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Comment: Time for Japan, ADB to assert influence at aid summit

Comment: Time for Japan, ADB to assert influence at aid summit

IN July, donor countries, multilateral agencies and the Royal Government of Cambodia (RGC) will gather in Tokyo

to discuss future arrangements for aid group meetings.

The format of the proposed aid forum takes on a new label "Consultative Group" (CG), co-chaired by Japan

and the World Bank, to eventually replace ICORC, which met in in 1994 and 1995. Concerns of some donors and the

RGC on the matter should be adequately addressed, and be put to rest once and for all.

It is doubtful, however, that this issue which was intensely debated at the last two ICORC meetings in Tokyo and

Paris will be settled at the forthcoming July Tokyo meeting. It is also unlikely that this meeting will achieve

new directions or make significant breakthroughs in terms of the way the international community looks at Cambodia.

The ICORC mechanism, an offshoot of the Paris Peace Agreements, was created to mobilise global political and financial

support at the highest level for Cambodia. Japan has played an important role.

Since the beginning of the Aid For Cambodia Initiative in 1992 in Tokyo, some $2.3 billion was mobilized for Cambodia.

It is clear that the ICORC has been quite successful in mopping up resources in support of Cambodia's massive rehabilitation,

reconstruction and development.

On its part, the RGC itself achieved significant progress, especially in putting its policies and institutions

in place to ensure that external financial and technical assistance is efficiently utilized.

The arrival of a new player on the scene in the form of the World Bank and its insistence on a lead role has sparked

off the current debate. The danger of this development is that some of the donors who have contributed so much

to the success of ICORC would probably be sidelined.

Non-developmental issues and inter-agency rivalry may dominate the new forum.

Hence, it will be up to Cambodians to rise above these concerns and speak up on the more substantive and urgent

development issues and problems affecting the future of the country and, more importantly, on the appropriate successor

mechanism for ICORC.

What Cambodia seeks in Tokyo is the opportunity to determine its own socio-economic future and not to be asked

to endorse a fait accompli. The RGC has had too many 'gurus' of various persuasions and ideological bent telling

Cambodians what they ought to do, or not to do. The RGC must be the only 'mahaguru' since when it comes to the

crunch, in a fledging democracy, the RCG alone is accountable to the Cambodian people. Otherwise, there will be

no end of this debate. This can be costly to Cambodia.

Why fix the ICORC if "it ain't broke"? Cambodian politics remains fragile. A premature breakup of the

ICORC process could only weaken the position of the RGC and international support for Cambodian development. One

can, therefore, appreciate and strongly support the RGC's desire to maintain the ICORC mechanism until at least

1997 and to host the next ICORC meeting in Phnom Penh.

Cambodians are rarely contentious at international fora. Due to their nature to be polite, as most Asians are,

they often avoid open expressions of discord, particularly with their host.

The tussle for leadership role in Cambodia between the UNDP and the World Bank, with the former wanting to engage

Cambodia in a UNDP inspired and led Roundtable, and the latter wishing to play a lead role in future CGs, can make

Cambodians uncomfortable.

Cambodians do not wish to take sides. This discomfort is exacerbated when they know that major donors are divided

over the effectiveness of the proposed CG mechanism.

The World Bank's overbearing and doctrinaire stance does not sit well with the Cambodians and might not blend with

the sociocultural ethos of the Cambodian people. Furthermore, the World Bank is too preoccupied with Russia and

Eastern Europe. As a result, Cambodia might continue to remain a "sideshow".

The existing in-country process for inter-sectoral meetings of the ICORC mode would suit the RGC's wish to play

a more dynamic and proactive role of "Development Manager" in Cambodia's future. Under this arrangement,

the Council for the Development of Cambodia (CDC) engages line ministries to prepare plans and programmes for consideration

of the donors. The Ministry of Finance and Economy and the Ministry of Planning assist in the preparation of the

National Budget and the Public Investment Programme (PIP). The CDC, in turn, has performed well in the role of

reviewing all pertinent information, and making policy decisions on development strategies and inter-sectoral resource


The ICORC process itself has been a useful means for Cambodians in learning the basic ropes of development planning,

implementation, monitoring and review. It has enabled Cambodians to acquire negotiating skills and build self-confidence

as they interact with experts to exchange ideas and discuss strategies at technical working levels.

As a result, Cambodians have gained from the interactions which the ICORC process has bequeathed. They can also

see their own ideas and proposals accepted into plans and programs for their own national development. This sense

of direct participation and involvement is a powerful and positive motivating force for Cambodians. It is part

and parcel of "institutional capacity building" and of increasing "absorptive capacity" in

simple and practical terms.

In a nutshell, the ICORC process has brought about a clear division of responsibilities for Cambodia as well as

for the donor community, including multilateral agencies, that is workable and can be further enhanced.

For example, UNDP's efforts are focused on aid coordination. The World Bank is concerned with transparency and

good governance through the budget and expenditure control. The IMF is concentrating on monetary policy, fiscal-monetary

policy coordination and reform of the financial and banking system.

The Asian Development Bank (ADB), on the other hand, has and continues to assist the RGC on development strategy

and planning, such as the National Programme to Rehabilitate and Develop Cambodia (NRPD) in 1994, Implementing

the NRPD in 1995 and the First Socio-economic Development Plan (1996-2000), and the PIP.

The ADB (whose membership in the main includes ASEAN and other East Asian countries, Australia and New Zealand)

is a regional bank with an Asian focus. It has an outstanding record of solid achievements in Asia. Its vast experience

with Asian Governments, and in tackling problems indigenous to Asia, makes it eminently qualified to play a greater

role in Cambodia. It has "comparative advantages" in sector development and has been an "investor"

in Asia.

The time has, therefore, come for the ADB to play a meaningful role in aid group meetings. Recognising that the

situation in Cambodia is still evolving, the ADB could also play the role of "honest broker" in consensus

building at the technical level on matters related to development planning and strategy formulation.

What is then the role of Japan, the host of the forthcoming CG meeting? Japan is an important factor in the equation

for a number of reasons. Firstly, it has an outstanding record of mobilizing support for Cambodia through ICORC.

Secondly, Japan is politically neutral with no colonial hang-ups. Thirdly, it has the economic and financial clout

to help Cambodia. Finally, Japan together with the other East Asian countries can mobilize the private sector on

a massive scale.

On the basis of past experience, Japan would normally be sensitive to the interests of the Europeans and the Americans

and would work towards achieving a convergence of views and approaches. But it would be a serious setback for Cambodia

if Japan does not exercise a very strong and positive influence on the shape and future of the new aid forum. Japan

should play an assertive role as host.

The international community, east or west, has contributions to make to Cambodia. That effort would be more meaningful

if we respect the aspirations of the leaders and people of Cambodia who want to determine their own future. We

should, for example, use existing institutions (CDC, Ministry of Planning and Ministry of Finance and Economy)

in Cambodia rather than marginalize them.

In the final analysis, whatever form the proposed future aid forum will take, the RGC must be in the "driver's

seat", with Japan on the one side, and the ADB and the World Bank on the other. This "CG -type"

mechanism will be consistent with the RCG's desire to take a very dynamic and proactive stance in Cambodia's socio-economic

future and to be the "Development Manager".

None of the dynamic economies of Southeast Asia had opted for the conventional CG mechanism. If it has not worked,

why dismantle ICORC in the first instance.

(Din Merican is an economist who has written articles on aid issues).


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