Mr. Chairman, Royal highnesses, Excellencies, Distinguished Delegates, Ladies & Gentlemen,

The European Commission wishes to compliment the Royal Government of Cambodia and the World Bank for the excellent arrangements for this Consultative Group Meeting for Cambodia.

The theme of this years CG Meeting, Poverty Reduction and Governance, as well as the titles of the different sessions indicate that the process of national reconstruction has reached a crucial step and highlight a number of priority issues that the Royal Government of Cambodia will have to face, with the assistance and support of its partners.

The European Commission continues to support the people of Cambodia in its great effort to consolidate democracy and achieve prosperity. Moreover, the Commission has recently up­graded its dialogue with the Royal Government of Cambodia, as well as with other donors to Cambodia, through the opening of the EC Delegation in Phnom Penh at the beginning of 2001.

The Commission has also reiterated its willingness to consolidate its co-operation with Cambodia through the recent adoption of the EC-Cambodia Country Strategy Paper and the National Indicative Programme, which outlines our programming of co-operation activities in the priority sectors identified in the Strategy.

€ 68,7 million in grants have indeed been earmarked for Cambodia, over the next three years, 2002-2004, to finance activities in rural development, the social sector and in support of the development of the trade sector. Governance and democratisation are crosscutting sectors that will be mainstreamed in all our activities as well as a supported through specific actions.

The Commission firmly believes that it is crucial, for the Royal Government of Cambodia, to continue-implementing key “pro-poor” policies that have been put forward. The RGC should also revise these policies, if necessary. The quicker the policies are implemented the quicker Cambodia’s poor living conditions will improve. Poverty alleviation is therefore the central focus of the EC development programme in Cambodia

Considering the importance of the rural sector, the major component of our co-operation is devoted to support the efforts to create the conditions for self-sustainable development in rural communities, targeting particularly the Northwestern provinces of Cambodia. The Commission will continue its comprehensive approach to rural development, promoting a number of activities crucial for improving food security and increasing income of the rural communities.

The continuation of multi-annual activities in the sector of rural development will be based on the Commission’s previous record of activities in programmes such as PRASAC but will take into account new development as the decentralisation of decision making to province and commune level.

In line with the Commission’s Communication on Action against Landmines’, the EC will also assist Cambodia, as one of the most seriously mine affected countries in the world, in the implementation of its obligations under the Ottawa Convention. EC support to CMAC mine clearance activities will reinforce the decentralisation of CMAC clearance operations.

The promotion of equitable access to basic social services, such as health and education, in order to contribute to poverty reduction is another priority of EC/Cambodia co-operation, in the framework of the development of Sector Programmes, led by respective Ministries.

The 20 million euro allocated to the education sector will be devoted to programmes which are in full agreement with the policy priorities set out by the Ministry of Education, Youth and Sports in the Education Strategic Plan (ESP) and the Education Sector Support Programme (ESSP).

EC experts are now taking an active part in the preparation for the review of the ESSP later this year.

In the health sector, the EC focus on reproductive health, prevention of HIV/AIDS and of the major communicable diseases, and the need to improve health education and health systems, with a specific focus on the need of guaranteeing that the resources mobilised reach the poorest strata of the population. The EC is also committed to meeting the OECD International Development Goals, where three targets are more directly health related; a reduction of 2/3 of the levels of infant and child mortality, reduction of ¾ in the level of maternal mortality by 2015 and universal access to reproductive health services by 2015.

The EC notes with satisfaction the commitment of the Royal Government of Cambodia to the reform of the national economy, as economic growth and a concomitant stable and enforceable regulatory framework are pre-requisites for the success of poverty alleviation efforts. The possibilities and challenges accompanying the increasing liberalisation of the international trade regime have added urgency to the need of a thorough reform of the trade sector conducive to a positive investment climate.

The EC acknowledges the importance of the inter-link between trade policy and development policy to achieve objectives related to poverty reduction; therefore, trade-related technical assistance to developing countries is a high political and operational priority for our co­operation. € 3 million in grants have been allocated to trade sector development, with the aim of assisting Cambodia in meeting its commitments under AFTA and preparing for the accession to the WTO.

The commitment of the Royal Government of Cambodia to the decentralisation process, and the successful transfer of responsibilities to the local level, will be crucial for the development of the large rural areas of the country. € 10 million of the EC co-operation plan have been allocated in support of the decentralisation process, aimed at improving local democratic participatory mechanisms and local governance.

Referring to the forthcoming National Elections of July 2003, the Commission would like to encourage the Royal Government of Cambodia to pursue the process of revision of the electoral law and to implement all the measures necessary to address the shortcomings observed during the preparation of the 2002 Commune Councils elections. The European Commission will look into possibilities of providing election support for the 2003 National Elections, including in the form of technical assistance, as already requested by the Royal Government of Cambodia.

Last but not least, the Commission has identified Cambodia as one of its focus countries under the European Initiative for Human Rights and Democratisation. The Commission foresees activities, implemented mainly by NGOs, and, whenever appropriate, in partnership with relevant local institutions and international organisations, in the following priority areas: human rights education and training, the legal system and strengthening institutions and conflict prevention and resolution. Particular attention will also be given to gender and children’s rights, and to activities at the commune level.