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Program SECTION 1: WELCOME SECTION 2: CURRENT SITUATION IN CAMBODIA
2.1
CAMBODIAN PRESENTATION SECTION 3: OVERVIEW OF DEVELOPMENTS IN THE AUSTRALIAN AID PROGRAM SECTION 4: FINANCIAL OVERVIEW OF CAMBODIA PROGRAM SECTION 5: COUNTRY STRATEGY AND FUTURE PROGRAM DIRECTIONS
5.1
AUSTRALIAN PRESENTATION SECTION 6: OVERVIEW OF ASIA REGIONAL PROGRAMS STRATEGY SECTION 7: SUMMARY OF CONCLUSIONS AND AGREEMENTS REACHED DURING THE DAY SECTION 8: NEXT HLC SECTION 9: BACKGROUND DOCUMENTS
9.1
RECORD OF MEETING 1999 HLC
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PROGRAM FOR CAMBODIAN DELEGATION
Key Contact Details: AusAID:
62 Northbourne Avenue, Canberra City Cambodian Embassy: 5
Canterbury Crescent, Deakin Novotel Hotel Canberra: 65
Northbourne Avenue, Canberra City Ansett Airlines:
Tel: 13 1300 (domestic flights)
AGENDA 09.30 1. WELCOME 09.45 2. CURRENT SITUATION IN CAMBODIA
2.1 PRESENTATION (Cambodia) 10.30 3. OVERVIEW
OF DEVELOPMENTS IN THE 10.45 4.
FINANCIAL OVERVIEW OF CAMBODIA 11.15 MORNING TEA 11.30 5. COUNTRY STRATEGY AND FUTURE PROGRAM DIRECTIONS
5.1 PRESENTATION (Australia) 12.45 WORKING LUNCH 13.45 6. ASIA REGIONAL STRATEGY (Australia) 14.00 7. SUMMARY
OF CONCLUSIONS AND AGREEMENTS 14.15 8. NEXT HLC 16.45 9.
CONSIDERATION OF RECORD OF MEETING BY 17.15 10. FINALISATION OF RECORD OF MEETING 17.30 11. SIGNING OF RECORD OF MEETING ROYAL GOVERNMENT OF CAMBODIA DELEGATION HE KEAT Chhon
Delegation Head HE HOR Nambora Ambassador, Royal Embassy of Cambodia to Australia HE CHHIENG Yanara
Deputy Secretary-General of the Council for the HE IM Sethy Secretary of State for Education, Youth and Sport Dr MEAN Chhi Vun Deputy Director General, Ministry of Health HE HANG Chuon Naron Deputy Secretary-General, Ministry of Economy and Finance Mr ENG Yeng Minister Counsellor, Royal Embassy of Cambodia Ms HENG Sokun Director, Bilateral Aid Coordination Department CDC/CBRD Mr SOM Sunna Counsellor, Royal Embassy of Cambodia Mr UNG Rachana First Secretary, Royal Embassy of Cambodia GOVERNMENT OF AUSTRALIA DELEGATION Ms Jennifer
Rawson Delegation Head Mr Richard Moore
Assistant Director General Mr Steve Deady
Assistant Secretary, Mainland, South East Asia and Mr Rob Stewart/ Director Mr Michael Pilbrow Cambodia, Laos, Thailand and Burma Section, AusAID Ms Sue
Gordon Cambodia Country Program Manager Ms Fleur
Davies Cambodia Program Officer Ms Meg
Johnson Cambodia Program Officer Ms Lydia Bezeruk
Cambodia Program Officer Ms Helen Windle
Cambodia Program Officer Ms Stacey
Morgan Desk Officer Cambodia
Draft
Opening Remarks of H.E. KEAT CHHON, MP
at the High-Level Consultations between
Excellencies, our distinguished hosts from
the Government of Australia and AusAid, It is indeed a great honor and pleasure for our Delegation from the Royal Government of Cambodia to attend this High-Level Consultation between our two governments. First of all, let me say how grateful and appreciative we are for the enduring interest and support that Cambodia has received in many ways from Australia, and you continue to be a valued partner in our rehabilitation and reconstruction efforts, always ready and willing to provide essential advice, financial and technical assistance support, wherever needed and possible. Australia’s country programme assistance to Cambodia has moved up to A$25M for 2000/2001, in the areas of: Agriculture Development, Education, Governance & Human Rights, Health, Landmine Action, Infrastructure, NGO Activities, and Emergency and Relief Assistance. In addition, you contributed about A$1.5M through humanitarian grants programmed through UNDP/CARERE, and parallel financing of IFAD’s loan programme support to SEILA, as well as humanitarian assistance during the year 2000 Floods in Cambodia totaling to about $5.25M, and intend to continue support for a 4th phase of CCDP with another $7.5M for 2002-2004. For all this support, continued goodwill and interest, allow me to record the deep appreciation and thanks to Australia from the Royal Government and the people of Cambodia. These consultations comes after the successful Consultation Meeting with External Partners held at the Council for the Development of Cambodia on 24 April 2001, in which the Australian Government representatives played a significant role in supporting our technical and financial requirements. This meeting was in preparation for 11-13 June 2001 Consultative Group Meeting for Cambodia to be held in Tokyo, Japan. All the CG Meetings held so far have demonstrated the strong partnership between our Government and the International Community, through the conduct of frank and constructive discussions, and with the expression of goodwill on both sides, all of which were intended to strengthen the management of Cambodia’s development to mobilize potential resources. Our progress over the last 2-3 years are proof of our commitment to achieve national reconciliation between opposing groups. We are committed to rehabilitate our country and place it firmly on a path to peace, progress and prosperity. We are conscious that only a clear vision, strong commitment and hard work can help us overcome these challenges although we also need substantial external assistance, which we have been fortunate to receive so far. We are accelerating rural development and improving agricultural productivity in order to enhance living conditions of our people. Improving domestic resource mobilization is essential for financing of high priority development expenditures and, for reducing over time, our dependence on external assistance. Good governance and an enabling environment for private investment are essential for sustainable economic development, with institutional strengthening and capacity building our main keys to success. Finally, our full membership in ASEAN brings the promise of increased external and domestic resources for development and change within Cambodia. In conclusion, let me once again thank you for your warm welcome and hospitality. I look forward to frank and fruitful discussions and to the continued spirit of mutual goodwill and understanding in our future relations, Thank you all for your kind attention. Draft
Presentation by H.E. KEAT CHHON, MP
Vice-Chairman, Council for the Development
of Cambodia
Excellencies, our distinguished hosts from
the Government of Australia and AusAid, Under the second agenda item, I will overview for you the Royal Government’s progress since the last High-Level Consultation between our two Governments. 1. The years 2000-2001 clearly demonstrate the continuing evolution of Cambodia’s policy reform and social development agenda. With favorable conditions Created by the successful 1998 National Elections, we achieved encouraging results in implementation of our “Triangle Strategy”. Over the last 2 years, under the leadership of Samdech Hun Sen, our Prime Minister, we have created a “Diamond Opportunity” for development, with great hope for the bright and prosperous future. Our long-term vision for rapid poverty alleviation of our population through economic progress and social development was first conceived in the National Programme to Rehabilitate and Develop Cambodia (NPRD), and then taken further with the 1st Socio-Economic Development Plan, 1996-2000 (SEDP-I). Now we have our 2nd Socio Economic Development Plan, 2001-2005 (or SEDP-II) and a Poverty Reduction Strategy (PRS), which forms the base of our development objectives. 2. In 2001, the current Royal Government is at its mid-term, and we will witness a number of important developments, such as the organization of commune elections to be held in early 2002 with a view to promoting decentralization and strengthening democracy at the grassroots level. An important challenge confronting us is to achieve success in military demobilization and public administrative reform. Assistance from our external partners is the catalyst for the implementation of these bold moves, one of the most difficult ever undertaken by any government in the world. As such, we increased the level of Participation of all our external partners through various Government-sponsored forums and regular meetings, in order to build on the Partnership with the Royal Government and forge open dialogues through a permanent sectoral mechanism for consultations to address our common concerns. A new turning point has been reached. We regard such Participation as an important ingredient of the consensus building process at the national and local levels and with development partners on all issues, and an efficient vehicle for mobilizing all kinds of resources and mustering the support from all quarters. Good governance - notably, implementing the principles of transparency, accountability, predictability and partnership with the Donor Community, the private corporate sector, NGOs/civil society - is the real backbone or Cambodia’s reforms. 3. The Royal Government proposed a “New Social Policy Agenda” for Cambodia, wherein we believe that growth must take a “pro-poor” path. As we reiterated In the 2nd National Conference on Implementation of the RGC’s Political Platform for Social Development and Poverty Reduction, held on 12-14 March 2001, the main objectives of our “economic Government” are geared towards the reduction and alleviation of poverty. Our long-term vision is that by the year 2020, Cambodia will have developed to the level of neighboring advanced economies in the region and the Cambodian people will have attained a proper and decent living standard, enjoying progress, prosperity and happiness. Without high, sustainable economic growth, Cambodia cannot hope to alleviate the poverty or its populace, which requires equitable sharing of the fruits of economic growth. 4. The performance of economic and fiscal reforms in year 2000 was strong, despite the most severe flooding in 70 years which Cambodia experienced in the latter half of year 2000. The National Committee for Disaster Management (NCDM) reported that flooding affected about 3.4 million (30% of the population) in 21 out of 24 provinces. Over 375,000 ha. of ricelands and 47,000 ha. of other croplands were destroyed. Over 300,000 homes were flooded and about 347 people lost their lives. Many roads, bridges, irrigation systems, health centres and schools were seriously damaged with the estimated economic damage set at more than US$150 million. The scale of this disaster exhausted Government human and financial resources, and we had to divert funds to deal with the emergency resulting in a slowdown of some planned expenditures for development. 5. Cambodia has been undergoing a period of accelerated transformation, restructuring, and adjustment that is now starting to pay off. With rigid implementation or Fiscal Reforms and strict management of public expenditure, we received encouraging results, with improved revenue mobilization and expenditure restraint to make room for flood relief advance payment of 73 billion Riels. Measures were put in place to strengthen customs administration, prevent decline in international trade tax and improve efficiency of non-tax revenue collection. We fully acknowledge that Improving Domestic Resource Mobilization is essential for financing of high priority development expenditures and for reducing, over time, dependence on external assistance. To strengthen the Banking System and Corporate Governance, the National Bank of Cambodia (NBC) proceeded with re-licensing of commercial banks, in compliance with the Law on Banking and Financial Institutions, with the view to closing non-viable banks, either voluntarily or through liquidation process. These measures are necessary to establish a sound banking system, promote savings and increase public confidence in the banking system. 6. We place high priority on Social and Economic Spending, notably on Education, Health, Agriculture and Rural Development. Actual disbursements to the priority sectors, including advance payment on flood relief increased by 55% compared to 1999. In nominal terms, current disbursements to Health increased 25%, Agriculture - 13%, Rural Development - 161% and to Education - 24%. We have taken measures to improve the expenditure and budget execution framework, especially through the Priority Action Programs with coverage in 2001 expanded to the MAFF and the MRD. To ensure stability and social order, we also introduced a 10% salary increase for public servants and retirees effective from 1 January 2001. 7. In the area of Forestry Policy Reform, the RGC’s Progress Report prepared by the MAFF illustrates achievements attained and directions of the reform process underway. We established the Forest Crime Monitoring Unit (FCMU), wherein Global Witness, acting as the “watchdog” assists in monitoring illegal logging. The draft Forest Law has been prepared and a public consultation was launched In July 2000. We commenced implementation of the Forest Concession Management and Control Pilot Project to ensure smooth implementation of the sub-decree passed by the Cabinet meeting in February 2000. Efforts will be further deployed to maintain participation and full support by the Royal Cambodian Armed Forces (RCAF), relevant authorities at all levels, civil society, NGOs and Cambodia’s external partners in the forest sector. 8. There is a strong correlation between sound Natural Resource Management and Poverty Reduction. The plight of the poor can be improved by widening their access to forest, fisheries, water resources and other public goods, which is critical to improve the living standards of the people living in the Tonle Sap and riparian regions. Realizing the Importance of such actions, we introduced a “pro-poor” policy by canceling or reducing the size of official fishing lots to improve access by the poor to traditional fisheries to ensure equitable distribution of the fruits of economic growth. Over the past eight months, we cancelled a total of 495,000 ha. (or 53%) of fishing areas to allow the poor to eke out their existence from fisheries. 9. To maintain social order, the RGC prioritized the preparation and implementation of a Land Management Policy for land distribution, management and administration. The core program consists of development of a national land policy, improved management of the national land stock, commencement of systematic land registration, tax reform, establishment of a legal framework to enforce property rights, establishment of provincial, municipal and national master plans and zoning and the development of rural housing. A draft Land Law was adopted in July 2000 with a view to securing land tenure, reducing land ownership conflicts, and facilitating land management, natural resource monitoring and state property protection. A pilot systematic land registration project was conducted using state-of-the-art technology and delivered land title certificates for the first time to the inhabitants of Samrong District, Takeo Province. 10. We are conscious that Good Governance is a sine qua non condition for promoting social and economic development and sustainable social equity. A draft Governance Action Plan (GAP) was prepared and distributed at the May 2000 Consultative Group Meeting, which identifies four cross-cutting areas over the near- and the medium-term: Judicial and Legal Reform; Fiscal Reform; Civil Administration Reform; and Anti-Corruption Measures. We have genuine willingness to implement all these programs. However, the GAP is very comprehensive, requiring prioritization, establishing a checklist, costing of projects and setting concrete schedules to facilitate implementation and monitoring. The National Programme for Administrative Reform is a key to ensuring successful improvement in service delivery and strengthening governance. We have successfully completed the civil service census and established a computerized payroll at the central level. The next steps will be establishing a computerized payroll at the provincial level, issuing ID cards to public servants, formulating a strategy for civil service rationalization and strengthening the human resource management Information system. We are committed to seriously implementing de-concentration and de-centralization in order to ensure devolution of power from the central to the grassroots level. We expect that the 2002 Commune Elections will contribute to further strengthening democracy and improving the of public service efficiency at the grassroots level. 11. Regarding Military Reform, Demobilization and Reintegration, comprehensive progress reports demonstrate our firm commitment for completion. Our primary concern at this stage is the delay in donor support to finance this demobilization. We will ensure successful completion of the Pilot Demobilization Project, whose lessons can be drawn for the preparation of the full mobilization of up to 15,000 soldiers in 2001. The Council for the Demobilization of Armed Forces (CDAF) is conducting an evaluation and arranging for an audit of the pilot project to ensure transparency for donors’ decision to finance the full program. The CDAF will also discuss thoroughly with the WB the procurement guidelines and procedures in order to speed up implementation and strengthen financial management capacity. Availability of donor financial support provides some degree of flexibility to facilitate expedient and successful Implementation. 12. In summary, the year 2001 is a crucial turning point for the people of Cambodia, paving the way for development of our country in the new century and millennium. Our practices and actions have clearly shown that Cambodia is one of only a few sovereign countries that open its doors to external partners to be involved in discussions, provide opinions and recommendations, and ensure monitoring of the reform programs by checking performance against goals. We have confidence in this Open Partnership and we expect that all Cambodia’s external partners would understand and be convinced of our sincerity and candor. In return, they should respond by enhancing effective Cooperation to meet the real needs of Cambodia in ensuring fruitful implementation of these ambitious reform programs. 13. In Building Development Cooperation Partnerships, a proposed strategic management framework for improving the development partnership focuses on Continuous Improvements in the management of institutional development processes. The strategy focuses on improving the quality of information available to both national and international partners, on using poverty reduction strategies and actions as the common frame of reference for development, and on building the utility value of the national resource programming and coordination system. No major overhaul of the existing development management and coordination instruments is needed. Rather making the development partnership work requires realigning performance incentives, unleashing productivity, creating positive momentum in forging dynamic alliances targeted to poverty reduction and capacity development goals of the Government, confidence building of national stakeholders, creating commitment and the sense of ownership. 14. During the 24-26 May 2000 Consultative Group Meeting in Paris, and based on the successful outcome of the 24 May 2000 Informal Working Sessions on Partnerships, wherein the Government’s Operational Framework for Development Cooperation Partnerships was conceptually accepted and supported by all Donor Agencies present, Prime Minister Hun Sen appointed the CDC/CRDB as the Partnerships Focal Point within the RGC. CDC/CRDB’s main role is to assist all ministries and agencies in effectively managing the process of establishing partnership arrangements and to provide technical support and coordination for resource mobilization activities required. This role was recently confirmed through a Government Decision on 23 April 2001 and reinforced through the establishment of an Inter-Ministerial Committee on Partnerships tasked with establishing effective partnership arrangements in selected sectors for the development of Cambodia. These tasks will require a lot of work arid discussions, but the end result is that the Lead Responsibility for sectoral partnerships will still firmly be in the hands of each sectoral ministry/agency. 15. In establishing mutually-beneficial Partnerships, the RGC intends to clearly utilize the OECD/DAC guidelines and criteria established for donor agencies in implementing partnership and capacity development activities, as well as the principles for Strengthening Development Partnerships arid simplifying and harmonizing donor procedures, which were agreed on by all donor agencies and countries at the late 1999 OECD/DAC Conference. These guidelines and basic criteria will help the Government and its development partners in determining the capabilities of the lead agencies, facilitators and proponents in being able to provide a check and balance between donors which will participate in Partnership arrangements using sector wide mechanisms and those which intend to continue on with the traditional project-based assistance. The Royal Government is evolving a clear policy that planning and programming activities in each sector will be integrated based on national development agenda and will involve bilateral and multilateral donor agencies, international organizations/NGOs/CSOs, and even private sector service providers or investors. The Government will still encourage separate financing and implementation modalities based on this integrated sectoral approach. This policy ensures that no hindrances arise in the mobilization of ODA and in the implementation of development activities, which benefit Cambodia and its population. 16. Aid coordination and management is not only leadership in the entire process but more so the ability for lead agencies and facilitators to manage the process and secure consensus in order to leverage varied activities and resources in a most effective manner. Unless process management issues are well coordinated between RGC and Donors, this would again lead into a donor-driven situation. It is with this resolve that we reiterate that the RGC intends to be cautious and selective in such implementation. We fully intend to take the lead responsibility in the process of aid coordination and management in the development of such Partnerships, and we will demonstrate the political will to assume full ownership of our own development agenda and leadership of the process necessary to develop it. 17. In dosing, let me also add in all humility, that our achievements so far and the knowledge and experience we have gained, gives us confidence that we can take our country forward. We are eternally indebted to all of you for your generosity in assisting Cambodia since 1992 and we need your continued help in the years to come. Let us assure you that your interest in and assistance to us will be well rewarded by Cambodia becoming a strong economic partner in the region and growing robustly to bring rising levels of prosperity to its people. Thank you for your attention and interest. 3. Overview of Developments in the Australian Aid Program ------------------------------------------------------------------------------------------------ Ms Jennifer Rawson will discuss AusAID corporate directions and priorities ------------------------------------------------------------------------------------------------ The 2000/2001 Australian Aid Budget Australia will provide a total of $1.6 billion in official development assistance in 2000/01. This is an increase of $100 million, or 4% in real terms, over the 1999/00 Budget figure of $1.5 billion. The aid program focuses on the Asia Pacific region, with Papua New Guinea, the Pacific and the poorest regions of East Asia being the areas of highest priority. The sectors of highest priority for the aid program are agriculture and rural development, health, education, governance, and infrastructure. With the exception of infrastructure, these are also the key sectors of the Cambodia program. The 2001/2002 Australian Aid Budget The 2001/02 Budget will be released on 22 May and is confidential at this stage. It is envisaged that the aid budget will be tight in the coming year due to competing pressures within the aid program and wider budgetary pressures. The Cambodia Program Financial Year 2000/01: The Budget estimate for the Cambodia program in 2000/01 is $37.9 million. This is made up of $23.8 million for the bilateral program and an estimated $14.1 million for other programs. Our current estimate for the bilateral program includes some over-programming. In contrast to the allocation of $23.8 million, our current estimate is $24.2 million. At this stage we expect that there will be some slippage in the estimates and that the bilateral program will come in on target for the year. Table 1 and Figure 1 show the sectors in which the bilateral program funds will be spent this year. The major sectors of assistance will be agriculture, health, education & training, community development, landmine action and governance. The Country Strategy set a target of 35% for the agriculture sector. This will be met in 2000/01. The current estimate for other programs is $16.9 million, compared to the original Budget estimate of $14.1 million. Major activities funded through other programs include food aid, landmine action (including clearance, awareness and victim rehabilitation projects) and support for the activities of Australian NGOs in Cambodia. Financial Year 2001/02: The.2001/02 budget will be released on 22 May. Therefore we do not yet know the bilateral allocation for Cambodia. Table 1 shows indicative planning figures with the allocation held constant. A number of large activities are locked in or in the advanced stages of design. Therefore, the scope for new activities is limited. Figure 2 shows the sectors in which the bilateral program funds are expected to be spent in 2001/02. Agriculture is again the largest sector. The balance of the bilateral program is fairly evenly spread across the other Country Strategy sectors.
TABLE
I - BILATERAL PROGRAM (A$’OOO)
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