Keynote Address at the National

Keynote Address at the National Conference on the People's Prosperity through the Achievements from the Implementation of the Rectangular Strategy by the Royal Government 2004-2007

Chaktomuk Conference Hall, 29 May 2008

Excellencies, Ladies and Gentlemen!

1. Today, it is my great honor and pleasure to join this important national conference on “Prosperity of People through the Achievements from the implementation of the Rectangular Strategy by the Royal Government 2004-2007” to stocktaking and evaluate accomplishments of the government of the third legislature of the National Assembly. First, I would like to express my warm welcome and sincere compliments to all leaders and staffs of all ministries and institutions for joint efforts to make this conference possible and fruitful.

2. At the outset, I would like to reemphasis that "Rectangular Strategy" for Growth, Employment, Equity and Efficiency in Cambodia, which was laid out by me in the first cabinet meeting of the third legislature of the National Assembly at the Council of Ministers in July 2004. It is the political platform formulated into prioritized, systematic, consistent, interlinked and complimentary package of policies aiming at achieving development, progress, prosperity, harmonization and happiness for Cambodian people. To achieve four important strategic objectives namely Growth, Employment, Equity and Efficiency, the government adopted the “Rectangular Strategy” which entails Good Governance as the core with four reform angles that must be interconnected with four enabling environment. In this connection, the 3-day conference will stocktaking achievements and discuss on seven important topics , (1) peace, stability and social order, Cambodian integration with the world and region, partnership in development and favorable macroeconomic and financial environment (2) good governance (3) agricultural development (4) rehabilitation and construction of physical infrastructure (5) private sector development and employment (6) cultural and tourism development (7) capacity building and human resource development.

3. Taking this rare opportunity, I would like to share the whole conference by giving remarks on a number of major achievements by the government between 2004 and 2007 with respect to each angle of the “Rectangular Strategy”.

4. In overview, the government of the third mandate has got major achievements that are casting positive effects on strengthening peace culture, security, social safety and democracy; provide the government rare opportunity to implement decentralization and de-concentration process and continue other reform programs. The Senate election for the second legislature in 2006, election for village chiefs and assistants in 2006, election for commune/sangkat council of the second legislature in 2007 were conducted in smooth, free and fair manner. On the other hand, general election of the fourth legislature is going in a well-organized process amidst good political climate. The process of Extraordinary Chambers in the Courts of Cambodia under cooperation between Cambodia and the United Nations for the Prosecution of Crimes Committed during the Period of Democratic Kampuchea is making progress in conformity to the Cambodian law while ensuring the international standard and gaining support and encouragement from national and international public opinions. At the same time, peace, political stability and liberalization have taken firm roots for strengthening macro-economy and investment that are prerequisites for sustainable development and poverty reduction. These economic achievements are attributed by the institutional capacity building and the implementation of the rational social and economic development policies with the supports from Cambodian people, development partners and private sector participation.

5. The favorable preconditions provided Cambodia firm opportunities to make speedy progresses in the integration with international communities and the world. As a result, Cambodia has made accession to ASEAN and WTO and participated in different regional initiatives and cooperation such as ASEM and ACMEC. Moreover, Cambodia also participates in UN's peace keeping activities such as sending peacekeeping force to Sudan.

6. The government gives high priority to strengthening partnership with all development partners such as partnership with development partner communities, private sector and civil society. The partnership mechanism with development partner communities has been established on the basis of decision of General Assembly of the United Nations, Development Assistance Committee (DAC) of the Organization for Economic Co-operation and Development as well as initiatives of the World Bank and UNDP. Through the consultation with development partners, the government has strengthened efficiency of joint technical working groups and facilitating committee between the government and development partners. As a result, the cooperative financing for Cambodia has increased every year. In this framework, Cambodia was successful in organizing the first Cambodian Development Cooperation Forum (CDCF), held at Phnom Penh on 19 June 2007. At the same time, the accomplishments in the implementation of 1^st platform “Public Financial Management Reform” program, which was presided over by m yesterday, is another evidence of successful development partnership between the government and development partner communities.

7. In this context, the government considers private sector as the engine of growth. Therefore, strengthening partnership between government and private sector must be smooth with rational intervention from the government into the economic sector while enforcing the implementation of the legislation as well as effective support and facilitation by relevant government institutions. In this spirit, the government will strengthen “Government-Private Sector Forum” into more effective mechanism for the public-private partnership.

8. Indeed, “Government-Private Sector Forum”, which has been regularly organized every six months and presided over by myself, has strengthened the cooperation with the private sector and become an important mechanism for exchanging views, ideas and opinions on challenges faced by the private sector and joint efforts to seek common solution for social and economic development and to ensure the sustainable economic growth. In particular, FDI has inreased dramatically over recent years; and the private sector, both domestic and overseas, has become a significant catalyst to promote growth.

9. The Royal Government continues to strengthen cooperation between the government and the civil society in accordance with the principles of the rule of law to promote democracy, human rights and dignity, social order and law compliance. The civil society acts as an effective partner of the Royal Government in the process of national development. In this context, by all means, the Royal Government encourages NGOs and registered associations that are serving the benefits of the people across the country. The Royal Government welcomes the contribution from international NGOs in socio-economic rehabilitation and development process, promoting democracy, human rights and dignity. In this spirit, the Royal Government will continue to push for the drafting and implementation of the Law on Non-Government Organizations and Associations by exchanging discussions with related institutions and organizations.

10. At the same time, partnership with the civil society will push for the adoption and implementation of a number of laws and regulations, such as the implementation of the Law on Anti-drug Trafficking and the Law on Anti-human Smuggling and Sexual Exploitation. These are the priorities that require specific attention. Furthermore, the development of micro-finance institutions is another important priority in the agenda of the cooperation with the civil society. These tasks are conducted through pushing the issuance of licenses, registering micro-finance institutions properly, requiring micro-finance institutions to follow the accounting standard and financial statement format approved by the National Bank of Cambodia. Furthermore, other micro-finance institutions such as financial cooperatives, credit unions and village saving banks are also highly encouraged.

11. For future direction, Cambodia will further mobilize financial and human resources by combining with cooperation fund provided by development partners through various means and priority programs. Moreover, Cambodia will continue to encourage and provide appropriate guidance in organizing the Cambodia Development Cooperation Forum (CDCF) in order to coordinate cooperation within the framework of development partnership and further focus on strengthening partnership with the private sector and civil society by promoting the roles of both components to boost the efficiency of the future economic growth.

12. In the economic sector, we have made a positive and encouraging achievement. In particular, during 2004 – 2007, despite facing some unfavorable external factors such as the surge in oil price, we have achieved an average economic growth of 11.1% per annum which has never been seen before. The inflation is contained at an average of 5% regardless of rising oil price. This leads to the 50% increase of per capita income, jumping from 394 US dollars in 2004 to 594 US dollars in 2007. The international reserves has more than doubled, rising from nearly 809 million US dollars in 2004 to more than 1.6 billion US dollars in 2007, and in early 2008, it reached 1.9 billion US dollars. Poverty rate declined from 35% in 2004 to 31% in 2007. The export industry such as garment, service, especially financial and tourism sectors still continue its high pace of growth. The total export increased by 64% between 2004 and 2007, rising from 2.6 billion US dollars in 2004 to 4.2 billion US dollars in 2007. Out of this figure, the garment export, made up of 70% of the total export, increased by 51%. To maintain the growth of this export sector, the Royal Government has introduced a number of measures such as trade facilitation and tax incentives. The flow of FDI nearly sextupled, jumping from 121 million US dollars in 2004 to 713 million US dollars in 2007. Political and macroeconomic stability attracted substantial amount of FDI to Cambodia.

13. However the challenge facing the Royal Government is the dramatic surge in inflation since mid-2007 in spite of vigorous preventative efforts. The average inflation in 2007 was 5.8% but it climbed to 10.8% in December, and this trend still carried on in March 2008. The most significant rising prices are seen on food and fuel. Compared to 2006, food price and transportation cost indices increased by 20.9% and 13.5% respectively. The surge in goods prices is caused by both external and internal factors. Regarding the external factors, the surging price of oil, food and other goods, and weakening US dollar are the main causes of inflation in Cambodia. Oil price on the international market increased substantially from 22 US dollar per barrel in 2003 to 135 US dollar per barrel at the end of May 2008. The internal factors are the imbalance of supply and demand of goods, the hike in rice price and foreign capital inflows that have triggered sharp increase in bank credit. In this circumstance, the government issued continuous measures to cope with the inflation, especially to limit increase in price of basic goods such as food and oil in order to maintain macroeconomic stability. Therefore, I would like to appeal all ministries and institutions to exert efforts to carry out the anti-inflation measures, especially to save on the usage of electricity and gasoline and to maintain tight expenditure in the framework of existing budget law aiming at increasing investment capital for infrastructure such as roads, irrigation system and energy transmission network. Especially, I would like to call for attention on the agricultural development of our people and to increase rice yield from 2.5 tons to 3 tons per hectare.

14. Good governance, the core of Rectangular Strategy, is the most crucial pre-criterion to ensure equitable and sustainable economic development and social justice. Good governance has been constantly promoted through reforms such as Public Administrative Reform, Armed Force Reform, Legal and Judicial Reform, Economic and Financial Reform, Land Management Reform and Fisheries and Forestry Reform. Anti-corruption, one priority of the Governance Reform, is gradually and strictly promoted through administrative and judicial measures against guilty officials. In this spirit, despite being without anti-corruption law, so far the government gave priority to fight against corruption through the implementation of Governance Action Plan (GAP) and the strong measures in the existing legislation and regulation. As a result, the government has achieved several major outcomes. The Prakas on Non-tax Revenue Management has been prepared and adopted while the old Sub-decree on Public Procurement has been amended and the new Sub-decree is being enforced in order to enhance transparency in the public bidding process. The Customs Law is adopted and promulgated since July 2007 while the Code of Conduct for customs and excise officials has been launched and enforced. The check and balance mechanism and other auditing services of the National Audit Authority is being strengthened while all ministries and institutions have established the Internal Audit Departments. The anti-corruption unit has been strengthened by imposing some administrative punishment and sending guilty officials to court.

15. To implement the Public Administration Reform, we have established the Priority Mission Groups in a number of ministries and institutions in order to strengthen the managerial ability and capacity of the civil servants, to set recruitment criteria, to prepare the exam in recruiting civil servants, to adjust the public functional allowance and civil servants' functional allowance and to implement the Merit Based Payment Initiative aiming at strengthening the public services to be more effective, transparent and responsible as well as setting up the process of “Single Window Mechanism” and the IT-based service provision. These works focus mainly on the prioritized sectors such as education, health and agriculture while extending their coverage to the other reform programs of the Royal Government. Starting from January 2005 the basic salary has increased in average approximately 20% per year. Generally, the salary has increased by 163% since 2002, in which the average salary was approximately 55 USD/month in the year 2007.

16. At the same time, in order to bring the public services closer to the people, the Royal Government has promoted the democracy and participation from the local level regarding the provision of public services through the mechanism of de-concentration and decentralization policy. As a result, the smooth process of the Khum/Sangkat election demonstrated the great success of the decentralization policy and this political platform has been further extended to the District/Khan and Province/Municipality through the approval of the “Law on the Organization and Management of Provincial/Municipal and District/Khan Administration” in early April 2008.

17. Through the Law and Judicial Reform program, the Royal Government has improved the legal and judicial system by putting particular emphasis on strengthening the judicial framework, modernizing law as well as setting necessary strategies and measures to build the independent ability and neutrality of the court, considered vital for the process of strengthening the state of law. During the 3^rd legislature, the National Assembly has adopted 133 laws in which 3 substantial codes which are the basis for the process of legal procedure have been established including, Code of Criminal Procedure, Code of Civil Procedure and Civil Code. As for other significant laws such as Criminal Code, Anti-corruption Law, Law on the Statute of Judges and Prosecutors and Law on the Arrangement and Process of Court are under the review of the Royal Government according to the legal procedure of the law adoption. In the meantime, the Royal Government has organized various programs in order to publicize and train the people and other law officials about the laws in order to ensure proper understanding and implementation. With the efforts to create new laws as mentioned above, the Royal Government puts more focus on improving the court system through capacity building and the responsibility of judges. In practice, the disciplinary measures have been strengthened and continually set with the cooperation from the Supreme Council of the Magistracy, in which the ability and professional responsibility of the judges have been enhanced through the initial training and the continuous adoption of professional ethics for judges and prosecutors. With the support from the UNDP, we have created a number of “Center for Judicial Service” at the district level in order to institutionalize the process of conflict resolution outside the court, which could actually reduces the delay of legal cases in the court.

18. The reform and the strengthening of armed forces' capacity including demobilization and the creation of a more effective armed force have been implemented as planned. It consists of anti-terrorism training, de-mining, armed force restructuring, weapon management reform, the participation of the engineering team in building infrastructure in all sectors, the protection of the election process, security, stability and social order and the participation in the anti-trafficking of women and children as well as anti-drug trafficking.

19. The strengthening of the public financial system management is not only the heart of the good governance, but also one of the crucial tools to achieve the objectives of the Rectangular Strategy. I am greatly delighted to see that the "Public Financial Management Reform", which was officially launched by me on 5^th December 2004, has been successful. Yesterday, I presided over the "Annual Review of the Public Financial Management Reform" and evaluated that the 1^st Platform of reform, which is the credible budget, has totally met the set objectives. In fact, after the reform, the domestic revenue increased from 2,625 billions riels in 2005 to 4,019 billions riels in 2007. In average, the domestic revenue increase by 23% per year, in which the tax revenue increased by 27.6% and the non-tax revenue increased by 19.3%. Along with that the budget expenditure increased from 3,513 billions riels in 2005 to 4,586 billions riels in 2007. In average, the budget expenditure increased by 20% per year. This provides opportunity for the Royal Government to increase the expenditure on public investment, especially on the building and repairing of the main national infrastructures such as transportation network, irrigation network, schools and health centers…etc. On the other hand, the Royal Government increased the spending on the rural infrastructure by transferring the big part of the debt relieve by the IMF (83 millions USD) for the small scale irrigation system in the eastern provinces. The arrears have been cleared and cash in the National Treasury increased 250 times, compared to 2003, achieving 1,000 billions riels.

20. The next step, especially during the 2^nd Platform of the reform, the Royal Government realized a number of challenges, including the improvement of capacity that all ministries and institutions have to consider in order to ensure more resources and capacity for the effective implementation of the financial management delegated to them. Therefore, I would like to appeal to all ministries and institutions to implement the "Public Financial Management Reform" in the 2^nd Platform by ensuring ownership and further cooperation with the MEF, which is an institution implementing this public financial management reform.

21. Promoting the agriculture productivity and diversification to be a leading sector is the prioritized principle in implementation of the "Rectangular Strategy" of the Royal Government. The agricultural land was restored more than the pre-war agricultural land and the rice yield increased 2.5 times, compared to the pre-war period. The agriculture in Cambodia is gradually modernized through the increase of the land consumption and the use of highly productive seeds. The value added in agriculture increased in average 7.2% during the year 2003-2007, compared to 1,6% increase in 1998-2002, and 4.9% in 1993-1997. It is mainly due to the increase in public investment on irrigation network, improvement of water resource management, increase in commercial credit and micro-financial institution. The rice yield gradually increased up to 2.5 tons per hectare in the year 2007. Therefore, we have to put more efforts to reach up to 3 tons per hectare. The increase in rice, milled rice, maize, bean, cassava and rubber will further encourage the implementation of this agricultural diversification.

22. Land reform is the most sensitive issue due to the complex history. In implementing the Land law and policies, the Royal Government of Cambodia focused specifically on the measures to strengthen the land management, distribution, and utilization; to ensure security of land holding, to eliminate anarchic and illegal land tenure, and introduce the appropriate measures for preventing land speculation and unproductive land. The Royal Government is reviewing the vacant state land and the illegal private land tenure that does not have proper legal documents. For instance, we have issued more than 1 million land titles. The Systematic Land System has been welcomed by the people in the rural area. Mine clearance has resulted in expanding road network, and the cultivated area. We have cleared the land mine more than 20,000 ha form 1992 to 2008, and the mine accident has been reduced 1.5 times from 800 cases in 2003 to 315 cases in 2007.

23. Forestry and fishery reform has been vigorously implementing for the effectiveness of management and the sustainable natural resource development. The Royal Government realized that the participation from the community in management is more efficient and provides more benefits to the society. The Royal Government has effectively prevented illegal logging and reviewed all the forest concessions. Tp participate in preserving the valuable of natural resources, 264 Forestry communities was established with the coverage of 180,000 hectares and more than 400 community fishery was established. Even though the yield of fish per capita has been declined, but the total fish production is increasing.

24. Transportation network plays the same role as blood vessel for connecting all parts of Cambodia into an economic mainstream which integrate internal economy and with the region and the world. In addition, for current situation of Cambodia’ economy, the physical infrastructure plays a crucial role as “a locomotive of economic growth” and as the most effective tool for alleviation of poverty and misery of people. Base on this point of view, the Royal Government gives the high priority to renovate and build all kinds of transportation system including road, bridge, railway, port, and airport that will connect cities, towns, rural and remote areas of Cambodia together and also with the neighboring countries. This system of transportation allows for convenient accessible, secure, safety, low cost and economic efficiency that contributes to the trade facilitation, accelerating the tourism development, rural development and the economic integration into the regions and word.

25. Government Achievements on transportation are: From 2004 to 2006, the 92 new roads in length of 264 km were built, 44 roads in length of 707 km were repaired, 118 roads in length of 822 km were maintained and 160 of bridges and drainages were put in place. The length of national road and tertiary road has been increased by 632 km. The Royal Government plans to restore road to 25,000 km out of 28,000 km by 2010.

26. Many big priority projects have been implementing such as a project on linking Cambodia to Thai railway which is financed by the Asian Development Bank under the Greater Mekong Sub-region Railway Network from Kun Ming of China to Singapore. Phnom Penh port has been renovated under the Cooperation financing from Japan and could be finished in this 2008.

27. For the energy sector development, the Royal Government has increased electricity capacity and made available to many regions which previously could not be reached. In 2030, availability of electricity is believed to cover 70% to 100% of Cambodia’s total demand through the increases of local production capacity and importation from Laos PDR, Thailand and Vietnam. It means that Cambodian electricity has been integrated into power grid of the Greater Mekong Sub-region (GMS) countries and ASEAN.

28. The national policy on water resource is one of the broad project that provide the basis for protection, management, the use of river water, sea water and water-based natural resources in sustainable, equitable and efficient for public interest. The most challenges are to reap benefits at full potential of water resource. Recently, around 27% of total rice fields are irrigated. According to estimation, the potential of the irrigation can cover up to 65 percent of arable area. If the irrigation can be expanded, it will increase the land productivity which can make Cambodia the main rice bowl of the region. Royal Government will highly concentrate in renovate and build the irrigation and drainage, especially at the poor-ridden and border areas. From 1999 to 2006, 253 places of irrigation system have been renovated and constructed covered the area of 89,211 hectares (of which 75,101 hectares for rainy season and 14,110 hectares for dry season). The capacity to preserve water is extended and water volume has been increased. Water User Communities using the water has been increased and the participation of women have also been further strengthened.

29. Meanwhile, the Royal Government has pushed for the development of a high quality information and telecommunication sector that conforming to international standard and has appropriate cheap price, modern service, and country-wide coverage. According to the government’s Rectangular Strategy, the two big development projects on information and telecommunication sectors—administrative information system and E-government—have been implemented. The main objective is to close the gap among people, business, and government. In 2002, there were only 12,000 internet customers and currently there are 500 domains in total that registered with the Ministry of Post and Telecommunication of Cambodia. In 2007, the customers who used fixed phone was 35,000 comparing to 1.5 million subscribers of mobile phone. The fiber optical network has deployed in Banteay Meanchey, Siem Reap, Battambong, Phnom Penh, and Takeo province. And, the fiber optical network for connecting Phnom Penh-Kapong Cham-Steung Treng and Phnom Penh-Sihaknouk ville are under construction. In this regard, it will help pushing the national economy to another level of progress.

30. The Royal Government considers the private sector as an engine of economic growth and the government is the strategic manager for creating favorable climate for private sector and governing the development. In sum, the Royal government in this third mandate has reduced cost of doing business and the market connectivity has been expanded through the increase of public investment on infrastructure. The transportation development project of the Royal Government led to the reduction of transportation cost and improves the travel safety. Meanwhile, the development of road also contributed to the integration of rural and urban economy. Moreover, the Royal Government allowed private investment in infrastructure sector in form of “Build-operate-transfer” (BOT) that contribute to betterment transportation infrastructure. In fact, up to 2007, the government allowed the 17 companies to invest in infrastructurein the form of BOT with the total registered capital of USD 77.5 millions and fixed assets of USD 588 millions.

31. At the same time the Royal Government has also established and implemented many necessary judicial frameworks to support the development of the private sector which could ensure transparency between the private sector and the government, especially the Government-Private Sector Forum which has become an effective mechanism for resolving conflicts with peace. Trade facilitation reform has reduced the need for documents, which is a positive and an important step for promoting private sector businesses, particularly, during the last few years, the commercial registration procedure has been simplified. The cost of commercial registration has reduced from $630 USD in 2004 to $117 USD in the present. The “single window service” has been established and put into operation at Special Economic Zone such as Bavet. The establishment of the “single administration system” and “single window service” has brought about the benefits for small and medium enterprises (SMEs) development. The Royal Government has reduced to the minimum the capital requirement of SMEs from $5,000 USD to $1,000 USD and the registration cost to only $177 USD. The Tax Department has improved and simplified the reporting system to assist the SMEs. Loan provided by the Micro-financial Institutions for SMEs has doubled to $60 millions USD in 2005.

32. Besides, from 2003 to 2007 the Cambodian economy continued to expand in all sectors making economic institutions and enterprises (both garment and non-garment) to grow noticeably well, for instance, up until 2007 there were about 2,400 institutions/enterprises to absorb about 440,500 workers into the field. Moreover, overseas’s jobs, such as those in Korea have absorbed about 4,038 workers in 2007. Jobs in Thailand have attracted approximately 46,300 legal workers. At the same time, through the open-sky policy, Cambodia has received many tourists and created many employments for the people. The work control and disputes resolution mechanism has been created to monitor the implementation of the labor law and work related dispute resolutions.

33. Furthermore, the Royal Government has prepared action plans by focusing on 6 prioritized actions to provide the social security network including:

- Expanding social work services and emergency aids

- Promoting the wellbeing of children and youth’s skills

- Improving public services for handicaps and those who lost the working ability

- Improving the implementation of soldier pension fund

- Providing support services to former veterans and

- Enhancing good governance in the provision of security

34. The Royal Government acknowledged that the scope of the current’s retirement pension scheme is only limited to cover those retired government officials. In this sense, the Royal Government is preparing to implement a pension system which has a broad scope by establishing the “Draft Law on Nation-Wide Social Security Fund” and “Draft Law on the Establishment of National Soldier Pension Fund for former veterans”.

35. The development of the education sector has reached a new stage by focusing on the strengthening of basic education and education quality within the framework of national economic development which is systematically broad in nature. For the long-term vision, the Royal Government has linked the education strategy to poverty reduction strategy through integrating the education financial planning with the public expenditure management. During the last few years, many educational institutions have been established and the students’ education quality as well as the teachers’ living standard have been prioritized and taking care of according to the actual capacity of economic growth. Meanwhile, the Royal Government of the Third Legislature of the National Assembly has published the Education Sector Strategic Plan 2006-2010 which is a part of the Royal Government’s Rectangular Strategy and the National Strategic Development Plan 2006-2010. The Government also placed particular efforts into ensuring equal opportunities for all Cambodian children and youth in receiving both in-the-system and out-of-the system basic education without any racial, sexual, religious, social, and political discrimination. Regarding the living morality this Strategic Plan has been linked with the education on the culture of peace, respect for human right, respect the principle of law, freedom, democracy and justice by combating against violence, drug usage, children and women trafficking, and all types of discrimination in the society. These factors clearly manifested that “Education is for all and all are for education” which is the implementation of Chapter 6 of the Constitution which states that all the people have equal rights.

36. Based on the implementation of the strategy through the ensuring of the equity in basic education for 9 years for all children, the Royal Government of Cambodia has achieved the satisfied development. The school has increased by 30% from 6,963 in 2003-2004 to 9,018 in 2006-2007. The rate of enrollment has increased for all level of education. The scholarship for poor student in the high school has increased to 45,754 of which 63.2% are the women. The number of teachers has also increased from 73,642 in 2003-2004 to 78,606 in 2006-2007.

37. Many educational institutions have been quickly established due to the implementation of privatization policies since 1990s. Nowadays, there are 66 institutions, of which 24 are public and 42 are private. At the same time, the budget for education has increased. The current budget for the education increased nearly double in 2007 from 300 in 2003 to 546 billions or from 17.1% to 19.2%. The total expenditure of education should be more than this amount in case that we include the public and private budget.

38. For the health sector, the RGC gives priority for the timely prevention against the contagious disease, health care and the nutrition for Cambodian people, and considers that the good health of the citizen is the main factor for human resources development, social development ant the sustainable economic growth. The Royal Government also takes into account the welfare of the people, especially the poor, women and children through the support of the health service development in terms of prevention and treatment with a low cost, high quality and accessible to all people, and strengthen the institutional capacity on financial planning, implement and monitor the policies in an efficient way.

39. The children mortality rate decreased from 95 to 66 amongst the 1,000 births during 2000-2005. The under-5-year children mortality also decreased at the same period. The mother mortality rate has decreased from 472 to 437 amongst the 100,000 births. The data of 2005 also showed the remarkable increase in health care during the pregnancy. In 2005, more than 65% of pregnant women received the health service at least once during their pregnancy from the trained health staff (Doctor, nurse, or midwife). The prevalence rate of HIV/AIDS has remarkable decreased. Based on the 2005 demography and population survey, 0.6% of Cambodian people who are 15-49 years old were HIV/AIDS positive, reducing from 1.9% in the year of 2003.

40. Women were considered as a backbone of the economy and society. The Royal Government has made great effort to promote the women status through the implementation of Neary Ratanak, women as precious stone, strategic plan. The objectives are to give a high value and hope in the Cambodian women’s lives and focus on the issues of gender in the economic development. The Royal Government gives priority to enhance the role of women and their social status through the implementation of Gender Mainstreaming which focuses on the capacity building; education and health opportunities and economic resource; the changing of negative attitude toward women; and the encouragement of women’s participation in all public issues as well as ensuring the women’s rights to participate actively and equally in the development of the country. The Royal Government has strictly implemented the plan and strategy in order in ensure that all Cambodian women have rights to receive the health service through the establishment of working groups, communities and health service center, and the instruction of the health care and prevention ,etc.

41. Moreover, the promotion of the women’s economic situation, particularly the poor jobless and handicapped women, is the ultimate goal of gender strategy. Women Development Centers (WDCs) were strengthened in eight provinces to provide training in these areas such as the skills training based on market demand and small businesses. Business Development Service (BDS) was set up for the women in rural areas and small enterprises. The Royal Government also strictly monitored the implementation of labor law and relevant regulations for protecting women in workplace.

42. In the meantime, in order to prevent the domestic violence on women, the Law on Anti-Domestic Violence was adopted in 2005. The law provides the legal protection and is timely and effective for the victims who are mostly women and children. The Royal Government has struggled against human trafficking since 2006 and the new law against human trafficking was adopted in 2008. The national plan to prevent the women from domestic violence is being prepared to raise the public awareness and to enforce the laws relevant to the women.

43. The Royal Government considers high population growth as a burden to production sector and negatively impacts the poverty because it leads to reduction of wages, impacts on education outturn, increasing pressure on public services and damaging the environmental. Due to the above reasons, the Royal Government introduced a first National Population Policy on the 4 February 2004.

44. The implementation of national population policy of the Royal Government of the third legislative of the National Assembly resulted in reduction of annual population growth rate from 2.4 to 1.8 in 2006. The achievements made by the population policies are (i) majority of women clearly understands the techniques for birth spacing of which 40% of married women are in birth-spacing programs and 27.2% are using modern birth-spacing technique; (ii) fertility rate has been reduced from 4.0% in 2000 to 3.4% in 2005. As the result, population growth rate reduced to 1.8% in 2006 and is projected to 1.5% in 2010; (iii) reduction of willingness to have children was 3.3 for a woman which leads to a reduction of the size of household; and (iv) increase in literacy rate among women.

45. To achieve development goals, the Royal Government commits to implement the principle of good governance and maintain macroeconomic stability and fiscal discipline. The policy of the Royal Government is strictly saved and increases domestic resources to finance the needs of national development. However, domestic resources are not enough to finance investment needs for maintaining economic growth rate at acceptable level and responding to key socio-economic targets including the Millennium Development Goals. In this regards, in medium term framework, Cambodia needs cooperation financing from development partners to support national development. The progress in implementation of the Rectangular Strategy proves the necessity of these supports.

46. Moreover, the Royal Government frequently highlights both in national and international forums regarding to the strong commitment to rigorously and strictly carry out the reforms to be more comprehensive and deep. Reforms are death or live of Cambodia. Only if we work together for reforms, then we have hope to liberate from poverty cycle and restore back our national dignity that we used to live with proud and be honored. In contrast, if we avoid the reforms, we are certainly going to loss lucks and opportunities that currently are in our hand and continue to live in poverty, conflict and instability forever.

47. I think that I spent a lot of time to draw attention to the achievements of the implementation of the “Rectangular Strategy” for 2004-2007. However, what I highlighted does not fully cover the real progresses experienced by our people. I strongly believe that our next-three-day conference is going to detail and sum up all achievements that jointly made by our people and highlight weaknesses as well as discuss for recommendations to address the weaknesses and to continue the implementation of the Rectangular Strategy in the next government term with success and high efficiency.

48. Finally, I would like to wish excellencies, ladies, gentlemen and the conference the five Buddhist blessings which are longevity, wealthy, happiness, healthy and wisdom.

I would like to open the National Conference on the Prosperity of People through the Achievements from the implementation of the Rectangular Strategy of the Royal Government.

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