KEY STRATEGIES AND ACTIONS

4.01  RGC attaches high priority and is firmly and fully committed to national sovereignty, peace and national reconciliation, stability and social order, democracy and protection of human rights, and sustainable development that will accelerate progress, prosperity, harmony, and enhance the living standards and dignity for Cambodians in all walks of life.

4.02  With a clear vision, RGC is committed to the following basic principles for taking the country forward:

• Strict adherence to democracy in governance, where all citizens are able at regular intervals to freely elect their representatives to govern at national and sub-national levels.

• Protection of individual and human rights, including full freedom of expression.

• Maintenance of peace, political stability, rule of law, equity and social order.

• Government at all levels to be fully responsive, responsible, effective, transparent, accountable and predictable.

• Government to ensure macro-economic stability, create and maintain key physical and institutional infrastructure, as well as a conducive climate and a regulatory framework for private sector to operate and flourish.

• Government to provide essential social services for human capital formation and enhancement -- health, education, cultural development --, and create an environment that enables individuals to seek and realize their full potential and contribute to their own well-being and the country's growth.

• Government to ensure sustainable management of nation's environment and natural resources -- forests, fisheries, land, water and bio-diversity -- on which human livelihoods and welfare depend.

4.03  This chapter presents major strategies and actions to implement programmes and efforts to reach the overall goals outlined in Chapter III and to overcome shortcomings listed at the beginning of Chapter II.  The chapter highlights key and major strategies developed through extensive consultations. This chapter provides only a macro overview of strategies and critical actions. It is intended to be a broad guide, not detailed listing of all work being done or to be done by ministries and agencies. More and clearer details could be found in sectoral plans already developed or to be developed soon. It should be noted that many goals to be achieved are essentially quantitative. Qualitative aspects though critical cannot be easily measured but over time could be experienced and would manifest themselves through improvements in various ways.

4.04  Poverty: Given that 90% of all the poor live in rural areas, special attention and targeted inputs and investments are needed in rural areas, especially those not covered by the 1993 survey (and poorer pockets of other areas), to rapidly bring down poverty levels and to reach overall CMDG targets for 2010 and 2015. Since a greater share of the poor are now closer to the poverty line, these targets are not beyond reach. Such special attention will include more and better health care, educational facilities, improved incomes through rural activities (farm and non-farm), improved rural infrastructure and so on. More funds should devolve to these areas through the Commune and Sangkat development fund and other measures. Achievement of progress to reduce poverty, a crosscutting issue, depends on the totality of pro-poor policies and efforts in all other sectors. Accordingly, RGC will ensure that:

• All its sectoral strategies keep in focus positive impact on poverty to reach the goal of bringing poverty index down to 25% by 2010.

• In particular, targeted investments and attention are directed towards underserved people and areas, especially those with high poverty prevalence.

• In addition to broad sectoral and macro-level approaches, and with EDP support, special and innovative grass-root level support schemes of direct benefit to the poor are devised and implemented^.

4.05  With established peace, social order and robust economic growth, Cambodia is at a critical threshold for faster and more equitable growth. The next ten years represent a decade of opportunity for steering the country forward to realise ambitious CMDGs and uplift the poor and vulnerable. RGC is committed to seize this opportunity to consolidate and build on past gains to make a positive impact during the five years of NSDP, 2006-2010. The time has arrived to divert attention from high level studies and surveys to concrete and tangible actions to accelerate progress in the lives of Cambodian people. It is time that significant gains are achieved at the grass roots level where it matters most to the ordinary citizen and for speedy reduction of poverty. Accordingly, RGC is committed to pursue strategies and actions that will:

• Factor poverty reduction and gender equity concerns in all activities.

• Ensure speedy reforms in all sectors, which will yield long-term benefits, however painful they may be in the short-term.

• Foster and facilitate equitable and spatially and sectorally well spread, in depth, robust and sustained macro-economic growth that readily provides opportunities and benefits to one and all.

• Significantly increase "real investments" for growth such as in infrastructure (urban, rural and national), productive sectors like agriculture and industries, and in human development (health, education).

• Target the most needy and least served people, including those with disabilities and indigenous people, and areas to help rapidly reduce poverty.

• Maintain a judicious balance between top-down (macro level reforms) and bottom-up (grass root) approaches.

• Focus on well tried, low-cost activities with potentially high-returns at the grass roots level where speedy changes are possible and will have a profound and positive impact, and/or that will directly benefit the poor.

• Optimise factor productivity -- capital, labour, land and natural resources, inputs -- in all activities.

• Promote adaptation and use of science and technology.

• Rely as much as possible on human labour for all construction work, to boost household incomes, especially in rural areas.

• Stress building of institutional and human capacity in all sectors and at all levels to create and sustain a critical mass of expertise and human capital.

• Evolve mechanisms to ensure as much funds as possible to be routed through sub-national levels for implementation of development activities.

4.06  These factors are central to and will influence and govern all the strategies outlined in this chapter. All of them in one way or the other impact on the achievement of goals and targets listed at Chapter III (Table 3.2). These factors will be taken into account in preparing new sectoral strategies or plans or in reviewing ongoing ones and activities. TWGs could play a useful role in the process.

4.07 The Rectangular Strategy (RS) "for growth, employment, equity and efficiency", provides a clear and focused framework to move the country forward on the path to fast socio-economic development. Goals and targets were listed in Table 3.2 of Chapter III on the basis of priorities for alleviation of poverty and for enhancing economic growth. Implementation of various strategies and actions under NSDP will be organised within the RS framework. These are discussed below along flow of Rectangular Strategy, starting with Governance. For each side of each rectangle as well as other crosscutting and generic subjects not specifically included in the rectangles, the proposed key strategies and anticipated actions for the next five years, 2006-2010, are presented and considered.

4.08  The Rectangular Strategy contains at its core Good Governance which will be promoted and pursued in an encircling Environment for its successful implementation, for the purpose of achieving speedy socio-economic progress in various priority areas listed under four other "growth" rectangles. There are therefore six (6) aspects of the strategy. The rest of this chapter is organised along the flow of RS.

Governance

4.09   Good governance is the most important pre-condition for achieving sustainable socio-economic development with equity, equal opportunity and social justice. It needs wide participation, sharing of information, openness and transparency, accountability, equality, inclusiveness and strict rule of law. Accordingly, Governance covers four reform areas, viz., (a) fighting corruption, (b) legal and judicial reforms, (c) public administration reform including decentralization and deconcentration, and (d) reform of the armed forces, especially demobilization.

4.10   RGC's Governance Action Plan (GAP I) approved in 2001, to promote multi- and cross-sectoral governance reforms is the main framework for various actions on this front. On the basis of experience gained, GAP II, 2005-2008 is being finalised. 

4.11  Fighting Corruption: Corruption is debilitating and inimical to orderly growth. It makes the playing field for economic factors and actors unpredictable and uneven and deters much needed domestic and foreign investment. It increases costs, renders Cambodia less competitive and makes the country lose important opportunities for growth. A variety of actions, in many areas including reforms and behavioural changes, are needed to combat corruption and instil a "culture of service" whereby public administration acts truly as an instrument of efficient, effective, speedy and impartial service to all Cambodians. The priority goals are:

• Reduce corruption significantly by 2010; and

• Strengthen education, publication and dissemination of legal and related material.

4.12  The strategy for drastic reduction and eventual elimination of corruption will follow a three-pronged approach -- enforcement, prevention and public support/public education. RGC is determined to take concrete actions that strike at the root causes of corruption by ensuring predictability, enhanced transparency and clear accountability in all its actions. Various proposed priority actions include:

• Fast track passing of the comprehensive Anti-Corruption Law, and make it conform to best international practices.

• Build capacity of the concerned institutions to effectively manage and enforce the Anti-Corruption Law, including strengthening inspection tasks.

• Set up an independent and effective body to fight corruption.

• Ensure the strictest and total enforcement of the law sparing no one from its provisions, however highly placed.

• Strictly adhere to competitive public bidding and transparency in all contracts, leases or disposal of state assets.

• Make audit processes and public procurement more efficient and effective to address accountability and transparency.

• Continue the already commenced concrete efforts to incrementally increase the low level of remuneration of civil servants so that the temptation for corruption could be reduced.

• Streamline the delivery of public services to contain opportunities for corruption particularly in areas related to trade, commerce and investment.

• Establish a Citizens' Bureau as a watchdog mechanism to contain corruption.

• Develop and enforce codes of ethics for the public sector.

• Continue to actively participate in the international arena for fighting corruption as was done in joining the Anti-Corruption Action Plan for Asia and the Pacific.

• Prevent and avoid any "waste" of public assets or resources, including incurring higher than necessary cost of production of goods and delivery of services; ensure in this regard that global competitive advantages are fully availed of for investments, avoiding those that are less competitive.

4.13  Legal and Judicial Reforms: With considerable progress so far, it is evident that the RGC is committed to accelerate legal and judicial reforms which are clearly considered as crucial elements in its Political Platform. Some essential regulations have been prepared and adopted to underpin the socio-economic development process through a trusted and respected (in-country and internationally) judiciary. In the efforts to build this confidence, the RGC has endorsed a vision and the Legal and Judicial Reform Strategy (June 2003) including seven strategic objectives. The Plan of Action for implementing that strategy (29 April 2005) include major strategies and actions:     

• Establish and pass basic laws and codes relating to judicial system, viz. law on the establishment of courts, law on the statute for judges and prosecutors, law amending the law on the establishment and functioning of Supreme Council of Magistracy, civil and penal codes and procedures, administrative codes and other regulations in order to ensure the independency of prosecution.

• Establish transparent procedures for preparing laws; carry out programmes to increase community awareness about rights and freedom; and establish office for protecting citizen rights.

• Ensure the sustainability of publishing and disseminating the Royal Gazette and court verdicts; establish a trilingual law lexicon; and strengthen legal aid.

• Establish Special Courts as needed such as the Commercial Tribunal, the Labour Tribunal, the Juvenile Tribunal and the Administrative Tribunal.

• Extend the model of the pilot court, already established at Kandal Province; provide the court with adequate and up-to-date facilities; and establish information office at each court.

• Establish code of ethics for judges, prosecutors, and judicial officials.

• Establish and strengthen mechanisms for conflict resolution outside of the court system.

4.14    Public Administration Reform: The reform of the Administration is a core governance strategy. The goal is to make Administration a potent instrument of public policy and make it more effective, efficient, neutral, transparent and responsive, to serve people better. With the foundations in place, the task ahead is to deepen and broaden reform processes to target poverty reduction while being sustainable. Building on achievements to date, the NPAR seeks to develop the capacity of the Administration to serve people better where and when needed. The following highlight the scope of the reform underway:

• The overall size of the Civil Service will essentially stabilise at current levels, but its composition will change significantly in favour of priority sectors and the front lines closer to the people outside major centres.

• Workforce management and control mechanisms will be strengthened to marshal human resources to priority needs.

• The remuneration of civil servants will increase gradually by 10 to 15% per year in line with means available to the Government.

• Public services will become less bureaucratic, more effective, accessible and transparent through implementing a mix of tools such as One Window offices.

• The capacity of people and institutions within the Administration will be developed urgently to uphold principles of good governance and to improve performance.

• The gradual automation of management and service delivery processes through information technology will be continued to enhance the quality of transparency of public services.

4.15    Priority actions envisaged include:

• Continue to increase civil service salaries according to budget availability.

• Articulate and implement a policy on public services and their delivery.

• Further develop and implement the allowances system to improve performance and reward merit.

• Enhance the control and management of the Civil Service through the strengthening of merit based HRM processes and practices and the further upgrading of the HRMS.

• Implement strategies and programmes for the redeployment of staff according to priority needs.

• Develop human and institutional capacity through the promulgation of a framework to manage capacity development, a more effective management of HRD including the implementation of an HRD master plan, and enhancing the value of training.

• Implement the PMGs programme as an innovative way to reward performance and merit and phase out salary supplementation practices.

4.16  Decentralization and Deconcentration (D & D):  Crucial to strengthening of democracy at the grass roots level is participatory local development in improving and delivering as many public services as are possible at the commune level. A key priority is building local management capacity and providing reasonable level of financial resources. RGC has recently introduced a pilot scheme for a "one window" service delivery in two districts, to make available some relevant administrative services to people and the private sector.

4.17  Grass root level development can best proceed by identification and prioritisation of local needs at the local level. As such, based on the overall goals outlined in the NSDP (Chapter III), each commune, district and province would prioritise their own needs and try to achieve them using increasing funds made available to them through block grants and other forms such as tax sharing and own revenues generated through local level taxes.

4.18  Following the major step taken by developing an overall framework for D&D in early 2005, the main strategies and actions proposed are:

• Draft and pass Organic Laws to clearly delineate the basic concepts of subsidiarity in order to provide clear guidelines for the devolution process and to specify functions, roles and responsibilities at various levels of the administration.

• Further delegate increased responsibilities and make available development and operational funds from line ministries to the provincial and other sub-national levels in accordance with the organic laws and related regulations and other amended rules.

• Build upon the considerable progress already made through individual initiatives of line ministries including the Priority Action Programme (PAP) ministries -- Education, Health, Agriculture and Rural Development -- as well as Ministry of Land Management, Urban Planning and Construction, to better define a framework under which deconcentration of services can develop more coherently.

• Systemise and better institutionalise the allocation mechanism to ensure full and timely transfer of funds and strengthen the "block grant" system (e.g. already developed Commune/Sangkat Fund) from the national budget to the commune councils, and develop block grant and sectoral allocations for provincial and other sub-national levels to ensure accountability and transparency of revenue collection and expenditures to the citizens and other stakeholders. 

• Increase and target provision of such funds on a priority basis particularly to remote and other regions where poverty levels are high, to help meet in a significant way local needs for infrastructure and other development.

• Explore appropriate avenues for provincial and other sub-national levels including communes/sangkats to develop their own resources including revenue generation from taxes to be collected at local levels, service charges and tax sharing for local budgets.

• Steadily implement a commune decentralization accounting system (CDAS) in provincial treasuries.

• Build up institutional capacity at all sub-national levels.

4.19  Armed Forces Reform and Demobilization:  The White Paper of National Defence articulates policies and programmes to be pursued, including distribution of social concession lands to demobilized landless soldiers who need land for their residence and/or for family farming in conformity with the Sub-decree on Social Land Concessions. Equally, efforts will continue to reform, build, train and strengthen the national police to become a truly professional force, equipped with modern technology, and capable of discharging its responsibilities for maintaining internal security, social order and harmony, and to protect people's lives and property. In performing its duties the police force will always act impartially and efficiently with due respect for human dignity and rights.

Environment for the Implementation of the Rectangular Strategy

4.20   Four aspects of this enveloping circle are: Peace, political stability and social order; Integration of Cambodia into the region and the world; Partnership in development; and, Favourable macro-economic and financial management. In addition, some critical crosscutting aspects are also considered as part of the overall environment for progress.

4.21  Peace, political stability and social order: constitute the fundamental basis on which any sustainable progress can take place. It is clear that the post-conflict reconciliation, democracy, social order and reduction in crime achieved in the past through dialogue and mutual adjustments are precious and need to be vigilantly safeguarded and enhanced. These are essential not only for progress of Cambodia but also to the fair image of the country all over the world. No efforts will be spared to ensure that they continue to be maintained in a dynamic and growing manner.

4.22  A major aspect of maintaining political stability and harmony is conduct of five-yearly general elections for various bodies of the State, viz., Senate (due in 2006), National Assembly (due in 2008), and Commune Councils (due in 2007). Since government budget alone cannot meet the heavy expenditure on these elections, external support will be needed as before.

4.23  Integration of Cambodia into the region and the world: By taking active partnership role in all aspects of ASEAN, attending and contributing to various region level initiatives and conferences, and by joining WTO (2004), Cambodia is well on the way to achieving this goal. Much more however has to happen to deepen, and benefit from, the integration process. The goal is to ensure that efforts for integration of the Cambodian economy into the regional and global economy pay due attention to benefiting the poor. In this regard, RGC will:

• Pursue full partnership in the implementation of various elements of the Initiative for ASEAN Integration, and in depth participation in the Greater Mekong Sub-region Program. In particular, the efforts would be to synergise national and regional activities consistent with the ASEAN Vision 2020, the Bali Concord II, the Vientiane Action Programme (VAP) for the period 2004-2010 including all plans of actions.

• Actively pursue and increase the number of free and favourable trade agreements with other countries to enhance access of Cambodian products and services to overseas markets.

• Attract investment, instil and upgrade skills, create employment and accelerate economic progress that will have a pro-poor bias.

• Adhere to the obligations and commitments of Cambodia as a member of WTO in particular to action programmes endorsed by the Cabinet Meeting of 27 February 2004 and assess the impact of WTO accession on poverty reduction targeting especially the agriculture sector, including impact on vulnerable groups, particularly women who are a predominant part of the informal sector.

4.24   Partnership in development: There are three (3) basic aspects of partnership between RGC and other stakeholders, viz., (i) with civil society, (ii) with the private sector business and investor community, and (iii) with external development partners. The goal is to strengthen partnerships with all the stakeholders to improve effective and coordinated use of resources in order to achieve equitable socio-economic development.

4.25   Ongoing efforts will be continued and strengthened to involve and associate all sections of the civil society in all appropriate aspects of RGC's planning and decision-making processes, and to make civil society an effective partner in the development efforts. Already, many NGOs, both national and international, are involved in socio-economic development as well as in promotion of democracy and human rights. A Law on Non-Government Organizations will be formulated soon with broad consultation with all relevant institutions and organizations.

4.26  The crucial role of the private sector as the locomotive and driving force for investments and economic growth cannot be over-emphasised. Attaching a high priority to facilitate private sector operations, several mechanisms have been put in place and efforts will continue to strengthen and deepen harmonious relations with the private sector, based on strict adherence to laws and regulations and focused on development priorities.

4.27  Relations with external development partners: RGC gratefully acknowledges that generous levels of financial and technical assistance received from EDPs since 1993 have in a large measure helped Cambodia's impressive progress. It is clear that as an LDC the country will continue to need such support for quite a length of time in the future as it moves forward towards its long-term vision. Various forms of cooperation with EDPs have evolved in the past, including annual aid-mobilization meetings (now CG meetings), sector level consultations, in-country periodic consultations and more recently, the formation of government-EDP joint technical working groups (TWGs) for various thematic and sectoral areas and an overarching Government-Donor Coordination Committee, which meets once every quarter to assess progress and guide future directions. All these mechanisms will continue to be strengthened to achieve effective and regular consultations and partnership through increasing RGC ownership and leadership. Meeting quarterly on a regular basis, or as often as necessary, TWGs will have an important role in assisting RGC to develop new sectoral plans, review ongoing ones, harmonise and coordinate external assistance to programmes and projects as well as to monitor their implementation and progress.

4.28  It is noted that a great deal of past resources spent directly by external development partners have been devoted to technical assistance and conducting various high level studies and surveys. While these have no doubt had their use, it is time now to ensure that resources are redirected to make available "additional funds" for concrete and tangible actions to accelerate progress in the lives of Cambodian people.

4.29  On a global level, through OECD/DAC initiatives, international compacts have been proclaimed through high level Rome (2003) and Paris (2005) declarations emphasizing that for aid-effectiveness it is essential to encourage and abide by the full ownership and leadership of the recipient countries in regard to formulation and implementation of development efforts. Furthermore, it has been agreed that EDPs would align their development assistance policies, priorities and programmes as well as harmonize their procedures to those of the host countries. Cambodia is one of the pilot countries for these efforts. Through Monterray Declaration of 2002 it was also agreed that developed countries would increase development assistance significantly.

4.30  A Strategic Framework for Development Cooperation Management is now being finalised to re-confirm and clarify RGC's policies and procedures, which would govern and guide both its relations with external development partners and assign roles and responsibilities within the government. This would further streamline processes to improve mutual cooperation between RGC and EDPs. Through various cooperation mechanisms outlined in that document, EDPs would be encouraged to move increasingly away from stand alone as well as TA projects and to start providing support through Sector-Wide Approaches, aiming eventually to providing largest proportion of resources through budget support as the preferred mode, conditioned on agreed upon reforms and/or sectoral progress.

4.31  Favourable macro-economic and financial environment:  The goal is to ensure macro-economic progress and financial environment to achieve more diverse and pro-poor economic growth. Already, sustained, robust and spatially and sectorally well-spread macro-economic growth and prudent financial management form the centrepiece of all socio-economic programmes. RGC has had success in macro-economic management in the past and was able to withstand both external shocks like those caused by East Asia crisis of 1997 as well as internal political uncertainties from time to time, in 1997 and during 2003-2004. Based on this experience RGC is confident that, with vigilance and timely actions, it would be able to successfully steer the situation in the future. The strategies and actions during NSDP are to:

• Ensure steady GDP growth of 6% per year.

• Maintain external sector and exchange rate stability.

• Contain inflation at under 5%.

• Mobilise more domestic revenues. 

• Directly provide, and encourage private sector, investments in the rural sector, which will also broaden the base of economic activities.

• Pursue progressive and strict budgetary policies both on the revenue and expenditure sides.

• Through strict implementation of the Law on Taxation and other measures, enhance collection of revenues, tax and non-tax, broadening the tax base, and root out the "culture of tax waiver and exemptions".

• Vigorously fight against smuggling through international borders and ensure collection of arrears.

• Target expenditure to priority sectors of development and hitherto underserved areas.

• Strengthen and strictly implement laws relating to public procurement.

• Conduct regular audit, internal and external, of revenue and expenditure sides of the budget including MEF and all ministries.

• Manage state assets including tangible and intangible properties, as well as state enterprises and joint ventures in a transparent and efficient manner both to safeguard the interests of the state and to enhance steady flow of revenues.

• Follow clear, transparent, public bidding procedures in disposal or lease of state property or rights, indeed in award of all state contracts.

• Maintain full vigil through MEF on signing of contracts with private companies.

4.32  A Public Financial Management Reform Program (PFM) is already in place and being implemented. A rolling (moving ahead one year, every year) five-year Medium-Term Fiscal and Expenditure Framework (MTF/EF) seeks to project income and expenditure and is followed in implementation. For ensuring increasing allocations and timely disbursements to priority pro-poor sectors, mechanisms will be set in place through which predictable, assured and increasing annual budgetary amounts are made available to Agriculture, Rural Development, Health and Education.

4.33  Led by the National Bank of Cambodia (NBC) and the MEF, the Financial Sector plays a crucial role in macro-economic stability and is vital for the pace and direction of economic growth. A well-functioning financial sector can break down the limitations of self-financing, and mobilise idle financial resources for productive investment. To link up saving, investment and economic growth, the financial sector needs to go hand in hand with private sector development and governance reforms, forming three pillars to support RGC's vision for generating and sustaining growth, which in turn is a major means to reduce poverty. The Financial Sector Blueprint (FSB), 2001-2010, adopted in 2001, is the guiding tool for policies and programmes in this sector and envisages the development of a sound, market-based financial system by 2010, to enhance resource mobilisation for sustainable economic growth. FSB, now under implementation, focuses comprehensively on various elements and aspects of the finance sector such as:

• A competitive, integrated and efficient banking system that is well regulated and supervised to generate finances for private sector investment and growth.

• A viable, pro-poor and effective rural finance system for providing affordable and accessible financial services for the poor to enhance rural income and reduce poverty.

• An insurance sector that protects businesses and individuals from unforeseen adverse events and a pension system that provides a secure retirement, both also providing capital for investment.

• An efficient and transparent capital market with a critical mass of issuers that mobilises funds for long-term investment.

• A money market that enables inter-bank transactions and provides banks, companies, and individuals with the means for effective liquidity management.

• Creation of Non-Bank Financial Institutions such as leasing companies, finance companies, investment companies, venture capital companies and development financial institutions.

• Put in place an accounting and legal infrastructure to ensure good corporate governance and transparency.

Table 4.1: Key Macroeconomic Forecasts
(In percent of GDP unless otherwise indicated)

4.34   As the figures in Table 4.1 show, the macroeconomic outlook for the next few years seems stable and promising. The mainly export-oriented garment industry, now the driving force in the economy, is likely to remain robust for some more years, but its rate of growth may decline, although the end of the quota system in early 2005 has not had any significant impact on the rate of increase.  Tourism has also contributed robustly to the economy and is expected to continue to do so, as will the trend of high increase in Construction. But there is need to broaden and deepen the base, especially by promoting agricultural growth that will also at once help reduce poverty. Accelerating much needed reforms in governance would help in attracting more investments, both domestically and from outside.

4.35  Some important factors that might impinge adversely on the economy are: continuing high oil prices; threats of terrorism any where in the world that would disturb international political climate and destabilize predictable economic environment; decrease in flow of ODA due to extraneous causes; unexpected outbreak of epidemics such as those that may arise from spread of "avian flu"; and, severe changes in weather affecting agricultural production.

4.36  With all the reforms already on way as well as those being undertaken and the further steps planned under the NSDP, RGC is confident that the forecasts shown above could materialize. Some portion of the national budget revenues in the past has come from 'budgetary' or 'program' support mainly from multi-lateral financial institutions, provided against specific reform and other actions. (In 2005, this is estimated at about CR 120 billion or US$ 29 million representing 0.5% of GDP and 5% of total domestic budget revenue). RGC expects that such support would continue during the NSDP as well.

4.37  Religious and cultural issues: The Royal Government's emblem accords highest status to "Nation, Religion and King". Religious beliefs, faith, family values and the rich and vibrant culture which has sustained them, during past millennia, have kept the social fabric in tact and growing in strength, adjusting to changing times and influences. They are the bedrock for building, strengthening, and maintaining the very vital "social capital" that no amount of economic development can alone create or sustain. They are thus an overriding issue cutting across all aspects of Cambodian life everywhere. Though these suffered a severe setback and rupture during the genocidal regime in 1975-79, they have revived robustly since then. RGC accords high priority to preserving and enhancing the country's rich and unique cultural heritage both to starch and strengthen the social fabric and also to attract "cultural tourists" to observe and admire Cambodia's past and present culture. RGC will provide adequate funds for this purpose.        

Enhancement of Agricultural Sector 

4.38   The four sides of this rectangle are: improving and diversifying agricultural sector (including nutrition and rural development); land reform and mine clearance; fisheries reform, and, forestry reform.

4.39   Improving and diversifying agricultural sector:  This sector embraces crops -- predominantly rice --, plantations, livestock and poultry. It is well recognized that, with immense but as yet unrealised potential both for boosting GDP and for uplifting the poor especially in the rural areas, quickest and high returns are possible at fairly low costs, especially in crops and more particularly in rice production and by diversification into cash and other crops. With women constituting the majority of the labour force, improvements in this sector would benefit women directly. The priority goals in this sector are enhancement of: food security, productivity and diversification; and, market access for agricultural products.

Table 4.2: Targets set for 2010 for the Agriculture Sector

4.40  A comprehensive Strategy for the Agricultural Sector as a whole is still to be developed. Through close cooperation among all concerned ministries and agencies, an "Agriculture and Water Resources Strategy" will be developed during 2006, which will take into account all ongoing sub-sectoral plans in this sector and include, inter alia, analysis of, solutions to, and strategies for:

• Agricultural land management issues: pros and cons of economies of scale and social dimensions and factors relating to small farm holders, farmers cooperatives, contract farming, large scale land concessions -- all in the context of increasing production, productivity and diversification, and for ensuring equity and social justice.

• Production of High Yielding Varieties (for example of rice) developed elsewhere, especially in nearby countries with similar agro-climatic conditions versus large scale investment in agricultural research to develop new varieties in Cambodia.

• Increased production of rice for export in preference or in addition to production of crops with special 'niche' value.

• Increased production of crops like fruits and vegetables for which Cambodia is currently heavily dependent on imports.

• Clear goals, specific targets and proposals for achieving increased crop production through: cropping systems that make the best use of limited water resources and reduce risk to farmers from year-to-year variations caused by natural occurrences; and, best crops to be grown every season taking into account soil conditions and other factors, export potential, improvements in irrigation, etc.

4.41  In the meantime, till a full-fledged Agricultural Strategy is in place, RGC will pursue action for enhancement on the following fronts:

• Food Security, productivity and diversification.

• Improve water management for agricultural and farm-scale aquaculture.

• Improve and extend agricultural extension services.

• Better market access for agricultural products, especially from remote areas.

• Foster a conducive climate for SMEs in the sector.

• Strengthen Institutional and legislative framework.

4.42  Given the low productivity in all crops due in part to poor soil conditions, the most important challenges in regard to crop production are:

• Identify through soil surveys and other means the best crops that could be grown in any given area to derive the maximum returns and benefits.