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Donors talk tough on future funding conditions

Donors talk tough on future funding conditions

FOREIGN aid distribution to Cambodia and other developing countries is set to become

more competitive, according to participants of the Jan 29 Donor Consultative Group

(CG) meeting in Phnom Penh.

Speaking at a Jan 31 press conference , the ADB's Resident Representative Urooj Malik

said the aid pie is shrinking and donors are expecting more from recipient countries

than just spoken commitments to reform.

Malik said donors want to see more action from recipients, and will be implementing

a number of key performance indicators to determine how much aid individual countries

should be granted.

"The donors [and] the international community really would like to see more

action [from the government in meeting stated reform objectives]," Malik said.

"We would like to see rhetoric being matched by results."

If Cambodia does not begin serious attempts at meeting reform objectives, the Kingdom

might soon have to "compete with other countries that are doing better,"

Malik added.

While aid conditionalities have long been a standard component of International Monetary

Fund (IMF) assistance packages, 2001 marks the year that the ADB and the World Bank

will follow suit.

The ADB is now requiring aid recipients to meet 12 key performance indicators in

order to justify aid contributions.

Cambodia's IMF Resident Representative Mario Zamaroczy said the concept of "conditionality"

is not intended to frighten recipients into action, but to encourage a culture of

accountability and transparency in both the private and public sectors.

Of particular concern to donors was the lack of progress in both Cambodia's civil

service reform project and military demobilization.

While donors acknowledged government moves toward a fingerprint identification system

and computerized wage payments, funding for the 2001 military demobilization target

of 15,000 troops has been postponed pending an evaluation report from the Demobilization

Working Group.

Donors were more impressed with an increase in tax collection and social spending,

and projected economic growth of 6 per cent for the coming two years.

Of the $548 million pledged to Cambodia by donors in 2000, $45-50 million of which

was contributed by NGOs, about $400m has already been received, and donors confirm

Cambodia is well placed to receive a similar level of funding pledges in 2001.

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