2^nd Cambodia Development Cooperation Forum

Session I
Comments on the NSDP Mid-Term Review and progress towards a Medium Term Expenditure Framework

Presentation on behalf of Development Partners

by Mr Douglas Broderick, UN Resident Coordinator
Mr Tim Conway, Senior Poverty Specialist, World Bank

progress in outcomes and
capacity development

the Mid-Term Review summarises good progress towards
NSDP / CMDG targets for development outcomes:

• 2007: fourth year of double-digit growth

• between 2004 and 2007:

• poverty fell from 35% to 30%
• food security improved, child malnutrition fell
• school enrolment of children from poorest families is catching up with wealthier groups

Results driven by

• sustained economic growth

• progress in service delivery

• underpinned by improvements in public spending

• Including draft Medium Term Expenditure Framework (MTEF) 2009 – 2011

challenges emerging over the last year

the context for Cambodia’s development is changing:

• Inflation (peaked at 25% in May 2008)
• Recession in US and Europe (reduced demand for Cambodian garment exports, effects on employment)
• Tourism slowing
• Uncertainty over future investment flows (particularly in real estate)

inflation and global crisis will slow growth

responding effectively to these challenges
calls for integrated national systems

• progress in recent years in 3 key areas:

• Goal setting and strategic planning (NSDP defines medium term goals and priorities)

• Revenue generation and public spending (Public Financial Management Reform Program )

• Aid effectiveness (Harmonization and Alignment agenda improves management of Official Development Aid in support to national goals and systems)

Goal:
all available resources (domestic and external) are
directed effectively to national development priorities

Bringing these 3 processes together
– a challenge and an opportunity

To respond to challenges need coordination between:

• MoP (prepares and monitors the NSDP)

• MEF (prepares revenue forecasts, the budget and MTEF)

• CDC (provides guidance to development partners on aligning allocation and modality of assistance to NSDP and MTEF)

• Line Ministries (prepare strategies and Budget Strategic Plans in iteration with NSDP, MTEF and budget)

Supporting next steps:

• improve revenue collection

• use budget and MTEF to direct public spending to goals

• strengthen PFM systems to ensure disbursement and expenditure follow allocations in budget and MTEF
   

Key actions to build the
foundations for integration

MEF

• Bring together capital and recurrent spending in a comprehensive MTEF

• Move from incremental to policy- & results-based budgeting

• Upgrade the MEF Budget Office role in budget management

MOP

• Coordinate push to integrate sector strategies with NSDP

• Strengthen NSDP monitoring and evaluation, as a guide to policy formulation and implementation

CDC / CRDB

• Lead policy dialogue with development partners on aligning external assistance with NSDP priorities and MTEF

Development partners are committed to supporting a Government-led process

• To do so effectively, we would welcome

• Clarification on the relationship between Rectangular Strategy, NSDP (now extended) and sector strategies

• Guidance on the timeline for moving from a draft MTEF to a finalised MTEF and implementation

• An outline of the process for preparing comprehensive sectoral Budget Strategic Plans (which include ODA)

END