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Top three reforms of 2016

Children in Battambang wash their hands with clean water. Kuno Shinichi/Jica
Children in Battambang wash their hands with clean water. Kuno Shinichi/Jica

Top three reforms of 2016

The Reform Inventory Initiative (RII), an expert-led platform that tracks and reviews the Royal Government of Cambodia’s reform efforts, has selected three reforms in the fields of education, finance and water quality as the most promising of 2016.

The RII assessed ministerial-level reforms at 17 ministries, up from 12 in 2015. The process saw RII staff undertake desk research and consult with ministries’ technical staff, before passing their findings to the advisory group (AG) members. The AG members – experts in the administrative, economic and social sectors – then reviewed and selected the top reforms.

The Asia Foundation established the RII in 2015 to improve public understanding of those reforms considered most likely to improve public services in Cambodia. A list of reforms collected by the RII can be found at www.reforminventory.wikispaces.com.

1. Teacher Policy Action Plan: Spotlight on Continuous Professional Development for Teachers
The decision by the Ministry of Education, Youth and Sports to reform the Grade-12 examinations continues to yield results, with pass rates rising from 55.9 percent in 2015 to 62.2 percent this year. Simultaneously, the ministry has rolled out its Teacher Policy Action Plan, a rigorous, systematic reform designed to elevate the profession and improve the quality of education nationwide.

The plan recognises that improving learning outcomes is inextricably linked with teachers’ capacity to master subject knowledge, and to evaluate and adapt to students’ diverse learning needs.

One of the many programs to boost outcomes – called in-service training (INSET) – last year benefited 4,544 education officers, school principals and lower secondary and primary school teachers, according to the 2017 Budget Strategic Plan for the Education Sector. That figure nearly doubled this year, and is expected to reach 23,168 education professionals by 2017.

The ministry has incorp-orated civil society perspectives on effective teacher-training methodologies as it develops the standardised national INSET system, which will be aligned with accredited training opportunities, career growth, financial incentives and transparent steps for promotion for education professionals.

2. Revision of Tax Regimes
The government has significantly amended taxation for enterprises by abolishing the Estimated Regime of Taxation and restructuring the Self-Assessment Regime (previously the Real-Regime of Taxation). The changes were part of the Law on Financial Management 2016, which was promulgated on December 17, 2015, and clarified by the Ministry of Economy and Finance’s Prakas 1819.

Previously, many enterprises based their tax obligations on estimated turnover and expenditure rather than actual figures. The revised policy (the Self-Assessment Regime) requires enterprises, including not-for-profits, associations and charities, with average annual turnover over 250 million riel (approximately $62,500) to charge VAT, file monthly and annual tax returns, collect and pay certain withholding taxes, keep proper accounting records, and be subject to tax audits.

Entities are categorised as small, medium or large depending on factors including turnover. Companies are required to register as either medium or large taxpayers regardless of turnover.

This reform’s benefits include more accurate recordkeeping and reporting of financial activity and, when combined with other measures taken by the General Department of Taxation (GDT), should boost state revenues. Indeed, the GDT recently reported tax revenues up 20.2 percent in the first 10 months of 2016 compared to the same period last year.

3. Urban Water Supply
The third notable reform, which is both remarkable and under-recognised, is the work by the Ministry of Industry and Handicrafts (MIH) to expand the coverage, service quality and financial sustainability of the urban water supply.

MIH’s goal is that 100 percent of the urban population has access to safe, affordable and sustainable water by 2025. It has already reached 80 percent (up from 62 percent five years ago) by replicating Phnom Penh’s successful approach in various provinces.

By last year, all of the public water utilities in Phnom Penh and in eight major provincial cities – Battambang, Kampong Cham, Kampong Thom, Kampot, Pursat, Svay Rieng, Sihanoukville and Siem Reap – reported a financial surplus; before 2013, only Phnom Penh and Siem Reap had managed that.

Success has come from cutting production costs and increasing operational efficiencies. Additionally, the MIH has significantly improved its licensing system, which means more licensed private water utility companies.

Cambodia’s urban water services now surpass even those of some developed nations, an achievement that is due to government leadership and effective use of donor financing in this sector.

Conclusion
The RII sees promising signs that, three years on from the 2013 election, important reforms remain underway. Other potential reforms include: the draft code on the environment; adopting an inclusive multi-stakeholder approach to governance in the mining industry; and strengthening the health profession by implementing a new law to regulate health practitioners.

Additional potential administrative reforms at the sub-national level include: ensuring municipal and district bodies receive funds to carry out service delivery; improving the delivery of administration services for citizens by aiming for One-Window Service Offices in every district; and increasing citizen awareness and engagement through the Implementation Plan for Social Accountability Framework (ISAF).

The RII is committed to continue observing reform efforts and engaging more ministries in this initiative, and believes the government’s ongoing efforts should see the Cambodian people enjoy improved public services.

The RII’s three advisory groups include representatives from the American Chamber of Commerce in Cambodia, the Cambodian Institute for Cooperation and Peace, Cambodians for Resource Revenue Transparency, the Committee for Free and Fair Elections in Cambodia, the Cooperation Committee for Cambodia, DFDL, the European Chamber of Commerce in Cambodia, GIZ, JICA Cambodia Office, Mekong Strategic Partners, the NGO Education Partnership, the NGO Forum on Cambodia, OXFAM, PACT, the Reproductive and Child Health Alliance, Transparency International Cambodia, the United Nations Children’s Fund, University Research Company, LLC, and other experts from bilateral agencies, multilateral institutions, NGOs and the private sector.

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