Pre-Consultative Group Meeting Between the Royal Government of Cambodia and the Donor Community

Statement by Mr. Mario de Zamaróczy
IMF Resident Representative
Phnom Penh, Cambodia, April 24, 2001

Excellencies, Ladies and Gentlemen:

This is a well written, comprehensive, and well-focused executive summary. We can support it broadly, as it addresses the right challenges, both economic challenges and structural challenges. We particularly welcome the fact that poverty reduction is at the center of the Royal Government of Cambodia's (RGC) reform efforts. As you know, the on-going efforts in producing a Poverty Reduction Strategy Paper are at the heart of both the World Bank and the International Monetary Fund's concessional financial assistance. We also like the fact that this document reaffirms the RGC's strong political will to continue with reforms. We would like to congratulate the RGC for the notable efforts put in promoting a participatory approach in many reform areas, such as the adoption of the new forestry law, revisions to the investment law, or the design of the poverty reduction strategy.

This having been said, I would like to share the opinion of some previous speakers who found the document a little bit too optimistic in some areas. Therefore, our recommendation would be to complement this document for the Tokyo Consultative Group Meeting with a concise document, that would list concrete actions, either taken or being envisaged in the short run. Those could include:

  • Demobilization: reform has started, but only 1,500 soldiers have been demobilized out of a total target of 31,500 soldiers, thus the program needs to be jump started.

  • Forestry: the revised law needs to be forwarded to the National Assembly; the Memorandum of Understanding with Global Witness needs to be finalized; the Forest Crime Monitoring Unit's tracking system's reports need to be investigated; and concessionaires need to be canvassed, as to where they stand for the September deadline on submitting their sustainable forestry management plans.

  • Law on Investment: this is a difficult area, but we need to come to a closure in order to clarify the current uncertainties, which could adversely affect the investment environment.

  • National Audit Authority: it is urgent to appoint the Auditor General, and it would be desirable that the National Audit Authority be operational before the Tokyo Consultative Group Meeting.

  • Administrative Reform: the civil service census is proceeding and the computerized central payroll is being implemented, but in other areas progress has been slow. Concrete reform actions would be welcome.

  • Fiscal Reform: measures need to be taken to reach the ambitious revenue target stated in the document: 14 percent of GDP in 2004 vs. 11.5 percent of GDP in 2000.

Thank you.

IMF EXTERNAL RELATIONS DEPARTMENT

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