Development in Cambodia Falling Short

Absent from this week’s Live 8 rock concerts—held around the world, from Tokyo to Moscow to Philadelphia—and media coverage of the impending G-8 meeting of the world’s most powerful countries, was talk of Cambodia’s plight.

And a new report from the UN, released Friday, helps to further illustrate how worldwide focus has shifted away from Cambodia in recent years. It warns that the pressing needs of the 14 least developed countries in Asia are at risk of being ignored.

For the entire region, the report, entitled “Voices of the Least Developed Countries in Asia and the Pacific,” calls for an additional $10 billion in aid by 2006, $15.7 billion by 2010 and $24 billion by 2015 to meet the UN Millennium Development Goals.

The report also states that Cambodia, like sub-Saharan Africa, is likely to meet few of its Millennium Development Goals by 2015.

On the one hand, it says Cambodia is on track to halve the proportion of the population living on less than $0.43 to $0.65 each day, and by 2015 the number of people struggling at this level will be some 19.5 percent. It also says Cambodia is on track to enroll all children in primary school by 2015.

But on the other hand, in every other category, from lowering the percentage of underweight children and underfed citizens to increasing literacy, Cambodia is an “underachiever.” Meanwhile, in combating infant and child deaths, Cambodia has a “deteriorating trend.”

In Phnom Penh on Monday and today, government and donors have been sitting down to discuss progress on making existing international aid—delivered at a rate of some $600 million a year—more effective. Neither side is talking of massive aid increases. Instead, donors are once again focusing on reform.

Asked Sunday evening if Cambodia needs a massive increase in aid to meet its development goals, Douglas Gardner, UN Development Program resident representative, said Monday’s aid effectiveness workshop was an important preliminary step.

“It is still not too late to meet the development goals…. There must be commitment to a connected reform program, getting increased government revenue flowing into education, teacher’s salary and health,” he said. “Reform also must focus on achieving an economically broad base of employment.”

On Monday, World Bank Country Manager Nisha Agrawal said that increasing aid effectiveness is a very important part of donor’s effort to meet the development goals.

“Cambodia needs more aid, and it needs better quality of aid,” she said. “The surveys we have done on the effectiveness of our aid have shown that in some areas, it is of very poor quality. We are missing important targets, we are imposing high transaction costs on the government.”

To quantify the amount of aid lost to poor implementation Agrawal cited a study released last month by the group Action Aid. The “Real Aid” report states that in 2003 at least 61 percent of donations to poor countries were wasted on ineffective technical assistance, transaction costs and poor planning.

Cambodia is one of the case studies for the report, but no exact figure for the country are available.

Gardner said increases in primary school enrollment and decreases in HIV prevalence show government-donor cooperation at its most effective. But high infant mortality and low secondary school retention rates show a lack of focus and coordination.

As to the overall poverty goal, Gardner was skeptical of the new report’s “on track” assessment.

“There has been economic growth, but it has been narrowly based in the garment and tourism sectors,” he said, adding that a demographic survey now being analyzed and due as early as August will give more reliable economic data on the health of the country.

The discussions underway at the Council for the Development of Cambodia are aimed at improving procurement procedures, enhancing the government’s ability to critique the often expert-laden assistance it receives, and ending assistance that requires that donations from any country be used to buy supplies from that country.

Untying aid and opening procurement to competition should make aid projects less costly and aid dollars go further, donors say. Giving government a greater say in determining Cambodia’s needs should cut down on wasted aid going to overlapping projects, reports and salaries for consultants.

For its part, the government pledged to continue is own reform agenda. Finance Minister Keat Chhon said that it is not too late for Cambodia to reduce poverty by half by 2015, as long as corruption can be controlled.

Shyam Bajpai, the head of the Asian Development Bank’s resident mission, said Monday that harmonization is important but is one of many key issues that need to be addressed if Cambodia is to reach its development goals.

“The idea is that donors have agreed to simplify their procedures so that, for example, governments do not have to waste time filling out hundreds of forms,” he said. “I do not know if anyone has attempted to quantify how much money is lost due to lack of harmonization.”

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