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Countries and Regions Country Partnership Strategies Document
IV. Country Performance and Lending LevelsA. Proposed Lending Level27. The lending level for Cambodia is $75 million based on the performance-based allocation (PBA) system. Poor performance would result in a lower indicative planning figure (IPF) in a given year, up to 20 percent below the base case allocation. Good performance will indicate achievement of a policy and institutional environment conducive to a higher development impact and a more efficient use of scarce resources, and will result in a higher IPF, up to 20 percent higher than the base case allocation. Under the base case scenario, macroeconomic stability is maintained, the execution of budget implementation for each of the four priority sectors is in line with overall budget performance, portfolio performance is in line with the agreed upon targets, and progress is made in the area of forest management and prevention of illegal logging. The triggers for the low and high case scenarios are in Appendix 4. B. Loan Program28. The basis for the lending program is the 2000 COS and the draft SEDP-II. In addition, the Government’s own assessment of the country’s needs, as reflected in Socio-Economic Development Requirements and Proposals, tabled at the Consultative Group meeting in Tokyo, in June 2001, was taken into account. Accordingly, poverty reduction remains the overarching objective and the sharp focus of the assistance program. At the request of the Government, ADB agreed to be the facilitator in the education, water resources, and transport sectors, and that is reflected in the program. 29. The proposed lending program for 2002-2004 consists of 11 firm projects costing $225 million, or $75 million a year (Appendix 4). The 2004 program includes two standby loans, costing a total of $58 million. Additionally, the program contains three projects under the subregional GMS program, for a total of $85 million, or an average of $28 million a year. Average actual lending from 1992 to 2000 was about $66 million, with an average of $71 million in the last four years. Core poverty and poverty intervention projects constitute 73 percent of the program for 2002-2004. The project selection briefs are in Appendix 6. C. Technical Assistance and Economic and Sector Work Program30. The technical assistance (TA) program is envisaged to be about $5 million annually. The focus of the program will be on capacity building in governance as well as sectors in which ADB is involved, project preparation, and economic and sector work. To further strengthen the lending pipeline, and thereby provide increased flexibility to respond to changing needs and allow for PBA implementation, the 2002-2004 program contains 11 PPTA projects, or 45 percent of the total number of TA projects. Although the situation has been improving in recent years, the country continues to suffer from an extraordinary lack of capacity to manage the development process at all levels of Government. With the Government’s commitment to decentralization, this lack is likely to become even more acute. To augment ADB’s scarce grant resources, capacity building activities will also be financed from selected loans, while co-financing will play an increasingly important role. The concept papers for the TAs for 2002 are in Appendix 6. 31. Economic and Sector Work (ESW) underpins ADB’s assistance program and provides the basis for policy dialogue (Appendix 5). Recently conducted or initiated studies cover governance, transport, poverty assessment, education, TA effectiveness, and the financial sector. These form the basis for the ongoing and planned lending program. ESW is planned in decentralization, rural development, and public financial management. D. Summary of Changes32. In the 2002 lending program, the Road Network II project has been deferred to 2003, while a loan for Capacity Building in Support of Public Administration Reform has been added. The program for 2003 has one new loan, Local Governance/Deconcentration Project.
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