusive approach to planning local governance and development in which all stakeholders were encouraged to participate. TCAP initiated the first program approach to planning and coordinating technical assistance for public finance reform, in which a number of donors participate under a common, comprehensive framework.

The effectiveness of a learning-by-doing approach was most clearly demonstrated by the Seila program, but the other cases have also used this approach to some extent. Seila started in 1996 by piloting small scale activities to develop concepts, instruments, and capacity for local governance and development. Its aid coordination mechanisms at the national and provincial levels have evolved through a similar process. This approach helped to identify what worked and what didn’t in Cambodia’s context. In Education and Health, learning by doing has been practiced in the process of program planning, implementation and monitoring, in which program plan and activities have been adapted flexibly to reflect lessons learned in the process.

It is thus critical to recognize that there is no single aid coordination arrangement that can be applied to all sectors or all cross-cutting issues, even in the same country. In other words, imposing an arrangement without adequately addressing local needs and conditions unique to the sector or the cross-cutting issue and without broad participation of stakeholders involves high risk of failure, particularly if the initiative is driven by donors. However, an open, participatory process that involves the government, donors, and other stakeholders in developing a shared vision of sector priorities and agreed rules for cooperation can lay a solid foundation for successful coordination, and a flexible attitude towards constantly adapting plans based on what has worked can ensure continued effectiveness.

The current study has also distilled some other key factors concerning institutional arrangements and the specific steps in aid coordination that have contributed to the achievements of the cases studied (see Table 2 and Chapter 4 for details). These factors can also provide a useful guide when other sectors or cross-cutting issues consider developing new arrangements for aid coordination.


Table 2. General approaches to aid coordination
recommended for other sectors or cross-cutting issues

Overall approaches

  • Start with and continue a broadly inclusive, participatory process.

  • Learning-by-doing approach is effective in accommodating the needs and conditions unique to the sector or the cross-cutting issue.

Institutional arrangements for aid coordination

  • Formal mechanisms are needed for coordination and consensus building.

  • Institutional arrangements for aid coordination should be flexible to accommodate local needs, in particular the implementation arrangements of respective ministries and agencies.

  • Informal networks can serve an important, complementary role to formal institutions.

Process of aid coordination
Preparation and planning stage

  • Establish an open, transparent, neutral (unbiased) process of aid coordination.

  • Start a sector program with the formulation of a common vision through intensive dialogues among stakeholders.

  • Widely disseminate and sensitize sector program concepts at the early stage.

  • Sharing information about donor assistance has a direct impact on aid effectiveness.

Implementation stage

  • Assistance modalities should be kept flexible to seek out and enhance complementarities among donors and reflect the reality on the ground.

Monitoring, evaluation and review stage

  • Joint sector program reviews are a good start to aid coordination at the monitoring and evaluation stage.


B. Specific recommendations for action

In addition to the more general recommendations concerning approach, institutional arrangements, and the process of aid coordination discussed above, this study has generated some specific recommendations, both for other sectors and cross-cutting issues which wish to implement better aid coordination, and for how to further improve aid coordination in the four cases studied. Although the government and its partners have made progress in advancing the new partnerships paradigm in the cases studied, there are some key issues that need to be addressed if the new partnerships are to advance further. Those key issues are discussed below and some recommendations for the government and development partners are proposed (see Table 4-2 in Chapter 4 for the list of key issues and recommendations).

(i) Recommendations for other sectors and cross-cutting issues

Develop comprehensive policies and strategies for all relevant sectors or cross-cutting issues

In Education and Health, the government has made significant progress in the development of sector-wide policy and strategy. This has helped the government and development partners forge a shared vision of sector development that has improved aid coordination, and the comprehensive scope of those programs has enhanced the government’s ownership and capacity to manage both specific programs and aid coordination. The outputs of the sector programs have also contributed to providing essential information to the NPRS. Similar steps could be taken in other sectors in which sector policy and strategy are weak and coordination of donor assistance is urgently needed. The initial step for the government might be to identify some priority sectors consistent with the Socio-Economic Development Plan (SEDP) II and the NPRS. Immediate candidates could be, for example, agriculture and road transport, which are critical for development in Cambodia. Donors and NGOs could assist the government in undertaking this initiative, for example, by providing technical assistance for analytical work, and support for workshops and seminars.

Enhance complementarity among donors by combining strengths

External assistance is much more effective when donors divide up the work according to what they can do best. For instance, Seila’s core components are funded by one set of donors who have the ability to provide funding through trust fund arrangements, and these core components then manage and supervise various local investment projects funded by other donors. In TCAP, some donors provide funds for operational costs, whereas the other donors finance and supervise technical assistance through co-financing arrangements. In Health, TB Sub-Sector Program has developed and applied a common TB treatment strategy (called DOTS) for Health Centers nationwide through complementary assistance schemes among donor-funded projects. In all the cases, the strengths of each donor’s preferred aid arrangements have been combined effectively while minimizing individual weaknesses, in order to achieve desired program objectives and outcomes that could not have been achieved without such cooperation. It is therefore recommended that the government continue the current policy of accepting diverse assistance schemes and aid modalities. It is also recommended that donors actively seek out complementarities among themselves through dialogues and information sharing within the respective sectors or cross-cutting issues.

Improve information systems for aid management

One of the critical issues that has emerged from this study is the difficulty facing the government in collecting information about external assistance. This has been a major obstacle to governmental management and coordination of external assistance, and therefore should be addressed as a matter of first priority. The information on past and present donor assistance will help ministries analyze trends in the amount and the area focus of assistance and coordinate ministerial activities in day-to-day management. The information on future assistance is required for the planning of future activities in each ministry and agency which receive donor assistance, in particular for the preparation of Public Investment Programme (PIP) and Medium Term Expenditure Framework (MTEF). MOEYS has made a major progress in developing a fairly comprehensive database of external assistance (AID Management Information System) with assistance from CDC. It also collected comprehensive assistance data for annual joint sector reviews in 2003. However, the compilation of future assistance information remains as a challenge because actual amount of donor assistance has not always been consistent with the amount pledged and donors feel that the pledged amount should be read as working figures which are subject to change, although they make their best effort to provide accurate information. It is therefore recommended that MOEYS’ good practice be replicated in the other sectors receiving external assistance, under the leadership of respective ministries and agencies. The initial step for the government is to compile a comprehensive record of past and current assistance. Subsequently, the government is recommended to explore ways to compile comprehensive data on projected assistance, in close consultation and collaboration with external partners. External partners might want to consider supporting this government initiative and ensuring full cooperation in the provision of assistance information at the request of the government ministries and agencies.

Develop the Government’s capacity for public financial management

This recommendation applies both to developing aid coordination in new areas, and to further improving aid coordination in the four cases studied. Although the development of sector policy and strategy in Education and Health is a significant achievement, the government’s current limited capacity for public financial management has proved a major challenge to their implementation. For instance, although the introduction of Priority Action Program (PAP) is an important step forward in improving budget disbursement for education and health spending units, the changes made at the policy level have not been fully matched by capacity development at all levels of ministries concerned, including the sub-national level, leading to delays in disbursement and the lack of adequate monitoring. In Health, capacity gaps in public financial management in such areas as accounting and financial management at spending units (hospitals and health clinics) constrain effective implementation of the health sector policy and strategy. In Seila, the disbursement of Commune/Sangkat Funds has been considerably delayed since the government’s treasury system replaced the private banking system as the channel for disbursement, following the commune elections in 2002. The capacity issue is also a major concern among many development partners in using the government system to disburse their funds.

Therefore, capacity development of public financial management should be carried out as a matter of urgency. Strengthening public financial management (including provinces and spending units) is a major undertaking and requires systematic, coordinated efforts between the government and development partners. Although MOEYS and MOH are already undertaking some capacity development activities, the impact would likely be greater if it is coordinated with MEF and Seila (at provinces and communes). One way to develop new partnerships in this area might be to build on the experience of TCAP as discussed below.

Address the issue of low pay and salary supplements in the civil service

This recommendation also applies both to developing aid coordination in new areas, and to further improving aid coordination in the four cases studied. It is the general consensus that low pay in the civil service has been a major obstacle to implementing the programs studied. Salary supplements have been provided under many donor-funded projects and programs as a temporary remedial measure for the last ten years, even though it has been recognized that salary supplements cause a number of problems in the civil service in terms of accountability, transparency and fairness. As Cambodia has finally entered into an era of sustainable development after a long period of emergency relief and rehabilitation, now is the time to take action to address the problem of low pay through partnerships between the government and donors.

The government has already made important progress with the preparation of the Strategy to Reform Civil Service (SRCS) and a series of recent studies under the initiative of the Council for Administrative Reform (CAR). The average pay levels of civil servants have been raised gradually in the last few years, but further efforts are needed to bring about a fundamental change in the system of incentives facing civil servants. Any recommendations to address the low pay problem and seek an appropriate form of aid coordination require detailed studies, and are therefore beyond the scope of this report. However, the current study points to the urgent need for the government to seek feasible options to address low pay problems, and for donors and NGOs to cooperate with the government in pursuing this initiative and provide technical support where needed. In considering the options, it should be bourne in mind that timely disbursement of salaries to the provincial and district levels must be ensured. At the same time, the efforts of the government to broaden its revenue base need to be continued in order to afford enhanced civil service pay in the future.

Reorient technical assistance (TA) to focus on capacity building

This recommendation also applies to developing aid coordination in new areas, and to further improving aid coordination in the four cases studied. In Education, Health and TCAP, the government officials who worked with the respective programs reported that technical assistance often does not develop the capacity of government counterparts, even though the Terms of References of technical advisors usually includes capacity building. Some advisors’ primary work has resulted in merely producing official documents as their own outputs without transferring skills to their counterparts. This has been partly a reflection of the overwhelming workload that donor agencies expect technical advisors to accomplish. In Education, the issue of technical assistance is further compounded by the presence of a large number of technical advisors who are not well coordinated, as discussed below.

In order to meet the urgent need to reorient the focus of TA, it is recommended that the government consider developing clear official guidelines for the use of TA personnel, which could be agreed upon with its development partners. It is important that those guidelines articulate monitoring mechanisms of TA practices at the ministerial and/or higher levels. Donors who support government activities through the provision of TA might want to consider supporting the development of those TA guidelines and make sure that transferring skills to government officials, not doing the government's work on its behalf, be the main purpose of technical advisors.

Enhance collaboration among working groups under the CG mechanisms to raise collective concerns and address cross-sectoral problems

This recommendation is concerned with the ways in which cross-sector problems are addressed in partnerships. The delay in PAP disbursements has become a major issue between the government and its development partners. As a result, some donors have had difficulty implementing their programs without the government's matching funds. This is a cross-sectoral problem as MOEYS, MOH and MEF are involved. However, progress has been made in resolving the issue because officials at MOEYS, MOH, and MEF have taken a lead in addressing the problem and development partners have actively supported them. In order to expedite the process, the Fiscal Reform Working Group and Social Development Working Group established the PAP Taskforce and assisted all concerned ministries in identifying the causes of the problem and articulating effective measures to address them. The collaboration of the two Working Groups presents a good example of dynamic partnerships in which working groups under the CG mechanisms work collectively to address cross-sectoral problems.

The roles of existing working groups under the CG mechanisms are being reviewed by the government and its partners. In the review process, the government is recommended to consider developing effective working groups to address cross-sectoral issues such as PAP. It is important to ensure that the process of the review be open, transparent and broadly participatory. Donors might want to participate in the government initiative of the review and consider providing technical inputs when requested.

(ii) Recommendations for the four cases reviewed in this study

The key issues and recommendations specific to the respective cases are summarized in Table 4-2 in Chapter 4. The following priority issues are highlighted below (see Table 4-1 for the list of all key issues and recommendations).

Education SWAP—Better coordination of technical assistance for capacity development of MOEYS officials is needed.

MOEYS and its development partners have recognized that the number of technical advisors has increased to the extent that MOEYS can not fully grasp the overall picture of assistance and therefore the technical advisors need to be better coordinated. Avoiding overlaps of assistance is one issue, but more serious is the role of technical advisors to the ministry. It was reported that advisors’ work has often focused on providing advice to high-level officials and drafting official MOEYS documents, whereas limited emphasis has been put on developing the capacity of the officials who are actually supposed to prepare the official documents. Although the advisors may have needed to play this role in the past, many officials interviewed strongly felt that the advisors’ task should not be to do the work, but to build the capacity of government officials to do the work. MOEYS officials appreciated the contribution of technical assistance in the past, but also stressed that MOEYS and donor partners should make concerted efforts to develop capacity of officials who engage in day-to-day management, in particular of their program/project management as well as report writing skills.

As the first step to providing clarity on the status of technical assistance for MOEYS, ESWG is conducting studies on technical assistance in the education sector. It is recommended that, building on the findings of the studies, MOEYS and development partners discuss and agree on the scope of further work to facilitate better coordination of the use and provision of technical assistance. One action which could be taken immediately is to develop an informal network among technical advisors, which has proved effective in TCAP and Health TB sub-sector.

Health SWIM—More assistance is needed for capacity development to implement various activities under Health Sector Strategic Plan (HSP).

Although the MOH has made a major progress in developing the HSP with support of its partners, the HSP’s implementation remains a major challenge. The need for capacity development to implement the HSP, particularly to plan and monitor program activities, is expanding rapidly at the sub-national levels, as MOH has devolved these functions to provincial and operational district offices, and they are set to devolve further down to hospitals and health centers in 2004. There are also indications that accounting and financial management capacity at local offices needs to be strengthened. Some external partners are already providing technical assistance, and yet the unmet need for capacity building seems to be large. It is critical that the capacity of civil servants keep up with the progress of activities planned under HSP.

It is therefore recommended that the MOH identify the capacity development required for the implementation of HSP for all provinces, and that interested donors then consider providing technical support to fill the gaps identified by MOH -- making sure that their assistance is complementary to ongoing projects.

Local Governance SEILA--Aid coordination at the sub-national level needs to be enhanced further.

Partnerships and aid coordination at the sub-national level are increasingly important as the government expands decentralization and deconcentration policies, and as external assistance is directed to the poor in rural Cambodia under the NPRS. Seila provides a good practice in which provincial level coordination on local development is carried out through District Integration Workshops (DIWs) in all provinces, which coordinate development activities of line departments, commune councils, and projects funded by donors and NGOs to ensure consistency among them.

Building on the experience of Seila DIWs and others, the government might want to review the existing arrangements for aid coordination and consider ways to enhance aid coordination capacity at the sub-national level. A key prerequisite is the adoption of an Organic Law defining the roles and responsibilities of the provincial and district administration, as part of deconcentration policies. It is recommended that donors and NGOs working in provinces participate in the government’s coordination activities and provide technical support for the preparation of the Organic Law. In addition, the capacity of local officials, including commune councilors and clerks, needs to be further strengthened to manage local governance under the new Law.

Public Finance TCAP—Building on TCAP accomplishments, a comprehensive program approach to capacity building is needed for the strengthening of public financial management.

Through TCAP, the MEF has gained experience and capacity in coordinating a wide range of technical assistance activities in public finance reform. At the beginning of the program, institutional arrangements for fund management turned out to be inefficient and caused some delays in disbursement and procurement. However, the problem has been addressed by making the position of Program Manager into full-time to work for project management. Also, the IFAPER by the ADB and World Bank has recently developed a comprehensive action plan in which strengthening public financial management is a key component. As pointed out earlier, the need for strengthening public financial management is urgent in Education, Health and other line ministries, both at the national and the provincial levels. It is recommended that the government pursue the development of a comprehensive program for capacity development of public financial management, building on the accomplishments of TCAP. This program could include the implementation of capacity building at the sub-national levels, in close collaboration with Education, Health and other priority line ministries, and potentially with Seila. Active participation of all development partners providing assistance in this area will be critical.


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