INTRODUCTION

The holding of the second General Elections in 1998 which were organized by the Cambodian people themselves were both fully in line with the spirit of 1993 Constitution of the Kingdom of Cambodia and an expression of our continued implementation of democratic, liberal and multi-party system so as to put into full play the sense of mastership over the country's destiny as well as enhancing the Cambodian nation's prestige in the international arena. Starting from the above historical event that the international community viewed it as a miracle of the Mekong River, the Royal Government of Cambodia, with Samdech Prime Minister Hun Sen at the helm, came into being and laid down a triangular strategy aimed at boosting a sustainable national development.

Strong with its Win-Win Policy initiated by Samdech Prime Minister Hun Sen, the Royal Government of Cambodia had put a total end to the Khmer Rouge military and political organization, thereby bringing a full peace to the whole country by ending a more than two-decade of internal rift and civil warfare. In turn, the Cambodian people have had rights to freely travel nationwide with joy and hope.

The Kingdom of Cambodia upgraded the relations with the United Nations, became the tenth member of ASEAN, and normalized its relations with various international financial institutions and international organizations. Efforts are being made in order to join in the nearest future the World Trade Organization so as to fully integrate Cambodia into the regional and world community.

The Government also paid its special attention to restore and boost the socio-economic development through public administrative reform, military reform, demobilization of armed forces, economic and public finance reform, legal and judicial reform, land policy implementation, environment protection, sustainable natural resource management, all of which are aimed at alleviating the people's poverty.

As far as the social reform is concerned, the Government curtailed the military and security expenditures year by year through the demobilization of militiamen and armed forces in order to re-allocate it to the four priority sectors, namely health, education, rural development and agriculture.

The Government had designed the Second Socio-Economic Development Plan (SEDPII) for a period of five years (2001-2005), the National Economic Growth and Poverty Reduction Strategies (2003-2005), the Yearly Public Investment Plan to back up the second five-year plan and a related plan of action for each specific sector within the framework of good governance.

The strengthening of democratic practices and the rule of law through the successful holding of the Communal Council Elections on 03 February 2002 constitutes an undeviating and firm commitment of the Royal Government in carrying out the decentralization policy at the local level.

In the same vein, the Government has been doing its part to provide support to the preparatory process of the upcoming third General Elections scheduled to be held on 27 July 2003.

The successive successes obtained by the Government and the entire people of Cambodia indeed have broadly won the sympathy and confidence both inside and outside the country and this was reflected in the positive result of the Consultative Group Meetings. Last but not least, Cambodia recently hosted the first Greater Mekong Sub-region Summit, the eighth ASEAN Summit, the ASEAN + 3 Summit, the ASEAN + 1 Summit as well as the third World Buddhism Conference.

In short, all these significant achievements stemmed from the efforts striven by the Coalition Government between the Cambodian People's Party and the Funcinpec Party coupled with the full backstopping rendered respectively on the part of the members of National Assembly and Senate under the Royal leadership of His Majesty Preah Bat Norodom Sihanouk, the King of Cambodia and Her Majesty the Queen as well as the support from the Royal Cambodian Armed Forces, Military Police, National Police, Civil Servants, Local Authorities of all levels, Private Sector, Workers, Farmers, Youth, Students, Intellectuals, Benefactors, Civil Society, Monks and Buddhist believers, other religions and the Cambodian people as a whole along with the precious and indispensable assistance rendered on the part of the international community.

Statistics of Provinces (P), Municipalities (M), Districts (D), Precincts (Pr), Communes (C), Quarters (Q) and Villages (V)

Year	P	M	D	Pr	C	Q	V
1999	20	4	170	14	1,499	110	13,216
2000	20	4	170	14	1,500	110	13,427
2001	20	4	171	14	1,510	111	13,707
2002	20	4	171	14	1,510	111	13,707
Total	20	4	171	14	1,510	111	13,707

A triangular strategy laid down by the Royal Government with Samdech Prime Minister Hun Sen at the helm was carried out in four axes.

The Government took great pride in its work to strengthen and ensure peace security and social order for the Cambodian people, local and foreign businessmen and investors, national and international guests, diplomatic corps, national and international organizations as well as NGOs based in Cambodia.

The Government has also been successful in its endeavors to provide security and social order to the proceedings of the sixth Consultative Group Meeting held for the first time in Phnom Penh, the first Greater Mekong Sub-region, the eight ASEAN Summit, the ASEAN + 3 Summit, the ASEAN +1 Summit, the third World Buddhism Conference with the participation of 16 countries and the Royal procession of Buddha's relics that was held to take the relics from a decades-old stupa to a newly-constructed site located at Preah Reach Trop mountain of Ponhear Leu district, Kandal province, where the relics would be placed.

-Up to 31 January 2003, the competent authorities have seized 119,104 riffles (946 short guns), destroyed and burnt down 103,995 riffles on 22 times.

Year	Crackdown (case)	Detained offenders
1999	2,064	3,182
2000	2,374	3,746
2001	3,016	4,667
2002	3,185	4,297
Total	10,639	15,892

Year	Weapons	Grenades	Vehicles	Motorbikes
1999	290	35	15	165
2000	158	8	19	157
2001	328	37	26	347
2002	211	74	21	362
Total	987	154	81	1,031

II-Democratization, the Rule of Law and Integration of Cambodia into the Regional and World Community

The constitutional establishments are normally functioning in accordance with the constitution, namely the King's institutions, the Senate, the National Assembly, the Constitutional Council, the Supreme Council of Magistracy, the judiciary institutions and the Governmental establishments. Furthermore, so free was the operation of the Civil Society that the international opinion could regard the Kingdom of Cambodia as heaven of the NGOs.

8 political parties competed in the Communal Council Elections that were held on 3 February 2002.

Description	Votes	Chiefs of communes and quarters	Seats
Cambodian People's Party	2,674,303	1,598	7,703
Funcinpec Party	958,326	10	2,211
Sam Rainsy Party	731,150	13	1,346

Description	1999	2000	2001	2002
Cabinet meetings	37	28	36	35
Inter-ministerial meetings	233	249	265	230
Issued judicial sub- decrees (Number)	121	103	132	131
Issued nominating sub-decrees (Number)	570	430	554	605
Decisions (Number)	89	67	75	55
Directive circulars (Number)	16	13	14	2
Published Royal Gazettes (Volume)	75,000	75,000	48,000	46,000
Draft laws submitted to legislative institutions	23	24	17	31
Laws adopted by legislative institutions	23	11	18	21

-Issue and vulgarize other legal documents among the public through the Royal Gazettes in order to increase the effectiveness and efficiency of law enforcement; thereby encouraging civil servants, armed forces, people, civil society and the private sector to participate in the implementation of laws and legal documents.

To implement successfully the reform policies of the Royal Government of Cambodia, the Supreme Council for Sate Reform has been established by the Royal Decree NS/RKT/0399/72 dated March 19,1999 chaired by Samdech HUN SEN, Prime Minister, Deputies Prime Minister, H.E SAR KHENG and H.E TOL LAH are Vice-chairs, and Senior Minister, H.E SOK AN is Permanent member.

-Create a database and personal files of all civil servants through the Civil Servant Census which is a necessary tool for the new management system to better manage the civil servants. Distribute ID cards to central and provincial civil servants.

-New classification regime and new remuneration system for civil servants, were established and implemented, started from January 2002.

-Create necessary legal texts to reinforce the new management system such as civil servants obligations, 22 particular statutes (inter-ministerial administration, health, diplomacy and techniques).

-Pay automation is in place and working for all ministries and provinces by implementing the new remuneration system, started January 2002, by which, the average salary has been increased of 44.3% (the components of new remuneration system are: basic salary, functional allowances, pedagogical allowances,....).

-Draft politics and strategies of De-concentration in Cambodia and design policies and particular structures to administrate the urban districts.

For Local Administration, significant achievements of the Royal Government of Cambodia are as follows:

-Law on commune-Sangkat election and Law on Commune-Sangkat Administration Management.

Description	Variation
Description	Retirees	Selected civil servants	Integrated civil servants	Civil servants on the payroll
1999	3,775	924	217	16,772
2000	3,424	5,739	446	162,991
2001	959	4,820	124	162,197
2002			124	160,189

-Provide nominating visas to 24 positions of civil servants (nominated by Royal decrees)

-Provide nominating visas to 179 positions of civil servants (nominated by sub-decrees).

The implementation of this State reform has brought about a positive result, reflecting through the GDP Growth's average rate of 7% from 1999 to 2002.

The Government continues to push forward the implementation of military demobilization program so as to further reallocate the savings from defense and security to other priority expenditures, particularly to socio-economic development.

In 2003, the Government continues to further increase the budgetary allocation to the four- priority ministries:

Description	1999	2000	2001	2002*
GDP(%)	6.9	7.7	6.3	5