114.     Since the last CG Meeting for Cambodia held in December 2004 there have been significant developments in both the international arena and within Cambodia to address the aid effectiveness issues. This section presents the highlights of progress that has been made since the last CG

Building Partnerships to
Enhance ODA Effectiveness

1.     Progress since the Last CG Meeting
2.     Challenges & the Way Forward

meeting, the challenges that both the Royal Government and development partners need to address in order to enhance aid effectiveness, and outlines some priorities to move forward.


115.   In the international arena, the Second High Level Forum meeting was held on 28 February - 2 March 2005 in Paris to review progress in implementing the Rome Declaration's commitments. The Royal Government presented "Cambodia's Report on Progress toward Enhanced Aid Effectiveness" at the Forum.  At the close of this meeting, the joint declaration -- issued by Ministers of developed and developing countries responsible for promoting development and Heads of multilateral and bilateral development institutions -- has set new standards for both developed and developing countries to address the aid effectiveness issues. The Paris Declaration's commitments include far-reaching and monitorable actions to reform the ways in which aid is delivered and managed.

116.   Since the Paris Declaration, the OECD/DAC Working Party on Aid Effectiveness has been working on finalizing indicators and developing a framework for monitoring progress on the implementation of the Paris Declaration. In September 2005, the Working Party established a Joint Venture on Monitoring Paris Declaration that, for the first time, will be co-chaired by a partner (Vietnam) and a donor country (UK), and will be supported by Austria, Cambodia, Canada, European Commission, France, Germany, Ghana, Mali, Nicaragua, Norway, Senegal, South Africa, UNDP, United States and World Bank. The participation of partner countries in this monitoring work has also been broadened and it will now include 23 partner countries and 23 bilateral donors and several multilateral institutions. This Joint Venture has been tasked to prepare two progress reports on the implementation of the Paris Declaration's commitments before the Third High Level Forum that is scheduled to be held in Ghana in 2008.  Work on preparing the first progress report will be carried out in 2006. Cambodia is one of the six partner countries where the field testing of the survey instruments for this monitoring round will be carried out in early 2006.

117.  Within the country, in 2005, the Royal Government in close collaboration with development partners has made significant progress in a number of areas that include:

  • Putting-in-place the new government-donors coordination mechanism that has enabled the Royal Government to monitor progress, on a quarterly basis, on the implementation of ODA supported activities and in achieving the targets of the joint monitoring indicators agreed at the last CG meeting.

  • Implementation of the RGC's Action Plan on Harmonization and Alignment.

  • Preparation of RGC's Strategic Framework for Development Cooperation Management.

  • Preparation of National Operational Guidelines for grant assistance and the Standard Operating Procedures for loan assistance.

  • Support to senior officials in ministries and agencies to take real ownership of development cooperation activities.

  • Development and implementation of a CDC/CRDB ODA Disbursements website.

1.1    New Government Donors Coordination Mechanism

118.  After extensive consultations with development partners in 2003 and 2004, a new government-donors coordination mechanism was put in place in 2005. It includes: (i) 18 sector/thematic Joint (government and donor) Technical Working Groups (TWGs); and (ii) a high level Government-Donor Coordination Committee (GDCC) to ensure coordination among the 18 joint TWGs, and to provide policy guidance, to set priorities, and to propose measures to solve problems raised by joint TWGs. At the Pre-CG Meeting held on 10 September 2004, Samdech Hun Sen, the Prime Minister has endorsed this proposal and appointed H.E. Keat Chhon, Senior Minister, Minister of Economy and Finance and the First Vice Chairman of the CDC, to be the chairman of the GDCC.  Its membership includes Ministers or heads of government agencies, Ambassadors or heads of diplomatic missions, and heads of multilateral institutions. The Secretary General of the Cambodian Rehabilitation and Development Board at CDC (CDC/CRDB) is also the Secretary General of GDCC. The GDCC is assisted by a Secretariat that is located within the CDC/CRDB. The role of the Secretariat is to liaise with the joint TWGs, report to the GDCC on progress made by TWGs in implementing their Action Plan and to achieve the targets of the Joint Monitoring Indicators (JMIs) agreed to at the CG meetings. The GDCC has met quarterly in 2005. The Secretariat of GDCC has prepared quarterly progress reports that outlined the issues and challenges in implementing TWGs Action Plans and progress made toward achieving the JMIs for GDCC consideration and decision making. The formation of the GDCC has enabled both the Royal Government and the development partners to jointly review progress for the first time on a quarterly basis and to take corrective actions to achieve the targets of the Joint Monitoring Indications agreed at the last CG meeting. 

119.  This joint TWGs and  GDCC mechanism represents a fundamental change in the institutional set up for planning, managing and monitoring progress on the implementation of development assistance to improve ODA effectiveness. Ensuring that this mechanism contributes to improving the process of ODA mobilization, allocation and utilization leading to improved aid effectiveness is a very high priority of the Government.

120.   The basic principles that were agreed to by the Royal Government and the development partners for establishing the Joint TWGs at the sector/thematic level and have to a large extent been followed include:

First, to strengthen the ownership and leadership of the Royal Government, the joint TWGs are being lead by the responsible ministry or agency and include members from other concerned ministries and the development partners. On the development partners' side, a lead donor facilitator or facilitators has/have been appointed by development partners to ensure donor-donor coordination.

Second, almost all TWGs have prepared their Terms of References (TORs). However, to ensure consistency across TWGs it was agreed that the TORs of each TWg will include the following basic generic elements:

  1. Each TWG shall jointly prepare detailed strategies or policies for the sector/thematic area that is being dealt with by the TWG, if these had not been developed so far, ensuring that these strategies or policies are consistent with the Rectangular Strategy. For sector/thematic area where these have already been developed, the strategies or policies should be revised, if necessary.

  2. After the strategies or policies have been prepared, each TWG shall develop an Action Plan and identify priorities and modalities of support for the implementation of the TWG Action Plan. The Action Plan shall be considered to be a joint document of the Royal Government and the donor community for monitoring progress by the Working Group.

  3. Each TWG shall be responsible for mobilizing resources needed for the implementation of the agreed TWG Action Plan. If the resources are not enough, both the Government and the donors shall work together to re-prioritize their activities in line with the available resources.

  4. Each TWG shall jointly monitor progress against benchmarks that have been set forth to increase aid effectiveness and to achieve the strategic objectives laid out in the Rectangular Strategy and Cambodia's Millennium Development Goals.

121.   Overall, the TWGs have made steady progress in 2005. Some have functioned better than others. The year 2005 has been a year of learning-by-doing for both ministries/agencies, as well as donor members of the TWGs.  For the GDCC meeting in December 2005, the Secretariat had attempted to collect information from TWGs on the estimate of financial resources that each TWG had needed to implement its Action Plan for 2005 and the amount of resources that it was able to mobilize. A major finding of this survey was that very few TWGs had prepared estimates of resources that they needed to implement their Action Plans for 2005. In its report to the GDCC, the Secretariat of GDCC had noted that TWG’s that had linked their activities and identified the resources needed to implement these activities had performed better than those that did not establish these linkages. It also noted that in areas where there was clear linkage between planned activities and the resources needed to implement the activities -- significantly better progress was made than in those areas where this linkage was either weak, missing or there was lack of ownership by concerned institutions. There is a need for TWG’s to pay special attention to this area. Because of limited budget resources, ODA is the major source for financing of RGC’s development programs. The efficient allocation and utilization of these ODA resources to meet RGC’s development priorities in an environment of mutual accountability is, therefore, of critical importance for the Royal Government.

122.  In this phase of learning-by-doing an important lesson learned by the TWGs is to be more realistic about setting the time frames for the completion of planned activities. It is an important lesson learned and the Royal Government urges all members of the TWGs to set realistic time frames by taking into account the existing capacity of the concerned institutions for carrying out the required tasks and the complexities of the processes involved.

1.2    Implementation of the RGC's Action Plan on Harmonization and Alignment

123.  The Royal Government’s Action Plan on Harmonization and Alignment, that was prepared through an extensive consultative process involving both ministries/agencies and development partners, was endorsed by the Council of Ministers on 19 November 2004. The Royal Government and 12 development partners of Cambodia who showed a willingness to support the implementation of RGC’s Action Plan on Harmonization and Alignment also signed a Declaration on 2 December 2004. These development partners are: Australia, Canada, Denmark, France, Germany, Japan, Sweden, United Kingdom, Asian Development Bank, European Commission, UN System, and World Bank.

124.   An important element of this Action Plan was Royal Government's commitment to prepare a single National Strategic Development Plan (NSDP) for the years 2006-2010 to serve as the framework for alignment of all ODA supported activities. In 2005, the NSDP was prepared through an extensive consultative process within government and with development partners and civil society. The NSDP 2006-2010 is the overarching single document that presents RGC's goals and strategies to reduce poverty rapidly, and to achieve other CMDGs and socio-economic development goals for the benefit of all Cambodians. A Public Investment Program for 2006-2008 has also been prepared to support the implementation of the NSDP. The Royal Government urges all development partners (bilateral, multilateral, private sector, and NGOs) to ensure that their country assistance strategies are aligned with the priorities outlined in the NSDP and their development programs and projects are aligned with the PIP.

125.   In the process of restructuring of the working groups, the TORs of the existing Government-Donor Partnership Working Group were reviewed and revised and in 2005 it was renamed Partnership and Harmonization TWG (P&H TWG). A key role that the restructured P&H TWG has played in 2005 was to coordinate and facilitate the implementation of the Royal Government's Action Plan on Harmonization and Alignment. It has also in close consultations with ministries/agencies and development partners updated the Harmonization and Alignment Action Plan to incorporate the Paris Declaration's commitments. The Paris Declaration is a commitment by Ministers of developed and developing countries responsible for promoting development and Heads of multilateral and bilateral development institutions -- who attended the Second High Level Forum in Paris on 2 March 2005 -- to take far-reaching and monitorable actions to reform the way in which ODA is delivered and managed to enhance aid effectiveness. It consists of 5 Partnership Commitments:

  1. Ownership: Partner countries lead and coordinate development actions.

  2. Alignment: Donors align support with partner countries strategies, institutions and procedures.

  3. Harmonization—Donors’ actions are harmonized, transparent and collectively effective.

  4. Managing for Results—Managing resources and improving decision-making for results.

  5. Mutual accountability—Donors & partner countries are accountable for development results.

126.   To review the first draft of RGC’s Updated Action Plan on Harmonization, Alignment and Results a workshop for government representatives and development partners was held at CDC on 4-5 July 2005. Based on comments received at the workshop a revised draft was prepared by CDC. This revised draft was reviewed at a two-day workshop of government representatives on 1-2 September 2005 held in Sihanouk Ville. The purpose of this workshop was to review and internalize the content of the Action Plan within the government in order to empower government officials to take ownership and to play a leadership role in discussions with development partners.

127.   Following these workshops, CDC/CRDB had carried out a review of what other countries have done in this area. Also, a review by the Secretariat of GDCC in December 2005 of TWGs progress in implementing the existing RGC’s Action Plan on Harmonization and Alignment revealed that while on those activities that required Government action significant progress was made, there had been limited progress in areas where the development partners were to take specific actions. Taking into account the realities on-the ground, CDC again revised the draft of the Updated H-A-R Action Plan based on the following criteria:

  1. The Updated Action Plan must be fully aligned with the partnership principles of the Paris Declaration.

  2. Each activity in the Action Plan must clearly identify who will be responsible for carrying out the planned activity.

  3. As the first next step, identify resources that will be needed to carryout the planned activities as well as donors who will provide the needed resources.

  4. Ensure that time frames set for completing each activity are realistic and take into account the complexities of the issue.

128.  The revised draft of the Updated Action plan was reviewed at a workshop for government representatives and development partners held at CDC on 7 February 2006. The final draft of the RGC's Updated Action Plan on Harmonization, Alignment and Results (H-A-R Action Plan) was approved by Samdech Prime Minister on 14 February 2006 (Annex I).

129.  A recent study on harmonization and aid coordination in Cambodia commissioned by DFID that was completed in late 2005 reported that both within the Government and among development partners there is not yet a full understanding of the internationally agreed commitments made in the Rome and Paris Declarations. At the P&H TWG meeting on 8 December 2005 and the GDCC meeting on 12 December 2005, the Royal Government urged both sides to take the necessary actions to correct the situation and highlighted the need for both parties to work together in a spirit of mutual accountability that is a basic principle of the Paris Declaration. The Royal Government also noted that just preparing Action Plans without a clear understanding of the issues and commitment to implement the activities seriously jeopardizes the chances of any success.

130.  In terms of monitoring and facilitating the implementation of the updated H-A-R Action Plan, the CDC in consultation with the P&H TWG will continue to provide the overall direction and technical support to TWGs; and the sector/thematic TWGs will continue to be responsible for the day-to-day operational management of the implementation of the activities in the Action Plan and for monitoring progress in their areas.

1.3   RGC's Strategic Framework for Development Cooperation Management

131.  In 2005, the RGC’s Strategic Framework for Development Cooperation Management was prepared through an extensive consultative process both within government and with development partners. It was approved by the Council of Ministers on 27 January 2006. The consultative process included:

  • A review of the zero draft (draft #0) of the Strategic Framework by an inter-ministerial group that met at CDC on 1 August 2005. Based on inputs from the inter-ministerial group the zero draft was revised.

  • The revised draft (draft #1) was submitted to SNEC for its review and comments. SNEC’s comments were incorporated in a revised draft (draft #2) that was formally approved by SNEC in September.

  • This draft was sent by Chair of the P&H TWG to the Lead Facilitator of the P&H TWG to discuss the draft with all development partners and provide a consolidated version of the comments of the development partners.

  • A final draft incorporating comments/suggestions of development partners that were within the parameters endorsed by SNEC was prepared and submitted to the Council of Ministers for its review and approval and also made available to all development partners through the Lead Donor Facilitator of the P&H TWG.

132.  The Strategic Framework outlines RGC's policy framework on institutional and operational issues related to development cooperation management. It presents information on:

  1. the role and responsibilities of the RGC’s focal point for resource mobilization and aid coordination functions within the Royal Government;

  2. the current situation and recent initiatives of the Royal Government and the international community to strengthen development cooperation;

  3. the objective and basic principles that shall guide the management of development cooperation programs; and

  4. outlines a national program to implement RGC's development cooperation management strategy.

133.  As outlined in the Strategic Framework, the Royal Government would like to see support for the implementation of the Strategic Framework through a Multi-donor Support Program. The core concept underlying this Program is to enhance Government capacity to take ownership and assume leadership of development cooperation management processes and management of ODA to achieve targeted development results. The Program aims at capacity development of CDC/CRDB -- the focal point within the Royal Government for ODA mobilization and aid coordination functions -- as well as at capacity development of the line ministries and agencies to effectively manage external assistance. The Multi-Donor Support Program will be managed by CDC/CRDB. The RGC's preferred modality to finance the Multi-Donor Support Program is a pooled resources modality co-financed by development partners. UNDP will establish a “pooled resources facility” to manage the contributions of development partners to the pooled resources facility. Under the UNDAF for 2006-2010, UNDP has allocated US$ 1.16 million from its core resource to participate in the pooled resources modality. Using these as core resources, the CDC/CRDB and UNDP will mobilize resources from other development partners who are willing to co-finance this Program through a pooled resources modality. So far, in addition to UNDP's commitment, DFID has indicated a strong interest in participating through the pooled resources facility. UNDP will be responsible for completing all formalities related to co-financing arrangements/agreements with contributing development partners and for receiving and disbursing to the Multi-Donor Support Program resources contributed by participating development partners to the pooled resources facility.

134.  Development partners who because of their internal rules and procedures are unable to contribute to the Program through the "pooled resources modality" can support the Program by making their contributions directly to CDC/CRDB. The formal arrangements for participation through this modality will be documented in an agreement between the CDC/CRDB and the contributing development partner. Development partners opting for this modality will be provided periodic financial and progress reports in the same format that is used for the pooled resources modality.

1.4      National operational Guidelines for grant assistance and the Standard Operating Procedures for loan assistance

135.   The preparation of the National Operational Guidelines for grant assistance was commissioned by the Government-Donor Partnership Working Group as one of three studies. A Sub-Working Group composed of government and development partner representatives was formed to facilitate and guide the work of the study team.  The purpose of the National Operational Guidelines for grant assistance is to set out policies and operational procedures for planning and management of the implementation of development cooperation activities. These guidelines provide further elaboration of the principles and polices outlined in RGC's Strategic Framework for Development Cooperation Management. The guidelines have been formulated based on the principles embodied in the OECD/DAC “Good Practice Papers”, and incorporate best practices in the planning and implementation of development cooperation programs in Cambodia. The use of these guidelines as a common reference document on policies, operational procedures, and institutional responsibilities by national and international development partners will not only significantly improve aid effectiveness but will also reduce administrative burden on implementing government ministries and agencies. The Royal Government urges development partners to make use of the guidelines in planning and management of their development assistance programs and projects. The preparation of these guidelines was supported by UNDP.

136.  This work on the preparation of operational guidelines for grant assistance has been closely coordinated with the work on the preparation of Standard Operating Procedures for loan assistance that has been completed by the Ministry of Economy and Finance in collaboration with ADB and the World Bank.

1.5       Support to Senior Officials in Ministries and Agencies to Take Real Ownership of Development Cooperation Activities

137.   In 2005, CDC/CRDB started a process of dialogue between government officials on how to improve aid effectiveness and to identify specific support that it can provide to them to enable them to take ownership and to play a leadership role in managing development cooperation activities within their area of responsibility. CDC/CRDB has placed a high priority on providing whatever support is needed through workshops and other modalities to meet these needs. It has begun to organize workshops, in Khmer, to deepen the understanding of the issues and approaches in areas such as: harmonization and alignment; sector and program-based approaches, sector MTEFs, and managing for results. In addition to workshops on harmonization and alignment issues, a workshop on program-based approaches for government officials was held on 9-10 June 2005 that was supported by SIDA. A two-day workshop of government representatives that was conducted in Khmer was held in Sihanouk Ville on 1-2 September 2005. For this workshop, the participants were provided a translation of the Paris Declaration and the RGC's Updated Action Plan on Harmonization, Alignment and Results (H-A-R) in Khmer. The presentations and discussion at the workshop covered the Paris Declaration, RGC's Updated Action Plan on H-A-R, and preparation of MTEF. This workshop was supported by UNDP Support Program at CDC/CRDB. In 2006, CDC/CRDB will continue to organize these workshops on relevant topics.

1.6      Development and implementation of a CDC/CRDB ODA Disbursements website

138.   In 2005, CDC/CRDB has developed and operationalized a ODA Disbursements website. The website has been designed to: (i) enable development partners to report their ODA disbursements data directly to the website; and (ii) provide access on ODA disbursements information to the general public. The website includes a “query” system through which users will be able to obtain specific information on ODA flows. It has been used to collect ODA disbursements data from development partners for the year 2005. This website has been designed, developed, and implemented employing national personnel. Over the next year, CDC/CRDB will make available the software that has been developed, free of cost, to other developing countries that want to develop a web-based ODA disbursements system.

1.7       Government-Private Sector Partnerships

139.    For the Royal Government the private sector is the engine of growth. The Royal government's policy with respect to fostering private sector development is to play a strategic role in creating an enabling environment for the development of private enterprise, and to manage the development process. The Royal Government recognizes that improving the business climate and creating an enabling environment for private sector development are key pre-requisites for fostering growth, creating jobs, reducing poverty and achieving sustainable economic development. To remove critical bottlenecks impeding the development of the private sector as well as to provide inputs in the processes of administrative and regulatory reforms, the Government-Private Sector Forum has continued to hold six monthly meetings. As further support to the Government-Private Sector Forum mechanism a Private Sector Development Steering Committee was established in mid 2004. Under the Steering Committee, three Sub Steering Committees have been established: one dealing with Investment Climate and Private Participation in Infrastructure (PPI) that is chaired by Senior Minister and Minister of Economy and Finance, second on Trade Facilitation that is chaired by Senior Minister and Minister of Commerce, and third on SME's that is chaired by the Minister of Industry, Energy and Mines. These mechanisms have proven to be effective not only in building partnerships with the private sector but, more importantly, in providing inputs in the process of prioritization of activities under the reform programs.

1.8      Partnerships with Non-Governmental Organizations and Civil Society

140.   The Royal Government believes that the civil society and NGOs can play an important role in monitoring the implementation of poverty reduction initiatives of the National Strategic Development Plan (NSDP) 2006-2010. Cambodian NGOs are a part of the civil society. NGOs can contribute much to poverty reduction plans based on their development experiences and are in a strong position to convey the needs and concerns of vulnerable groups to policy makers. The NGOs now participate in the quarterly GDCC meetings, the Partnership and Harmonization TWG, as well as in several other TWGs. The Royal Government would like to encourage a greater participation of the trade unions, ethnic associations and farmers' associations in monitoring the implementation of the poverty reduction initiatives of NSDP. To better target poverty reduction initiatives the participation of the poor and vulnerable groups in monitoring of poverty reduction efforts needs to be strengthened. There is also a need to strengthen the capacity of the Parliament in order for it to make concrete inputs.

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