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Case Study Efforts and Issues to Improve Aid Coordination and Effectiveness in Cambodia * Yoko KONISHI 1970 NGO OECD/DAC 2006 5 ABSTRACT Cambodia still remains one of the Least Developing Countries (LDCs) due to its legacy of genocide during the Pol Pot regime and the following civil war that lasted until the 1990s. In this context, external assistance from the international community and NGOs has been playing a significant role in improving human development and reducing poverty in Cambodia. However, those supports have been subject for donor trends with low government ownership, the * UNDP 14

government has had difficulties in meeting various donor procedures, and sustained capacity development has not yet been realized. Since its participation of OECD/DAC exercise for harmonization, the Royal Government of Cambodia (RGC) and its development partners have been making efforts for harmonization and alignment of development cooperation. With the formulation of the National Strategic Development Strategy 2006-2010, the Strategic Framework for Development Cooperation Management, and the newly restructured aid coordination dialogue mechanism, the RGC aims to achieve its own poverty reduction and Cambodian Millennium Development Goals more effectively. This paper examines the background of that effort, and discusses issues impacting improved aid coordination and aid effectiveness in Cambodia. There are several challenges to meeting such objectives in Cambodia; these include linking planning to budgeting processes, shifting the support from policy alignment to system alignment (including supporting credible public financial management system), streamlining the aid coordination window and installing an effective institutional arrangement with key ministries, supporting enhanced and coordinated capacity development and civil service reform, promoting managing for results and mutual accountability, delegating authority from the donor HQ to the field offices and reviewing internal incentive frameworks for aid coordination, and finally, creating behavior and an approach that considers the host country s culture and effective aid dialogue. 177 130 UNDP 2005 1 GDP 441 IMF 2006a Least Developing Countries: LDC 1994 2002 6.7% 2005 13.4% IMF 2006b 35% 1 1992 2005 6267 CDC/CRDB 2006 ODA 2004 12 504 2006 3 601 2004 551 2005 629 CDC/CRDB 2006 2 1 ODA 37.9 GDP ODA 12% ODA UNDP 2005 1975 79 1 100 1990 3 1980 NGO 1991 15

I 1992 Consultative Group: CG CG CG 1999 3 CG 5 4 5 ASEAN ASEAN 23 17 NGO 1600 NGO OECD/DAC 2000 4 CG A New Development Cooperation Partnership Paradigm for Cambodia 1990 OECD/DAC OECD/DAC 6 OECD/DAC Hubbard, M. 2002 2002 16

II 1 1996-2000 Socioeconomic Development Plan: SEDP Asian Development Bank: ADB 2 2001-2005 Second Socio-economic Development Plan: SEDP II Comprehensive Development Framework: CDF Poverty Reduction Strategy Paper: PRSP National Poverty Reduction Strategy: NPRS 2003-2005 Cambodian Millennium Development Goals: CMDGs 2003 JICA 2001 2003 Cambodia People's Party: CPP 3 2 1 ADB DFID 17

UNDAF Quadripartite Initiative 1 2004 7 The Rectangular Strategy RGC 2004 7 National Strategic Development Plan: NSDP 2006-2010 NSDP NSDP 1 12 8 SEDP II NPRS NSDP 1 NSDP 2007 3 NSDP NSDP 3 Public Investment Program: PIP Medium Term Expenditure Framework: MTEF 2006 CG PIP 2006-2008 2006 NSDP NSDP MTEF PIP RGC 2006 NSDP 9 NGO NGO OECD/DAC ODA 18

III 2002 6 CG 10 OECD/DAC 11 12 13 3 2004 1 1 CDC Council for Development of Cambodia /CRDB Cambodian Rehabilitation and Development Board = / 2004 9 CG 17 Technical Working Group: TWG 14 TWG TWG Government-Donor Coordination Committee: GDCC CDC CRDB TWG TOR Joint Monitoring Indicators: JMIs CG 15 GDCC 2006 3 CG NSDP 2006-2010 NSDP 2010 NSDP NSDP CG Strategic Framework for Development Cooperation NSDP 19

NSDP 2005 3 5 2006-2010 16 2006 17 GDCC CDC/CRDB TWG GDCC TWG TWG TWG TWG CRDB 2006 TWG IV 3 PIP NSDP MTEF MTEF NSDP ODA NSDP PIP 20

MTEF CDC/CRDB NSDP 2006 2006 2010 5 3500 700 2500 ODA NSDP ODA NSDP Quadripartite Initiative NSDP 18 19 ADB Standard Operation Procedures 20 CDC/CRDB CDC/CRDB Strategic Framework for Development Cooperation Management 2006 1 Council of Ministers 21

CDC/CRDB 21 UNDP NZAID DFID CIDA AusAID JICA 2007 1 CDC/CRDB CDC/CRDB 2007 800 22 23 Capacity Development Technical Cooperation 24 25 Project Management/Implementation Unit: PMU/PIU 2006 PMU/PIU 10 PIU PIU Strategy 1 26 NGO NGO Andersen, O.W., T. Lindqvist, and J.Nielsen 2002 27 28 29 22

2004 CG 2005 6 Public Administrative Reform TWG Council for Administrative Reform: CAR AusAID DANIDA UNDP 2 TWG TWG TWG 1 Merit-based Pay Initiative: MBPI NGO CG IMF CG GDCC NGO 30 NSDP CG 2005 3 CG CG GDCC 2007 CG Cambodia Development Cooperation Forum TWG 23

OECD/DAC 2006 Asia Foundation 2005 V 2006 32 OECD/DAC 31 UNDP UNDP JICA UNDP Philip Courtnadge DFID Helen Appleton Ann Lund 1 Ministry of Planning 2004 World Bank 2006 IMF 2006b 1 2100 24

1 1753 2351 1 160 250 91% 2 ODA ODA 3 1975 400 600 1980 10 117 6 1 World Bank 2004 4 HIV/ 5 NGO 6 2003 1 7 Economic Policy Agenda of the Political Platform of the Royal Government in its Third Legislature of the National Assembly 2004-2008 8 Declaration on Harmonization and Alignment 2 December 2004 12 ADB EC GDCC 9 pp.50-52 Partnership in Development 10 CDC/CRDB UNDP Partnership and Harmonization Technical Working Group UNDP DFID 11 Siddiqui F. C. Sticker and P. Vinde [2004] Council for Administrative Reform: CAR 12 Government-Donor Partnership Working Group Sub- Working Group No.3 2004 13 National Operational Guidelines for Development Cooperation Grant Assistance March 2006 Phnom Penh 14 HIV/ 18 TWG 15 3 16 RGC s Action Plan for Harmonization Alignment and Results 2006-2010 2006 2 CDC http://www.cdc-crdb.gov.kh/cdc/h_a_r_action_ plan2006-2010.htm 17 3 18 ODI 2005 19 SEILA UNDP CARERE. 20 Regional Workshop on Aid Coordination and Management June 6-8 2006 UNDP 21 Multi-Donor Support Program to Implement the RGC s Strategic Framework for Development Cooperation Management 22 World Bank 2004 Capacity Building Study Siddiqui F. C. Sticker and P. Vinde 2004 740 23 Action Aid International 2005 24 OECD 2006 DAC 25 DFID 2005 World Bank 25

1998 26 1 33 World Bank and Asian Development Bank 2003 15% 27 Public Administrative Reform TWG 2006 1 28 29 A 5 10 30 NGO CCC MediCam NGO GDCC NGO 31 OECD/DAC 2006 5 CDC DAC http://www.oecd.org/document/50/0,2340,en_2649_155 77209_37106034_1_1_1_1,00.html DFID JICA 2001 JICA Action Aid International 2005 Real Aid, an agenda for making aid work, June 2006. Johannesburg, South Africa. Andersen, O.W., T. Lindqvist, and J.Nielsen 2002 Salary Reforms as Part of Public Sector Reforms in Developing Countries, the cases of Tanzania and Bolivia, Danida Discussion Paper, No.4, October 2002. Asia Foundation 2005 Aid Effectiveness and Aid Coordination in Cambodia, Stakeholder Perceptions, October 2005. Phnom Penh. Funded by DFID. Cambodian Rehabilitation and Development Board CRDB 2006 The Government-Donor Coordination Committee GDCC and Technical Working Groups TWGs in Cambodia, a Review. October 2006. Phnom Penh. Cambodian Rehabilitation and Development Board, Council for the Development of Cambodia CDC/CRDB 2006 Development Cooperation Report 2004 and 2005, Phnom Penh. 2007 A Capacity Development Strategy for the Cambodian Rehabilitation and Development Board, Council for the Development of Cambodia, January 2007. Phnom Penh. DFID 2005 Why We Need to Work More Effectively in Fragile States. Government-Donor Partnership Working Group, Sub-Working Group No.3. 2004 Practices and Lessons Learned in the Management of Development Cooperation, case studies in Cambodia. February 2004. Phnom Penh. Hubbard, M. 2002 Cambodia, a country case study (funded and commissioned by OECD-DAC Task Force on Donor Practices. IMF 2006a IMF Executive Board Concludes 2006 Article IV Consultation with Cambodia, Public Information Notice PIN No.06/78, July 20, 2006. 2006b Cambodia, selected Issues and Statistical Appendix. IMF Country Report No.06/265. July 2006. Ministry of Planning 2004 Cambodia Socio-Economic Survey, National Institute of Statistics, Phnom Penh. OECD/DAC 2006 Working Party on Aid Effectiveness and Donor Practices, compendium of Donors Reports on Disseminating the Paris Declaration. 3 July 2006. Paris. Overseas Development Institute ODI 2005 Weak/fragile country leadership and fragmented donors, Senior Level Forum on Development Effectiveness In Fragile States, Harmonization and Alignment in Fragile States, Draft Report by Overseas Development Institute ODI, United Kingdom, Meeting in London, 13-14, January 2005. Royal Government of Cambodia RGC 2004 The Rectangular Strategy for Growth, Employment, Equity and Efficiency in Cambodia, Prime Minister Samdech Hun Sen and The Third Legislature of the National Assembly, At The Office of the Council of Ministers, Phnom Penh, 16 July 2004. 2006 National Strategic Development Plan 2006-2010, For Growth, Employment, Equity and Efficiency to reach Cambodia Millennium Development Goals. Chapter VI. Monitoring and Evaluation. Phnom Penh. Siddiqui, F., C. Sticker and P. Vinde 2004 Capacity Building Practices of Cambodia's Development Partners : Results of a survey, a Discussion Paper prepared for Government-Donor Partnership Working Group. UNDP 2005 Human Development Report, International 26

cooperation at crossroads; Aid, trade and security in an unequal world. New York : Oxford University Press. World Bank 1998 Assessing Aid: What Works, What Doesn t, and Why. Washington, D.C. : World Bank. 2004 Cambodia at Crossroads: strengthening accountability to reduce poverty, prepared by the World Bank in collaboration with the IMF for the Cambodian Consultative Group Meeting. Phnom Penh, December 6-7, 2004. 2006 Halving Poverty by 2015? Poverty Assessment 2006. Phnom Penh. World Bank and Asian Development Bank 2003 Cambodia Enhancing Service Delivery through Improved Resource Allocation and Institutional Reform, integrated Fiduciary Assessment and Public Expenditure Review. A joint document of the World Bank and the Asian Development Bank. UNDP UNDP 27