Home 
Countries and Regions Country Partnership Strategies Document
II. Implementation of the CSPA. Poverty Reduction7. According to the Cambodian study of poverty assessment (Ministry of Planning, 1999), 36 percent of the population has a per capita consumption level below the poverty line: KR54,000 per head per month or about $14 (less than $0.50 a day). As in other countries in the region, over 90 percent of the poor live in rural areas. Approximately 70 percent are employed in agriculture. If an annual real GDP growth rate of 6 percent is achieved over the period 2001-2005, income would reach approximately $320 per capita, up from the current $271. Such growth would reduce poverty significantly, assuming that there are no adverse changes in income distribution. Cambodia’s poverty gap index is 8.7, which means many of the poor are just below the poverty line. The Government hopes to reduce poverty to just over 31 percent by 2005. 8. ADB assisted in formulating Cambodia’s Second Socioeconomic Development Plan (SEDP-II, 2001-2005), which is the key strategic document for reducing poverty in the country. National Assembly approval is expected before the end of the year. In formulating SEDP-II, a participatory poverty assessment (PPA) was undertaken to inform decision makers on the concerns of the poor. The launch of the first draft of the SEDP-II was at a high level forum at which civil society, the funding community, and government line ministries voiced their views on the Government’s strategic poverty reduction vision. The forum endorsed the thrust of the strategy, which has three broad goals: (i) long-term, sustainable economic growth of 6-7 percent a year; (ii) equitable distribution of income at the national level, in the urban and rural areas and between genders; and (iii) sustainable utilization of natural resources and environmental protection. 9. With this background, ADB’s CSP update was prepared on the basis of the 2000 country operational strategy (COS), the draft SEDP-II, the PPA and issues presented at the high level forum. These recent activities will strengthen and update the COS, and further ADB’s country program 2002-2004. Following approval of the CSP update and finalization of the SEDP-II, a partnership agreement reflecting key priorities of the Government and ADB will be signed with the Government by the end of 2001. B. Thematic Priorities1. Economic Growth10. Sustainable and equitable economic growth is one of the three goals of the Government’s poverty reduction strategy. Although necessary, such growth is not sufficient for achieving poverty reduction. Cambodia's population is relatively young and is growing rapidly, and the economy will need to continue to grow to support new entrants into the workforce. Otherwise, wages will stagnate and poverty reduction will be limited. To achieve the poverty reduction goal, the performance of agriculture needs to further improve, while the legal environment and physical infrastructure need to be strengthened to achieve private-sector-led growth. The Government continues to implement its reform program, with emphasis on governance, public financial management, decentralization and financial reforms in a stable macroeconomic environment. ADB will continue to support important elements of the reform program. 2. Human Development11. Cambodia’s human development index in 1998 was 0.512, which placed the country in 136th position among 174 developing countries according to the United Nations Development Programme’s (UNDP) 2000 Human Development Report. At the time of the general population census of Cambodia in 1998, infant mortality was 104 per 1,000 live births (Appendix 2). Only 32 percent of households had access to a safe water supply, 15 percent of households had electricity, and less than 15 percent had toilet facilities in the home. The adult literacy rate in 1998 was 68 percent. Net primary and lower secondary enrollment rates were 90 and 23 percent, respectively, reflecting high dropout and repetition rates. Physical infrastructure remains poor in both the health and education sectors, and the wages of service providers remain inadequate despite recent measures to improve them. 12. The poor quality of human resources remains a principal long-term constraint on economic development in Cambodia. Wages remain low, as does labor productivity. Less than 1 percent of the population has had any form of training beyond high school. ADB will continue to include capacity building and training in all the projects it supports, while spearheading major reforms in basic education and continuing to support basic skills development. 13. HIV was first detected in 1991 and has now been detected in all regions of the country. The highest prevalence rates are in urban areas, and in the southeast, central provinces, and along the Thai border. It is estimated that at least 3.8 percent of all sexually active adults (15-49 years old) in the population are now HIV positive, that close to 50,000 people become infected each year, and that more than 12,000 new cases of full-blown AIDS occur each year. HIV’s prevalence rate in Cambodia is the highest in Southeast Asia, and is rising at the highest rate. ADB will continue to support the Government’s as well the communities’ efforts to improve the human development situation, including support for specific HIV programs. ADB will also assist in addressing the epidemic by supporting regional programs. 3. Gender and Development14. Cambodia continues to experience serious gender disparities. Women have less access to health and education services, to paid employment, to land-ownership and other property rights; and have fewer opportunities to ensure that their views are included in the political process. The Government is committed to addressing gender imbalances (as reflected in the GAP), and aims to ensure that an appropriate gender focus is integrated into the planning and implementation process. ADB will continue to actively support the Government’s policy, by direct support to the Ministry of Women’s and Veterans’ Affairs—whose mandate is the mainstreaming of gender issues in development—as well as a sharper focus on gender issues in relevant ADB-supported projects. 15. As of 1998, 2.4 percent of pregnant women, 42.6 percent of commercial sex workers, and 19.1 percent of indirect commercial sex workers were infected with HIV. Women also bear primary responsibility for caring for family members with HIV/AIDS. Cambodia has become a sending, receiving, and transit country for trafficking of women and children. There are an estimated 88,000 Cambodian women in Thailand, and an estimated 40-60 percent of sex workers (14,000) in Cambodia say they were forced or tricked into the business. Other young girls turn to the sex industry as they have few viable alternatives. Poverty, social upheaval, underdeveloped legal infrastructure, and weak law enforcement are all contributing to the rapid growth of the sex industry. 4. Good Governance16. In January 2001, the Government finalized and published its Governance Action Plan, a document that is also highly relevant for ADB’s country strategy and program. The GAP focuses on two categories of governance reform critical to Cambodia’s development. The first category consists of five cross-cutting areas: (i) judicial and legal reform, (ii) public finance, (iii) public administration, (iv) anticorruption, and (v) gender equity. The second category consists of reforms in two specific areas: (i) demobilization of the armed forces, and (ii) natural resources management. ADB supported a governance assessment study, which assisted the Government in completing the GAP. ADB’s continued support to the Government’s reform agenda follow a two-pronged approach. Key elements of the GAP will be integrated into ADB-supported sectorwide development initiatives, and second, direct support will be given to certain aspects of public administration reform, decentralization, public finance reform, gender equity, and natural resources management. ADB is supporting public financial management, and certain key aspects of public administration reform. The loan and TA pipeline includes a number of governance-related projects. In addition, a number of sector projects (especially in education, health, rural development, and agriculture) will be formulated to support and assist in implementing reforms in public financial management, public administration, and gender equity. 5. Private Sector Development17. Unlike in many countries in transition, the role of state-owned enterprises in Cambodia is limited to only a few sectors. Developing the private sector in Cambodia requires investing in the physical, legal, and financial infrastructure necessary to support a vigorous private sector. Recently, steps were taken to improve the dialogue between the Government and the private sector, including the establishment of a number of thematic working groups. The Government is in the midst of an ambitious reform of the financial sector, which is an essential step to promoting economic growth and the private sector. In December 2000, the NBC revoked the licenses of 11 nonviable banks, and placed 16 banks, classified as conditionally viable, under agreements requiring compliance with restructuring measures and prudential regulations by the end of 2001. Only a few of the existing banks were granted unconditional operating licenses. There are currently no commercial banking services outside of Phnom Penh and a few other cities, and rural microfinance is limited. ADB will continue to provide policy, investment, and technical assistance support for physical infrastructure, financial sector reform and development (including rural finance), and improvements in the legal framework. ADB is supporting the establishment of the Mekong Project Development Facility, which will provide financing to small and medium-scale enterprises. 6. Environmental Protection18. Forestry and fisheries are vital natural resources for Cambodia’s overwhelmingly large rural population. Poverty is pervasive in rural Cambodia and many people depend on these natural resources for their livelihoods and subsistence existence in combination with small-scale, family-size farms. In recent years, pressure on these resources has intensified as Cambodia experiences a long period of political stability, along with a liberalized economy and a rapidly expanding postwar population. Recognizing this pressure, the Government, with external assistance, has taken concrete steps to develop strategies to manage these resources in a sustainable manner. Central to the strategy is the development of legal instruments to promote sustainable forest and fisheries management. The Government is currently in the advanced stages of formulating both forestry and fisheries legislation. In addition, the passage of the Land Law, expected in the middle of this year, and its implementation will assist in resolving environmental governance problems. A protocol governing the operations of an independent monitor for forest crime prevention has been signed by all parties. Further work is needed to ensure community participation and legal transparency in forestry. 19. In the inland fisheries sector, a recent decision released more than 50 percent of fishing lots from private holdings, and turned them over to local communities for management. The decision was made following numerous complaints and reports from villagers that fishing lot owners prevented them from conducting subsistence fishing, even in areas designated for communal fishing. Early reports indicate that, as a result of opening up the fisheries, unrestrained fishing is taking place. The Department of Fisheries is closely examining community fishery projects supported by the Food and Agriculture Organization as a possible model for further expansion, when the community fisheries subdecree is approved. ADB will support changes in natural resources management of the lake through a sector development program. 7. Regional Cooperation20. A key element of the enabling environment for private sector development is regional and global integration, which is a high priority of the Government. In addition to participation in the Greater Mekong Subregion (GMS) Economic Cooperation Program, Cambodia joined the Association of Southeast Asian Nations, and applied for membership in the World Trade Organization. ADB intends to support continued efforts to broaden Cambodia’s reintegration into the global economy by assisting its participation in the GMS program through TAs and selected investments, compatible with ADB’s overall program in Cambodia. 21. The first regional project under the GMS program was the 1998 Phnom Penh-Ho Chi Minh City Highway Project, currently being implemented. The Primary Road Restoration Project indirectly supports the GMS regional transportation program. The road network project scheduled for 2003 might also support GMS objectives. The Integrated Natural Resource Management Project scheduled in 2002 is being prepared under a GMS regional TA. In addition to these investments financed with Asian Development Fund (ADF), Cambodia will continue to benefit from GMS regional TAs designed to enhance regional development opportunities, encourage trade and investment among GMS countries, resolve or mitigate cross-border problems, and meet common resource and policy needs. Investments in the pipeline include GMS projects in telecommunications, tourism, and rail transport.
|
|||||||||||||||||||||||
RSS Feeds
Back
Top of page