Volume 1,Number2 July 2003 National Poverty Re Strategy Imp] The National Poverty Reduction was a seminar in Phnom Penh for all the ministries and stakeholdersin getting the Strategy (NPRS) of Cambodia was governors, provincial planners andcom- strategy imple~ented. Our correspon- launched in March 2003 by the Prime munechiefs to discussthe impactof vari- dent met him at the seminar to discuss Minister, Hun Sen,following theinvolve- ous of reforms on the poorest, the pri- the implementation of theNPRS. ment of all of the ministries, a variety of vate sector's role in Cambodia, how fo- What areyour plans for the imple- agencies,and including comments from cused individual communes are on de- mentation oftheNPRS? a variety of stakeholders. veloping plans to improve the lives of Implementation has different Since then the government and poor people, and other issues. phases.In the first instance,we need to NGOs have beenworking to disseminate Kim Saysamalenis the Secretary inform the people aboutthe strategy and information aboutthe NPRS throughout General of the GSCSD and has the pri- what it means-just having the printed the country. On the 25th of June there mary responsibility for working with the document is not enough. Secondly, we needto seehow priority programmes can receive funding; and finally we need to develop anannualworkplan for the strat- egy so that we can see what is actually going to happenyear by year. Q. When will you start? A. Actually we startedimmediately after the launch in March. The World Food Programmehasproduced apoverty map for Cambodia, and we started dis- semination in the poorestprovinces. We met the governors and had regional launches. We were also assisted by the NGO Forum which organizeddiscussions onpeople's perceptions of the document. Information is very important because just printing the document and handing it out will not achieve anYthing as we needto ensurethatthepeopleunderstand whatis in it. In addition we havethe man- date from the Prime Minister to put to- A womanandherchildren on an ox cartin Tumring,KampongThomProvince gether an annual report on how the min- istriesareimplementing theirpriority strat- Is Cambodia's D ebt Sustainable? egies. This means that there is room for amending the document aswe go along. Since the UN sponsored election debt sustainability and the ability to in- Q. Is it likely to require changes? in 1993,Cambodia has received a large vest that debt efficiently and effectively A..Well, that's really upto whatthe amountofforeign aid,averagingUS$400 for the sakeof the nation's next genera- ministries wantto suggest. Wewere a bit million annually, for rebuilding country's tion. A high levelof externaldebthasbeen disconcerted to find that the priority ac- economic structure that was devastated increasingly recognized asaseriouscon- tion plans totaled over 5 billion. This by nearlythreedecadesof civil war. Most straint onthe ability of poor countries to money is simply not going to be avail- of the foreign aid to Cambodia has been pursue sustainable development and re- able so we have asked the ministries to in form of grant (82%) andthe remaining duce poverty. Cambodia is one of the now try and fill out-thePublic Investment has been concessionalloan (18%). The poorest nations in the region with per Program ( PIP) from the NPRS action amount of foreign loans racking up (in- capitaGrossNational Income ofUS$280, plans to try andbring somecoherenceto cluding debtSowed to the US in 1970s this createsconcernsamong the Cambo- budgeting. In addition in Cambodia work and to the Russia in 1980s),bring about dian public over country's continuous is going on to prepare a Medium-- Term growing concerns from Cambodian civil ability to repayits debt. Is Cambodia's Expenditure Framework (MTEF) so that society and academia over the country's therecanbe forward planning. Aligning continue on page 3 continue on page 2 lementationVpdate duction The World BankINew,I'letter ~O().) continue trom page 7 this. I doubt very much that this will hap- first Report. It will be really,asfar asI am programmes to the budget will be very criti- pen overnight but we have decided to form concerned,a stocktaking. The other im- cal, but the ministries need to first prioritise small "clinics" which will pu)l together the portant aspectis that we would like this their plans and then..]ook to the Ministry relevant ministry along with the technical reportto feedinto theConsultative Group of Economy and Finance for money. Ad- assistance available in the ministries and meeting CG so we can startstreamlining ditionally, as much of 9urfunding is from with NGQls working on that sector to at theprocessand don't haveJotsof parallel external sources {donors), the ministries least start looking at the Action Plan Ma- thingsgoingon.TheNGO Forumorganized often have problems with long--term plan- trix of the NPRS (APM) and realistically a meeting a couple of weeks ago on the ning as they are not sure about sources of work at what should be a priority. implementation of the annual progress funding. So on the other side we need to In addition by asking for what is reports,and they are keento feed into the work with donors as well to avoid dupli- planned for each year, priorities will start annual report aswell. The very fact that cation, leakage and wastage. to surface. If something is seen as not it's theremeansthateachof usis regularly Q. Whatwasthe responseto the being possible this year, or the next or answerablefor achievements(or lackof!). launchesin theprovinces? the next, etc, then obviously it's not likely Theseare all small but very impor- A. For a start, it was just to in- to be much of a priority. tantsteps. I amhopeful thattheproblems form. But we have also been working Q.Howwillyou workonmonitor- Cambodiafacesare notinsurmountable. for the last few mont~s to simplify the ing theNPRS? main parts of the NPRS. ~ Q. How do you answer the criti- --cism that the NPRS is very We now have a grassroo1s general and not focused on manual ready in Khmer for the poor? distribution to all the com- A. Please understand munes, based on the 20 that this has beenput together core messages of the taking into consideration NPRS. In addition we everyone's input. The main have been working with an thing is that at the time of its NGO to take the messages compilation (December 2000) and receive feedback from this was the consensus. Now, the communes through there is more discussionabout 'mobile shows', a sort of whetherthe poorestin fact re- 'show-and-telJ' at the main marginalized and which community level. To start services actually reach them, with, we will be going to s whetherthereshould betarget- 53 locations in 13 prov- ~'"~..- "'";:' " ing or not and so on. This has inces (starting once again I .~ all happenedin the shortspace with the poorest areas). Mr. Kim Saysamalen,Secretary General ofthe GSCSD of sixmonths.ButI amoptirnis- We have a video prepared A. Again this needs some hard tic that we will move aheadand actually which will be shown, and which we hope work. -Currently in Cambodia there are startreducingpoverty! wilJ kick-start discussion about the just somanydifferent indicators.Wehave Q: How does Cambodia's experi- NPRS am~ng the people. We have also one set of indicators in the action plan ence compare with other countries that prepared a poster-calendar with the 20 for the NPRS; but this does not match are preparing and implementing na- core NPRS messages and these will be the indicators given in the monitoring tionalpoverty reduction strategies? distributed to the people. sectionof theNPRS! We then have an- A: We understandthat 27countries The idea really is to get the people other setof benchmarks for the Consul- have already prepared national poverty themselves thinking about what poverty tative Group; andthe MDGs. strategies (PRSPs)and another 36 coun- reduction means and what they can do So,really for a startwe needto get tries are currently doing so. We are keen towards getting out of poverty. People one setof indicators which is validated to share our experiences with others and do have the right to health and educa- by the ministries and where there is con- also to learn from them. As a first step, tion. It's pointless if we are buil~ing sensus amongst the stakeholders. 1 am we are delighted to be hosting a confer- schools and health centers but not sure notalone in thinking this. andI imagine I ence in Phnom Penh on October 15-17, the poor benefit from them. will get support on this. My office has 2003, which will be jointly organized by The mobile shows will go to the alreadyhadsomediscussionwith USAID theIMP, ADB, UNDP andtheWorld Bank people. We cannot expect the poor who and Qjher agencies like WHO and and will bring together 6 countries from , are looking for work all day to have time UNICEF to geta small working groupof EastAsia to learnfrom eachother's expe- to come to us, so mostly these programs experts onmonitoring and evaluation to- riences. will be in the evenings when people are: getherfrom the donor sideto resolve this F .,/: . able to attend. 'We will also be broad- .or more lnjormauon about Issue. casting on the radio and the television. NPRS or PRSP please CfJntact: Q.Howmuchdoyou realistically Q.Howwillyouprioritizsethedif- H.E. Saysamalen expectto happenin timefor your first Email: "NPRS"Gscsd@Everyday.cfJm.kh ferentplans? Annual Report? Or visitNPRSwebsite: A. This is really very difficult and A. I think it's a mistaketo expectto the ministries need to work quite hard on www.woridbank.org/prsp haveperfectionand all theanswersfor the Jut' .." Is Cambodia's debtSustainable... continue from page 1 projection Cambodia's debt service-to- ditureReview (IFAPER) andlheTechni- external indebtedness manageable and export ratio was 3.0% in 2002compared cat Cooperation Assistance Program sustainable and should Cambodia con- with 17% of Nicaragua,17.4%of Bolivia (tCAP). tinue to borrow for its development? and 11.0%of Chadandbasedonthepro- Since1993,Cambodiahasborrowed This chart shows a comparison of jection, Cambodia's future debtservice- mainly on concessional terms, of which Cambodia's net presentvalue of debt-to- to-exportratiowould fall to 2.3%by200? theWorld Bank provides credits to Cam- export ratio with thatof region and other The analysis above indicated that bodia myrely through International De- countries classified as the Heavily In- Cambodia's external debtis manageable velopment Assistance (IDA). IDAcred- debted Poor Countries (HIPC). Accord- but to ensure efficient return of debt uti- its have maturities of20, 35, or 40 years ingto DebtSustainabilityAnalysis (DSA) 11zatiomordevelopment.Cambodianeeds with a 10-yeargraceperiod ontheprinci- done by the World Bank and IMF pal amount. IDA loans consist to determine sustainability of the of a small annualservicecharge 600500 country's debtburden,Cambodia's of 0.75 percentonthedisbursed external debtremains in a sustain- andoustanding balance. In July able level by international stan- 400 of 2002, donor representatives dards.The threshold for sustainable 300 agreed on establishment IDA- debt identified in the HIPC initia- 13Replenishment which Cam- , bodia is eligible to receive. The tive is 150% ofNPV of debt-to-ex- port ratio, Cambodia is well below 0 IDA-13 Replenishment in- the threshold. .t ~. "" 00 -'00 .00 Q. 00 cludesa significant useof grant Q." 00'- ,,0 Oo~ ",,'" @' Nicaragua,Chad,Boliviaa.nd Oo~o ~,0!"",~,,0!"1;# ~~ ~o".~'" C~O'"(,0-"0' to addressthe special difficul- Uganda are some HIPC countries (j ~ ~ ties faced by the poorest and that have received debt relief due * ThisincludesCambodiassovereigndebtowedtothe US mostvulnerable countries. The t0 thelr . rat10. . Th in 1970sandRussiain 1980sjor whichtheprocessoj very Ig h. h debt e ... cutoff for IDA grant eligibility current IeveIf0 Camb0dla d b .reschedulmglsongomg .,s e t15 is around $360 percapita Gross sustainable and further borrowing ap- to be devoted to the question of how to National Income -which would pears to be manageableaslong,as itre- link more firmly and transparently the representincome of$1 perday. mains below the HIPC initiative debt public expenditureandfinancial manage- IIMP EB S/O3/10 Report,DatedFeb-ruary threshold. This assumesthat Cambodia mentand improvement of capacityof the achieveseconomic growth of 5-6 percent public sectorto deliver pro-poor services 4,2003. annually and gradually increasesgovern- and improve fiduciary accountability. ment revenue..The sustainability in the Severaldonorsincluding theWorld Bank For moreinformation,please medium term also dependsonstrong ex- andIMF areworking with governmentto contact: portandsolid GDP performanceandcon- strengthenbudgetand expenditure man- Mr. CheaHuot,EconomistEmail: tinued assistancefrom donor countries'. agementsystems through the Integrated huotchea@worldbank.org On the other hand,according to the IMF Fiduciary AssessmentandPublic Expen-~ TheWorld Bankisno ordinarybank. IntemationalCenter for SettlementofIn- when they pay back their loans. Youcannotdepositorwithdrawmoney.The vestmentDisputes(ICSID). The Bankem- The World Bank lends only a por- World Bankis actuallyaninternationalde- ploys more than 9,000 people,including tion of the money needed for a project. velopment organizationthat is owned by economists,educators,environmentalsci- The borrowing country must getthe rest itsmore than180membercountries -both entists, financial analysts, anthropolo- from other sources or use its own funds. rich andpoor. Itsrole is to reducepoverty gists, engineers,and many others. About Eventually, since the country must pay by lending money to the governmentsof 160nationalities-including Cambodians- backits loans,it ends uppaying for most, itspoorermembers-often called"develop- arerepresented. if not all, of the project itself. ing" countries -and to those countries The Banklendsmoneyio thepoor- World Bank loans are for specific whoseeconomiesarein transition. est developing countries, those that of- development projects as well asfor tech- The World Bank wasestablishedin ten cannotfind othersourcesof loans, at nical assistanceand policy guidance. For 1944andits official namethenwastheIn- no interest. In addition, the Bank lends example,World Bankloans helpcountries ternational Bank for Reconstruction and moneyto middle-income countries at in- supply people with safe drinking water, Development(IBRD). As ithasgrown,the terestrates that are lower than the rates build schoolsand train teachers,increase World Bankhascreatedneworganizations on loans from commercial banks. Coun- agricultural productivity, manageforests within itself thatspecializein different ac- tries that borrow from the Bank alsohave and other natural resources, build and tivities. All theseorganizations together a much longerperiod to repaytheir loans maintain roads, railways, and ports, re- are called the World Bank Group. The than commercial banks allow. And they duce air pollution and otherenvironmen- World Bank Group consistsof the Inter- don't have to start repaying for several tal problems, generateand distribute en- national Bank for Reconstruction and years.Fora countrylike Cambodia,which ergy; expand and modernize health care, Development (IBRD, the original "World qualifies for no interestloans,mostloans especially for women andchildren. Bank,"whichlendstomiddle-incomecoun- would not berepaid for 30-40years. tries),the International DevelopmentAs- For more information,please TheBank's financial reservescome sociation(IDA, whichlendsto low-income from several sources-from earnings on contact: countries), the International Finance its investments,from feespaid inbymem- Mr. BouSaroeun Corporation (IFC, which lendsto the pri- ber countries, from contributions made Email: sbou@worldbank.org vate sector),the Multilateral Investment or visit our website: by members, generally the richer ones, Guarantee Agency (MIGA) and the and from borrowing countriesthemselves www.worldbank.org/kh