CAMBODIA     

Medium Term Expenditure Framework: How to Ensure
Budget-Policy Linkages

Second Cambodia Development Cooperation Forum

1. Good Framework for Budget-Policy
Linkages Has Been Established

National Strategy Development Plan/Rectangular Strategy
Growth, Employment, Equity, and Efficiency for Poverty reduction
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Sectoral Development Plan
Socio-economic development priorities (Education, Health, Agriculture, Water resource, Rural development, and physical infrastructure)

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Medium Term Expenditure Framework/Budget Strategy Plan
Multi-years budget plan

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Annual Budget
Single year budgeting

2. Medium Term Expenditure
Framework (MTEF)

• MTEF has been introduced since 2000 and it was first developed for only some key priority ministries.

• MTEF is a top down sectoral policy targets based on key macro indicator targets and is used to guide the annual budget plan.

• Process, accuracy, and usefulness of MTEF still need to be improved

• MTEF preparation process and participants roles and responsibilities should be defined clearly

• MTEF is suffered from inaccurate of macro indicators forecasting

• MTEF is suffered from lack or week of long term sectoral policy of some sectors

• MTEF is only used as a reference document and has not become a guidelines

3. Budget Strategy Plan (BSP)

• BSP has been introduced in 2007 aims at improving budget integration and comprehensiveness as well as serving as a bottom up multi year budgeting.

• BSP is a 3 years rolling budgeting plan which requires all Line Ministries to present both recurrent and capital budget including all external financing from Development Partners.

• BSP is being used by Budget Department as an inputs in preparing budget circulars and developing budget envelop for Ministries.

• Good BSP will improve annual budgeting accuracy, effective and efficient budget allocation, and budget documents

4. MTEF and BSP

• MTEF need to improve for continue to serve better as a top down sectoral envelop targets based on macro indicator targets to guide the annual budgeting plan.

• BSP will continue to improve to serve as a bottom up multi years budget plan based on sectoral and ministerial strategy development plan and annual budget implementation.

• MTEF and BSP will be consolidated and integrated into the budget at the annual budgeting process.

• Good MTEF and BSP will improve budget policy linkages, annual budgeting accuracy, effective and efficient budget allocation, and budget documents.

NSDP Allocations and Annual
Budget (million USD)