160.   This document has presented the highlights of what has been achieved since the last CG meeting held in Phnom Penh in December 2004. It has provided a succinct summary of the issues that will need to be addressed to effectively implement the National Strategic Development Plan (NSDP) for 2006-2010 period and to improve aid effectiveness. It has provided an update on the macroeconomic performance, monetary and fiscal performance, and Government’s policy performance. It presented the priorities for the implementation of the National Strategic Development Plan for 2006-2010. It has provided an update on progress that has been made over the last year in building partnerships with all development partners -- the bilateral and multilateral donors, private sector and the civil society – to enhance aid effectiveness. It has also outlined the challenges that both the Royal Government and the development cooperation partners face to enhance aid effectiveness and has identified priority areas to which the development cooperation partners urgently need to give a high priority. Finally, it has presented information on the development cooperation resources that will be required – in addition to domestic resources – to implement the programs and projects outlined in the PIP 2006-2008.

161.   To achieve its development goals, the RGC is fully and firmly committed to the principles of good governance and to maintaining sound macro‑economic policies and fiscal discipline.  The RGC will do its utmost to raise domestic savings and capital resources to provide as much funds as possible for its developmental programs and projects.  The Royal Government, however, recognizes that it remains dependent in the short-term on  support from development cooperation resources. For the next three years, 2006-2008, the total development cooperation resources needed for the priority programs and projects in the PIP are estimated to be US$ 1,625 million, after taking into consideration the Royal Government’s contribution of US$ 350.0 million. The Royal Government would appreciate pledges for the entire three-year period, to enable it to plan for the implementation of its priority development programs. At this stage of the development of Cambodia, the Royal Government is well aware of the pitfalls of financing its development programs through loan financing, that has implications for debt and debt services charges that are likely to constrain its ability to restructure its budget allocations for social sectors in the future. It, therefore, places a high priority to seeking assistance from its development cooperation partners as grants.

162.    Over the years, the development cooperation partners have been generous in providing support to Cambodia’s public investment program. The Royal Government of Cambodia is gratified by the support of its development cooperation partners and hopes that they will continue to provide their support to enable Cambodia to implement the NSDP to achieve its goal of reducing poverty and attaining Cambodia's Millennium Development Goals.

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