World Bank Managing Director and Chief Economist Visit Cambodia Family farms, small businesses critical engines for reducing persist(?'nt poverty Improving the investment climate ited on May 2 -5, met with Government with senior officials in the Cambodian and investing in the rural economy are officials and a range of stakeholders to Government, including H.E. Mr. Keat critical to having an impact onpoverty in talk about Cambodia's prospects for re- Chhon, Senior Minister, Ministry of Cambodia, said two senior World Bank ducing poverty and improving the Economy and Finance; H.E. Mr. Cham officials who visited the country recently. economy.The visit markedthebeginning Prasidh,Ministerof Commerce;andMem- Managing Director Mr. Shengman of aprocessto formulate theWorld Bank bers of Parliament. He also met with Zhang, who visited Cambodia April 28 -group's newplan for working with Cam- groupsof donors,NGOs andprivate sec- 29, and Senior Vice Presidentand Chief bodia, the Country Assistance Strategy. tor representativesto discussCambodia's Economist Mr. Nicholas Stern,who vis- During his visit, Mr. Zhang met developmentchallengesand how to build more effective partnerships. Mr. Zhang applauded the signifi- cantprogressmade overthe past 1.0years in rebuilding thecountry. He noted,how- ever,thatwhile Cambodiahasexperienced favorable growth in recent years,growth hasnotbeenwidespreadand it is notclear to what entent it has had an impact on pervasive poverty. "Going forward, Cambodia must confront a numberof complex issuesthat cannot be solved overnight. It is there- .fore critical that the government and all of its developmentpartners approachde- velopment with a long-term perspective and seriously examine what will be the country's engines of growth in the me- dium- and long-term," he said "The fragility of the Cambodian economycanbe addressedby improving the productivity and competitiveness of its manufacturing sectors,diversifying its N. k S .th Ri S d A .. b d ..export base, and improving the invest- iC tern met Wi ce ee ssociatlon mem er an see new nce vanety t 1. t E 11 . men c lma e. qua y lmpo rt an,t h ow- dunng his official ViSit. to Stem Reap ever, is how to grow the rural economy, From the New Cambodia Country Manager particularlythrough.in.ves~nginruralin- frastructure such as lffigauon," he added. This year, the World Bank group Strategy. Mr. Zhang spokewith teachersand will develop a new Country Assistance Because I am new to the coun- students atthe Chambak primary school Strategy for Cambodia, a plan that try, I have spent my first month learn- in Bati district, oneof 46primary schools guides the World Bank group engage- ing and listening to a variety of people supported by the World Bank-supported ment with Cambodia. The Country As- from all walks of life -Government Education Quality Improvement Project sistance Strategy or CAS is a tremen- officials, NGO head~, donors, re- and talked with commune council offi- dous opportunity to take stock of searchers,journalists, business people, cials who are implementing the SElLA where we are in terms of poverty re- and farmers. where we want to be. program, a multi-donor-supported pro- duction and development, learn from What they have told me is this. gram designedto reducepoverty through what has worked and what hasn't, and. The World Bank is working on too sustainabledevelopmentprograms iden- determine how we can work together many different areas.That it should tified through the commune's participa- to achieve the goals set out in the focus its efforts on th,reeor so key tory planning process. country's National Poverty Reduction continue on page 3 continue on page 2 A Country Assistance Strategy World Bank group programs,and has theBankgroupCAS.Theseactivitieswill (CAS) is the plan for the World Bank strengthenedownershipandcommitment supportthebroaderandlonger-termde- groupassistanceto a membercountry of governmentandothersin the devel- velopment outcomes articulated in overa3-to5 yearperiod.TheCASiden- opmentprocess. Cambodia'sNationalPovertyReduction tifiesthepriorityareaswhereBankgroup The Bank groupusestheCAS to Strategy(NPRS)and localizedMillen- assistancecanhavethe greatestimpact accountto its shareholdersfor thepro- niumDevelopmentGoals(MDGs). on povertyreductionandsetsthe level. gramsit supportsin anygivencountry. The results-basedframeworkwill andcompositionof financialandtechni- Thecountry'spastportfolioperformance providea moreeffectivetoolto monitor cal assistancethe Bankgroupcanpro- andcreditworthinessarealsotakeninto andassessprogresstowardsachievement videduringthisperiod. accountwhendeterminingthe leveland of thesegoalsduringtheCASimplemen- Tohelpdeterminepriorityareasfor natureofassistancetheBankcanprovide. tationperiod.ThisCASwill alsobeused developmentassistance,theBankdraws All CASs arereviewedby the Bank's asa mechanismfor reviewof how the from the country's poverty reduction Boardof ExecutiveDirectors.The key WorldBank groupcanenhanceits work strategy --in Cambodia,the National elementsof theCASarediscussedwith with Government,NGOs, donors,and PovertyReductionStrategy(NPRS)--and the governmentprior to presentationto otherpartners. engagesinaconsultativeprocessinvolv- the Bank's Board. However,it is not a CASsfor all countrieseligible for ing keystakeholders,includingmembers negotiateddocument.Any differences IDA fundingaremadepublic oncethey of government,NGOsandothercivil so- betweenthe country's ownagendaand havebeendiscussedbytheBoardandfi- cietyorganizations,privatesectorrepre- theprogramsupportedbytheBankgroup nalized.The World Bank Grouppolicy sentatives,aswellasotherdonorsto get arehighlightedintheCASdocument. alsorequiresthat,with Governmentcon- theirperspectiveonthecountry'skeyde- Theprocessforformulatinganew sent,theBankissueaCASPublicInfor- velopmentchallengesandtheareaswhere CAS is alreadyunderwayin Cambodia mationNotice (CPIN)following Board the World Bank groupcanbestassist. for 2004-2008.Cambodiahasbeense- discussionof aCAS. Thesedocuments This broadparticipationin CASformu- lectedasapilotfora results-basedCAS, arepostedontheBank'sexternalwebsite: lationhashelpedimprovethequality,ef- which will focusmore ondefiningkey http//www.worldbank.org/casand in its fectiveness,and sustainability of the resultsof activitiesundertakenaspartof PublicInformationCenter. World Bank Managing Director and Chief Economist... continuefrom page1 tionto governanceandruralinfrastruc- bodianfarmerscanbenefitfromthis de- TheWorldBank'sChiefEconomist ture. The bestway to benefit the fam- mandaswell." Mr.SternmetwiththePrimeMinister,H.E. ily farm and smallbusinessesis to in- Mr. Stemnotedthatfor Cambodia, Mr. HunSen;SeniorMinisterH.E. Mr. vestin irrigation systems,agricultural themaindriverof povertyreductionwill KeatChhon;aswellasseniorpolicymak- extension, and rural roads.This will be rural development."Rural develop- ersof the SupremeNationalEconomic help raise productivity and get prod- mentshouldbe centralto anydevelop- Council.He alsospokewith morethan ucts to market. Cambodiaalso needs mentstrategy,notjustafootnote,"hesaid. 100universitystudentsfromfive univer- to beginto tackle the problemsof in- A strongrural developmentstrat- sitiesandgaveaspeechbeforesome100 formal taxesthathinderentrepreneur- egyshouldbe complementedwith in- government,donor,NGOandpri- vestmentin people through vate sectorrepresentatives. "When we are talking aboutthe investment climate, h~alth and ~ducation. "So- Mr. ~te~ pointed out th~t we are talking about the family farm and small- cial sector~nvestmentsare thetwo mampIllarsof econOffilC d di . d t . Th h uld b not only vItal and worth- growthandpovertyreductionare .an me urn-sIZe en erpnses. ..while ese s 0 e our ... lDvestmentslDandof toimprovetheinvestmentclimate focus becausethey a~ the maIn ~o~s of busIness themselvesfor thedirect im- and to empower and invest in and are key to reducmgpoverty, saId Mr. Stern provements they make in people."Whenwe talk aboutthe people's lives, they also investmentclimatewe aretalking about ial initiative and participation in the help the country lay a better founda- thefamilyfarmandsmall-andmedium- economy.Thesetypesof investments tion for medium-termgrowthandinte- sizedenterprises.Theseshouldbe our and reforms can have a profoundly grationinto the broaderregional or in- focusbecausetheyarethemainformsof positive impact on the lives of poor ternationaleconomy,"Mr. Stemsaid. businesshereandare key to reducing people, particularly in a country like Both officials called for a poverty,"he stated. Cambodiawheremorethan80percent broaderdevelopmentpartnershipthat "The importanceof improvingthe of thepopulationlive in ruralareasand includes the Government, the Bank, investmentclimatewill only intensifyin over 70 percentearntheir livelihoods otherdonorsaswell asmuchmore ac- theyearsaheadasthecountrymustwork from agricultural activities. tive participation of the private sec- to reversea decreasingtrend in foreign "Improvingtradeandinfrastructure tor, NGOs,the media,and local com- directinvestment(POI)andadjusttothe linkswithneighboringcountriescanalso munities to ensure that development dismantlingof thequotasystemthathas provideanenormousboosttothefarmer," activities reach the poorest and ad- stimulatedthegrowthof itsgarmentsec- Mr. Stemsaid."In SiemReapwelearned dressthe needsof farmers and small toroverthepastseveralyears,"headded. thatlargequantitiesof vegetablescome businessentrepreneurs-Cambodia's Both mennoted that improving in fromVietnamto meetthetourismde- mostpromising enginesof growth. the investmentclimate requiresatten- mand,but with someinvestment,Cam- June 2003 TheWorldBankNewsletter 3 continuefrom page1 knowledge aboutdevelopment. The areaswhere it canbuild a Bank should work to help build the consensusfor reform and action. knowledge base of the country and Overthe pastsix months,theWorld bring experiences from other .We needtowork togetherinpartnership Bank's International Development Asso- countries and helpshareexperiences ciation (IDA) has approved nearly $69 with others, including local within the country. million in no-interestloansandnearly$10 organizations,NGOs,otherdonors,as million in grants to help Cambodia im- well aswith Governmentbecausethe These are important insights, and prove the delivery of basic health ser- challenges are huge and we cannot my colleagues and I look forward to vices, enhance rural infrastructure and make a difference if we work alone. hearing others and helping to come up with solutions on where we can do the services,andimprove accessto waterand .Since poverty in Cambodiais largely sanitation services. most good. rural in nature,weneedto focus much I believe this Country Assistance The threeprojects supportedby the morethanwehaveinthepastonrural IDA credits and grants are the Health Strategywill look very different from the development, including agricultural onesbefore. Cambodia is reaching a new SectorSupportProject,approvedDecem- growth and productivity; rural stage in its development, moving from ber,2002($17.2 million IDA credit; $9.8 infrastructure; and making rural million IDA grant),andRural Investment post-conflict reconstruction to more marketswork better. and Local Governance ($27 million) and long-term development issues, but the challenges remain significant. Provincial and Peri-urban Water Supply .Improving governanceshould be a This calls for avery different way of and Sanitation ($22 million), approved key objective of everything we do. operating,onethatfocusesonpartnerships April 2003. andbuilding skillsandabilitiesfor thelong- IDA, one of the institutions that .We need to find better ways of term. I look forward to working with you makes up the World Bank Group, pro- working that that build and utilize and invite your insight andsuggestionson vides loans and grants to low-income local capacity and to always have theWorld Bank's future programs. countries. IDA loans arecalled "credits" that as our long-term goal in becausethey are loaned without interest whatever we do. Ms. Nisha Agrawal and have a long repayment period, nor- .The World Bank should be a Cambodia Country Manager mally 40 years. conveyor of information and Email: nagrawal@worldbank.org. The Health Sector Support Project focusesonprimary healthcare,especially World Bank Conducting Civil SocietyAssessment improving health services in rural areas and making it easier for low-income The World Bankis conductinga torsthatcontributeto successfulpartici- peopleto usehealthservices.The project civil societyassessmentinCambodiaas pationof civil societyorganizationsin is intended to support better control and partof its effort to build strongerpart- Bank-supportedprograms in terms of prevention of infectious diseaseepidem- nershipsin itsdevelopmentprograms. project design, implementation and ics and malnutrition, especially among TheCSOassessmentwill provide learning experiences.It will also con- the poor. a comprehensive. " ..sider missed op- The Provincial andPeri-Urban Wa- picture of the ClVll soclety organzzatlons (CSOs)-portunities and ,. ter Supply and Sanitation Project aimsto overall state of NGOs,community-basedorganizations, provide recorn- assistthe Water Supply Authority to ex- civiI society in faith-basednetworks,labor or workers mendations for pand the supply of safe water to targeted Cambodiaby ex- groups,themedia,academicsandstudent how to achiev~ towns and growing peri-urban commu- amining the his- organizationhaveplayed a significant more productive nities (communities immediately outside tory of civil soci- role in Cambodiasreconstrnctionover and collaborative the city) andimprove sanitationservices. ety development, thepasttwodecadesand thenumber of partnership mov- The project alsoaimsto helplow-income the ~ectors a~d localNGOshasgrownsubstantiallyfrom ing forward. communities in urbancentersfind a way prOVinces . h h in. ..The report Just150m 1995to almost600todily.In . to pay for piped-in water services. whIC t ey work, .." WI11be competedI The Rural Investment and Local theactivitiesthey addltlon, ~hereare ~80 .mternatlon.al in June 2003 and Governance Project supporting through undertake,the le- NGOs actlvely working m Cambodla. will bepublishedin Seila Prgoram,provision of priority pub- gal and financial Local and internationalNGOsprovide EnglishandKhmer, lic goods and services at the commune environment in essential basic services, promote posted on the level, and promotes good local gover- whichCSOsoper- democracyandhuman rights,andraise Bank's website at nance. ate,their areasof public awareness of important www.worldbankcr-g/ concern with re- developmentissues. kh shared with For more information about the spect to CSOsandavailable World Bank in Cambodia,pleasevisit our Cambodia'sdevelopmentprocessand at the Public InformationCenterat the Public Information Center (PIC) at 113 theirrolein it,andthepotentialforbuild- World Bankoffice. Norodom Blvd, Phnom Penh or our ing moreeffectivepartnerships. .. website ath11;Q://www.worldbank.orgLkh. The assessmentincludesareview For More mformatzon please of the World Bank's portfolio in Cam- contact: Ms. Nil Vanna bodiawhichwill analyzethecriticalfac- Email: vnil@worldbank.org The WorldBankreturnedto Cambodiain 1992to helpwiththeGovernment'sdevelopmentobjectives. TheGovernmenthasborroweda total of$478millionfrom the WorldBank (ofwhich$300million has beenreceivedsofar) andhasreceivedmorethan$15million in grantsfor thispurpose. Banklending aimsto helpbuild The Bank's loans and grantsfocus neTS,theWorld Bank is supporting imple- the foundations for Cambodia's de- asmuch aspossible onCambodia's rural mentation of Cambodia's National Pov- velopmentandfor poverty reduction. areaswhere the majority of the popula- erty Reduction Strategy (NPRS), includ- This means supporting good gover- tion, and the majority of the people who ,ingstrengthening participation in setting nance,suchaslegal,judicial andpub- are poor, live. They also aim to increase priorities andmonitoring activities in the lic sectorreforms,including civil ser- accessandopportunities for women, es- NPRS towards achievement of the vice restructuring and military demo- pecially in education. Millenium DevelopI;nentGoals (MDGs). bilization. It meansbuilding physical The Bank is alsohelping the Cam- The World Bank also co-chairs, with the infrastructure, such as roads, water bodian Government in creating a long- Government, the Consultative Group supplyandelectricity in rural andpro- term strategyto reducethe country's vul- (CG) which provides a forum for Gov- vincial areasto increasepeople's ac- nerability to flooding. And the Interna- ernment and its development partners to cessto servicesandproductive activi- tional Finance Corporation, a division discuss coordination and progress with ties. It meansrebuilding humancapi- within the World Bank, supports the de- development assistancein Cambodia. tal by increasing people's accessto velopment of private, domestically andthe quality of healthcareservices owned, small- and medium-scale enter- and education. It meansinvesting in prises through the Mekong Project De- educationandskills developmentthat velopment Facility (MPDF). It includes For More information please will contribute to building new gen- the Hagar Project, an integrated housing contact: erations of good leaders in govern- and job-training program for destitute Mr. StevenN. Schonberger ment, business and society. It also women and their children. This project is Email: meanshelping private sector devel- seenas one of Cambodia's most effec- sschonberger@worldbank.org opment in traditional and non-tradi- tive poverty-fighting initiatives. tional sectors, including supporting In collaboration with the rural-income-generation. government's other development Part- World Bank provides $42,000 in grants to 7 local organizations The World Bank recently awarded provincial advocacynetworks. CBO, their work is on upgrading capac- $42,000 in grants to 7 local NGOs as part A Kampong Speuprovince-based ity building of thecommunity-based net- of the 2003 Small Grants Program, a pro- Disabled NGO, SDDF, also received work, improving the way decentralized gram that operates globally to support $6,000to supportactivities to provide op- partnershipsfunction andpromoting good local NGOs working with vulnerable portunities and capacity building to dis- governance to local community leaders groups. abled women to establish their equal and commune council members. The Small Grants Program (SGP) rights, and to participate and contribute KWVC has received $5,000 for was created in 1983 to provide a way for to development activities. The program work to disseminate information on the World Bank to promote dialogue and will operate in four districts in the prov- women's rights through concerts and dissemination of information about inter- ince where there are 47 direct beneficia- streetactivities. This work will focus on national development in forums outside its ries and 17700disabled members. empowering women and encouraging own operations. The SGP in Cambodia was Wathakpheap(Development Orga- them to p~rticipate in decision making started in 2002. This year, the program is nization) received $7,000 to support process in all sectors of political, eco- providing support to seven local NGOs: implementation of activities to enhance nomic, social and cultural life of the na- Star Kampuchea, Action on Disabled and the capacity and partnerships with local tion. Development (ADD) through Svay communities onservicedeliveryandshar- WMC received $6,000 to operate Kravann Disabled People Development ing experiences,and to promote a com- aradio program on womenandthe law on Federation (SDDF), Wathnakpheap, munity-basedchild developmentprogram violence against women to be broadcast operation Enfants De Battambang (OEB), in four districts in Pursatprovince. The on radio PM 102. This program focuses Cambodian Building Organization (CBO), program is also helping to promote vil- onwomen's rightsin societyandaddresses Khmer Women Voice Center (KWVC), and lage-basededucationandincome-genera- issuesof women's protection,andencour- Women's Media Center of Cambodia tion skills. ageengagementby womenlawmakerson (WMC). Two Battambang province NGOs, theseissues. Star Kampuchea has received OEB and CBO, have also received US$6,000 to strengthen labor rights $6,000 for activities suchas supporting through cooperating with union federa- the rights of vulnerable children in a For More information please tions and trade union, share the updated newly reconciled area and cooperation contact:Ms. Nil Vanna draft law to public, and strengthen capac- between local authorities and NGOs to Email: vnil@worldbank.org ity of the cooperating organization and addresscasesof abuseof child rights. For