27th Meeting of the Inter-Agency Working Group  
World Bank, Washington D.C., 6-7 September 2001

Implementation of the Integrated Framework Pilot Scheme

in Cambodia, Madagascar, and Mauritania

Responses by H.E. Sok Siphana

Secretary of State, Ministry of Commerce

Focal Point for the IF Pilot Scheme (Cambodia)

I.      Evolution of Cambodia’s Pro-Poor Trade Strategy

1. Cambodia first provided trade policy needs assessment to IF in September 1998 following its establishment in October 1997. A paper entitled A Pro-Poor Trade Sector Strategy for Cambodia: A Preliminary Concept Paper was tabled at the mid-term Government-Donor Meeting held in Phnom Penh on January 29, 2001. 

2. Subsequently, an Inter-ministerial Steering Committee responsible for formulating – later on, implementing – the Government’s pro-poor trade sector strategy was appointed in March, 2001 with the Ministry of Commerce (MoC) as chair.

3. On April 17, 2001, Cambodia has been designated as one of the three Pilot Countries for Integrated Framework Pilot Scheme.

4. In close consultation with the World Bank and the other IF Agencies, the  Ministry of Commerce prepared and presented the Tokyo Road Map at the Fifth annual Consultative Group meeting in Tokyo June 2001.  The Road Map is essentially a description of what Cambodia needs to do to prepare all the inputs required to formulate a robust pro-poor trade sector strategy which can become a critical cornerstone of the country’s poverty reduction strategy.

5. IF activities were aimed at complementing other poverty reduction strategy development such as the PRSP, and the Second Five Year Socioeconomic Development Plan (SEDP II).

II.    Events Following the Tokyo Road Map

6. In early July, drawing on the Tokyo Road Map, the WB Task Manager and   the IF  Team Leader prepared a draft generic IF TOR highlighting emerging needs and team composition and submitted to MoC for comments.

7.   By early August 2001, extensive discussions to incorporate the specificities of the country requirement was held and the IF TOR was finalized, leading to the recruitment of consultants, the assignment of MoC counterpart team, the establishment of a permanent IF secretariat at the MoC, and the commissioning of field work by a 13 member team comprising of officials from the WB, IMF and WTO, sector specialists and 4 local consultants (see Annexes 1 and 2 for Consultants' components and key events for field work).

III.   Progress and Emerging Issues for Activities Foreshadowed in the Tokyo Road Map

8.     The review of economic and trade sector performance was undertaken by the World Bank team in Washington, DC.

9.     On the macroeconomic environment, a draft report was completed by IMF team members covering issues such as dollarization and the implications of minimum wages specified in dollars.

10.   On the investment climate a review of the investment law which was proceeding under separate contract with the government involved extensive stakeholder discussions.

11.   For the assessment of competitiveness of Cambodian exporters and entrepreneurs, a survey of 100 firms covering competitiveness and market access is being conducted, the results of which are expected to be available around 10 September.

12.   For the assessment of current trade regime, advices on WTO accession aspects, including legal obligations and other compliances, are ongoing through to 10 September. An analysis of the existing cascade tariff structure raises the issues such as the scope for high protection while not much established industry depending on this protection; the questions whether tariff could be simplified without sacrificing revenue and making administration easier; and the implications for tariff binding.

13.   The trade facilitation review was undertaken in close consultation with the resident IMF customs advisor, Bill Le Drew. Some complexities at Customs reflect the commitments made under CDC approval and obligations to preferential trading partners.

14.  Product sector action plans include rice, other agriculture crops, fisheries, tourism, handicraft, and labor services export. The draft Rice report was completed highlighting main issues which hinged around shifting from a food security/quantity emphasis to an environment where producers are encouraged to, and can, produce to a specification. For other agriculture crops, issues also involve producing to a specification and identification of obstacles - road block taxes, local trade monopolies, and access to information. Given the costs of Government provision of services how can farmers be assisted to form associations to access information and technology - farmer associations an option. The issues raised in the Fisheries report include the need to establish community based regulatory regimes to replace the company based systems which have been dismantled. For the Labour Services, the main issues involve how to test whether slow uptake onto Malaysian market reflects costs of agency transactions or slow demand from Malaysia. The Tourism and Handicrafts reports are still in progress and are due early September.

IV.   Other Institutional Developments Since the Selection of Cambodia in the IF Pilot Scheme.

15.   On March 28, 2001, the Government adopted a Sub-Decree amending the composition of the IF Inter-Ministerial Steering Committee. The growing importance of the IF and the Pro-poor trade strategy process was reflected in the expansion the steering committee to include high level policy makers at the secretary of state level for 5 key ministries such as Commerce; Economy and Finance; Agriculture Forestry and Fisheries; Public Works and Transports; Woman and Veteran Affairs; at the under secretary of state for 3 ministries such as Industry, Mines, and Energy; Tourism; Social Affairs, Labor, Vocational Training and Youth Rehabilitation; and key representatives from the banking sector and the private sector.

16.   In July, the Government appointed its senior economic advisor to the post of Ambassador to the Permanent Mission of Cambodia to the WTO.

17.  In August, the Prime Minister appointed a large think tank comprising of senior officials in the government to assist in matters related to Cambodia's accession to the WTO.

18.   The Prime Minister appointed H.E. Cham Prasidh, in addition to his current commerce portfolio, as Vice Chairman of the Council for the Development of Cambodia (CDC) in charge of private sector investment.

19.   An extensive awareness campaign on the IF, the Pro-Poor Trade Sector Strategy, and Globalization was initiated and included inter alia: the holding of a 2 days international conference on "Globalization: Perspectives on Business and Law", followed by a special condensed lecture at the Royal Academy of Cambodia, a lecture on Intellectual Property Rights at the Faculty of Law and Economics, a National Seminar on Investment for Provincial Governors, and a special Hearing Session at the National Assembly.

20.   A parallel campaign to involve other donors in the process was also undertaken and has culminated in the pledge of support from key donors like Japan in the area of TBT, Australia in the area of SPS, Canada in the WTO accession process, Singapore in trade related capacity building, France in the area of IPR protection, ESCAP in the fisheries sector, ADB in the provision of a electronic law database for the WTO reference center, and the US in a yet to be determined area. Several other activities of the Tokyo Road map were funded under an extension of the World Bank Technical Assistance Project (IDA Credit 2664‑KH).

V.    Next Steps

21.   The Team Leader will work with team members and MOC to have a draft for circulation by 20 September. The Government expects to see an action oriented  report involving identification of priority matters and steps, including TA for resolving them.

22.   The Government will organize a workshop in Phnom Penh in October to discuss the draft component reports and draft summary overview reports. The workshop process should bring to closure on proposals in the draft report and secure funding commitment from donors. The success of the workshop will be used by the Government in its presentation at the 4th WTO Ministerial Meeting at Doha in November, 2001.

VI.     Experiences from the Implementation of the Pilot Scheme in Cambodia

23.   The following experiences can be drawn from the implementation of the IF Pilot Scheme in Cambodia.

24.   Inputs from the Government: First: Government as owner of the process: While the initial TOR was drafted by the Bank Task Manager and the IF Team Leader, the Government believed that the success of the IF initiative lies to a great extent on it being able to provide the right leadership both the formulation stage and the implementation. Government ownership of the process is a sine qua non condition for the success of the pilot scheme in Cambodia. The Cambodian Commerce Minister Cham Prasidh has been on the forefront, both on the domestic front and the international front, to earn the respect and support of the key stakeholders and to assert his leadership on this vital initiative. This leadership was in fact one of the key determinants of Cambodia being selected in the pilot scheme.

25. Second: Government as partner: With the rigid time constraint imposed by factors beyond its and the IF agencies control (i.e. the Doha meeting in November and to a lesser extent the PRSP timetable), the Government believes that substantive outputs can still be achieved provided it and the mission can develop an efficient, collaborative and synergistic partnership drawing on each other strengths and covering for each other shortcomings. The mission was comprised on highly qualified international consultants who, most of them regrettably have never been in Cambodia and thus lacked the insight of the local realities. Nonetheless this deficiency was easily matched by the extensive exchanges with the Cambodian local consultants and official counterparts. Research materials and other policy documents were conveniently made available to the team thus saving enormous research time and resources.

26.   Third: The Government as Policy maker: The Government believes that technical assistance can be a potent tool for assisting it in the policy formulation and implementation. For this reason, Minister Cham Prasidh has appointed a senior policy maker, the Secretary of State for Commerce, to act as the focal point for the entire exercise. The IF permanent secretariat was established right next door to his office thus providing instant access for mission team members to discuss policy issues and other matters requiring quick decisions. Access of other key policy makers within the Government was also secured expediently through the network of the focal point.

27.    Transparency: The Government feels that the Bank should provide more information on the management and procedures on the use of the IF Trust Fund and should have discussed more on the budget allocation with the Government in order to ensure that the fund allocation are prioritized according to the actual needs of the country specific TOR. The lack of understanding of the fund usage on the part of the Government has prevented it from timely securing the necessary budget to undertake several key activities it deems crucial, such as provincial field visits, and capacity building sessions for key counterpart staff whose responsibilities are to ensure the follow up of the IF scheme after the departure of the mission.

28.     Coordination During Field Missions: The Government believes that coordination amongst various government agencies and donors was adequately made by both the Government and the mission team leader. Both bilateral and multilateral consultations and debriefing were held on numerous occasions during the mission.

29.   Emphasis on Securing the Continuous Support of Stakeholders: The Government believes that the IF exercise will never be complete if the key stakeholders or beneficiaries are not fully on board with the process to share and experience the challenges and ultimately the success of the initiative. The fact remains that the IF will be an ever evolving undertaking which will require constant nurturing from all concerned, and in particular the Cambodians, be it public sector, private sector, and the civil society. Recommendations of actions under the IF study will have to concretely reflect this need.

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ANNEX 1: Team Composition  

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Annex 2: Key Events and Field Work

Thursday, 2 August        

• Most team members arrive in Phnom Penh.  

Friday, 3 August

• Briefing from H.E. Sok Siphana, Secretary of MOC. Introduction to MOC colleagues.

Monday, 6 August  

• Team attend private sector Government meeting chaired by Prime Minister, H.E. Hun Sen.

Tuesday, 7 August            

• Team visit with H.E Sok Siphana to Kompong Cham province by bus 100 miles north of Phnom Penh.

Tuesday, 7 August

• Team attends reception hosted by Minister for Commerce H.E. Cham Prasidh.

Thursday, 9 August  

• Meeting to introduce team to Steering Committee and donors.

Tuesday, 14 August                  

• Team meeting chaired by H.E Sok Siphana.

Friday, 17 August

• Team dinner.

Wednesday, 21 August

• Reception for team members, government officials and bilateral donors attended by H.E Cham Prasidh.

Thursday, 2 August to Friday, 1 September

• Team members meet with officials, donors, private sector employers and employees.

Wednesday, 5 September

• Team members submitted respective field reports.
• First Draft Mission Report submitted.

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