on Danish Assistance to Cambodia
Council for the Development of Cambodia, Phnom Penh
17-18 January 2009
Bilateral consultations on development co-operation between the Kingdoms of Cambodia and Denmark were held for the fifth time in Phnom Penh on 17-18 March, 2009.
The Cambodian delegation was headed by H.E. Mr. Keat Chhon, Deputy Prime Minister, Minister of Economy and Finance and First Vice Chairman of the Council for the Development of Cambodia (CDC). The Danish delegation was headed by Mr. Martin Bille Hermann, Head of Department, Danish Ministry of Foreign Affairs (a list of participants is enclosed as Annex I).
During its visit to Cambodia, the Danish delegation had separate meetings with H.E. Senior Minister Im Chhun Lim, Minister for Land Management, Urban Planning and Construction; H.E. Senior Minister Mok Mareth, Minister of Environment; H.E. Mr. Kao Kim Hourn, Secretary of State, Ministry of Foreign Affairs and International Cooperation; H.E. Mr. Chan Tong Yves, Secretary of State, Ministry of Agriculture, Forestry and Fisheries; and H.E. Mr. Sak Setha, Secretary of State, Ministry of Interior. In addition, the Danish delegation had meetings with other resident development partners and civil society representatives.
2. Opening Statements
In the opening remarks from the Royal Government of Cambodia (RGC), H.E. Mr. Keat Chhon, on behalf of the RGC and the Cambodian delegation, welcomed the Danish delegation. He acknowledged the cooperation with Denmark in support of the Rectangular Strategy and the National Strategic Development Plan (NSDP). He highly appreciated the alignment with Cambodian national priorities that is consistent with the principles of the Paris Declaration and Accra Agenda for Action, which contributed to the effective use of Danish assistance in support of equitable growth and poverty reduction.
He highlighted the good cooperation and partnership with Denmark in areas of Natural Resources Management and Livelihoods; Human Rights and Good Governance; and Private Sector Development, which are the focus areas for Denmark’s support. He also emphasised the RGC’s commitment to implement programmes in an efficient and transparent manner in order to achieve the goals of the NSDP.
The Danish delegation highlighted the long-term nature of the partnership with Cambodia which started in 1992. The planned disbursement for 2009 was 90 million Danish Kroner, with an additional 26 million DKK provided through Danish NGOs. He expressed his appreciation of the significant achievements made in Cambodia over the last 15 years in terms of political stability and strong economic growth and congratulated the RGC on the peaceful and orderly National Assembly Elections held in July last year. He pointed out the critical importance of the election process of ensuring a level playing field up to Election Day. He also highlighted the great responsibility that comes with such a significant election victory in terms of maintaining accountability in a democratic society.
Although many achievements had been made many challenges still lay ahead. The Danish delegation highlighted the need to improve public access to government information — and underlined the importance of transparency and accountability. He encouraged the RGC to consider adopting a law on access to information. He also mentioned the need to ensure that the opposition gets opportunities to scrutinize government policy in the National Assembly.
While acknowledging general improvements in the human rights situation, there were still areas for concern. He underlined that human rights and the rule of law were central pillars of Danish cooperation with Cambodia, and were also decisive for further political and economical development of Cambodian society. He stated that the Danish government was very concerned about the many land disputes in Cambodia, including those in areas of indigenous people. He asked that further steps be taken by the RGC to resolve these issues lawfully.
The Danish delegation also mentioned the need for an independent and professional judiciary, which was essential to ensure the rights of individuals, and to ensure continued economic growth and integration into the world economy. He stated that Denmark was ready to continue to support Cambodia in strengthening human rights and the rule of law.
He also stated that civil society monitoring of the development process was important, and that while Denmark recognised that every government has the right to provide a framework for the work of NGOs, but it was imperative to protect their right to freedom of expression and their independence in general.
The Danish delegation congratulated the RGC on their decision to join the Optional Protocol to the Convention against Torture. The Danish delegation encouraged the RGC to fully cooperate with all UN treaty bodies, special procedures and the Human Rights Council.
Finally, the Danish delegation emphasised the strong ties between Cambodia and Denmark, and looked forward to a frank and open discussion, focusing on the RGC’s programmes and how Denmark could support the Cambodian people in advancing these programmes.
Macro-economic Management for Sustained Economic Growth
The Cambodian delegation reported that macro-economic performance remained positive in 2008, although lower than previous years, with only 6.8% growth. The RGC expected a drop to 4% in 2009. The exchange rate had been stable, inflation had subsided, but exports are slowing. However, the fiscal position remained strong due to ongoing reform efforts (public financial management), for example the overall budget deficit was at a historical low in 2008. The RGC outlined a number of measures taken in fiscal policy to tackle the challenges, including increasing the budget deficit to 3.2% of GDP, prioritising public investment in infrastructure, and mobilising all kinds of revenue. A number of other initiatives, e.g. in agriculture sector, training for unemployed garment workers etc were also shared.
The Danish delegation commended Cambodia on the macro-economic achievements and their swift and comprehensive response to the global economic downturn. Countries such as Cambodia and Denmark were both small, open economies, and were therefore both affected by the global economic downturn. He stressed the importance of looking to the future for sources of growth, and improving the enabling environment and investment climate. Broad based economic growth and employment generation were important as poverty levels remained high, with rising inequality. The downturn could provide an opportunity to look at the fundamentals and identify new opportunities e.g. linkages between different economic sectors to reduce rural poverty, and further strengthen Cambodia's competitiveness.
Cambodia’s Approach to Aid Effectiveness
The Cambodian delegation highlighted solid progress in establishing tools and processes, but few results in terms of more efficient aid management and more impact in meeting NSDP targets. The focus of government efforts would now be on a limited number of achievable and results- oriented actions, relevant to sector and central planning-budgeting processes. The focus would be on capacity building and technical cooperation to increase use of national systems. Steps would be taken to strengthen the use of programme based approaches, and encourage further division of labour.
The Head of Danish delegation welcomed the approach of keeping it simple, and emphasised the importance of aid effectiveness to Denmark. He stressed that there was also an important role for multi-stakeholder processes, allowing stakeholders — including civil society - to come on board to strengthen ownership of national plans. The Danish delegation emphasised the need for the RGC to allocate their own resources to meeting the Cambodian Millennium Development Goals and to strengthen the link between the NSDP and the civil society framework.
3. Cambodia's reform programmes
Public Financial Management
The Cambodian delegation outlined their comprehensive public financial management reform programme, which aims to achieve internationally recognised standards by 2015. The Strategy of the Reform Programme has four stages or platforms. The first stage — focusing on improved budget credibility including revenue forecasting — had been completed. The second stage was now underway — focusing on improved financial accountability. An important challenge for this stage was integration of ODA with the national budget. From 1994 to 2008 revenues had been above expenditure for most of the period, resulting in the building up of reserves which allows some room for manoeuvring in mitigating the effects of the global economic downturn.
The Danish delegation thanked for the comprehensive view of PFM, which demonstrated the high level of commitment to the programme of activities. He mentioned that PFM is not just a technical agenda, but also contains element related to accountability and public oversight. Resources should be used efficiently. He encouraged the RGC to adopt the law on anti-corruption and a law on access to information.
Public administration reform (PAR) and salary reform
The Cambodian delegation thanked Denmark for changing its stance on payment of salary supplements since an earlier visit of the Head of Delegation to Denmark in 2003. He stated that since 1998 public servant’s salaries had increased four-fold. A study, funded by the World Bank, on the cost of raising salaries further and the associated financial implications, would be completed by July 2009. The RGC planned to implement various schemes. Priority Mission Groups (PMGs ) would be established in 24 ministries/institutions. Merit Based Pay Initiatives (MBPIs) would be established in eight ministries in 2009, having started piloting in 2005 in MEF. This would involve more than 1,000 public servants. The RGC would also implement 21 Special Operating Agencies (SOAs ) in 9 provinces involving 2,500 public servants in the Health Sector. The RGC had plans for a National Employment Agency with job centers, using SOAs in 8 provinces. As part of Governance Action Plan III, each ministry had to present action plans with indicators for implementing different areas of reform — transparency, accountability, responsiveness and effectiveness.
The Danish delegation acknowledged its change in position regarding salary supplements, and was happy to be part of the merit based payment process within NRMLP and Council for Administrative Reform (CAR). In this area, the RGC and development partners had joint responsibility. Development partners had not been good at honouring pledges on harmonising their approaches to salary supplementation, and aligning them with RGC’s agenda.
The Danish delegation asked about the overall financial implication for a comprehensive PAR in Cambodia. Development partners were now waiting for the RGC to present a realistic timetable and plan for moving PAR forward with prioritised tasks and progress indicators. He stated that Denmark was ready to contribute towards the achievement of a coordinated donor approach to PAR in alignment with the RGC’s agenda. Denmark would remain committed to this important aspect of civil service reform.
Decentralisation and Deconcentration (D&D) Reform
The Cambodian delegation explained the recent progress on D&D and informed about the upcoming elections in May 2009 of 225 new governing councils at provincial and district levels. The RGC was building on the experience of decentralisation over the last seven years. Independent surveys confirmed that the majority of the local population are positive and supportive of the Commune/Sangkat councils. The next stage of reforms would focus on the quality of public services and ensuring downward accountability. The NCDD was working to further strengthen this by partnering with the Demand for Good Governance Programme funded by the World Bank, and working with various civil society groups. The ten-year national programme for sub-national democratic development was under formulation, expected to be finalised by mid-2009. The Cambodian delegation recognised Danida’s contribution as a long-term partner in these efforts.
The Danish delegation welcomed the passing of the organic law, and the establishment of the new NCDD as important steps in strengthening local governance and supporting local development. He recognised the magnitude of the tasks ahead for the RGC, and suggested that there must remain scope for consultation with the public as well as development partners regarding how reforms are taken forward in spite of the elections in two months. He emphasised the dual nature of decentralisation of government functions as well as pursuing democratic development involving citizens. Denmark was in full support of the joint EU position on D&D, which highlighted the important role of communes and the issue of accountability and voice. He stated that the RGC must take a strong leadership role and push development partners to a more harmonised approach for their support and engagement with D&D in the future.
Legal and Judicial Reform
The Cambodian delegation expressed its sincere appreciation for the support provided through the Danish Centre for Human Rights since 2002, towards the preparation of the National Plan for Legal and Judicial Reform and its implementation. The reform strategy was approved in 2003 and implementation began in 2005. Denmark was providing support to the development of an indicator monitoring system for the reform, and for the establishment of model courts in four provinces. The inception phase of the latter project was almost finished with the completion of business plans for the four model courts. Implementation was expected to start in April 2009. Criteria for the model courts had been developed based on international standards. A number of activities were listed in the business plans, which would enable the model courts to live up to these criteria.
The Cambodian delegation mentioned a number of other achievements under the legal and judicial reform including raising public awareness of individual rights, adoption of a number of fundamental laws, training of lawyers, judges and prosecutors as well as reinforcement of alternative dispute mechanisms.
The Danish delegation expressed appreciation for the cooperation with the RGC on the implementation of the Action Plan for Legal and Judicial Reform. The delegation hoped that it would initiate the required comprehensive reform of the legal sector.
He emphasised the importance of the judiciary in safeguarding rights for ordinary people, and expressed his concern over its disproportionally low share of the national budget (less than 1%). He highlighted that the success of the planned projects within the sector would be dependent on increased allocations from the national budget.
The Danish delegation underlined that Denmark attaches great importance to: 1) the imminent adoption of the penal code as the government has stated that the draft law on anti-corruption cannot be passed before this has happened; 2) a law on the Supreme Council of Magistracy and on the organisation and functioning of the courts; and 3) a commercial law which is necessary for Cambodia to attract foreign investments.
The Cambodian delegation responded by acknowledging that contributions to the judiciary are modest, but also that legal and judicial reform is a priority area for the RGC. Thus, the revised penal code, which is a precondition for the adoption of anti-corruption legislation, will be forwarded to the National Assembly for adoption in the near future.
Natural Resources Management
The Danish delegation expressed its appreciation of the RGC in its efforts in developing long term strategic development plans for the forestry and fisheries sector and urged the RGC to stick to the deadlines set for the completion of the work as Cambodia’s economy was heavily dependent on agriculture, fisheries and other natural resources; and strengthening of the RGC in general strategic planning was of high importance. He stated that Denmark supports land use mapping and planning at commune level and was spearheading efforts to start this process by creating consensus among stakeholders in the land sector.
The Danish delegation expressed the need for urgent adoption of the sub-decree on Commune Land Use Planning and stated the importance of disclosing more information on economic land concessions. He also reiterated Denmark’s concern over the many land disputes and illegal exploitation of natural resources, and inquired about the RGC’s plans to resolve these.
The Cambodian delegation responded that information about economic land concessions had already been posted on the Ministry of Agriculture, Forestry and Fisheries (MAFF) web site, and that law enforcement had improved markedly in recent years. While the total number of forest crimes had not fallen, the seriousness of the crimes had diminished. The amount of timber confiscated had fallen significantly — from 35,000 cubic meters in 2003 to only about 5,000 cubic meters last year. The Forestry Administration had also confiscated 2,000 chainsaws and closed down a number of wood-processing plants. The RGC was happy with the Danish support and urged Denmark to continue its support in the forestry sector.
The Cambodian delegation mentioned the achievements of the fishery sector made possible with support from Denmark. The RGC had developed plans with clear goals and objectives for each sub-sector. The systems established with Danida’s support had helped the RGC manage fisheries resources more effectively. Regarding law enforcement, the situation was improving, with thousands of illegal fishing gear confiscated and a reduction in serious fishery crimes and conflicts. With community fisheries, there had been some conflicts regarding unclear boundaries, and individual illegal fishermen encroaching on community fisheries. He stated that Denmark’s support to the sector was extremely important.
The Cambodian delegation emphasised that natural resource management was a sensitive issue. It was not only about exploitation but also about demographic pressure. Natural resource management should not be looked upon from only one angle. The RGC had planted lots of rubber trees in the North eastern provinces but these do not count in forest cover assessments. Finally, the Cambodian delegation expressed its wish for the continuation of Denmark’s Natural Resource Management programme in a second phase.
4. Danish development cooperation with Cambodia
The NRML Programme 2006-2010 and beyond
The Danish delegation expressed its appreciation of the Cambodian-Danish cooperation. In particular, the CDC’s support to the joint Danida/DFID/ NZAid funded program had been very valuable, to ensure continued government ownership in the process and alignment with the RGC agenda. Also, the joint annual programme reviews chaired by CDC were welcomed.
The Danish delegation highlighted the good collaboration amongst DFID and NZAid and informed that Danida planned to begin the formulation of the second phase mid- 2009. The programme formulation would take into account the UK’s decision on its future engagement in Cambodia. He underlined that Denmark looked forward to working together with the RGC on the programme formulation. He welcomed that gender mainstreaming and climate change had been clearly mentioned as priorities by the RGC for future cooperation. He also emphasised the importance of the involvement and engagement of civil society and community-based organisations in these processes.
With reference to the last high-level consultations in 2006 the Danish delegation highlighted the importance of sustainability and reminded the RGC on their previous confirmed commitment to the continued operation of the coastal zone management centres.
The Cambodian delegation welcomed Denmark’s successful conduct of the last two joint annual programme reviews, highlighting their usefulness in terms of taking stock of progress and finding solutions to problems in programme implementation. This mechanism ought to be continued. It was confirmed that CDC stands ready to assist in the formulation of the new programme phase.
The Cambodian delegation confirmed its commitment to the continued operation of the coastal zone management centres and promised that funds would be made available by MEF for 2010.
Danish support to Human Rights, Democracy and Good Governance 2006-2010
The Danish delegation informed about its intention to strengthen its support to Human Rights and Good Governance (HRGG) in Cambodia through the second phase of its HRGG programme which will hopefully be approved by the Danida Board early next month. The programme is focusing on (i) Access to Justice, (ii) Defending human rights and (iii) Transparency & Accountability. He underlined that these areas were of concern to the overall HRGG agenda in Cambodia and of relevance to the implementation of the NRML programme. Both government initiatives and civil society organisations were supported under the programme.
The Danish delegation stressed the importance of focusing on rule of law - and on law enforcement. Plans had been developed and systems put in place. He reaffirmed Denmark’s commitment to cooperating with the RGC in furthering this aim. Denmark looked forward to further cooperating with the RGC in strengthening public oversight and fighting corruption. Working towards strengthened rule of law and increased transparency and accountability also linked the HRGG programme with the NRML programme. Both these government reform programmes would improve ordinary people’s lives.
The Cambodian delegation emphasised that respect for human rights was important to Cambodia as well as the contribution of civil society organisations in advancing these rights. The RGC considers human rights a core element of its strategies and programmes. He stressed that interpretation of human rights standards varied from one country to another.
Private Sector Development Programme 2009 - 2011
The Danish delegation shared their plans for supporting a new Private Sector Development (PSD) programme, formulated and approved by the Danida Board in November 2008. The aim was to assist in Cambodia’s efforts to participate in the globalisation process and to enhance the sector’s resilience in times of recession. The programme would be facilitated through a multi donor trust fund in cooperation with WB, EC and UNIDO and would be officially launched on 23 March 2009. He underlined the need for a speedy implementation of the 12-point Action Plan to mitigate the adverse effects of the global financial crisis on Cambodia’s economy.
The Cambodian delegation welcomed the Danish initiative. A clear development plan would strengthen the private sector. Plans for training of unemployed garment workers and provision of credit for entrepreneurs were also mentioned. The RGC had so far only focused on large-scale private sector development, but small and medium-sized enterprises and entrepreneurship would also be given priority now.
The Danish delegation encouraged the RGC as a country likely to be highly affected by climate change to raise its voice on this issue. The next Conference of the Parties to the Convention on Climate Change will be held in Copenhagen in December 2009.
The Cambodian delegation recognised that the magnitude of the impacts of climate change may be larger than originally anticipated. The RGC, including MEF, attended the Bali Summit, and recognised that the issue needed attention from the MEF to ensure adequate funding in this sector. The Ministry of Environment stated their commitment to working together, and looked forward to detailed bilateral discussions on 18th March 2009.
5. Concluding remarks
The Danish delegation thanked for a frank exchange of views, conducted in a spirit of mutual respect and understanding. He thanked CDC for cooperating with the Danish delegation in planning the event. He thanked all ministries for attending and providing their valuable contributions. He particularly thanked His Excellency Deputy Prime Minister Keat Chhon, Minister of Economy and Finance, and First Vice Chairman of Council for Development of Cambodia, for his excellent chairmanship.
The Head of the Cambodian delegation, H.E. Mr. Keat Chhon, expressed his thanks to the members of the Danish delegation. He reflected on the similar size of Denmark and Cambodia, and on the number of lessons that the countries could share, for example around decentralisation and deconcentration. He looked forward to a future with greater private sector investment — where Danish FDI increased, and ODA could therefore decrease.
Phnom Penh, 18th of March, 2009
LIST OF PARTICIPANTS
THE GOVERNMENT OF THE KINGDOM OF DENMARK
THE ROYAL GOVERNMENT OF CAMBODIA