Keynote Address at the Dissemination of the Sub-National Democratic Development Process under the Law on the Administrative Management of Capital, Provinces, Municipalities, Districts/Khans

Chaktokmuk Conference Hall, 28 January 2009

H.E Sar Kheng, Deputy Prime Minister, Minister of Interior and Chairman of the National Committee for Sub-National Democratic Development,

Your Excellencies Government Members,

Your Excellencies Ambassadors and Representatives of Development Partners

Excellencies and Ladies and Gentlemen!

Today, it is my great pleasure to attend this important gathering and make discussion together on the progress and action plan for decentralization and deconcentration process. I would like to convey my most warmly welcome and profound gratitude to all Excellencies, ladies and gentlemen for your attention and contribution to the importance of decentralization and deconcentration reform.

Taking this opportunity, I would like to thank H.E Sar Kheng for producing the progress report and action plan for decentralization and deconcentration and I would like to express my high appreciation for his effort in leading the decentralization and deconcentration reform since the establishment of the National Committee for Support to Communes/Sangkats to the establishment of the National Committee for Management of Decentralization and Deconcentration Reform and the National Committee for Sub-National Democratic Development at the time being. I would like to admire the active participation of Your Excellencies, ladies and gentlemen who are members of the above mentioned committees.

As we are aware that the National Committee for Sub-National Democratic Development has been established under the Law on the Administrative Management of Capital, Provinces, Municipalities, Districts and Khans, which is the Organic Law. I think it is the first time that we are able to discuss decentralization and deconcentration comprehensively since the inception of the National Committee for Sub-National Democratic Development, where I would like to welcome once again such an important occasion.

Moments ago, we were presented with achievements derived from the Organic Law and short-term, medium-term and long-term plans for future implementation. These plans focus on legal documents and requirements for the sub-national election in May, requirements for post-election operation, requirements for medium-term and long-term implementations of deconcentration and decentralization.

Despite facing difficult circumstances, specifically the global financial crisis, the Royal Government is still able to maintain macroeconomic stability and achieve 7% of economic growth as expected. In 2008, despite the inflation rate rose during the first half of the year due to external factors, such as rising oil, food and commodities prices along with some internal factors, however, it went down since mid-2008, thanks to timely introduction of coherent policies, including public financial management measures and monetary and banking policy measures. In particular, with regard to the banking and financial sector, commercial banks are still operating as usual, receiving insignificant influence from the global financial crisis.

In general, economic growth during this decade is strong, with annual average of 9.4%. During the 5-year period from 2003 to 2007, the annual growth averaged 10.8%, with the peak growth of 13.3% in 2005. The economic growth then eased to 10.8% and 10.2% in 2006 and 2007 respectively. The inflation rate, which stood at 19.7% in 2008, is predicted to decline until late-2009 to 7%. The exchange rate is generally stable, with average rate of 4,072 Riels against one US dollar. Moreover, by implementing prudential monetary policy and exerting all efforts, the Royal Government has increase its gross international reserves to more than US$ 2 billion, equivalent to 3-month imports of goods and services for domestic consumption.

Indeed, the financial crisis which is currently hitting the world, will leave unfavorable effects on Cambodian economy for few more years. However, with proper policies and strategies, along with non-stop dynamic leadership and management that will ensure political stability, reform progress, initiatives in the private sector, continued support from official development partners, and the flow of FDI, the Royal Government expects that the economy will remain sound and the target of slashing poverty by at least 1% per annum set in the “Rectangular Strategy” is still attainable.

In addition, the most important thing is that the economic challenge in the previous year will not steer Cambodia away from its concrete path of multi-party democracy. In such difficult circumstances, the Royal Government is bold and committed to successfully organizing an election which is regarded free, fair, and democratic by national and international sources. Through the election result, the Royal Government has assumed its position and introduced the “Stage-II Rectangular Strategy” for Growth, Employment, Equity and Efficiency with strong commitment to realize this strategy. The Royal Government is committed to implementing sharp measures to realize all 4 priorities by:

1. Ensuring the sustainability of peace, political stability, security and social order to enhance state of law, to protect human rights and dignity and democracy.

2. Ensuring sustainable annual economic growth of 7% per annum with broader growth base, better competitiveness, and low single-digit inflation rate.

3. Ensuring poverty reduction of more than 1% per annum and improvement of major socio-economic indicators especially in the education, health and gender equity.

4. Ensuring broader coverage and improved efficiency and quality of public services to gain public confidence. 

Indeed, the above four priority points are the most ambitious goals, especially in this context when the global economy and global financial system are in deep recession. The Royal Government believes that the goal of reducing people’s poverty could not be achieved in a short period of time. However, base on the experiences, past achievements, unwavering commitments and sustainable coherent activities, the Royal Government believes that it could build a Cambodian society with full peace, political stability, security and social order, and sustainable and equitable development, with strict adherence to the principles of liberal multi-party democracy, respect for human rights and dignity.

In concern with the Decentralization and De-Concentration policy the Royal Government had issued a Decentralization and De-Concentration Strategy Framework in 2005 which consists all the strategy on decentralization and de-concentration. Nowadays, the Royal Government has adopted the Organic Law which determines the time of council election, and also established the National Committee for Sub-National Democratic Development. These are the keys for the process which start from now. We have selected this path to ensure a sustainable economic growth at a broader and more competitive level and strengthen the management and quality of public services in response to the people’s need and reducing poverty. In reality we acknowledge that the Royal Government has no abilities to provide enough quality public services around the country from the capital city of Phnom Penh to the rural area. Hence, with the implementation of Decentralization and De-Concentration policy we have actually altered the way people’s work. The Royal Government is creating a sub-national level administrative system to handover a variety of roles including the provision of services and financial resource, human resource, and other resources from the national to sub-national level of government.

The Royal Government is aware that in order to achieve this achievement it is necessary to have a suitable time frame to implement this Decentralization and De-Concentration policy and the Organic Law, thus the Royal Government is preparing an important national implementation plan called the National Program for Sub-National Democratic Development. This program will start from early 2010 onward which will invent strategies and practical programs for 10 years to cover the implantation of the Organic Law and long-term strategies to achieve Decentralization and De-Concentration goals.

Therefore, this national program is expected to be a package link which consists of policies and other important procedures to:

1.    Implement long-term strategic framework of Decentralization and De-Concentration which can be altered if necessary.

2.    Implement the Organic Law.

3.    Define policy and other important strategies that connect with decentralization and de-concentration.

4.    Identify and implement various projects to support capacity development, investment, service delivery, land, natural resources, and environmental management, as well as the development of the sub national level economic base.

5.    Identify and implement a detail and sequential framework which includes action plan, the preparation of staffs and resources as well as technical assistance with a clear time frame.

The success of implementing this program depends significantly on what need to be done in a few months and years a head. Taking this opportunity I would like to highlight some key issues that need to be addressed in the future.

The National Committee for Sub-National Democratic Development has a general responsibility to ensure the implementation of the Organic Law and will be given a clear duty to review the “accountability, and roles of ministries, institutions, and the authority at all levels to determine the duty that need to be transfer to the sub-national level councils. This essential affair is the core of the reform implementation. 

For the time being, the National Committee for Sub-national Democratic Development has the ability to cooperate with all levels of the management including the Ministries/Institutions and the council of the whole sub-national administration in order to achieve the shared objectives of building, enhancing and sustaining the democratic development. The structure and system of the National Committee for Sub-national Democratic Development has been well designed to fulfill this task and the capital is ensured to be given in order to ensure the effectiveness and efficiency of the on-going administrative work. 

A number of key Ministries such as the Ministry of Economy and Finance and the Ministry of Interior have to play leading roles in preparing various strategic policies. These Ministries are required to closely cooperate to ensure the efficiency of the implementation. Other Ministries and Institutions have to also pay careful attention to the roles, responsibilities and various functions in the existing framework today and in the framework, in which these roles, responsibilities and functions will be changed under the reform process of Decentralization and De-concentration. The Royal Government expects that each Ministry will try its best to attach itself to the policy of Decentralization and De-concentration and the Organic Law and abide by high responsibilities in implementing this policy and law.

When the new council is set up these councils will be adhered to the policy of decentralization and de-concentration and organization law. These councils have to consider about their new roles and responsibilities as well as contributing to the discussion and the implementation of decentralization and de-concentration and national program. This new kind of working regulation requires those councils to consult and participate with the local partners including the private sectors and civil societies in an attempt to develop its vision and development. In this regards, various councils at the Sub-national level have to be ready in accepting new responsibilities and functions, which will be transferred with the proper intellectual resources. This to-be-filled procedure will tremendously influence the achievement of the Sub-national Democratic Development together with the provision of quality services and responding to the local needs.  Along with that, the national program will suggest and support these councils for planning and implementing this work.

In order to achieve the above objectives in the future, a governance institution will be established to replace the governance institution in the Capital, Provinces/Municipalities, Districts/Khans.  At the local level, in the future, there will be a council and governing boards, which are different from the current system consisting of governor. The Organization Law for Administration of Capital, Provinces/Municipalities, District/Khans have already illustrated about the relationship, responsibility and accountability of these two organizations.  However, there are still a number of different interpretations, in which of this occasion I would like to re-emphasize the relationship between these two organizations. In the framework of democracy and organization law, the councils exercise judiciary and executive powers. The councils represent the local interest and are primarily accountable for the locality and the government.  As for the governing board, they are just the officials who implement the job according to the decision made by the councils and have to be accountable for its council. Based on the law, the councils could actually ask for the reshuffle of the governing board if any of the governing board members have not implemented conforming to their roles. This is a new way of work arrangement at the local level in order to improve democratic development, requiring the change of habit and behavior in the upcoming future. 

There have been questions regarding the abovementioned issues as where the work will be implemented by the councils and governing board. As I have already demonstrated above it is absolutely sure that the Phnom Penh City Hall, Provincial, Municipal, District and Khan Offices will be the workplaces for the councils and governing board. We can periodically extend those workplaces according to the ability of our resources. 

Along with that, the re-distribution of the roles and functions from the central level to the sub-national level, especially relating to the service delivery is truly a complicated process. We have not only thought of transferring a number of substantial functions such as primary health or primary education, but also have been clearly thinking of what function is most suitable with what level of administration as well as how to prepare finance, human capital and other resources related to those kinds of functions and how to plan for the transferring functions and resources, consistent with the capacity of the responsible administration. If the administrative capacity is not sufficient we have to transfer the resources or capacity building to those administrative levels, which is the responsibility of the ministries in charge in order to ensure that this work can be achieved according to an appropriate date.

The above process will surely have the impact on the roles and responsibilities of the national Ministries/Institutions, which will be changed.  During this process, various ministries will maintain the common responsibilities including the creation of policies, supervision of the legal documents, counseling and support, observing and evaluating the implementation of the council.  The Sub-national level will have to be accountable for the Royal Government and be financially accountable through audit and other financial safety principles. In this connection, the National Committee for Sub-national Democratic Development has to supervise to ensure that the councils all over the country have implemented their work according to the law and legal framework and not contrary to the constitution. 

Regarding the work of military and security, sub-national administrations including the Commune/Sangkat councils have been delegated a number of tasks in maintaining security and social order within their locality through the mechanism of Commanding Unit in order to contribute with the Royal Government in strengthening peace, political stability. This role and responsibility have to be further implemented by the councils and the governing boards under the principle of decentralization, not de-concentration.

During the process of further reform, we have to be careful in the process of creating councils and division of functions to those councils ensuring that it will not hinder the Khum/Sangkat affairs or have made any decisions affecting the rights of those councils. The significance of this administration level is that the members of the Commune Councils have been directly elected by the people and trusted by the people in their locality and are the people who take the lead in local participatory and democratic governance.

More importantly, we have to set up an appropriate system to ensure that the councils to be newly elected in the election in upcoming June will be fully accountable for their voters, meaning the members of Commune Councils.  This ultimate fulfillment of accountability is most significant for the confidence on the whole sub-national election system including the efficiency of the service delivery and development at the sub-national level.

We must put in a lot more efforts, time and resources for the implementation of the decentralization and deconcentration reform, and we hope this reform will result in a democratic development framework which strengthen and expand the quality of public service delivery and especially to reduce poverty.

We also hope that this reform will provide fruitful results in the framework of good governance as well. The strategic framework of decentralization and deconcentration reform has emphasized the policies for democratic development at the sub-national level through re-structuring and reform of administration for the whole sub-national government level. The vision of the strategic framework states that “The development of administrative system at Provinces, Capitals, Municipalities, Khans and Districts are based on the principles of joint participation in a democratic manner”. This system will carry out transparently and accountably with the purpose of improving development and providing outreach public service in response to the people’s need and helping in poverty reduction in its own ground.”

Hence, this reform provides an opportunity for the establishment of an outreach administrative system which illustrates important principles of good governance including accountability, linking together with rules, transparency, participation, equality and response. Also, this reform must push forward a concrete application in two different aspects of good governance; which have often been overlooked, especially in terms of efficiency and effectiveness which we will attempt to acknowledge those aspects into the new councils.

Indeed, the decentralization and deconcentration policies; and the Organic Law also provides the opportunity to strengthen gender equality and women’s participation in decision-making process at the sub-national government level. This reform also provides chances in boosting youths’ voices in decision-making which prepare them to become future leaders at all levels.

I would like to re-emphasize that all ministries, institutions and all levels of administrative authority must participate in organizing and implementing the new program. In relation to this issue, I would like to urge all development partners to provide financial and technical supports in order to provide the government with the ability to implement this reform with success through guaranteeing that every current co-operative financing plans and programs have been closely trimmed with national programs.

I have also realized that the preparation of the Organic Law and its implementation, especially every preparation to ensure that the new councils which will be formed from the up coming May’s commune council election will be able to operate immediately is putting a heavy burden on the National Committee for Sub-National Democratic Development and its own secretariat along with Your Excellencies, ladies and gentlemen who are here today. Indeed, we are facing a very complex task which requires us to spend a lot of time working on this long part with detail works in this limited time frame. Presently, we are at the starting point of decentralization and deconcentration process. Although, it’s a fully engaged process, it is a historical pride that we altogether participate in this decentralization and deconcentration reform in Cambodia.

In the end, I would like to express my high appreciation to the active participation of Your Excellencies, ladies and gentlemen in the process of decentralization and deconcentration reform. I also would like to express my sincere thanks especially to all valuable support of development partners and to the National Committee for Sub-National Democratic Development which has put in tremendous effort in organizing this very important meeting. I would like to wish you all the Four Gems of Buddhist Blessings.

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