Contacts: Phnom Penh : Bou Saroeun (855-23) 213-538 sbou@worldbank.org Kimberly Versak 66-1-875-5064 kversak@worldbank.org PHNOM PENH, February 11, 2005 — “Cambodia is a country of great human, cultural, and natural resources with real potential to be a thriving economy, but it needs to move urgently forward on the reform agenda it has adopted,” said James D. Wolfensohn, President of the World Bank Group, as he concluded his visit to Cambodia this week. He congratulated the Cambodian people on the progress they have already made, and said, “You are at a crossroads for change. Cambodia must not falter, but must move decisively forward if it wants to ensure that its vision for a stronger, healthier country and people is to be realized.”  Mr. Wolfensohn, in his first trip to Cambodia, met with a number of key stakeholders here to learn more about issues important to the Cambodian people. He met with His Majesty the King, Norodom Sihamoni; Prime Minister Samdech Hun Sen; senior government officials; civil society; students and youth organizations; garment workers; members of the private sector; and donors. He also participated in a high-level panel discussion on Cambodia’s trade opportunities at the international summit: Cambodia: Seizing the Global Opportunity – a Growth Strategy in an Era of Free Trade.
In each of his meetings, Mr. Wolfensohn underscored the need for Cambodia to promote good governance and fight corruption in order to promote broad-based growth and poverty reduction. He stressed the need to improve aid effectiveness and coordinate efforts to achieve the growth and poverty reduction objectives. He also made special efforts to reach out to youth in Cambodia, given their important role in the hope, inspiration, and vision of the future of this country. Mr. Wolfensohn noted that the analytical work – diagnosing the problems of poor governance, weak institutions, and corruption that are holding back economic growth, investment, and poverty reduction – has been done, the reform agenda has been set, and that now, “the key is implementation.” Based on his own meetings with stakeholders in Cambodia, Wolfensohn said that the key to implementing the reform agenda and achieving Cambodia’s vision for the future rested in an aggressive fight against corruption. “There are many people in Cambodia who have asked why the World Bank remains involved in a country where the problems of corruption are as well-recognized as they are, by government, civil society, private sector, the media, and others,” Wolfensohn said. “We believe, however, that we have an obligation to help the Cambodian people to have the opportunity, the hope for a better life. We believe that by working with Government, increasing our partnership with the donor community, and increasingly consulting with civil society groups, including youth – all who share this dream of a better future – that we can do more by staying engaged than by leaving. We have reduced our lending to Cambodia – as a response to the poor performance on governance indicators – but we have not reduced our commitment, nor our efforts to push for the kinds of reforms that are needed to bring about a better life for all Cambodians.”  Mr. Wolfensohn visited a garment factory with 380 employees, most of whom are women and supporting their families back home in rural communities. The garment sector is Cambodia’s largest industry, worth $1.6 billion in 2003, and accounts for 80% of exports. He praised the International Labor Organization’s (ILO) efforts, through its factory monitoring program, in supporting the Government’s goals to make Cambodia an international leader in improving core labor standards. As part of these efforts, not only have the conditions of Cambodia’s labor force improved, but the productivity has increased and quality of products boosted, he noted.
“The increasing competition faced by Cambodia as the MFA (Multi Fiber Arrangement) expires means that continued reform to improve productivity and competitiveness by reducing costs—many of which are caused by poor infrastructure, weak institutions, corruption, and layers of bureaucracy – and improving the skills and training of the workforce is all the more urgent.” He warned that a workforce of some 1.2 million people directly and indirectly relied on the garment sector and if the government failed in its reform objectives, that these people would be seriously affected, and as much as 10% of GDP could be hurt. He urged renewed implementation on the Government’s 12 Point Reform plan, announced last August, which addressed competitiveness issues and impediments to private sector led growth. Another highlight of the visit was a ceremony where Mr. Wolfensohn handed out new land certificates to residents. He noted that having rights to land marks a new opportunity for the Cambodian people to invest in their farms, small businesses, and houses, to improve their financial security and their lives – and is key in the fight against poverty. With support from the World Bank-financed Land Management and Administration project, the Government is issuing 20,000 titles a month, mostly in rural areas, in a transparent and participatory process, with 80% of the these titles registered jointly by wife and husband or by female-headed households. Tackling another key issue – aid harmonization – Mr. Wolfensohn met with the government and a number of donors to discuss how to build upon the government’s efforts to increase the effectiveness of aid money – in particular, addressing issues such as the quantity and quality of technical assistance. Mr. Wolfensohn congratulated H.E. Keat Chhon, Minister of Economy and Finance, for his leadership in harmonizing aid – with donors increasingly cooperating with each other and aligning their programs with the government’s priorities, and government in turn taking on ownership of the development process and committing itself to reform of institutions and systems in a transparent and accountable manner. By improving national systems (ie, civil service, budgeting, accounting,) the government can reduce transaction costs and increase budget support from donors, Mr. Wolfensohn said. Partnership, better alignment, and strengthened country systems are absolutely crucial to making sure that the aid intended to help Cambodian people reaches them. Mr. Wolfensohn addressed more than 800 students at Pannasastra University, where he announced the Youth in World Bank Cambodia Program – a special program modeled on successful pilots in other country offices around the globe to involve a youth in analyzing the Bank’s projects and programs and helping to incorporate their views and needs in the design and implementation. He noted that Cambodia needs a paradigm shift from a society that accepts corruption as a natural way of life, to one that demands the highest ethical standards, one that focuses on education and hard work, and noting that young people have a crucial role to play in making this shift, provided they refuse to play any part in corrupt practices. He reminded youth of the lessons he learned from speaking to other youth groups, in other countries, who told him that “youth may be the future, but we are also the now.” He said that although Cambodians have suffered from a terrible past, the country has a great deal of unrealized potential and youth are an important part of that ; they must willing and confident in taking a leadership role in reforming Cambodian society.  Mr. Wolfensohn also joined in the high-level conference: Cambodia – Seizing the Global Opportunity: A Growth Strategy in an Era of Free Trade and participated in a discussion about how Cambodia can create a domestic environment that supports sustainable growth in investment and productive jobs; how the private sector can contribute to this growth agenda, and the important role of trade, good governance and corporate social responsibility in a least developed country. He spoke about trade and development linkages and urged that Cambodia, as with all developing countries, needs to focus on three areas to reap the benefits of the global trading system :good governance, including institutions, training, people and systems; a functioning legal system; and strong anti-corruption measures. He also assisted H.E. Minister Cham Prasidh, Senior Minister of Commerce in awarding four awards for the First Annual Corporate Citizenship Awards, supported by the International Finance Corporation and selected through a competitive process based on a set of international criteria.
Mr. Wolfensohn also met with members of civil society, and discussed with them key issues such as governance, use of natural resources, gender, and human and social development. “No society can move forward without respect for women and equal opportunity,” he said. He urged strengthened cooperation between the Bank and NGOs in areas where the vision and goals of Bank and NGOS are aligned – such as good governance, social and economic justice, and poverty reduction – and said that they need to continue to openly discuss areas where they may disagree and work towards identifying way to collaborate so that together they can reach their shared goals of a more prosperous and equitable Cambodia. Mr. Wolfensohn concluded his visit with a meeting with His Majesty, King Norodom Sihamoni in which he stated: “The future is in the hands of Cambodians,” Mr. Wolfensohn concluded. “The World Bank is ready to support your efforts – but ultimately, success or failure is in your hands. All have a role to play – the Government, the Parliament, civil society, the private sector, students, youth, media – in making their country a place of opportunity, of hope, and peace. Cambodia deserves this opportunity, and the World Bank is committed to being your long-term development partner and assisting you in meeting these dreams for a better, more equitable future for all Cambodians.” For more information about the World Bank and Cambodia or the new program with Youth, please visit our Public Information Center at 113 Norodom Blvd., or visit our website at: http://www.worldbank.org/kh. |
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