CDC - Second Cambodia Development Cooperation Forum

European Union’s statement on Division of Labour

2nd Cambodia Development Cooperation Forum, Phnom Penh 4-5. December 2008

Presented by Kerstin Henke, Federal Ministry for Economic Cooperation and Development (BMZ), Germany

Excellencies, Ladies and Gentlemen,

The European Union welcomes the opportunity to highlight in this distinguished forum the importance of improved division of labour in development cooperation as a tool to overcome fragmentation of aid, reduce transaction costs, and increase effectiveness of aid. The EU has presented its commitments and progress in improving the division of labour amongst them in an position paper, which was prepared for the CDCF to provide some background and local experiences of the work accomplished so far within the EU member states and the European Commission in Cambodia.

For example, the paper sets out the EU’s vision how to facilitate division of labour in the next years and sets clear targets: Individual EU development partners aim at focusing their active involvement in Cambodia on a maximum of three sectors, the EU (Member States and Commission) will seek to limit the number of active EU partners in any sector to a maximum of 3 based on their comparative advantages and any necessary sector exit will be managed in a responsible way with full participation of the government and other development partners. Also the EU seeks to engage more in delegated cooperation, respectively silent partnerships, to reach it targets. The Position Paper is meant to facilitate the discussion today and in the coming year.

Given the current international and local dynamics for improved aid effectiveness, this is an opportune time to consider taking further steps for an effective division of labour amongst all development partners. Building on the Paris Declaration on Aid Effectiveness of 2005, the Accra Agenda for Action, adopted on 4 September, 2008, unequivocally calls for reducing the costly fragmentation of aid. The Royal Kingdom of Cambodia and the large majority of the development partners present in this country have signed up to this document.

At the country level, the 2008 Aid Effectiveness Report (AER) acknowledges the need to consider a division of labour between development partners and identifies criteria for rationalising cooperation arrangements. In the AER the Royal Government of Cambodia indicates its readiness to set out its vision and to facilitate this process. Development partners to Cambodia are willing to engage in such an exercise and to support it. With more than 30 development partners currently engaged in more than 750 ongoing projects the report builds on the analysis presented in the previous Aid Effectiveness Report 2007 which also highlighted fragmentation of aid as of one of the core challenges for improved effectiveness of international aid to Cambodia.

The spotlight is therefore on Cambodia and its development partners to take initiatives, and show progress in defining ways to overcome fragmentation and rationalize division of labour at the country level. We are convinced that improved division of labour in Cambodia has the potential to tremendously increase the effectiveness of international aid to Cambodia and can unleash new forces on the way to reach the Cambodia Millennium Development Goals. We are encouraged by the Aid Effectiveness Report that there is the intention of the Government to jointly tackle the issue of fragmentation during the coming years as we enter the second term of implementation of the National Strategic Development Plan (NSDP).

The EU is committed to support the Royal Government of Cambodia and in particular CDC as the focal point for aid coordination in executing its primary leadership and ownership for division of labour. To further discuss the lessons learned by the EU, the local relevance of the basic principles for division of labour as derived from the Accra process, and options as well as possible obstacles and capacity constraints for a comprehensive move towards improved division of labour in Cambodia, we suggest to jointly organize a workshop in March/April 2009 to find the right approach for Cambodia.