48573 Volume 7, Number 4 April 2009 Best wishes for a Happy Khmer New Year 2009 Trade Development Support Program Launched From left: H.E. Pan Sarasak, Secretary of State of Commerce, Tom Barthel Hansen, Head of Representation of DANIDA, Rafael Dochao Moreno, Charge d'Affaires a.i. of the Delegation of the European Commission, H.E. Dr. Cham Prasidh, Senior Minister, Minister of Commerce, Ayumi Fujino, Head of Regional UNIDO, Qimiao Fan, World Bank Country Manager. T he Cambodian Ministry of Com ganization(UNIDO),anditwillbeadmin- unites all activities funded by develop- merce, together with four of its de istered by the World Bank. ment partners to assist the RGC to en- velopment partners, launched a The program focuses on legal re- hance its trade potential. The Trade $12.6 million Trade Development Support forms, trade facilitation and product stan- SWAp covers activities in different areas Program(TDSP)onMarch23,2009,aimed dards, and is designed to empower the ­ from fisheries to rubber and tourism ­ at assisting Cambodia to expand its inter- Royal Government of Cambodia (RGC) through addressing legal reform, product national trade. The program is financed by to facilitate trade by improving regula- and service development for exports and the European Commission, the Danish In- tions and internal processes. TDSP is capacity development for trade, and takes ternational Aid Agency (Danida) and the part of the trade sector-wide approach on board many of the RGC's ongoing re- United Nations Industrial Development Or- (known as the Trade SWAp), which see TRADE page 2 Making Trade Easier toAttract Investors I mport-export broker BeVanthon, 36, is in Sihanoukville International Port. The busying entering data into a computer. office has 15 computers linked to the He smiles and says, "This new system Customs database. The program, which saves me a lot of time and makes our work was installed in late 2006 to improve effi- easier and smoother." He continues. "I can ciency in trade facilitation and increase do it three times as fast as before, when I government revenue, is supported by the had to fill in all documents by hand. It took World Bank under the US$10 million me and my colleagues a long time." Trade Facilitation Project. Marketing graduate student Sao Hok, Although Vanthon and Hok are full 25, who started his career as a broker for of praise for the way the computerised Teng Lay company two years ago agrees system helps them with their daily work, withVanthon."Youknow,forthesamegoods they say they would like to see more steps we just change the figure and the date in the taken toward further trade facilitation. system because the same form is already They, and many other brokers, would like there; then it is done. Before, I had to fill in to see the ASYCUDA system go online the whole document every time." so that they can complete the paperwork Be Vanthon, left, enters details into the Vanthon and Hok are among more than from their own company offices. "It will Automated System for Customs Data at 200 brokers who use the ASYCUDA (Au- help us more if theASYCUDAsystem is the Customs office in Sihanoukville tomated System for Customs Data) office see MAKING page 3 International Port. 2 The World Bank Newsletter April 2009 MBPI forImproved Service Delivery P hnom Penh March 25, 2009 ­ Four ministries have signed Memoranda of Understanding (MoU) with Development Partners to sup- port and implement the Merit Based Per- formance Initiative (MBPI). They are the Ministry of Land Management, Urban Planning and Construction, the Ministry of Health, the Ministry of Interior and the Council for Administrative Reform of Council Ministers. The MBPI is designed to progres- sivelyreplaceDevelopmentPartners'fund- Government Representatives and the Development Partners signed the MBPI's ing of ad hoc and opaque salary supple- Memorandam of Understanding on March 25, 2009 in Phnom Penh. mentation to technical and professionally qualified civil servants with a harmonized, dom Department for International Devel- support improved service delivery. transparent, targeted and ultimately sus- opment (UK DFID), the United Nations "Signing the MoU is an easy part to tainablesystem--throughincreasingGov- Population Fund and the United Nations do," he said. "The challenge is that the ernment contributions -- of funding for Children's Fund. implementation of such reforms is not al- employee incentives. While MBPI incen- At the signing ceremony,World Bank ways easy as it involves changes in per- tives are relatively modest -- between Country Manager Qimiao Fan said MBPI sonal benefits and changes in organiza- US$100and$450permonth--theyserve is an important instrument for strength- tional and individual behavior, which may to help close the gap between current gov- ening PublicAdministration Reform and not always be perceived as beneficial to ernment salary levels and market rates for providing an improved standard of pub- all those affected. However, these kinds of qualifiedandexperiencedstaff,andenable lic service for all Cambodian people. reforms must be undertaken to ensure the staff retention and motivation. "We are very pleased to support the efficiency and transparency of public ser- The Development Partners involved expansion of the Merit Based Perfor- vices in the country and for enhancing the include the World Bank, DANIDA (the mance Incentives to the ministries of living standard of all Cambodian people." Danish International Development Health, Interior, and Land Management Deputy Prime Minister Sok An, Min- Agency), Agence Française de and the Council for Administrative Re- ister of the Council of Ministers, said at Développement (AFD), the Australian form," Qimiao Fan said. "This expansion the signing ceremony that the MBPIs and Agency for International Development of MBPI to these new agencies is a strong the related Priority Mission Groups Spe- (AusAID), the Belgian Technical Coop- signal of the Royal Government's intent cial OperatingArrangements (PMG/SOA) eration agency (BTC), the United King- to strengthen incentives for reform and See MBPI page 4 Trade Development Support Program ... continued from page 1 shrink in 2009 for the first time in 27 we face a major global economic crisis. forms in such areas as decentralization years and Cambodia's economy under We want to support the strengthening of and public finance management. real pressure, we need to find wider ex- Cambodia's economic base and ensure H.E. Dr. Cham Prasidh, Senior Minis- port markets and bigger investors for that investors and local businesses are ter, Minister of Commence, said in his Cambodia," said Qimiao Fan, World able to benefit from global trade. speech that, with support from develop- Bank Country Manager, "We aim to help This will be critical to sustaining ment partners, the RGC believes the Trade Government agencies make business growth into the future, and improving SWAp will strengthen partnerships with easy for local and foreign business the livelihoods of many millions of Cam- the private sector. people who want to contribute to bodians." "It is a strong commitment of the Cambodia's growth." Ayumi Fujino, Head of Regional RGC to translate Aid for Trade into "For us, it is important to help Cam- UNIDO office said: "As the UN agency concrete actions that will contribute bodia benefit to the maximum extent responsible for industrial development, to a more robust private sector and from the duty-free access that it enjoys UNIDO is committed to contribute to the overall income generation," said Dr. to the vast market of the European enhancement of trade capacity in order Cham Prasidh, Senior Minister, Minis- Union," said Rafael Dochao Moreno, for Cambodian business and industry ter of Commence. "Since Cambodia is Chargé d'Affaires a.i. of the Delegation sectors to fully participate in and ben- the first nation to apply a sector-wide of the European Commission. "Our $9 efit from the opportunities in the global approach in the trade sector, it is a million contribution will go a long way market. It is our great pleasure, there- proud moment for the Minister of Com- to increasing Cambodia's trade." fore, to be a part of this profound initia- merce and Development Partners to say Tom Barthel Hansen, Head of Repre- tive made possible through a strategic that `The Trade SWAp is established sentation, of Danida said: "Danida is alliance with the Government and de- officially today." proud to be a partner in this program - velopment partners and to witness its "With global trade expected to which has even more relevance now as commencement." April 2009 The World Bank Newsletter 3 Making Trade Easier toAttract Investors continued from page 1 installed on-line," they said. "We would prefer not to have to come and wait to use one of the computer terminals in the Cus- toms office here. Sometimes we have to Import-Export queue." brokers using the RogerTan, Managing Director for the ASYCUDA terminals Thai-pare Garment Manufacturing Co., at the Customs office Ltd. and the Secretary of Garment Manu- in Sihanoukville, an facturers' Association in Cambodia example of the moves (GMAC) believed: "If the Government towards trade agrees to ASYCUDA going on-line, the facilitation Cambodia time saving and efficiency of public ser- has made in the past vice will increase many folds." few years. The ASYCUDA program is one ex- ampleoftheprogressmadeinCambodiain the last few years towards trade facilitation.Thetimeandcostofdoingbusi- ness in Cambodia has been decreased by recent changes such as the reduction of bureaucratic red tape and extensions to the TSDP is financed by donations from the raw material supply," he said. "Given the tax holiday for newly arrived businesses. European Union, the Danish government current difficult market situation, the de- Learning lessons from the past, and and the United Nations Industrial Devel- mands for high skill and low cost are pri- looking ahead towards an improved trade opment Organization. It will be managed orities to win market share." environment in Cambodia to attract inves- by the Cambodian Government through ­ Mr. Tan suggested four main points tors, like theASYCUDAprogram, are the the Ministry of Commerce ­ under the co- should be considered. First, the govern- goals of a new Trade Development Sup- ordination of the World Bank in dialogue ment must seriously and immediately port Program (TDSP) to be launched on with development partners. look into more trade facilitation. Second, March 23, 2009. This program will assist RogerTan, Managing Director for the the public sector must be informed of the government agencies to integrate with the Thai-pare Garment Manufacturing Co., need to compete with the rest of the world international economy and to find new Ltd. and the Secretary of Garment Manu- to survive. Third, persistent unrest and roads for doing business with Europe, facturers' Association in Cambodia unreasonable demands on employers Asia andAmerica. TDSPfocuses on legal (GMAC), said Cambodia has many issues (especially at this difficult time) will force reforms, investment regulation and trade that need to be addressed, and he hoped out investors and discourage new invest- facilitation. the TDSP would make a significant contri- ments. Finally, the Government and the "With global trade expected to shrink bution. He said the cost of operations in people of Cambodia must make short- in 2009 for the first time in 27 years and garment manufacturing remained high term sacrifices for long-term gains. Cambodia's economy under real pressure, compared with competing countries. And Discussing the transport sector, this program can help Cambodia attract in the current deteriorating world market Chhim Sokan, Chairman of the Board of more investors and can contribute to conditions, garment buyers demand even Directors for the Cambodia TruckingAs- Cambodia's growth," Qimiao Fan, World quicker delivery. sociation and the President of Sokan Bank Country Manager said. "Cambodiawillhavedifficultytocom- Transport Co. Ltd, said the transport ser- The US$12.6 million grant for the pete with the countries that have their own vice industry also faced challenges. Most of the service his member companies pro- vided was based on credit. When a client closed their business or ran away, there was no mechanism to ensure the service provider was paid, so the transport com- pany ended up carrying a bad debt. Another challenge, he said, is the un- fair competition between registered com- panies and unregistered firms. The un- registered firm had an advantage, and the government should regulate to ensure a level playing field. For more information please contact: Stephane Guimbert Senior Country Economist Email: sguimbert@worldbank.org A container ship at the dock in Sihanoukville. April 2009 The World Bank Newsletter 4 Small Grantees Share Lessons Learned P hnom Penh, March 26, 2009 - More that sixty civic engagement local experts came together at a one-day workshop organized by the World Bank Civil Society Fund to share their successes and challenges, and to build their networking. Representatives from NGOs sup- ported by the World Bank Civil Society Fund, recipients of grants from the LAAR (Local Administration and Reform) pro- gram of Pact Cambodia, and Star Kampuchea's partners were invited to share their best practices and challenges in their fields of civic engagement for lo- cal good governance and land and citizen rights. World Bank Civil Society Grantees share their best practice to the participants at The workshop looked at several key a one-day workshop in Phnom Penh on March 26, 2009. best practices that led to success in pro- The workshop also invited two inter- tices on SocialAudit and the Government moting civic engagement: national institutes ­ the Society for Par- Watch (G-Watch). first, good collaboration with local and ticipatory Research in Asia (PRIA) and The workshop found that the scope provincial authorities, as well as with the Ateneo School of Government from of civil society work on civic engagement local civil society organizations and the Philippines ­ to share their best prac- remains limited, and that some local au- the village development committees; thorities still lack understanding and sup- second, the participation of the au- port for NGOs' working in their areas, par- thorities in the process; ticularly on land issues. third, collective action by the people; World Bank Civil Society Fund Co- fourth, good networking among civil ordinator Nil Vanna said: "I believe that societies working in similar areas; and civic engagement best practices, results, fifth, the strong capacity of the civil social accountability tools, and experi- society groups supporting people to ences learned from this workshop will working out on the issues. help to increase knowledge and confi- dence, and enhance the effectiveness of Where these best practices are imple- our work in empowering people to de- mented, the result is that people have more mand improved service delivery." She awareness of their rights and obligations, continued, "Sustainable Development and contribute their finance and ideas to will not be achieved without the active the community development processes engagement of the citizen." and monitoring the implementation. An- For more information contact: other result is that people and local au- Ms. Ung Yok Khoan, Executive Nil Vanna thorities change from blaming each other Director of AMARA share her work on Civil Society Fund Coordinator to working closely with each other. promoting local governance. Email: vnil@worldbank.org MBPI forImproved Service Delivery forms to achieve its objectives of sus- evidence from pilot implementation is that continued from page 2 tained development, social justice and MBPI has been significant in raising will directly contribute to developing the poverty reduction," he said. "Reforming trained employee motivation and secur- capacity of the civil service in implement- will be an endless and arduous process." ing more effective performance of service ing the Government's strategy and opera- MBPI together with the related Prior- delivery. tional priorities. ityMissionGroup(PMG)nowcovers1,335 He said the government had taken a public servants, in which 262 staff are un- For more information contact: major step to deepen and widen adminis- dertheMBPI,andthe1073underthePMG. Peter Murphy trative reform. "As you all know, Cambo- Development Partners are support- Sr. Financial Management Specialist dia has no choice but to continue to imple- ing the implementation of MBPI in sev- Email: pmurphy@worldbank.org ment comprehensive and profound re- eral Ministries and Institutions and early TheWorldBankCambodia Office 113, Norodom Blvd. Phnom Penh,Tel: (855 23) 217 301 Fax (855 23) 210 504 Khmer website: www.worldbank.org.kh and English website: www.worldbank.org/kh