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p. 21 of 21 BACK | NEXT Executive Summary I. Background II. Overview of Development Issues III. External Development Assistance IV. Priority Sectors for ADB's Future Operations V. ADB Strategy in Operation A. Issues Cutting Across Priority Area Interventions B. Absorptive Capacity C. Modalities of ADB Operations D. Risk Factors for ADB Operations E. Performance Indicators for ADB Operations

Country Operational Strategy - Cambodia : V. ADB Strategy in Operation

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E. Performance Indicators for ADB Operations

162. Consistent with the new ADB-wide performance-based allocation framework, ADF operations in Cambodia will be based on performance of country-specific indicators as well as standard indicators. The common criteria for performance evaluation will include standardized indicators in macroeconomic management, poverty reduction and environmental management, governance, and portfolio performance. The country-specific indicators used in ADF allocation could include progress in forestry management reform, demobilization, and budget support for social spending. In addition, poverty targets will be identified in the SEDPII and agreed on with the Government in the partnership agreement. These will also form the basis for country allocations. Potential triggers for investment such as a successful review of the rural credit project as a prerequisite for a second financial sector ADF intervention are identified in the overview table in the executive summary. These triggers will be further clarified during project preparation.

163. For internal assessment of the success of the COS and in keeping with the emphasis on poverty reduction, the incidence of poverty, the Human Development Index and its components, and other social indicators such as infant and maternal mortality rates, will be monitored over the next five years. The intended primary beneficiaries of ADB operations over the next five years are the rural poor in the populous Tonle Sap and Plains regions. The rural poor constitute roughly 30 percent of the population.

164. With completion or significant progress in implementation of ADB interventions in rural and primary roads, transportation costs for farm products should fall. As a result of planned interventions in banking and rural finance, the rural poor should enjoy increased access to cheaper credit. Interventions in water supply and electricity in provincial towns should enhance economic activity, thus improving market opportunities for the rural population in those areas. Together with the activities of other aid agencies and a sustained reform effort, these accomplishments should lead to an overall improvement in per capita income. Ongoing efforts by all aid agencies in basic education and health should begin to improve social indicators in the next five years. Thus, it is expected that the incidence of poverty will fall and human development will improve, particularly in the rural areas, over the next five years.

Back D. Risk Factors for ADB Operations	Country Operational Strategy - Cambodia