T HE government has produced five position papers on issues to be discussed at

the third International Committee on the Rehabilitation and Reconstruction of

Cambodia (ICORC) meeting to be held in Paris next month.

The papers cover

external budget support; administrative reform; armed forces demobilization;

management of market economy principles; and demining.

The papers have

won support from a major foreign aid donor, Australia, according to the Council

for the Development of Cambodia (CDC).

Minister of Finance and CDC

vice-president Keat Chhon led a Cambodian delegation to Australia early this

month to discuss cooperation between the two countries and also the ICORC

papers.

Meanwhile, Keat Chhon has told representatives of Cambodia's

biggest donor-Japan-that the government is working to improve the quality of

state spending this year.

At a Cambodia-Japan annual consultation meeting

on Feb 13 in Phnom Penh, he said reforms were being made on economic management,

public administration, the judiciary, police and Royal Cambodian Armed

Forces.

The primary objective was to adapt the government's

administration to be more effective, efficient and conducive to private sector

development.

He pledged that moves were afoot to ensure all state income went into the

treasury and to make all government spending more transparent.

"Fiscal

restraint and discipline are keys of our policy," he said.

Education,

health and rural development were the top priorities for 1995.

"Our

immediate concern are food relief, the use of labor intensive technologies for

employment creation, and the improvement of administrative functions and

services," he said.

On the economic front, Keat Chhon believed the

ground had been laid for Cambodia's development.

Inflation had fallen

from 31 per cent in 1993 to 18 per cent last year and the riel had been

stabilized against the US dollar.

He hoped for a 6.7 per cent GDP growth

rate this year and to keep the annual inflation rate at around 10 per

cent.

The GDP growth rate last year was estimated at 5.25 per cent, below

the target of 7.5 per cent because of a drop-off in agricultural output caused

by floods and drought.