CONSULTATIVE GROUP MEETING, MARCH 2 - 3, 2006 Cambodia: Government and Donors Agree Opportunity to Benefit From Deeper Reforms is Now - Joint Meeting Concludes with New Agreement on Next Steps for Better Future Public Disclosure Authorized hnom Penh, March 3, 2006 -- the 8th atmosphere for debate PConsultative Group (CG) Meeting on and dialogue and pro- Cambodia ended with Government and de- viding citizens, particu- velopment partners agreeing with Prime larly the poor, with the Minister Samdech Hun Sen’s statement that opportunities and tools Cambodia has chosen to be “firmly on the to raise concerns and path to progress and realization of its true ask for change, need to potential”, but that “every step shows us be continued, as they new challenges ahead.” For Cambodia to can significantly im- benefit from the vast opportunities of the prove the prospects of next decade, delegates agreed that the coun- successful reform, del- try needs to act now to consolidate the egates agreed. progress it has made to date and accelerate “To achieve the Public Disclosure Authorized its reform efforts in order to address remain- Cambodian Millennium ing challenges. Development Goals Delegates agreed that there was reason (CMDGs) Cambodia for optimism – given the past decade’s needs to intensify its ef- progress and the last year’s accomplish- forts to tackle emerging Prime Minister Hun Sen: “To achieve the Cambodian Mil- ments on growth and reform. However, to issues and daunting lennium Development Goals (CMDGs) Cambodia needs to sustain the progress over the last decade challenges,” declared intensify its efforts to tackle emerging issues and daunting made possible in large part by the transi- the Prime Minister. challenges”. tion from war to peace, the Government and The CG Meeting, held March 2-3 in the past decade on improving people’s development partners will need to redouble Phnom Penh, was attended by members living standards and opening up tremen- their efforts to implement reforms and im- of the donor community, including 12 dous opportunities. He commented, prove aid effectiveness. partner countries, 8 observer countries, “Cambodia is moving from war to peace; These include reforms to reduce cor- 5 international development organiza- from a culture of conflict to a culture of Public Disclosure Authorized ruption and make government more respon- tions, and the Government of Cambodia. compromise: and from a culture of con- sive, responsible, effective, transparent, ac- Civil society and private sector represen- frontation to a culture of dialogue and countable; continued commitment to mac- tatives attended as well. reconciliation. As we march further into the 21st century, the next ten years repre- sent a decade of opportunity to realize our development goals – defined through the CMDGs – and uplift the poor and vulnerable.” Referring to the important progress made by putting in place the Government’s new Five-year develop- ment plan – the National Strategic Devel- opment Plan (NSDP) and its correspond- ing work outlining priority government expenditures, the Public Investment Pro- gram (PIP), he said, “Setting down strate- Public Disclosure Authorized gies and targets on paper is the first step. Far more important is to plan and pur- sue practical actions to achieve them. … We need to work hard on further improve- The 8th Consultative Group (CG) Meeting was held in Phnom Penh on March 2 - 3, 2006 ments in governance if we are to make more than a dent in poverty.” roeconomic stability and promoting broad- Country Context: Delegates welcomed the NSDP and based and more equitable growth; invest- Cambodia’s Achievements PIP as a key sign of Government owner- ing in infrastructure and private sector led ship of the development agenda, and com- growth; and improving services for human mended the NSDP’s approach of provid- development and to improve the lives of The Prime Minister noted the posi- ing a road map, prioritization, and resource poor people. Efforts to create a more open tive impact of peace and stability over see NEXT page requirements to help the Government economy remains heavily dependent from 2004 to 2006 to the previous CG achieve the vision laid out in the Rectan- upon a few sectors, and the primary ben- period of 2002 to 2004, we note a clear gular Strategy. As detailed sectoral plans efits of this growth are highly concen- acceleration of reform in most areas. In for NSDP are developed and implemented, trated among the richer urban segments these areas a sense of momentum is being delegates agreed to work together to fo- of the population, which has resulted in built – which is heartening. And though cus on diversifying the sources of a rapid increase in inequality between the record is still clearly mixed, there is a growth, accelerating better land manage- the rich and the poor.” sense that Cambodia is going down the ment, developing rural infrastructure, and Senior Minister Mr. Keat Chhon, Min- right path,” said Mr. Porter during his investing in basic human development in ister of Economy and Finance and Co- Closing Remarks today. order to increase the impact and effec- Chair of the meeting commented, “Not- tiveness of the Five-year plan. Govern- withstanding this significant progress, Looking Forward: Serious ment and donors agreed to increasingly we still face many challenges to combat Challenges Remain align all public resources including aid poverty. Improving living standards and with the NSDP and PIP. the equitable distribution of growth Delegates stressed that key reforms in Delegates agreed that since the last among the population remains a high natural resource management, on the legal meeting of the Consultative Group in De- priority for the Royal Government. The and judicial framework, and on anti-cor- cember 2004, there has been important agriculture sector is the source of liveli- ruption need to be accelerated, and urged progress – with growth maintaining its hood of more than 70 percent of the la- immediate steps to move forward on these earlier average of 7 percent a year, in spite bor force – therefore speeding up the de- important action items which would have of higher oil prices and the ending of the velopment of this sector is the highest both immediate impacts in terms of solidly Multi Fiber Agreement (MFA) – and other and most important urgent priority. Sus- positioning the Government on the path economic and social indicators improv- tainable development, poverty reduction to reform and more long-term benefits in ing as well, including a reduction in ma- and the CMDGs cannot be achieved terms of growing confidence in the coun- ternal and child mortality rates, dramatic without further improvements in rice pro- try, increased growth, and ultimately, ac- decrease in infectious diseases, and im- ductivity and diversification of crops as celerated poverty reduction. proved supply of clean water in urban well as promoting agro-industry devel- Delegates called for accelerated efforts areas. The fight against poverty is also opment.” to address some shortcomings in natural showing some results, with a new Pov- Progress has also been made on some resource management, noting that while erty Assessment released last week show- key institutional and policy reforms – greater information availability on eco- nomic land concessions is welcome, more complete disclosure is needed to improve transparency and efficiency. Delegates welcomed the Prime Minister’s commitment that land not being appropriately utilized be converted from economic land conces- sions to social land concessions for the poor, and also urged increased attention to ensuring fair and equitable land dispute resolution, as tenure insecurity remains a core constraint to Cambodia’s economic and social development and a key factor in rising inequality. Delegates also agreed with the Prime Minister’s call for continua- tion of independent forest crime monitor- ing – which requires donor funding – and delegates noted that the institutional framework for independent monitoring of illegal logging and land grabbing needs to H.E. Kong Vibol, Secretary of State of Ministry of Economy and Finance; H.E. Sok be reviewed urgently. A comprehensive ag- Chenda, Secretary General of Council for the Development of Cambodia; and H.E. riculture development strategy is also Senior Minister Cham Prasidh, Senior Minister of Commerce, at the CG meeting needed, to guide reforms and development ing that pverty rate fell from about 47 per- which is measured through the Joint work in this key area which could greatly cent in 1993-4 to 35 percent in 2004. “These Monitoring Indicators or JMIs – with key benefit Cambodia’s rural poor. findings finally lay to rest the impression initiatives made in both formulating and On legal and judicial reform, partici- that had taken hold, that Cambodia had adopting a strategy and in carrying out pants urged the Government to move somehow experienced a decade of rapid specific actions in the areas of public fi- ahead decisively on passing of a series of growth with little or no poverty reduc- nancial management, private sector de- eight laws which are fundamental to es- tion,” said Mr. Ian Porter, World Bank velopment, human development and in- tablishing a sound framework for a more Country Director for Cambodia and Co- frastructure made over the last 15 months. effective legal and judicial system. On anti- chair of the CG Meeting. Reforms in public administration and on corruption, delegates noted that the cur- He continued,