The Fourth ASEAN
Senior Officials Meeting on Development Planning
Bali, Indonesia
14-15 July 2005
Country Paper:
CAMBODIA
I. Background
Over the last decade, Cambodia has achieved full peace, security, political stability and solid economic growth, maintained sound macroeconomic stability, and made remarkable progress in both human and economic development. In particular, the country's garment and tourism industries have speedily expanded from a very low base; and physical infrastructure, especially roads and irrigation schemes, are undergoing rapid rehabilitation. In the area of social development, Cambodia has made considerable advances. School enrolment has substantially increased; the health system has been rebuilt; and Cambodia has emerged as a model of successful HIV/AIDS prevention.
In reality, Cambodia entered a new phase of development after the General Elections in 1993, following the unprecedented trauma and catastrophe of the mid-1970s and its aftermath. Since 1993, fundamental reforms have been carried out in many critical areas and significant progress has been made in reconstruction and recovery.
However, still much remains to be done to rebuild the Cambodian economy and the society. Cambodia is a poor country with a low per capita income, which has changed very little since the 1990s. At current prices, per capita GDP is estimated at a low of US$ 297 in 2002, reflecting slow economic growth in the face of relatively rapid population growth in the country. Economic growth in Cambodia averaged 5.6 percent between 1993 and 2000, and it is estimated that half of the country’s poor can be lifted out of income poverty if a 6 percent growth can be sustained for eight years.[1] According to the latest available statistics, about 4.5 million Cambodians--around 36 percent of the total population (1999)--live in poverty and 45 percent of the children under five are underweight (2000). Cambodia’s poverty is rooted in its large agricultural sector, which has low productivity and low growth, but provides the livelihood to the vast majority of the country’s population. In terms of the UNDP Human Development Index, Cambodia is placed 130th out of 175 nations of the world.[2]
Notwithstanding the successful decade of achievement, many challenges remain, especially the pervasive poverty that still persists in the country. The Royal Government of Cambodia (RGC) considers capacity development of its citizens as a powerful instrument to address various development issues and challenges. Hence, there is a great need to improve human resource capacity in order to increase the impact of resources committed to reaching the objectives set out in the country’s development plans and programs.
The RGC’s long-term vision for development has been reflected in a series of policy documents, including the Second Socio-Economic Development Plan (SEDP II) 2001-2005, National Poverty Reduction Strategy (NPRS) 2003-2005 and the National Population Policy, 2003. Cambodia has also adopted the Cambodia Millennium Development Goals (CMDGs) as the overarching goals of development.
The development vision of RGC is to ensure a socially cohesive, educationally advanced and culturally vibrant Cambodia without poverty, hunger, disease and other social evils. The realisation of the vision requires persistent adherence to the principles and values of social justice and human welfare and promotion of people’s empowerment. The Royal Government’s mission is to realise the vision through establishing a democratic political system and a liberal market economy for which sustainable economic and human development and poverty reduction are essential elements.
The process of transformation of the Cambodian economy, nevertheless, faces many challenges--poor macroeconomic conditions; less developed state of the country’s social, institutional and physical infrastructure; underdeveloped financial systems; extremely inadequate availability of funds and materials; inability of the majority of the Cambodians to meet the basic needs; to name a few.
Despite such formidable constraints, the policy framework recognises that the country’s development potential can best be realised by pursuing outward-looking policies that foster Cambodia’s re-integration into the regional and the world economy. In this respect, Cambodia has adopted a ‘dual track policy’ under which the emphasis is on creating a strong domestic foundation of the national economy along with promoting beneficial external linkages through trade, investment and financial cooperation, especially in the region. This will provide a solid base for ensuring a balanced development of Cambodia and reduce the nation’s exposure to external volatility.
I.1 Structure and Mechanism of Planning Agency
In Cambodia, the Ministry of Planning (MOP) is responsible for guiding and managing socio-economic development planning and related statistics. The structure and mechanism of MOP is summarised in Figure 1. Under the overall guidance of the Minister, MOP has two organisations at the central level: the General Directorate of Planning and the National Institute of Statistics (NIS). The General Directorate of Planning consists of (i) General Planning Department; (ii) Economic Planning Department; (iii) Social Planning Department; (iv) Investment Planning Department; and (v) International Relation Department. The NIS, on the other hand, has four departments: (a) General Statistics Department; (b) Economic Statistics Department; (c) Social Statistics Department; and (d) Demographic Statistics, Census and Survey Department.
For ensuring smooth functioning, these departments are supported by the Directorate of Inspection, Cabinet of Minister, Personnel Department, General Administrative Department and Supply and Financial Department. At the local level, Provincial-Municipal Planning Offices and the District Planning Offices maintain vertical linkages with the national level, implement and coordinate the Ministry’s tasks, and provide support to planned local development.
I.2 Mandate of the Planning Agency
The mandate of the MOP stems from the Sub-Decree (No. 55.SD.ES) of the Royal Government, which organises the MOP’s entities and determines all tasks and roles of the directorates and departments of the Ministry. In Cambodia, the MOP is solely responsible for guiding and managing socio-economic and cultural development planning and related statistics.
In particular, as the planning agency of the country, MOP has several important roles and responsibilities, such as to:
· Act as the Government arm in formulating concepts, strategies, policies and in determining priorities for national development in order to ensure the sustainability and balance between development equity and social justice, between economic development and social and cultural development, between urban and rural areas, between exploitation and regeneration of natural resources, and between development and environmental protection.
· Guide and manage methodologies and procedures used in formulating socio-economic and cultural development plans according to decentralized system in the whole country.
· Prepare long, medium and short-term plans and national programs by coordinating with all relevant ministries/institutions in order to ensure consistency among socio-economic sectors and among provinces and regions.
· Monitor the implementation of plans, national programs and projects in all sectors, make assessments and propose corrective measures as needed.
· Work with concerned ministries/institutions in formulating strategies and policies and identifying priorities for both public and private investments in order to promote efficiency and maximize the use of potential internal and external resources.
· Collaborate with the Ministry of Economy and Finance in fixing the volume and in allocating the annual budget for public investment.
· Work with relevant ministries/institutions to formulate strategic policies and identify priorities in order to ensure that socio-economic, technological and cultural cooperation with foreign countries is consistent with national development objectives and policies.
· Work with relevant ministries/institutions to formulate demographic policies and plan of action about balanced distribution of manpower to ensure socio-economic development and national defence.
In addition, the Ministry is responsible for managing the national statistical system to generate required data and information and exchange statistical information at regional and international levels.
Within the MOP, the General Directorate of Planning has the roles of ensuring consistency in socio-economic development through coordination of all sectoral and sub-national plans and programs; monitoring the implementation of plans/programs in collaboration with relevant ministries/agencies; and providing coordination in periodic reporting on socio-economic developments. The departments under the General Directorate of Planning are responsible to undertake stipulated tasks under their own domains covering planning, monitoring and related functions.
For ensuring coordinated regional and global economic cooperation, the International Relation Department is responsible for (i) analysing and forecasting the overall situation of external economic cooperation and suggesting measures to reorient socio-economic, cultural and technological cooperation consistent with national development goals; (ii) ensuring cooperation and coordination in development planning framework with other countries as needed; and (iii) coordinating socio-economic and other forms of cooperation with other countries as per national interests.
II. Linking the Regional Agenda to National Actions
The Second ASEAN Informal Summit, held in Kuala Lumpur on 15 December 1997, adopted the ASEAN Vision 2020 which sets out a broad vision for ASEAN in the year 2020: an ASEAN as a concert of Southeast Asian Nations, outward looking; living in peace, stability and prosperity; bonded together in partnership in dynamic development and in a community of caring societies. For implementing the long-term vision, action plans are also being drawn up, of which the Hanoi Plan of Action (HPA) is the first in a series of plans of action for realising the goals of the vision.
II.1 Mainstreaming ASEAN Vision
The Hanoi Plan of Action, with a six-year timeframe covering 1999-2004, aims at closer regional integration through consolidating and strengthening economic fundamentals of the member countries. In particular, the emphasis is to strengthen macroeconomic and financial cooperation; enhance greater economic integration; promote science and technology development including information technology infrastructure; promote human resource development; protect the environment and promote sustainable development; strengthen regional peace and security; enhance ASEAN’s role as an effective force for peace, justice and moderation in the Asia-Pacific and in the world; promote ASEAN awareness and its standing in the international community; and improve ASEAN’s structures and mechanisms.
In order to solidify and accelerate regional integration, the Bali Concord II was adopted at the 9th ASEAN Summit in 2003, which redefined the four themes of the ASEAN Vision 2020 in terms of (i) A Concert of Southeast Asian Nations; (ii) A Partnership in Dynamic Development; (iii) A Community of Caring Societies; and (iv) An Outward Looking ASEAN supported by three pillars, namely (a) political and security cooperation; (b) economic cooperation and (c) socio-cultural cooperation.
As a follow up of HPA, the Vientiane Action Program (VAP) has also been adopted for the period of 2004-2010. For effective implementation of various programs and other initiatives under the VAP, along with a comprehensive understanding, adequate coordination and harmonisation of relevant national and regional programs will be essential to reaching the regional integration milestones.
Cambodia, as an active member of ASEAN, has been making continuous efforts to internalise and mainstream the ASEAN development agenda into its national level to ensure that the measures agreed upon in realising the ASEAN Community are promptly and effectively implemented in the country.
With the return of peace and restoration of macroeconomic stability after 1998, Cambodia initiated far-reaching reforms in all facets of economic and social life. For ensuring rapid growth with macroeconomic stability and sustaining the efforts to strengthen democratic institutions and promote global integration, the RGC clearly defined its development agenda through a series of policy documents, including the First Socio-Economic Development Plan (SEDP I) 1996-2000, Second Socio-Economic Development Plan (SEDP II) 2001-2005, and the National Poverty Reduction Strategy (NPRS) 2003-2005.
At present, Cambodia is in the process of preparing the National Strategic Development Plan (NSDP) 2006-2010 by combining the earlier SEDP and NPRS processes and integrating it with the Cambodia Millennium Development Goals (CMDGs). The CMDGs-based NSDP will be rooted in the ‘Rectangular Strategy’ for Growth, Employment, Equity and Efficiency, which provides the Political Platform of the Royal Government in the Third Legislature (2004-2008) of the National Assembly of Cambodia.
It may be mentioned here that, in 1998, the RGC adopted the ‘Triangular Strategy’ aiming to enable Cambodia to fully reclaim its destiny, to become a genuine partner in regional and global affairs, and to be well on its way to becoming a truly free nation; free from hunger, poverty, and other socio-economic deprivations. The Strategy called for Cambodia’s integration into the region and normalisation of its relationships with the international community, thus enabling Cambodia to attract more foreign assistance and foreign direct investment (FDI) to support the country’s development efforts.
The first side of the Triangular Strategy was peace building, stability restoration, and maintenance of security for the nation and the people. The second side of it was Cambodia's integration into the region and normalisation of relationships with the international community. The last, but not the least, side was the enhancement of economic and social development through the implementation of an ambitious reform program, agreed upon after intense discussions and consultations.
Within the context of the Triangular Strategy, and building upon the Interim Poverty Reduction Strategy Paper, the RGC adopted the Second Socio-Economic Development Plan (SEDP II) 2001-2005. The SEDP II presented the Government’s policies and strategies for achieving the primary development objective of poverty reduction. For this, four development objectives were adopted: (i) broad-based, sustainable economic growth with equity, at a rate of 6-7 percent per annum; (ii) social and cultural development; (iii) sustainable management and use of natural resources and the environment; and (iv) improvement in governance. For realizing these objectives, Public Investment Program covering three-year rolling action plan was formulated.
To sharpen the poverty focus in RGC’s policies and programs, the Council for Social Development (CSD), chaired by the Senior Minister of Planning, formulated the National Poverty Reduction Strategy (NPRS) 2003-2005. The NPRS laid out the key priorities for implementation over a three-year period in order to meet Cambodia’s poverty reduction goals. Within a comprehensive approach, the NPRS outlined pro-poor actions to improve rural livelihoods; promote job opportunities; ensure better health, nutrition and education outcomes; and reduce vulnerability. The NPRS was adopted as a rolling document with annual revision reflecting the progress of its implementation.
With strong commitments toward achieving the Millennium Development Goals (MDGs), Cambodia localised the MDGs into its national and local contexts and these were called Cambodia Millennium Development Goals (CMDGs). The CMDGs now consist of 9 goals, 25 overall targets, and 106 specific targets. The goals and targets were set at outcome and impact levels, and centred around welfare of the population including poverty, food security and nutrition, education, health, gender dimension, HIV/AIDS, environment, water and sanitation, land ownership, de-mining, and forging partnerships for development.