Cambodia Case Study of Government and Donor Efforts for Improved Aid Effectiveness in the Education Sector ( )

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1 2009/ED/EFA/MRT/PI/14 Background paper prepared for the Education for All Global Monitoring Report 2009 Overcoming Inequality: why governance matters Cambodia Case Study of Government and Donor Efforts for Improved Aid Effectiveness in the Education Sector ( ) Supote S. Prasertsri 2008 This paper was commissioned by the Education for All Global Monitoring Report as background information to assist in drafting the 2009 report. It has not been edited by the team. The views and opinions expressed in this paper are those of the author(s) and should not be attributed to the EFA Global Monitoring Report or to UNESCO. The papers can be cited with the following reference: Paper commissioned for the EFA Global Monitoring Report 2009, Overcoming Inequality: why governance matters For further information, please contact

2 19 April 08 REPORT Cambodia Case Study of Government and Donor Efforts for Improved Aid Effectiveness in the Education Sector ( ) Supote S. Prasertsri 19 April 2008 The opinions expressed in this report are those of the author and do not necessarily reflect the policies or views of UNESCO 1

3 Contents Executive Summary 3 I. Introduction.5 II. Report of the Findings II.1 Context...6 II.2 Ownership..11 II.3 Alignment.22 II.4 Harmonization 34 II.5 Capacity Development.. 42 III. Conclusion. 52 References. 55 Annexes 57 Annex I. Annex II Priority Action Programmes Donors and Programmes Annex III Education Access Policy Action Matrix 2004/2008 Annex IV Education Access Policy Action Matrix 2006/2010 Annex V; List of Acronyms 2

4 Executive Summary The main purpose of the case study is to examine critically how the Royal Government of Cambodia (RGC) and donors or development partners (DP) have improved the quality of aid effectiveness in the education sector during period of 2000 to 2007 and what barriers there are for further progress. The author attempts to provide examples that examine the dynamics between in-country commitment holders (in particular national government bodies, donors, civil society) that have contributed to or hindered improved aid effectiveness. The study also provides what lessons can be drawn about key elements for improved aid effectiveness in education sectors in the future. The study was conducted in Cambodia during the months of February and March 2008 with financial support from UNESCO Paris. From 1992 to 2006, external aid was channeled through the Consultative Group (CG) meetings, which was succeeded by the Cambodia Development Cooperation Forum (CDCF) in 2007.The total aid flow to Cambodia for all sectors has been at the amount of US$ to million during 2002 to Out of this aid, 13.0 % was for education sector, or around $ million per year. Within the education sector, the total annual budgetary requirement to achieve EFA goals is estimated at $ 289 million for Out of this, $ 110 million was from the national budget, $ 70 million was from external aid. The annual funding gap was at $ 109 million. The annual funding gap for is expected to decline to around $ 101 million as the FTI fund of $ 57.4 million is to be approved for Five donors have indicated the decrease in their funding for due to the lack of progress on Good Governance by the Cambodian Government. Currently the Cambodian education system is reaching 3.38 million primary and secondary students and employing 94,641 teaching and non-teaching staff members. The number of students has declined from 3.43 million in 2003 while the number of staff has increased during the same period. In terms of government donor coordination, there are 14 donors active in education sector. Cambodia s education development has been guided in recent years by a process whereby the Government works in close collaboration with external donors and civil society to design and implement a mutually agreed strategy for education. The sector-wide approach (SWAp), whereby, all significant funding in the sector supports a single sector policy and expenditure program, under Government leadership, adopting common approaches across the sector, and progressing towards relying on Government procedures to disburse and account for all funds, is adopted in Cambodia. On aid modalities, at present, only the Asian Development Bank (ADB) and the European Commission (EC) provide direct budget support to benefit the education sector. Most other education donors currently active in Cambodia support the sector with innovative, 3

5 project-like modalities, and adopting a decentralized approach by implementing the projects directly with provincial education authorities, communities, schools and NGOs. Within the framework of the Paris Declaration, the Royal Government of Cambodia has agreed to place Cambodia as a pilot country on Aid Effectiveness. It has developed the national Harmonization, Alignment and Results (H-A-R) Action Plan in In May 2007, the RGC produced the first Cambodia Aid Effectiveness Report (AER) after conducting Paris Declaration survey in In education sector, the European Commission has supported a study on aid effectiveness in education sector in The findings from the two studies in 2007 and this study in 2008 indicate that aid effectiveness through the education sector has greatly improved during 2000 to 2008 in terms of ownership, harmonization, alignment and capacity development, but the aid flow is till far below the requirements for achieving EFA goals. On Ownership, over the past eight years, MoEYS has performed increasing leadership in policy development, implementation of reforms, and aid co-ordination through developing its National Education for All Action Plan ( ), Education Strategic Plan (ESP) and Education Sector Support Programme (ESSP). Provincial education leadership has translated these plans into provincial ESSP and action programmes for 11 priority action programmes. On Harmonization and mutual accountability, it is encouraging that more donors are harmonizing their partnership in planning, management, co-financing, and working together. But further joint action and resources are needed to improve the audit of financial management at all levels, especially in the country where the anti-corruption law is absent and governance is weak. On Alignment, the education donors have based their support on Cambodia s national development strategies and reviews of progress in implementing these strategies and link funding to a single framework of conditions and/or a manageable set of indicators derived from ESP/ESSP, the national education strategic Plan. But due to weak national governance, not all development partners have been using and strengthening national financial management systems, nor have they reduced many parallel approaches, to meet the common EFA and MDG goals. On Capacity Development, the education personnel (teachers, administrators, planners), schools/learning centres and the education system as a whole have improved their abilities to manage the learning environments and institutions more effectively as seen in a steady increase in the Net Enrolment Ratios for primary and lower secondary levels. However, their quality is still weak as reflected in key education efficiency indicators (dropout and completion rates) due to many factors, including poverty, low remuneration for teachers, slow distribution of learning materials and inadequate supply of teachers in remote areas. The size of population living below the national poverty line remains high at 34% even though Cambodia has recently regained its position as a rice-exporting country after decades of deficit. 4

6 I. Introduction This study was conducted during 1st February to 15 th March 2008 using both qualitative and quantitative methods. In the first two weeks of February, the author collected and studied essential documents on education sector available at the Planning Department, the Ministry of Education, Youth and Sport and at the Secretariat Office, the donor Education Sector Working Group (ESWG), based at UNESCO Phnom Penh. The author also met with a number of senior officials at MoEYS, Chairperson of ESWG, the representative of NGO Education Partnership (NEP), and some programme officers of the donor community based in Phnom Penh. The author wishes to express his sincere appreciation to the following persons for their contribution and time. H.E. Dr. Pheng KOL, Senior Minister and Minister of Education, Youth and Sport (MoEYS) H.E. Mr. Vann MAK, Secretary of State, MoEYS, and Co-rodinator, MoEYS-Donor Joint Technical Working Group for Education (JTWG-ED). H.E. Dr. Nath Bunreoun, Secretary of State and National EFA Co-ordinator, MoEYS Mr. Sereirath SAM, Director, Department of Planning, and Secretariat of JTWG-ED, MoEYS Mr. Sophea MAR, Programme Officer, Asian Development Bank (ADB), Phnom Penh Sister Dr. Luise Ahrens, NGO Education Partnership, Cambodia Mr. Teruo Jinnai, Head, UNESCO Phnom Penh, and Chair of Donor Education Sector Working Group (ESWG), Ms Lynn Losert, Education Programme Coordinator, USAID, Cambodia Mr. Sarath KEO, Project Coordinator, Save the Children Norway, Cambodia Mr. Simeth B ENG, Human Development Operations Officer, The World Bank, Cambodia Country Office Mr. Sheldon Shaeffer, Director, UNESCO Regional Bureau for Education, Bangkok Mr. Koh-chi TUNG, Senior Advisor on Education Statistics, UNESCO Bangkok Ms Suos Sokly, Vice Chief, Internal Audit Department, Ministry of Education, Youth and Sport In addition to the above-mentioned officials, special thanks also go to many directors and officiers who presented their reports and comments at the ESP/ESSP Mid-term Review conducted in Phnom Penh by MoEYS during 31 March -2 April Personal converstations with these field officers were of immense value. The author served as the Education Programme Specialist for UNESCO Phnom Penh office from 1993 to early He was also a member of the ESWG during 1999 to January

7 II. REPORT OF THE FINDINGS II.1 Context Cambodia has been known throughout the world as a cradle of the Khmer civilization from 8 th 15 th Century AD. But in the 1970s the national education and cultural system was completely destroyed by war and the Khmer Rouge regime. The new education system was reconstructed by Cambodian people in 1979 with generous assistance mainly from the Socialist world and accelerated further through support of the international community after the 1991 Peace Agreement. The present system, therefore, is only 28 years old. After the end of the armed conflict, which was mainly financed by three superpowers, Cambodia returned to peace and found not only 2 million of its 7 million population dead, but also two large debts generated during the conflict periods: $ 800 million owed to the former USSR and $339 million to the United States of America. Those are bitter lessons Cambodia had learned through bilateral aid in war time. Since 1993 Election onwards, external aid to Cambodia has been mostly multi-lateral and bi-lateral which is pledged through annual multi-lateral dialogue between the Royal Government of Cambodia (RGC) and the international community. The Kingdom has entered a new modality of aid indicated below which is very different from the past. Above all, most of the new aid is intended for social, economic and infrastructure reconstruction and development. Aid Modality There are 14 major donors and UN agencies involved in education sector in Cambodia. The donor group (ESWG) has identified 10 ways in which donors provide their assistance to education sector. The author has added the 11 th modality at the bottom. The terminology used here is consistent with that used in the Donor Performance Report of and (ESWG, 2006: 16) Since different terminologies may be encountered in different documents, the aid modalities identified below should be understood in the following eleven ways: 1. Direct budget support (DBS) is channeled through the government budget, and may be general or targeted. 2. General budget support may be spent as the recipient government deems fit. It might benefit several sectors. The only possible financial reporting to the donor would be the general audit of government expenditure for the year in question. Only the ADB has made use of this funding modality. 3. Targeted budget support is given for a specific purpose (sometimes to supplement a commitment already made by government for the same purpose). The donor may accept the government audit of the Ministry s accounts as sufficient for its requirements, or may require a separate audit if the national auditing authority still lacks the capacity to provide 6

8 a reliable audit within the time-frame set by the donor. Only the EC has made use of this mechanism during the period reviewed. 4. A grant (as opposed to a loan), is funding given either to government, or to a particular institution or non-governmental organization (NGO). It is normally given for a specific purpose, targeted at defined activities. In the table, some of the assistance provided by the ADB, the EC, JICA, and the World Bank is identified as grant aid. 5. A loan is money borrowed, in this case by the RGC. The rationale is that the short-term and continuing benefits of a set of activities for which government does not have funds, will substantially outweigh the cost of repaying the capital borrowed and the accumulated interest at a later date. Government most frequently borrows for investment in infrastructure and equipment. The distinction in this table between two types of loans is that the project loan is mainly for investment in infrastructure and the programme loan for once-off (unlike recurrent, which implies repetition year after year) interventions to improve efficiency or effectiveness. The MoEYS regards a loan as government money, not donor money, since it is government that will service and repay the loan. Yet it is also appropriate to record loans in this report since there is an element of grant in the concessional interest rate and deferred payment arrangement. Loans have been made by the ADB and the World Bank. Repayment periods are from 2013 to 2036 for the ADB loan and from 2015 to 2045 for the WB loan. 6. Project funding to an NGO may take the form of a grant targeted to a particular activity or set of activities, or it may involve direct payment to service providers or to participants, for example in meeting the costs of a workshop. The organizer (the NGO) would provide a budget for the particular activity, and the donor might either provide the full value of the budget to the organizer, or might settle individual claims by suppliers and participants. 7. Project funding or project support where government is the implementer, might be provided by a combination of direct payment to the organizing department and direct payment to suppliers. The donor would require supporting documents (budget, invoices, receipts, signed attendance lists, etc.) for its own accounting records, to satisfy its own auditors that the funds had been used for the intended purpose. For a large project running over a number of years a special Project Implementation Unit (PIU) might be set up to manage the project. The cost of running the PIU absorbs a part of the project funds. Project funding or support is the aid modality used in the majority of programmes listed in the table. 8. Scholarships may be awarded to staff members as a contribution to building the capacity of the institution or Ministry, or to school-leavers to prepare them to enter the service of the Ministry, or to students whose family cannot finance their studies. The AUF, the EC and the French Embassy have provided scholarships for adults, while the ADB, Belgium, JICA, USAID and the World Bank have provided scholarships to girls and children of minority groups to make their schooling possible. 9. Technical assistance, the hiring of persons with particular competence for relatively short periods of time (from a few days up to several years), may be provided to compensate for skills which the Ministry s own staff lack or which they do not have the time to perform ( gap-filling ), or to work alongside Ministry staff to build their competence in pre-defined areas of their work. Gap-filling is generally regarded as 7

9 undesirable because it does not build the capacity of the organization. Technical assistants are sometimes hired to do work which does not fall within the Ministry s core functions, e.g. architecture or engineering. 10. Food aid, as provided in kind by the WFP, falls in this category. 11. Donation of school buildings and facilities by communities, individuals or groups of Cambodians and foreign donors. JICA and foreign NGOs donate many school buildings. The total value of the projects reported approximates to USD 256 million, with some of this aid provided as early as 2001 and some projected to be provided up to Because the duration of projects is so varied, an annual average cannot meaningfully be derived from this figure. The columns for 2005 and 2006 in table 1 are summarized from detailed financial data shown in the Donor Performance Report , which attempts to provide the annual disbursements in each programme over the period 2001 to From this table it appears that the amount actually disbursed during 2005 was USD 39.7 million. While the figure for 2005 may be regarded as a good approximation to actual expenditure, the amount for 2006 is indicative. It has not been possible to determine exact disbursement for (ESWG, 2006:13) Table 1 Value of donor assistance Donor Amount t d USD '000 AUF 3, ADB 44,670 9,613 14,865 Belgium 10,763 2,560 4,460 DFID 4, ,503 EC 28,681 3,174 8,787 France 20,061 2,421 2,196 JICA 17,439 1,981 4,342 Sida* 1, UNICEF/Sida 53,824 6,423 6,033 UNESCO UNFPA 10,102 1, USAID 9,679 3,300 3,000 World Bank 29,800 2,450 5,450 WFP 21,099 5,233 10,578 Total 256,458 39,670 62,932 *See explanation in the text below The Sida and UNICEF partnership requires a word of explanation. Sida has provided UNICEF with the bulk of the funding, although UNICEF has also drawn on its own funding resources. A large amount of Sida funding is counted under UNICEF s assistance. ESWG conducted a survey on donor commitment for as shown in the table 9.2 of the original report below. Two modalities of funding, direct project support and direct budget support, and their respective value from each donor, are shown here. (ESWG, 2006:13-14 ) 8

10 Table 2 : Donor Commitment and aid modality (Reproduced from ESWG 2006: 13-14) Table 9.2. Exploration of possible donor commitments for the period Donor Total value of Actual amount projects running disbursed Commitments Projected total in 2006 Actual 2005 Budget US dollars '000 Of total value of programmes: Direct project support Direct budget support AUF 3, ,622 1, % 0% 0% ADB 44,670 9,613 14,865 34,402 61,196 0% 45% 55% BTC 10,763 2,560 4,460 7,163 17, % 0% 0% DFID 4, ,503 3,933 5, % 0% 0% EC 28,473 3,174 8,787 20,769 29,903 9% 63% 27% France 20,061 2,421 2,196 9,065 11,543 0% 0% 100% Japan 17,439 1,981 4,342 15,296 15,807 6% 0% 94% Sida/UNICEF 26,461 6,493 6,185 26,461 31, % 0% 0% UNESCO % 0% 0% UNFPA 10,102 1, ,780 5, % 0% 0% USAID 9,679 3,300 3,000 4,579 15, % 0% 0% WB 29,800 2,450 5,450 27,350 19, % 0% 0% WFP 21,099 5,233 10,578 15,866 39, % 0% 0% Total 227,109 39,670 62, , ,506 53% 17% 30% Other Of the thirteen bilateral and multilateral donors and lenders currently providing assistance to Cambodia s education system: five donors have committed annual amounts beneath USD 1 million two donors have committed an annual amount between USD 1 and 2.5 million three donors have committed annual amounts between USD 2.5 and 5 million, and three donors have committed annual amounts in excess of USD 5 million for the period 2006 to The share of education budget to the national budget has remained at 17 % during the past four years, as shown in Table 2. Table 3: Share of education budget to national budget (%) and the target of 2010 Year Share It should be noted that the targeted share of the national budget to education sector of 2010 is still lower than the share of the pre-war level, which was 23 % in late 1960s. The actual expenditure has been always lower than the budget, especially for the funds which are channeled through the central Government. This is attributed to the late disbursement from MoEF to MoEYS and complexity of procurement process. 9

11 Table 4: level of expenditure as per cent of the allocated budget % 89% 90 % 89 % It should be noted that because of this slow and low disbursement from the central to the provinces, several donors decide to use the provincial system directly, by passing the central MoEF and MoEYS. 10

12 II.2 OWNERSHIP This section analyzes how the Government exercise effective leadership over its development policies, and strategies and co-ordinate development actions; translate these strategies into prioritised, results-oriented programmes, and Lead in coordinating aid in dialogue with development partners, civil society and the private sector. The author assesses influence that donors had on education policies and programmes and characterizes the dialogue between the government and donors. He also traces if the donor influence changed in recent years and in that case how, and why. The author then assesses the effectiveness of SWAp in upgrading the government capacity and leadership, and describes the impact of donors conditionality and its changes over time. Finally, the author identifies major challenges in relation to the government s ownership of the education sector development. The elected Parliament and RGC in 1993 promulgated the current Constitution which has shifted Cambodia from war to peace, from one party state to a multi-party system, from planned economy to market economy and from republic to constitutional monarchy. The monarchy is the main political system adopted in Cambodia for almost 2,000 years. From 1993 to 1999, Cambodian leaders were in the process of learning how to live and work together in peace. The 1997 internal fighting worsen the political stability. The Minister of Education, Youth and Sport and his team had to flee the country and lived in exile for one year, leaving senior level officials to engage in donor coordination. Donors had to divert attention and resources from rehabilitation to resolving conflicts and coping with humanitarian assistance. The development aid was suspended for one year in 1997 due to the fighting, causing a loss of $ 600 million of aid to Cambodia. The General Election of 1998 brought stability back to the country. The Khmer Rouge agreed to implement the Peace Agreement signed in The two ruling parties (Cambodian People Party and FUNCINPEC Party) started to work as coalition partners once again. Foreign aid was resumed in the same year. People also elected the third party (Sam Raincy Party) to serve as the opposition, which is a positive development in Cambodian recent political history. Cambodia (and Thailand) are the only two countries with multi-party system in the Mekong Region. This is the major change which reflects the new political and economic system in the Kingdom. For this reason, aid to education in Cambodia means more than just a normal aid. It is aid for building liberal democracy in a former war-torn and genocide-inflicted country. From 2000 onwards, the RGC has taken the driving seat in many ways. Secondly, for development policy, the RGC has been formulating and implementing its three major plans: National Strategic Development Plan (NSDP, ), The Rectangular Strategy ( ), and Cambodian Millennium Development Goals (CMDG). Third, in education sector, the country moved away from donorship and the top-down education policy to a 11

13 participatory and partnership approach where the focus is on close collaboration between community, private, government and donors. Many private and NGO education institutions and schools have blossomed since the signing of the Paris Peace Agreement in Since 2001, education sector reforms are guided by a rolling Education Strategic Plan (ESP) which sets out MoEYS s vision and strategies for the next 5 years. These are further translated into a rolling plan and programme of specific results-oriented interventions aimed at producing agreed educational outcomes, the Education Sector Support Programme (ESSP), which is supported by a sector-wide policy action matrix, as shown in Annexes III and IV of this study. ESP and ESSP provide a comprehensive framework for the engagement of all partners supporting the education sector. The ESP has served as the basis in the preparation of the NSDP. In collaboration with MoEYS, the Ministry of Economy and Finance (MoEF) has prepared an education MTEF , and the Ministry of Planning (MoP) an education PIP There is a shared recognition among MoEYS and development partners that, over a relatively short period (6 years), there has been a significant shift from donorship to partnership in the education sector, that MoEYS is strongly committed to ownership, and that it is demonstrating increasing leadership in policy development and implementation of the education reform process. (PIRNAY, 2007:13) In addition to planning, the RGC is also playing the lead role in implementing education plans through various modalities, ranging from direct implementation by the MoEYS, decentralizing it to the provinces and communities, and partnerships with NGOs and private investors. A key indicator measuring the ownership of the Government is share of education budget to the national budget. The education sector share of total government budget substantially increased from 13.9% in to 17.7% in , although the share is still short of the ESP target of 19.5%. With regard to the education expenditure as percent of GDP, the rate has slightly increased from 1.9% in 2003 to 2.1 % in 2006, which is still below the international recommended target of 5 %. The share of the Priority Action Programme (PAP) within total education budget also increased rapidly in the past five years from 5.5% to 27.9%. The share has nearly reached the ESP target. Donors Influence The donors influence on education policy and programmes is quite high in Cambodia since the formation of the ESWG in 1999 and the Dakar World Conference in In 2000, following the Dakar Conference, MoEYS and donors signed the Statement of Intent (SOI) which is designed to be the first step in formalizing new education development partnership arrangements and to work together in a unified manner in seven points below. (UNESCO PNP, 2004, Annex 2 ) This was done four years before the Paris Declaration. 12

14 In the spirit of mutual co operation we the undersigned intend to: a) Actively co operate in the education policy review and development planning process, leading to the formulation of a revised policy and strategic framework, targets and financial plans. b) Support and sustain government ownership and leadership of the process, including provision of necessary technical resources to achieve agreed policy and planning outcomes, within agreed Ministry timetable and procedures. c) Actively support Government ownership and direct management of technical assistance and related outcomes, including enabling necessary capacity building. d) Co-operatively negotiate new forms of government donor policy and strategy dialogue mechanisms that will help to move forward the education development planning process and implementation. e) Actively collaborate in the formulation and implementation of a common work programme for design and implementation of mutually agreed and sequenced policy priorities and action programmes. f) Explore the potential new forms of assistance programmes for education in addition to current project investments, taking account of agreed improvements of Government financial planning, management and monitoring systems. g) Explore the opportunities for moving forwards joint Government/multi-donor annual performance review, appraisal and forward planning exercises. Some concrete examples of donor influence on education policy are described and analyzed below. Education Planning: Donors and the Government have adopted the partnership and participatory approach or Sector-Wide Approach (AWAp) in formulating education policy and plans. It was within the framework of the SOI that the Government and donors worked closely together in formulating three important 5-year education plans : The Education Strategic Plan (ESP) sets out medium term education policy, strategy and programme priorities. Conditionalities tied to external aid are listed as benchmarks for monitoring progress against targets. The Education Sector Support Programme (ESSP) provides phases, sequences, and targets of key strategies and activities required for effective implementation of policy and strategy targets defined in the ESP. The Education for All Action Plan ( ) defines key longer-term strategy and actions required to achieve the Dakar goals and Cambodian MDGs in Cambodia. The introduction SAWp to education sector in 2002 has enabled the education planners at the central and provincial levels to engage commitment holders in a more efficient 13

15 manner. Since then, the participatory methods in identification of issues and solutions for basic education have been used regularly by planners at all levels. The most important use of SWAp is in the preparation for application to the Fast Track Initiative in by donors and MoEYS. In May 2007 a Cambodian Government Mission met in Bonn with the Fast Track Initiative Secretariat to request FTI Catalytic Fund support to the Education Ministry in Cambodia. The objective was to enhance Cambodia s implementation of its Education for All Plan in order to achieve Universal Primary Education by Approval was given for a grant of $US57.4 million to be expended over the period , subject to the submission of a satisfactory program, embedded in the Government s Education Strategic Plan, to expend the funds effectively. The program was to be in the form of a defined program document specifying key information such as the statistical background to and progress indicators to be used in monitoring the achievement of UPE. Central to the program document was a technical proposal, now known as the ESSP FTI CF Scale Up Action Plan , detailing the implementation plan activities to achieve the objectives proposed to and approved by the Secretariat in May. The Education Strategic Plan (ESP) plugs MoEYS planning into overall Government development policies and plans. A copy of the latest update ( ) may be viewed on the Ministry website Donor support is incorporated into the implementation of the strategic plan under the Education Sector Support Program (ESSP). This plan is then translated into specific actions under the annual Sector Wide Policy Action Matrix (SWPAM). Departments and provinces use the SWPAM as a basis for preparing annual operational work plans. Donors provide support for specific development actions. Work is now in hand to base development budgets (and eventually the full budget) into the newly adopted program-based budgeting (PBB) procedures. It is within this education sector planning framework the FTI grant can provide catalytic inputs to support policy, planning and management reforms which will expedite the attainment of Millennium Development Goals, in particular the Education For All goal of Universal Primary School Completion by Work on the preparation of the FTI technical plan commenced in September 2007 with the visit of a Joint Mission (ADB, EC, UN Group, WB) to initiate program preparation, and with the appointment of Early Childhood, Financial Management, Procurement, and Preparation TA. (21) During the past three months, with the support and encouragement of donor partners, in particular the EC, UNICEF and the World Bank, the Ministry has initiated a number of policy and planning process modifications and enhancements to ensure the satisfactory incorporation of FTI funds within the Ministry s overall development program and budget. These revisions are intended to ensure that the program which will be submitted to the FTI Secretariat at the beginning of April 2008 demonstrates Cambodia s readiness to make effective use of the FTI grant. 14

16 Following review and discussion by all stakeholders in early 2008, a decision will be made on the readiness of the Government to meet the necessary technical conditionalities from mid-2008 and this decision will enable the finalization of the implementation plan by the end of March, On the assumption that direct budget support is adopted, this plan proposes reductions in the budgets proposed by the Departments (proposed and reduced notional budgets annexed) in order to set aside $7.4 million to enable the conditionalities set for effective financing and procurement through direct budget support. The application SWAp in Cambodia has strengthened not only the Government in exercising its leadership of the education sector, but also the enhancement of ownership and capacity development for ALL implementing partners community leaders, NGOs and donors staff at various levels. At the national level, Government leadership in the 18 thematic technical working groups (TWGs) is linked to the development of plans that clearly articulate national priorities. Good progress has been made at sector/thematic level in elaborating NSDP priorities as programmes/policies are established or are being prepared for education, public financial management, public administration reform, and other sectors. The development of these strategic plans should provide a catalyst for increased programme formulation by Government, moving away from the trend of development partners developing most project proposals and leaving sometimes limited scope for revision by Government. The next phase of the Public Financial Management reform will also make a significant contribution to the linking of plans and budgets at macro and sector level as it will include a focus on the development of sector budgeting practices and procedures. The Strategic Framework for Development Cooperation Management, which was approved by Government in January 2006, also attempts to enhance ownership and ensure coherent aid management at a macro level by elaborating the respective roles of Government ministries and agencies. Toward the end of 2006 these roles were elaborated in the 'Guideline on the Role and Functioning of TWGs', providing more detail on PIP/MTEF linkages and responsibilities at TWG level, and in providing clearer direction on the supporting role of CRDB/CDC. The Guideline also clarified the leadership role of Government, emphasizing the supporting role of TWGs which provide a forum for dialogue and review. Policy Dialogue and Coordination Mechanism: The education sector has a long history of well-established coordination and consultation mechanisms, largely before the TWG structure was put in place. The donor Education Sector Working Group (ESWG) was established in 1999, originally as a sub-group of the Social Sector Working Group and as part of the CG process. In 2001, with the adoption of a SWAp in education, Principles and Practices for Partnership (generally referred to as the partnership principles ) were adopted, which clarified the way in which partners would engage and cooperate. The NGO Education Partnership (NEP) was formed to represent NGOs active in the education sector, and Consultative Meetings chaired by MoEYS were held regularly with ESWG and NEP. With the emergence of the new GDCC-TWG structure, the Consultative Meeting 15

17 was renamed in December 2004 as the Joint Technical Working Group in Education, Youth and Sport Sector (JTWG-Ed). Mid-2006, a review of the functioning of the GDCC-TWG was undertaken by the Cambodian Rehabilitation and Development Board of the Council for the Development of Cambodia (CRDB/CDC). The review found that about a third of the 18 TWGs are perceived to be working very well. As in previous analyses, it was confirmed that Education is one of them. Factors of success and best practices were analysed and led to a Guideline on the Role and Functioning of the Technical Working Groups, issued in December Revised Terms of Reference for the Education TWG have been drafted end of January 2007 in line with the RGC guideline. ( Pirnay, 2007:16) Coordination mechanisms have been established at several levels to support the ESP process in Cambodia. In addition to the annual ESSP reviews, a Joint Technical Working Group for education (JTWG-ED) meets approximately every other month. The Education JTWG is chaired by the Minister of Education (or by a senior Secretary of State as his delegate), and it brings together the leadership of MoEYS with the principal donors, NGOs and other stakeholders in the education sector, ratifies major policy decisions and agrees on new strategic directions initiated between ESSP reviews. The education donors meet approximately every month as the Education Sector Working Group (ESWG). The ESWG addresses issues of donor coordination, and it serves as an information exchange on programs and projects supported by donor financing and through technical assistance. The ESWG, established in 1999, is chaired by the UNESCO Representative in Cambodia (1999-Feb. 2008), and the co-chair is the European Commission (EC) Chargé d Affaires a.i. (both of these positions being full-time resident assignments in the country). The donors have also, from time to time, financed the position of a Donor Coordination Adviser (DCA), who helps compile information and, working closely with the Department of Planning in MoEYS, responds to the other heavy demands just prior to, and following the ESP and ESSP reviews. Sitting on the ESWG are two representatives of the NGO Education Partnership (NEP), established in 2001, which serves as a regular forum for the many private organizations working in support of education development in Cambodia. (ESWG 2006 (b), p.9). From March 2008 onwards, it will be chaired by UNICEF Representative, while the Secretariat is still at UNESCO Office. Ministry and donors jointly strive to improve the efficiency and effectiveness of these coordination mechanisms with the objective of speeding up decision-making and the implementation of programs. The role of the JTWG in clearly setting sector priorities and focusing attention and actions on these key priorities need to be further strengthened. In addition, a more informal gathering of individuals interested in and working on Cambodian education takes place approximately once each month, as a forum for reviewing experiences and exchanging new ideas. This informal group, known as EDUCAM, has been active since the early 1990s. 16

18 Education Innovations and Pro-Poor Policy: In the 1990s, the education system was managed on a first come, first served basis, which benefited the middle and upper classes, leaving the poor and poorest deprived of basic education. From 2000 onwards, several innovative approaches were introduced with support from donors. There are several innovative projects being implemented in different provinces, three of them are described below: The Education Quality Improvement Project (EQIP), experimented by MoEYS in Takeo and Kampot Provinces, with support from the World Bank and WFP. Poor children received breakfast and teachers received weekly training and stipend for attending it. Parents participated in the preparation of food. The net enrolment ratio and learning achievements increased significantly due to this intervention. The Belgium bilateral project was implemented with three provincial education offices and teacher colleges in three provinces, under which more schools were built and scholarships are provided to deprived children. As a result, access has increased and quality of learning improved. By bypassing the central ministries, the fund disbursement went smoothly as planned. ICT in Education Project: With financial support (only $350,000) from Japan Fund-In- Trust, UNESCO and MOEYS implemented this project by formulating National ICT in Education Policy and Strategy (2004) first and then conducted training for 500 out of 600 lecturers of 24 teachers colleges in the country, who are now training 5,000 teacher trainees per year for primary and secondary schools in Cambodia; 40% of trainees are females. The UNICODE-based Khmer Operating System, a free software, is introduced for the first time, allowing literate Cambodians to use computers and Internet more efficiently worldwide. Education Review, Monitoring and Evaluation Process: The donors have influenced the Government to change its way of reviewing and assessing education from a standalone, top-down exercise to a participatory one. Throughout the 1990s, the Government conducted its own annual Education Congress as a means to take stock on the progress in access which was normally reported in absolute number of enrolment of each level of education. From 1999 onwards, donors were invited to participate in the Congress as participants and more analytical thinking and real education indicators and statistics became the key components in the review process. The ESP/ESSP Review process took place for the first time in 2002 and has been conducted annually and simultaneously with the Annual Education Congress. The review is chaired by the Minister of Education and given the concluding statement by the Prime Minister and the Chair of the ESWG. It is normally attended by education administrators and specialists from all provinces and political leaders in the capital city. The Education Congress 2007, was conducted between November 5 th and 7 th at the Institute of Technology of Cambodia (ITC), Phnom Penh. H.E. Prime Minister of the Kingdom of Cambodia gave the concluding speech, and the Summary Report was made in the final session by H.E. Senior Minister and Minister for Education, Youth & Sport. Over 1000 participants attended from the central Ministry, Provincial Governors Offices, 17

19 Provincial and District Education Offices, schools, higher education institutions, the Ministry of Economy and Finance, the Council for Administrative Reform, other government organizations, development partners and NGOs. As last year, the Congress was conducted jointly with the annual ESSP Review. The most important objective of the combined Congress and Review, in the view of the Ministry and Development Partners, remains the strengthening of the monitoring mechanism of the Ministry. As noted in last year s Aide Memoire, this promotes the effective use of all resources available to MoEYS, both domestic and external, to achieve the policy objectives set out in the ESP and ESSP documents. In addition, both parties agree to use the Congress to monitor and promote adoption of the Paris Declaration and the Royal Government s Action Plan on Harmonization, Alignment and Results (Aide Memoire, 2008: 1) Conditionalities on Aid: Some donors provide aid with conditionalities intended to improve legitimacy, transparency and efficiency within the MoEF and MoEYS at the central level. They all require the Government to meet key benchmarks specified in the Policy Action Matrix of the Education Strategic Plans (ESP, , and ; in Annexes III and IV of this report). These conditions include the passage of the National Education Law, at a certain timeframe, before the next tranch of loan or grant can be released. The Government did pass the law in 2007, after two years of delay mainly due to the lack of expertise in drafting the law. The EC provides grant for direct budget support with the condition that the Government must advance or disburse its own funds first, according to the agreed intervals, before the EU releases its budget to replenish the amount advanced by the Government. Under this arrangement, for instance, the Government requires to have a seed fund of US$ 2.5 million to attract US$ 10 million from the EU in four quarters of any given year. This is a very generous condition for Cambodia because the national budget allocated as seed money remains revolving continuously and the small national fund can attract a larger funding from donors. A large portion of USAID and JICA fund is not be channeled through the central Government budgetary system. The Belgian fund is disbursed at the provincial and lower levels only; not at the national level. This is understandable given the difficult experience faced by EU in trying to get its grants (budget support) released for textbook printing from the MOEF to MOEYS from 2005 to This delay of three years had resulted in poor learning achievements of children in deprived areas, thereby, defeating the policy on achieving the 6 th Goal of Education for All. Among all donor aid for 60 projects in 2006, 17% is included in the national budget or direct budget support (ADB and EU), 53 % provided by other donors through direct project support (DPS), and another 30% through other modalities. It should be noted that among the 53% of aid through DPS, a large part of it is managed by local governments at the province, district and schools levels. (Please see details and figures in Table 2, page 9 of this study). The lending institutions (IMF, WB and ADB) use their Country Performamnce Assessment in determining the size of loans. Since Cambodia is rated poorly on CPA, 18

20 they shift the pattern of aid from loans to more grants. Either grant or loans, the pattern of conditionalities have not changed in the past seven years under this study. Good Governance and Joint Accountability: The Paris Declaration requires both the Government and donors assume joint accountability as a means to enhance aid effectiveness. In Cambodia, the donors have committed to help Cambodian people and the Government to shift their policy from the culture of war and Culture of Impunity to Culture of Peace, from weak administration to Rule of Law and Good Governance in all sectors. The Government has adopted its Rectangular Strategy since 2005 as the major strategy for achieving the goals of the National Strategic Development Plan (NSDP, ). Under this framework, The Government will implement the Governance Action Plan in four major reforms: Fighting Corruption, Public Administrative Reform through decentralization and deconcentration, Legal and Judicial Reform. and Armed Force Reform and Demobilization. (UN Country Team in Cambodia, 2006:3) In fighting corruption, the Royal Government of Cambodia has pledged, as soon as possible, to ensure the adoption of the Anti-corruption Law and create an independent body to fight corruption. The Royal Government will also promote effectiveness, transparency and accountability in the management of public finances, especially through the strengthening of audit processes and public procurement. The Royal Government shall also promote the implementation of the multi and cross-sectoral governance reforms, especially those guided Governance Action Plan, which has been developed with broad participation from various government ministries and institutions, civil society and development partners. The Government has drafted the Anti-Corruption Law. However, due to the delay of passage of the Anti-Corruption law, many donors and NGOs prefer to disburse their funds directly to the provinces, districts, communities and schools, bypassing the central ministries. However, they do report the disbursement rate and achievements to the central government. Despite the lack of adoption of the Anti-Corruption Law, donors have successfully advised the Government to establish the National Audit Authority at the national level and the Internal Audit Department at the ministerial level in the past five years. In the education sector, 55 audit specialists have been trained and assigned to audit 5% of all schools under the ESSP. But due to the shortage of funds, these audit staff have not been able to perform their functions according to the annual plan. Some donors, for example, USAID, have performed their own auditing at the school level together with communities, and have resulted in the transfer of school principals who mismanaged the donor s funds. The three financial agencies, IMF, WB and ADB, have placed Good Governance, financial performance and adoption of the Anti-Corruption Law as their major conditions not only for releasing grants and loans in each tranch of the agreed programmes, but also for determining the size of loan and grants for Cambodia at present and in the future. 19

21 These financial institutions conduct Country Performance Assessment (CPA) annually. Because of Cambodia s low CPA, the Asian Development Bank, has decided to reduce the volume of 2-year loan to Cambodia from $ 70 million to $ 50 million for all sectors. This is also true for the World Bank. Among the 60 programmes and projects supported by donors, only grants from EU and loans from ADB are provided as direct budget support through the national budget, whereas other project funds are managed on three mixed modalities of (1) budget support for provincial offices and lower levels, (2) funds are managed by line departments or schools of MoEYS and (3) the fund being managed by donors themselves or through their delegated co-operation partners (NGOs, or firms). Challenges Delay in the Adoption of the Anti-corruption Law. Most donors have expressed concerns on the delay by the Government in implementing the Good Governance Action Plan and the passage of the Anti-corruption Law because this delay will affect not only the external aid flow but also the collection of internal revenues in Cambodia. Ultimately, it affects the expansion of access to education, quality improvement, as well as private investment in employment generation for school graduates. The delay will also undermine the Paris Declaration on Aid Effectiveness, particularly on Joint Accountability and Management for Results. Delay in disbursement of PAP funds. The lack of predictability in disbursement of the Priority Action Programme (PAP) funds prevents schools from planning effectively and defeats the purpose for which the PAP was instituted, especially from , when funds normally reach schools in the third quarter of the fiscal year and schools had no time to spend it timely. It is important that in the change to Program-Based Budgeting (PBB) in 2008 the strengths of the PAP system (decentralized disbursement and expenditure) be retained and the negative aspects be eliminated. In the ESSP Mid-Term Review conducted on 31 March-2 April 2008, the Government reported a vast improvement in the disbursement of funds because the Ministry of Economy and Finance has now transferred the first installment in February 2008 and the school principals are trained to liquidate the funds monthly in order to receive the new one. Responsibilities now lie more with the schools. Low remuneration for teachers and other staff members Low salaries compel teachers to supplement their earnings and encourage the practice of charging parents informal fees. Even if these are voluntary, the pressure on parents to conform is great and has a negative impact on the Ministry s efforts to encourage enrolment of the children of poor families and to reduce erratic attendance and drop-out. It also militates against extending contact hours with pupils. Lack of communication and knowledge on ESSP at the school level 20