Kingdom of Cambodia
Opening Address
BY
Samdech HUN SEN
Prime Minister of the Royal Government of Cambodia
at the
Cambodia Consultative Group Meeting
Phnom Penh, 20 June 2002

Your Excellency, Chairperson
Excellencies, Distinguished Representatives of Partner Countries and Agencies
Excellencies, Members of the Royal Government of Cambodia
Excellencies, Ladies and Gentlemen

1. On behalf of the Royal Government of Cambodia (RGC) and on my own behalf, I have great honor and pleasure to welcome you all to this important meeting. A warm welcome to all of you who have come long distances from abroad to be here today.
2. We thank the World Bank for agreeing to hold the Consultative Group (CG) meeting here and for making arrangements for the same. This meeting has special significance as it is being held for the first time here in Cambodia rather than overseas. This way members of the RGC and senior officials get to attend the meeting and observe it in larger numbers. Also, some of you would have occasion to interact with people in the Cambodian polity and society both in this room and outside it during your stay here. On the one hand you will get some first hand impressions about the reality of the Cambodian society; on the other a wider cross section of our officials, local media, and civil society organisations would get to know, understand and appreciate the CG process and to absorb for reflection and action various view points expressed here by our partners in development of Cambodia.
3. The annual meetings of the Consultative Meeting on Cambodia have now become an established and regular feature for our true and genuine partners to dialogue with us on important issues with the view to moving Cambodia forward towards a better tomorrow for all. This is an occasion for stocktaking of what was achieved against plans and promises made as well as how much more and what else needs to be done in the immediate and longer-term future. It is therefore good and proper to look at the overall canvass of Cambodia in a holistic manner, not merely in terms of progress or lack of individual projects supported to achieve the whole.
4. As in the past the Royal Government as well as the World Bank and other agencies have prepared and circulated to you in advance several background papers. All of you would have no doubt studied them and would have many comments both on them and outside of them. I would encourage all of you to be fully straightforward and forthcoming in your observations and comments. That is the only way our frank dialogue could take place and be of benefit. We on the Cambodian side are grateful for all your advice and support in the past over ten years. We know and appreciate that all your comments in such forums as this are made for our understanding and benefit and in the larger interests of Cambodia and Cambodian people, as you perceive them. We will as before take them in that spirit. Do therefore be candid.
5. At this opening session of the meeting, I thought it would be beneficial if I could from the Cambodian side trace the contours in the major picture relating to the overall progress and achievements so far and what we see ahead in the future. All individual themes or subjects should and would fit into this overarching backdrop.
6. Certain matters stand out prominently and are to be counted in any discussion on the Cambodian scene. These in my view are: prevalence of peace; political stability and understanding; democratic principles and practices taking firm roots; improved and ever improving public governance through targeted and ongoing reforms; enhanced internal security and better law and order situation; macro-economic progress; better environmental management; higher levels of investments leading to employment and prosperity; increased revenues and allocation for social or human-development sectors; social cohesion; addressing glaring economic and social disparities. I would like to dwell on these in a broad manner.
7. Sitting here today many of you may not be fully conscious that a mere ten years ago UNTAC was functioning from this building. Cambodia's then warring factions had just a few months earlier signed on the Paris Peace Accord. The UNTAC conducted elections a year later brought into being the first term of the Royal Government of Cambodia, but mistrust and misunderstandings continued. Khmer Rouge broke off and continued its insurgency in some parts of the country. The first coalition Royal Government w as fragile and could not stand pressures within leading to a crisis in mid-1997. The elections conducted in 1998 were the first ever by the Cambodian themselves and was born out of more mature understanding and appreciation among the various competing parties. As a Cambodian effort, though supported by external partners, but not one somehow inspired or influenced from outside, the 1998 elections paved the way for formation of the current and stable Royal Government. The threat of Khmer Rouge eroded and disappeared following the collapse of their military and political organisation altogether within the first few months of the new Government taking office. Through perseverance, accommodation and compromise Cambodia and Cambodians have come to enjoy and appreciate peace unknown for many decades. And they know and value the prevailing political stability as the sheet anchor of the peace that was hard to achieve.
8. Since 1993, there has been an exponential expansion and growth of media as a close observer, reporter and commenter of events and views. We now have a multitude of print and electronic media working without restrictions. Freedom of speech and assembly are unfettered. Similarly there are many civil society organizations working in varied areas of common concern to the people at large - from human rights, social development, environment and several others. In terms of freedoms Cambodia in many ways is more advanced in this than several other countries in the region.
9. Our firm commitment and adherence to democracy has been the major influence in our achieving internal peace and stability. I said at this forum three years ago that compromise among different viewpoints, ideologies and approaches to promote the common Cambodian cause has been the key in our democratic evolution before, during and since UNTAC. Our people have embraced the principles and practices of democracy in a full and abiding manner, knowing that they have a direct voice through periodic elections in choosing their representatives to guide and take the country forward. The 1998 elections were hailed as a ‘miracle on the Mekong’. The peaceful and orderly conduct of the Commune level elections for all the 1,621 communes a few months back was indeed another miracle brought about by the dedication of all Cambodians. People turned out and voted in overwhelming numbers without fear or favour and unfettered by extraneous considerations. The results of the elections though not satisfactory to some were indeed a clear and unambiguous reflection of the true will of the people.
10. With the communal elections and the new bodies taking office we have crossed another major milestone in public governance. Since 1996 the Royal Government has been implementing an extensive village and commune based program of decentralization and deconcentration. This experience has proven to be very positive and progressive and has been adopted as a national policy and program. A National Committee to Support Communes has been established to implement the Law on Commune Administration and decentralization policies. The Government has also set up a Commune Fund consisting of block grants from the government, tax and non-tax revenues assigned to the communes by the Parliament and donor assistance. The Commune Fund will finance local development and public services. Supporting the communes and the villages to carry out t heir own local development will reduce the burden on the national government. The Ministries cannot and should not try to do everything that is needed at local level. Furthermore, whatever the communes and the people can undertake themselves involves the empowerment and commitment of the people so crucial for active participation, ownership and sustainability.
11. The three major achievements I have touched on above, namely, peace, political stability and democratisation would not have been possible without the grace, benevolence and wisdom of our revered monarch and father of modern Cambodia, His Majesty Samdech Preah NORODOM SIHANOUK, and Her Majesty Samdech Preah Reach Akkak Mohesei NORODOM MONINEATH SIHANOUK. All Cambodians are ever beholden to them and pray for their long life and continued guidance.
12. These were also possible because of the maturity of the rival political parties who have placed the Cambodian cause above narrow, short-term political interests and gains. I beseech them to continue to do so for the next general elections, which are scheduled for 27 July 2003. All political parties should act in a responsible manner and Cambodia should not be held hostage to petty political maneuvers and goals.
13. Let me divert here slightly to comment on a seeming controversy engaging the minds of many. I refer to the trial of the Khmer Rouge leaders responsible for genocide in Cambodia in the past. I have always maintained that any solution has to be Cambodian in nature while certainly conforming to accepted international norms. After we went to great lengths to pass necessary legislation to ensure a trial and His Majesty the King approved it, a new issue has emerged, i.e., the negotiations were interrupted. We realize that if we do not learn the lessons of history, history will repeat itself. Therefore, in resolving our past, we can ill-afford to leave our destiny totally in the hand of others. I believe that Cambodians should be understood and supported to pursue their proper course to resolve the past. In judging the past our partners need to trust and be confident that our Government is deeply and responsibly committed to the building of a bright and sustainable future for its own nation. High-level negotiations are ongoing behind the scene and have been constructive. We are fully and unequivocally committed to pursuing the matter in a way all could be satisfied, especially the affected Cambodian people. I ask the world at large to understand and appreciate our position and have trust in our sincere wish and ability to pursue the matter to a satisfactory conclusion.

    Public Governance and Rule of Law

14. I had mentioned governance as an area of progress. We realize that only proper, predictable, transparent, efficient and effective public governance can facilitate and ensure order and stability so essential for a conducive level playing field for common people to realize their full potential for their own advancement and for the benefit of the nation. Accordingly, many reform measures are already under way and more are in advanced stages on the drawing board.
15. The Royal Government of Cambodia is conscious that the institutionalization of codes of conduct and laws and regulations that shape human interaction in society matters a great deal in our nation's quest for sustainable development. Indeed, reforms to strengthen the government's institutional capacity is a fundamental prerequisite to long-term social and economic growth. Institutional efficiency reduces uncertainty and transaction costs, promoting increased inflows of capital and technology into Cambodia, which in turn will fuel economic growth.
16. Based on this philosophy, the Royal Government has embarked on a long-term agenda of major reforms in the legal and judicial system. Since 1993 a total of 154 laws have been enacted. Another 23 draft laws are awaiting adoption by the National Assembly. We are now working on new drafts of the Law on Criminal Procedures, the Criminal Code, the Law on Civil Procedures and the Civil Code. Attention is also being directed to economic and investment laws, particularly those related to Cambodia's impending membership in the World Trade Organization.
17. A Council for Legal and Judicial Reform (LJR Council) was established reporting directly to the Supreme Council of State Reform chaired by me. The earlier Council for Judicial Reform and the Unit in charge of legal reform were subsumed by the new LJR Council under the joint chairmanship of H.E. Sok An, Senior Minister in charge of the Council of Ministers and H.E. Dith Munty, Chief Justice of Cambodia. Senior representatives of ministries and public sector institutions are part of this mechanism including Ministry of Justice, Office of the Council of Ministers, Ministry of Economy and Finance, Ministry of Commerce, Supreme Council of the Magistracy and the Council of Jurists. The Council will meet regularly to steer and monitor the reform program, and it is supported by permanent structures acting as the implementation mechanism. H.E. Dith Munty, Chief Justice of the Supreme Court, will elaborate to you on the reform strategy.
18. Human resources are crucial in our efforts to overhaul the judicial system. Thirty new judges have just been appointed. To boost the performance of the Courts, a Trade Tribunal and an Administrative Tribunal shall be established. Furthermore, a "model" court will be piloted to promote integrity, impartiality and professionalism of judges. In Judiciary as elsewhere carefully selected people have to be trained to fully comprehend and properly administer laws, regulations and rules in a transparent and fair manner. This necessarily involves evolutionary time for traditions and precedents to build but we are determined to fast track the process.
19. Your Excellencies will surely agree that the work to rebuild the legal and judicial system is titanic. To succeed, it will require colossal administrative capacity and resources. Thus I urge all of you to consider providing substantial technical and financial assistance for this initiative.
20. The Government has exerted tremendous effort to ensure successful implementation of the Governance Action Plan and its update - GAP-II. We are conscious that corruption in the public machinery, be it judiciary or administrative or any other, increases transaction costs for every one and reduces predictability in law enforcement and implementation of government's policies and equality of opportunity so essential for economic growth and sustainable development. Low salaries in public service are a major influencing element in this equation and should be addressed and would need the support of our donors. Nevertheless, the government believes that enactment of adequate laws and regulations to prevent and punish corruption is crucial for addressing this problem. In this spirit, the Royal Government is committed to finalize the draft of the Anti-Corruption Law before end June 2003. I am confident that this law will provide the legal underpinning for an action agenda to improve the quality of public services. As part of this endeavor, the government has taken strides to establish the National Audit Authority, which is now operational and has embarked on a program of agency audits to ensure transparency in the operations of key ministries and agencies.
21. Human beings are the ultimate creators and consumers of wealth. The human factor is at the epicenter of our policy to strengthen our government institutions and organization. We have begun the implementation of a strategy to revamp the structure and size of the civil service and professionalize the quality of public services.
22. Building up the government's capacity and technical expertise is crucial to the success and sustainability of reforms. We therefore recommend that donors help build national technical capacity by shifting from traditional technical assistance towards direct support for the Government's national human capacity building initiatives.

    Consolidating and Maintaining Rapid Economic Growth

23. Your Excellencies, the Royal Government of Cambodia is nearing the end of a second term of service. The years 1999-2002 have constituted a decisive period for the government's reform agenda, characterized by the consolidation of peace and security in all parts of the country and the deepening and widening of reform across all sectors: fiscal, banking, administration, legal, military, further implementation of land, forestry and fisheries reforms and the assurance of environmental protection in order to achieve sustainable socioeconomic development.
24. Cambodia has resolutely implemented its programs of economic and financial reforms. Results eloquently testify to this. I am very pleased to report that the latest indicators of our economic performance are truly encouraging. The National Institute of Statistics of the Ministry of Planning, with the technical assistance of the Asian Development Bank, has updated the macroeconomic data for Cambodia. The updated report shows that Cambodia's real Gross Domestic Product grew by 7.7% in 2000 against only 5.4% as previously estimated. In 2001, the Cambodian economy grew by 6.3% against the previous estimate of 5.3%. Average inflation declined from the already low one-half of one percent in December 2000 to MINUS one-half of one percent in December 2001. The Rie/US dollar exchange rate continued to be stable. These are commendable results fully achieving envisaged targets during a period when the regional and world economies suffered considerable setbacks.
25. Governance has been strengthened in revenue collection through implementation of measures to prevent leakages, especially by combating smuggling and strengthening customs administration. I myself decided to establish an inter-agency mechanism to combat smuggling, detailing assistance requirements and practical arrangements among the Armed Forces, the Military Police, the Police and the local authorities to help the customs authorities prevent and crack down on smuggling at both the central and provincial levels. At the same time, the government has taken steps to increase collection of non-tax revenue and has worked out rigorous measures to protect the state's interests and increase the transparency of contracts with the private sector.
26. On the expenditure side, the Royal Government has spelt out policies and taken steps to shift priorities by providing adequate funds for spending on social and economic sectors, increase public investment in rural infrastructure and establish responsibility for performance at the level of disbursing units. With rigorous fiscal reforms and stringent budget management, we have made encouraging progress in enhancing revenue and containing expenditure at an appropriate level, conducive to macroeconomic stability. At the same time, to strengthen governance in public expenditure management, the RGC decided to implement procurement procedures for the four priority ministries: Ministry of Education, Youth and Sports, Ministry of Health, Ministry of Agriculture, Forestry and Fisheries and Ministry of Rural Development. The government is committed to expand the coverage of procurement procedures in the next few years when budget execution especially cash flows have improved. In this vein, I have instructed the Ministry of Economy and Finance to conduct a study on the possibility of expanding public procurement to key government ministries and agencies in 2003.
27. In sum, the Royal Government has substantially achieved the target of 6% to 7% annual GDP growth, which has made significant inroads into the poverty situation and firmed up the foundations for future sustainable development.
28. Our development program and actions have been, and will continue to be firmly guided by the vision, policies and strategies enshrined in important policy statements and documents: the Interim Poverty Reduction Strategy Paper, the Governance Action Plan, the Financial Sector Development Vision and Plan for 2001-2010, and the 2nd Socio-Economic Development Plan (2001-2005). Together, these documents outline our goal and strategy for uplifting Cambodia to a new plateau of hope, prosperity and development.

    Building the Foundations for Pro-Poor Development

29. Your Excellencies, at this stage we can confidently say that the momentum for the sustained economic growth of Cambodia has been set in motion. However we realize that the Cambodian people as a whole need to substantially share in the benefits of growth.
30. Making reforms work for the poor is a serious challenge. Reduction of poverty demands the assault on its structural causes through measures such as: (a) fiscal policies that enhance revenues and direct expenditure in favor of pro-poor public investments; (b) assurance of sustained economic growth and macroeconomic stability; and (c) formulation and implementation of appropriate sector policies, including attention to social development via increased investments in health and education, mainstreaming of gender issues, ensuring the development of ethnic minorities, land reform, sustainable fisheries management and environmental protection. While commune level councils would go a long way in identifying and effectively resolving local causes, increased investment in the economy is a sine qua non for an assault on poverty.
31. Ensuring that Cambodia is attractive to both domestic and foreign investment-by creating and maintaining a climate for investor confidence is at the heart of our development strategy. Indeed, it may seem Cambodia would soon need private investments from your countries even more than development aid. In this sense, the Royal Government has taken important steps in improving the investment climate, including the amendment of the Law on Investment to streamline procedures and paperwork in applications for investment approval and in imports and exports of goods and equipment. Also being pursued is the enactment of the Law on Corporate Accounting and Audit to enforce corporate governance. These actions promote transparency and predictability of the approval, monitoring and implementation of investment projects.
32. The Royal Government has been strengthening economic and financial management with the assistance of our development partners by improving tax and customs administration, budget and treasury management, central bank operations, economic statistics, and development of legislative framework for monetary and financial sector reform, which will inevitably create the favorable climate for the deepening of our reform efforts. With our "New Social Policy Agenda", we have been pouring a massive proportion of our budget into the education, health, agriculture and rural development - the priority sectors for the foundation of future growth, equity and progress. Over the last five years we have more than tripled the budget disbursement for health and almost tripled the budget disbursement for education. We aim to double social spending again in the next three years. More importantly we have to ensure that performance matches budget increases. The government is strongly committed to improve mechanism to disburse budget to the priority ministries, especially the Ministry of Education, Youth and Sports and the Ministry of Health.
33. For several years now the Royal Government has been implementing a "Locomotion Strategy" aimed at improving the physical transport infrastructure, especially roads and bridges that constitute the connective network of our economy. A more comprehensive road network will open up and link Cambodia's economic and tourism opportunities, facilitate the transport of goods and services, boost foreign and domestic investments and release the underlying potentials of the rural economy. Furthermore, the poor benefit from improvements in transport through reduced consumer prices, increased employment and improved opportunities for entrepreneurship. You will hear more details from H.E. Keat Chhon, Senior Minister and Minister for Economy and Finance.

    Sustainable Forestry Sector Strategy

34. The Royal Government's forestry sector strategy aims to promote sustainable forest management based on three pillars: (i) sustainable forest concession management policy, where timber exploitation is strictly controlled according to international forestry standards; (ii) a system of protected areas to preserve the country's unique biodiversity and endangered species; and (iii) a substantially stronger community forestry development program.
35. I hope that in the near future, a new Forestry Law that will incorporate the Government's forestry sector strategy will be enacted. We are already acting resolutely to implement the forestry strategy. A moratorium has been declared on logging in forest concessions pending the approval of management plans and inventory assessments that are fully compatible with sustainable forestry practices.
36. In order to upgrade the monitoring of previously cut logs, all log transportation by concessions was suspended starting May 2002. Henceforth, the monitoring of the log transport will be improved with the adoption of a new, electronic system of log tracking using bar code devices. A few days ago I signed a sub-decree to cancel a forest concession that was in contravention with logging regulations. The government will rigorously pursue this stance in forest management.
37. The plight of the poor can be improved by widening their access to forest, fisheries, water resources and other public goods. Therefore, providing access to fisheries and water resources is critical to improve the living standards of the people living in the Tonle Sap and riparian regions. Realizing the importance of such actions, the RGC cancelled or reduced the size of official fishing lots to improve access by the poor to traditional fisheries in some areas. To shore up the legal framework for fisheries, the Ministry of Agriculture, Forestry and Fisheries has drafted a new Fisheries Law, a Fisheries Master Plan, a governmental Decree on Community Fisheries and Fishing Lot Auctions with extensive consultation with all stakeholders.

    H.E. Chan Sarun, Minister of Agriculture, Forestry and Fishery, will elaborate.

    Demobilization

38. We remain strongly committed to the transformation of our massive stocks of swords into plowshares and the strong hands that wielded the former to operate the latter. Indeed, in this area as well as in other important sectors we would not be successful if we did not receive generous assistance from our development partners. Orderly and successful integration of former soldiers into the mainstream of productive society is therefore a priority. But there is no doubt that it is an agenda for the long haul as it involves changes in outlook, habits, attitudes, skills and the way of living. Through the year 2002 we are committed to the full demobilization and reintegration of up to 30,000 discharged military personnel. Again, H.E. Sok An, Senior Minister, Minister for the Council of Ministers and Chair of the Demobilization Council will provide more details.

    Promoting Gender Equality

39. Improved equality and equity for women and children is crucial to sustainable development, social justice and poverty alleviation in Cambodia. Investment in and greater attention to women's needs will result in better health and education of future generations, as well as greater economic efficiency and decreased poverty. Therefore, investment in women and children and improvements in women's social, economic and political status are direct investments in the future of Cambodia. Accordingly our actions are focused on the implementation of the five-year strategic plan, Neary Rattanak (Women are Precious Gems) and the program of Building Together: Toward Achieving Gender Equity and Social Development.

    Meeting the Challenges to Reforms

40. I have very broadly laid before you the many areas we have progressed. We more than any one else are acutely aware that there is a long march ahead.
41. Cambodia's past achievements and solid performance serves to highlight the many problems and challenges to overcome in order to push our reform and development agenda. We need to work on further improvements in governance if we are to make more than a dent in poverty. Furthermore, we should instill the sense of ownership of the development process and our achievements among all social strata.
42. Indeed, policy reforms across sectors have constituted the substance of our development thrusts. Yet we also realize that while good policies do matter, their rigorous and consistent implementation remains vital. Coordination and information sharing between and within ministries should be improved. The challenge to ensure that systems of governance work efficiently to increase access to modern knowledge and technology should also be overcome.
43. To systematically resolve the many challenges before us, we are promoting the sound management of knowledge and human resources through the building up of a performance based civil service. We are also embarking on e-government initiatives. We clearly need an efficient government that is responsive to the demands of the rapidly changing international environment as well as a strong and vibrant private sector. H.E. Sok An, Senior Minister, will provide more details about government's strategies and action plan for administrative reform.
44. I wish to emphasise that in all these efforts we are setting out a clear agenda and mechanisms for managing the process of change. We will work with vigor and determination to solve-not avoid-problems. We have enjoyed favourable conditions, more than at any other time in our recent history. This opportunity to forge ahead towards sustainable development and poverty reduction is within our reach.
45. The broad picture I have tried to place before you today no doubt shows the vast distances Cambodia has traversed in mere ten years, accelerating significantly in the last four years, to transform itself from a strife-tom, problem-ridden, poor country to one firmly on the path to progress and realisation of its true potential. But every step we take shows up new challenges ahead. Nevertheless, we have the horizon firmly in our sights and we will spare no measures to take Cambodia forward for betterment of its people.
46. You are in the land of the world's famous Angkor Wat and nearby monuments standing testimony to Cambodia's glorious past. Most of you have no doubt visited them. These are magnificent edifices conceptulalised by great minds, planned and choreographed by very competent architects, erected by highly skilled artisans and workers. They were built stone by stone not in one day but over decades. And so, in building a future Cambodia, we are laying one exquisite stone after another, confident in our determination and resolve as well as in our abilities to overcome all minor and major obstacles as they arise. No Angkor sculptor threw away his chisels because he made a mistake in one carving. He corrected it and laid another stone. So shall we as we build a modem, vibrant, thriving, living Cambodia.
47. We know we have come a long way, much farther than any one might have dared predict ten years ago when UNTAC sat here; may be more than many other nations if any were similarly situated. We however shall not rest on our laurels. I pledge that we will not waste this historic opportunity.
48. As you start your deliberations at this meeting I request you to keep in mind our demonstrated track record till now far exceeding expectations and also the promise and potential it denotes for the future. Your advice and assistance so far have been put to maximum advantage of Cambodians in general despite shortcomings here and there. You can rest assured we will do even better with your help in the future.
49. In closing, let me thank you all for your patience and attention. I do not want to take too much of your time going into all details of the situation in Cambodia. My intention is to assure you of our unity, sincerity and seriousness of purpose in pursuing progressive policies and measures. The road ahead has become much clearer, but is still long and difficult, and the solidarity of the international community with the aspirations of the Cambodian people continues to be vital.
50. The Royal Government of Cambodia is represented in the CG meeting by an experienced and able senior delegation led by H.E. Keat Chhon. They will be with you and share with you the details of our programs and all the information required about the various aspects of our socio-economic situation and needs for development assistance. Throughout the meeting Cambodia will listen, take careful notes of all that you say and give it utmost consideration.

Thank you very much for your kind attention and have a good meeting!

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