The Government of Japan
Japan's Assistance Policy for Cambodia
Table of Contents
1. Significance of Japan's Assistance to Cambodia
Japan's assistance to Cambodia, a country that experienced over twenty years of civil war and political unrest since the 1970s and is now earnestly struggling to rebuild itself as a nation, is instrumental in preventing Cambodia from slipping back into political instability. This assistance greatly contributes to peace and stability in Asia, a region of vital importance for Japan's diplomacy.
Japan's position has been to actively expand its diplomatic efforts to help lead the international community in support of the restoration of peace in Cambodia. Japan's first dispatch of PKO personnel in 1992 and its positive contributions to the Consultative Group meetings for Cambodia are the examples of Japan's efforts in this regard.
Moreover, Japanese citizens' keen interest in supporting Cambodia enables many of Japan's NGOs play an active role. The Japanese government recognizes the necessity to further cooperate with these NGOs in order to appropriately respond to the situation.
The Government and the people of Cambodia have expressed their appreciation for Japan's assistance and as a result have strongly supported Japan's policies in international venues. On various levels and occasions, close ties of friendship have taken root between Japan and Cambodia.
From the viewpoint of raising the overall economic level of ASEAN in the context of globalisation, the significance of Japan's assistance to Cambodia should be emphasised.
For ASEAN, the greatest constraints in moving forward with its economic integration such as the abolition of tariff barriers prescribed by AFTA are the continued economic gaps existing within the ASEAN region. Cambodia, as a member of ASEAN and weakened by its long period of internal turmoil, is burdened with a large number of development needs and a marked economic handicap. The effects of assistance for the rehabilitation and development of Cambodia do not stop within the borders of the country alone but also greatly contribute to the development of the Mekong subregion, which is a priority issue for ASEAN, and for the long-term activation of the ASEAN economy as a whole. This assistance will provide the Japanese economy with benefits as well.
2. Accordance with the Principles of Japan's ODA Charter
The international community concluded that the elections in 1998, for the most part, were free and fair, and the government's current policies pay serious attention to democratization. On top of that, the Cambodian government is promoting the transformation to a market-oriented economy and the reduction of its military expenditure. It can thus be said that, in accordance with the principles of Japan's ODA Charter, the Cambodian government is heading in a desirable direction. However, careful attention is still necessary with respect to the securing of basic human rights.
3. Desired Direction of Japan's Assistance
3.1 Japan's Assistance Up to the Present
Based on policy dialogues with the Cambodian government, Japan's assistance to Cambodia, which is mainly grant aid and technical cooperation, has focused on: (i) development of social and economic infrastructure; (ii) improvement of basic social services like health and medical care; (iii) promotion of agriculture and rural development; and (iv) human resources development. Because of Cambodia's status as a Least Developed Country (LDC) and its past political instability, Japan had not extended any yen loans to Cambodia since 1968. In 1999, however, after about a thirty year interval, Japan decided to extend to Cambodia a loan of up to 4 billion yen for the rehabilitation and renovation of the antiquated and deteriorating Sihanoukville Port. This decision was taken in views of the fact that Sihanoukville Port is Cambodia's only deep-sea port and is considered vital for the country's restoration. This decision took into account the fact that the new government was steadily carrying out various policies for rebuilding the economy and that there was a climate of relative political stability in the country.
Since the 1999 Consultative Group (CG) meeting, Japan has also been making positive contributions in the areas of administrative and fiscal reforms, the demobilization of armed forces, and forest preservation (natural resources management), areas which have been identified as priorities by donor countries and the Cambodian government. Japan has also subsequently assisted Cambodia with social services improvement and good governance.
3.2 Share of Japan's Assistance in the Total Assistance to Cambodia
Devastated by its internal upheavals, Japan has been active in extending assistance for the restoration of Cambodia. Japan's ODA to Cambodia in the past ten years has totalled (on a net disbursement basis) $720 million ($170 million through international organizations and $550 million on a bilateral basis). Japan is the top donor country to Cambodia, accounting for 25 percent of all assistance to Cambodia.
3.3 Direction of Japan's Assistance for the Next Five Years
As mentioned above, Japan has been consistently taking the lead in the international community in assisting Cambodia towards the steady reconstruction of the country. As a result, it is expected that Japan's future assistance to Cambodia's socio-economic development will play, -as it has played until the present-, a key role. This assistance should continue to be carried out in an effective and efficient manner.
Having endeavoured to rehabilitate and rebuild itself, Cambodia is currently making efforts at further promoting its basic socio-economic development and faces a number of difficulties. It is true that Cambodia must make its own efforts to overcome these difficulties, but for its part and in order to continue to take a leading role in the international donor community, Japan should respond appropriately to support such Cambodian efforts. Moreover, Cambodia's pressing needs include human resources development, necessary for making up for the shortfall caused by the civil war, the reconstruction of institutions, the development of basic infrastructure, and so on. It is essential that Japan, while giving due consideration to security and the goal of sustainable development, extend its assistance with a view to achieving sustained economic growth and poverty reduction.
On this basis, Japan's policy is to provide assistance that contributes to Cambodia's sustained economic growth and poverty reduction, keeping it fully in line with the Socio-Economic Development Plan (SEDPII) and Cambodia's Poverty Reduction Strategy Paper (PRSP) through closer consultations with the Cambodian government in policy dialogue and other appropriate occasions.
3.3.1 Continuation of Assistance for Reconstruction Efforts
With this in mind and taking into consideration the vital importance of Japan's assistance to Cambodia, Japan will continue to provide assistance, particularly its grant aid and technical cooperation, for Cambodia's reconstruction efforts from the damage caused by the civil war and the political turmoil.
3.3.2 Support Based on Economic Trends
Classified as a Least Developed Country (LDC) , the amount of Cambodia's foreign debt was approximately $2.26 billion, with a debt-to-GNP ratio of around 73.4 % and a debt-to-export ratio of 194 %. Therefore Cambodia does not belong to the Heavily Indebted Poor Countries (HIPC). The concessionarity of almost all of Cambodia's foreign debt is high, and its debt service ratio (DSR), after agreements on repayment rescheduling, is expected to remain at a stable level, at one to two percent.
However, Cambodia has ruble-denominated debts and has not reached a reschedule agreement with Russia. As a result, it needs to use assistance funds and foreign investment to make up for its current account deficit. With regard to the yen loan project, it is necessary to prudently consider carrying out small-scale infrastructure projects on a trial basis, taking into account the progress of economic reforms and current economic trends. On this basis, it is necessary to carefully deliberate the effective usage of grant aid and technical cooperation.
3.3.3 Assistance for the Balanced Development of Urban and Rural Areas
3.3.4 Assistance to Rectify Regional Gaps Within ASEAN countries
Within ASEAN, the economic disparity between the Indochina countries and the rest of the ASEAN countries tends to widen. Therefore, it is important that the assistance for promoting the sustained economic growth of Cambodia be also carried out with the aim of reducing this regional gap. From this point of view, the development of the Mekong subregion, which is beneficial for all the Indochina countries, and the improvement of telecommunications infrastructure to promote IT might be adequately considered. It is also necessary to take steps to improve the institutions related to a market-oriented economy, a legal and judicial system, a financial system and suitable conditions to attract foreign investment, and the efforts for human resources development.
4. Priority Areas; Assistance Policy for Each Specific Issue
Cambodia's development needs are wide-ranging and considerable. Consequently, it is all the more essential that Japan's assistance should be implemented efficiently and effectively by clarifying important sectors and priorities and respecting Cambodia's traditions and sense of values. Based on the direction of Japan's assistance for the next five years described above, Japan will give priority in its assistance to the four areas stated below. Japan regards sustainable economic growth and poverty reduction as the most important goals, and its assistance will be focused on the improvement of the basic economic infrastructure damaged by civil war over the long years, the rehabilitation of various weakened institutions and systems and the development of human resources whose shortage is one of Cambodia's more serious problems. In other words, in order to deliver balanced assistance and carefully considering the "hardware" and "software" needs, Japan has carefully considered its allocation of assistance. The four priority areas of Japan's assistance will be:
(2) support for the socially vulnerable;
(3) measures to respond to global issues; and
(4) support to rectify disparities among the ASEAN countries.
4.1 Realization of Sustainable Economic Growth and a Stable Society
The most essential factor for Cambodia's development is sustainable economic growth. For this goal to be achieved, social and economic infrastructure needs to be efficiently improved, while various reforms are smoothly carried out and good governance is encouraged. In providing the assistance for this, the promotion of agriculture, which is the main industry of Cambodia, and the rectification of regional gaps must also be taken into account. At the same time this assistance will contribute to solving the poverty issue. Furthermore, in the process of these development efforts, full attention should be paid to the landmine issue.
4.1.1 Assistance for Reform and Good Governance
4.1.2 Improvement of Social and Economic Infrastructure and Conditions for Economic Progress
Moreover, as large-scale flooding occurs in the Mekong River regions and results in serious damage to the road and other facilities, due consideration must be given to the improvement of the infrastructure so that is made more resistant to natural and other disasters. On the other hand, Phnom Penh presents different challenges, as environmental problems are anticipated in response to deteriorating urban problems caused by the rapid activation of economic activities and an increasing population. Therefore, support should be extended for strengthening administrative capability in urban areas. The disparity in existing infrastructure development for power generation, telecommunications, etc. between the capital and the rural areas, is striking, and from the mid- to long-term, Japan will provide technical and financial assistance for policy planning and the training of engineers and technicians.
4.1.3 Agriculture and Rural Development and the Improvement of Agricultural Productivity
Furthermore, in order to implement more finely tuned assistance, it is important to cooperate with NGOs operating in rural areas and to provide assistance through grassroots grant aid for the improvement of basic small-scale social-economic rural infrastructure (small-scale irrigation facilities, agricultural roads, etc.).
However, adequate attention still needs to be paid to the security situation in Cambodia, particularly in the implementation of assistance in the rural areas.
4.1.4 Comprehensive Assistance for Landmine Problems
Japan has actively been providing assistance for Cambodia's landmine problems, appreciating its ownership and considering Cambodia as a pilot country for Japan's assistance on this problem.
With respect to support for demining activities, Japan will offer support to make these activities easier to be implemented through the development and introduction of more efficient demining technology. This is in addition to the provision of financial assistance to the UNDP Trust Fund and the provision of equipment in the bilateral assistance that Japan has made so far. For landmine victims, in addition to the improvement of health care institutions, Japan will consider a form of cooperation where victims can reintegrate back into society following a period of rehabilitation. Education on landmines and efforts at the community level to solve landmine problems are also important. It is crucial to actively collaborate with and support NGOs deeply involved in the rural areas in carrying out their vital demining activities.
4.2 Support for the Socially Vulnerable
The most important factor for sustainable economic growth is the improvement of Basic Human Needs (BHN). The improvement of BHN directly provides benefits to the lives of the poor, and is also important as it provides a social safety net to deal with the social costs brought by economic growth.
Japan has provided assistance for BHN sectors such as education, health and medical care, water and sanitation improvement, and other priority sectors for cooperation. These sectors are very important from the viewpoint of humanitarian concerns and poverty reduction, and the demand for assistance is still very high. Moreover, it is anticipated that the number of the so-called socially vulnerable will increase as Cambodia makes economic progress, and Japan will continue to positively support the foundation of a social safety net for these people.
In the education sector, Japan will continue to provide assistance through grassroots grant aid for the construction of schools, the absolute number of which is still greatly lacking, and technical assistance for improving the quality of teachers' capacity and the administrative capacities of the education authorities. Assistance will particularly focus on improving science and mathematics education, subjects which are vital for economic growth and achieving sustainability.
In the health sector, Japan will continue to actively support the improvement of maternal and child health care and medical technology, as well as supporting countermeasures against infectious diseases, particularly HIV/AIDS, tuberculosis, and complications arising from the contraction of these diseases, and others such as malaria, parasitic diseases and so on. Assistance to the health sector will be implemented under the framework of a Japan-US partnership in identified areas. As the number of health workers is still scarce, Japan will put priority on technical cooperation, while collaborating with NGOs to help improve primary health care services.
4.3 Measures to Respond to Global Issues
Cambodia faces wider the issues that impact not only on Cambodia but also neighbouring countries. These "global issues" are extremely difficult for Cambodia to deal with alone. For example environmental issues related to the preservation of forests and other resources and the illegal drugs issue. It is necessary that assistance to deal with these concerns extended as the problems grows globally.
4.3.1 Environmental Preservation
With regard to fisheries resources, the preservation and sound management of the unique fisheries resources in the Tonle Sap Lake have become urgent issues, and Japan is promoting a Master Plan for the preservation of the lake's surrounding environment, giving due consideration to the security situation in those areas. In addition, Japan will dispatch experts to Cambodia to investigate the current situation of fisheries resources and consider means of cooperation for the preservation and appropriate management of those resources and the protection of the country's biodiversity. This assistance will take into account the existing collaboration in this area with the Southeast Asian Fisheries Development Centre (SEAFDEC). Japan will also deliberate the cooperation from a mid- and long-term viewpoint for improving environmental management and transferring the technology of sound environmental management to Cambodia.
4.3.2 Measures against Illegal Drugs
4.4 Support for the Rectification of Disparities within ASEAN
Another important aspect for the development of Cambodia is related to the rectification of economic gaps within ASEAN. Economic disparity between the countries in Indochina, including Cambodia, and other ASEAN countries is tending to widen, and to rectify this gap is an important issue for the development of ASEAN itself. Japan is actively moving forward with assistance to support the efforts made by ASEAN as a whole, and this positive action is significantly contributing to the stability and further development of the region.
In the formation and implementation of this assistance, Japan gives due consideration to the development of the Mekong subregion, which benefits all of Indochina, and the diffusion of Information Technology (IT) in Cambodia.
4.4.1 Mekong Subregion Development
4.4.2 Assistance for IT Development
Copyright(C): Embassy of Japan in Cambodia