Keynote Address of Samdech Akka Moha Sena Padei Decho Hun Sen, Prime Minister of the Kingdom of Cambodia, on the People's Prosperity through the Achievements from the Implementation of the Rectangular Strategy by the Royal Government 2004-2007 at the National Conference on 29 May 2008.

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”.

In overview, the government of the third mandate has got major achievements that are castingpositive 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 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.

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.

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.

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.

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 .

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.

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.

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.

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 3rd 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. 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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. 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.

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.

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.

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 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.

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.

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 live or death 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 lose lucks and opportunities that currently are in our hand and continue to live in poverty, conflict and instability forever. End Item

INDEX:

Prime Minister’s Keynote Address on the People's Prosperity through the Achievements from the Implementation of the Rectangular Strategy by the Royal Government 2004-2007 at the National Conference on 29 May 2008.

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