World Bank Provides $36.25 Million for Local Level Reforms

Koh Santepheap, Vol.40, #6122, 20.8.2007

“Phnom Penh: The World Bank announced on 16 August that its Board of Executive Directors had reaffirmed its support for the commune and subdistrict decentralization and local governance reforms of Cambodia, and approved to provide an additional grant of US$36.25 million for the Rural Investment and Local Governance Project [RILGP], in addition to the previous project of US$22 million for 2003-2007. The World Bank Board of Executive Directors approved this on 19 May 2007.

“According to the World Bank press release of early August 2007, which Koh Santepheap received, this additional financing aims to extend the support from the current 15 to 23 provinces and towns, providing additional financing for three years from 2007 to 2009, to increase the intergovernmental fiscal transfer to build up a Commune and Subdistrict Fund, and in this way facilitate a faster increase in the amount available for intergovernmental fiscal transfers [from top to down] and the related allocations to the communes. The World Bank continued that the World Bank’s Country Assistance Strategy for Cambodia for 2005-2008, which was approved by the Board of Executive Directors in May 2005, recognizes that governance issues are the main obstacle to poverty alleviation and aid effectiveness, and therefore supports decentralization as a means to develop local governance and accountability.

“The World Bank continued that through this additional financing for the RILGP, the World Bank will continue to support decentralization and local governance with participatory systems, providing priority public contributions and improved infrastructure at the commune and subdistrict levels.

“Mr. Ian Porter, World Bank Country Director for Cambodia, stated, ‘While the RILGP and the RILGP related additional financing are provided for specific investments at the commune level, the arrangement for institutional procedures, and the inflow of funds, are integrated as much as possible into the government’s structures and systems. In this way, this project helps to build capacity directly within government institutions, it strengthens administrative systems, and it creates a strong basis for sustainability and an increase in development effectiveness.’

“Mr. Sar Kheng, Deputy Prime Minister and Minister of Interior, said, ‘The Royal Government of Cambodia welcomes and congratulates the World Bank for supporting rural development and poverty alleviation by the Royal Government through the support of investment in priority public needs and infrastructure at the commune level; this helps to strengthen local governance at the commune level, in the Framework for Decentralization and Deconcentration Reform of the government.’

“The Deputy Prime Minister added that especially the support of the commune and subdistrict levels, through financing for the implementation of rural projects at this stage of local governance is important, and through this continued support to the Royal Government’s own intergovernmental fiscal transfer system of resources from the state budget to the commune and subdistrict, the ability to increase funds for commune and subdistrict developments for three years ahead will now be possible.

“Ms. Nisha Agrawal, Country Manager of the Cambodia program of the World Bank, said, ‘This additional RILGP is also helping towards the harmonization and coordination of support from other development partners. The government will use part of this additional aid to support the further development of the National Decentralization and Deconcentration Program at the national level, which will show up in the implementation details for the National Strategic Framework for Decentralization and Deconcentration Reform, and it will help to provide a better basis to coordinate the support of different donors in future.’

“The World Bank Board of Executive Directors approved the additional financing for the RILGP for Cambodia, after a recent approval by the Board of Executive Directors of another US$15 million grant aid for the Poverty Reduction Growth Operation.”