The Asian Development Bank (ADB) has agreed to provide $29 million in loans to support the government’s efforts to improve public services through reforms in public finance management and decentralisation in rural areas.
Cambodia first conducted decentralisation reforms in 2001. The new loans will supplement the reforms’ ongoing efforts.
An ADB press release on September 22 said the Second Decentralised Public Service and Financial Management Sector Development Programme includes a $20 million policy-based loan that will support a programmatic approach to strengthening local governments’ fiscal planning, management, and public administration.
It also includes a $9.35 million project loan to help build the National School of Local Administration, a dedicated training centre for local government officials. In addition, the government will provide the project with $1.7 million in financing.
Senior public sector management specialist at Asian Development Bank (ADB) Jhelum Thomas said the plan aims to assist locals across the Kingdom to receive sustainable, effective and efficient delivery of basic public services.
He said it will shorten the time taken for people to receive the services, whether they live in the countryside or the city.
“The plan addresses how Covid-19 has made some people move from the city to rural areas. It puts more pressure on local administrations in providing necessary social support and basic services such as roads, water supplies and sanitation to support inclusive and equitable growth,” she said.
The ADB said Cambodia’s gross domestic product grew eight per cent on average annually from 1999 to last year, reducing poverty to 13.5 per cent in 2014 from 47.8 per cent in 2007. But more than 70 per cent of Cambodians lived on less than $3 a day during that time.
Access to basic services has been uneven in the country and poor and vulnerable households are especially at high risk.
The ADB expects that the fund will improve incomes and expense management in response to local needs and help train local authorities.
Ministry of Finance spokesman Meas Sok Sensan welcomes ADB’s plan. It is beneficial for citizens and the government to achieve their decentralisation reform goals, he said.
“The Ministry of Finance also agrees with ADB and benefits from this agreement. Our aim is to cooperate to give good public services through important reforms in public financial management and decentralisation,” he said.
Democratic Institute president Pa Chanroeun said the ADB fund will make it easier for citizens to receive public services.
He said during the Covid-19 crisis, the government lost a lot of money, which caused the sector to face funding shortages. The reform process, he said, will be slow.
“Although State incomes for the last period are dependant on itself – from collecting taxes and income from other sectors, the budget that we use for sub-level administration is still limited. If there is only a policy of reform but no financial policy, then reforms will not be fast and effective,” he said.