Regions and Countries

	Table of Contents
p. 12 of 22 BACK | NEXT I. Country Performance Assessment II. Poverty Reduction and Country Operational Strategy III. Sector Strategies A. Agriculture B. Infrastructure C. Social Infrastructure and Environment D. Governance E. Gender Dimensions of ADB Operations F. Private Sector Development IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work IX. Local Cost Financing

Country Assistance Plans - Cambodia : III. Sector Strategies

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D. Governance

83. Good governance is an important crosscutting theme of ADB’s program. To support the process of improving governance, ADB cosponsored (together with Government and Konrad Adenauer Foundation), on 14-15 March 2000, a National Symposium on Democracy, Good Governance and Transparency in the ASEAN Context. A detailed study of governance issues in Cambodia, commissioned by ADB and carried out in close cooperation with the Government, highlighted three major governance challenges faced by the country: (i) strengthening transparency, predictability and accountability, (ii) ensuring broad participation in governance, and (iii) improving local governance especially at communal levels.²³ The study recommends guidelines for interactions between the government and aid agencies that include:

1. concrete governance reforms as a precondition to assistance in given sectors or to given institutions,
2. multiinstitutional participation in policymaking, rather than reliance on centralized committees or councils,
3. emphasis on development of accountability institutions such as the courts, the Supreme Council of the Magistracy, legislative commissions, the Ministry of Parliamentary Affairs and Inspection, the Ministry of Justice, and the National Audit Authority,
4. use of a specific set of governance performance indicators for program planning and monitoring.

84. To support sound development management through increased transparency, accountability, predictability and participation in development programs, the ADB governance program will include mainstreaming good governance practices into ADB program, particularly in support of the new ADB anticorruption policy. In addition, ADB will provide key support for improved macroeconomic management, and for capacity building in law and development. A series of governance TA totaling approximately $8.0 million in grant funds over four years will support this effort. A 2000 TA for capacity building in economic policy management will develop the capacity for independent policy analysis to assist the Prime Minister’s Office in reviewing policies submitted to the Council of Ministers for approval. A 2000 TA for Law and Development will initiate a program for judicial training.

85. A second 2000 TA will support the modernization of two aspects of Cambodian public financial management: budget management and audit. To improve budget management, capacity will be strengthened at MEF and priority ministries in budget formulation and strategic expenditure analysis, design of an Medium Term Expenditure Framework, and fiscal devolution. To improve audit, the TA will strengthen the capacity of the newly established National Audit Authority, help establish a modern internal auditing function in the MEF and in the Ministry of Health (MOH), and strengthen the Finance and Banking Commission of the National Assembly so it can play its role in the accountability chain. Improvements in both fiscal management and audit will be sustainable because of the introduction of priority groups of key government officials.

86. These efforts will be followed by TA support for further capacity building in macroeconomic and public finance management in 2001, in law and development in 2002, and in statistical systems development and economic policy management in 2003.

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